'Modelling electricity demand the key' as UK comes out of lockdown: Kiwi Power

London — All eyes at Kiwi Power are on how UK system operator National Grid models electricity demand coming out of lockdown, head of optimization Thomas Jennings told S&P Global Platts Aug. 10.

Kiwi has over 1 GW of Distributed Energy Resource (DER) under management on its co-optimzation platform, 300 MW of which in the UK.

For now it mainly bids these assets into various ancillary service markets but it wants more action in the lucrative balancing mechanism.

"As we come out of lockdown I suspect we're going to see new patterns in demand," Jennings said. "Being on top of how demand is shifting away from forecast is going to be a key area of value for us. If I can forecast demand better than the grid, that is worth quite a bit to me."

Kiwi's focus is to get as much DER capacity into the market and help the move away from fossil fuels.

National Grid has put back-up in place in the shape of contracts with large combined cycle gas plants, paying them to run at their stable export limit to provide flexibility when there is less certainty around the demand curve.

"We need to move grid away from that, and towards the use of distributed energy resources to solve these short-term problems," Jennings said.

Operational confidence

To do this, National Grid needed to build operational confidence that DERs could do as good a job if not better than CCGTs.

This came down to the quality of the DER platform, and the reliability of the dispatch service offered to National Grid, Jennings said.

"To be blunt, yes there is a merit order in the market, but Grid's responsibility first and foremost is security of supply," he said.

The ESO is always going to lean to the conservative side, so knowing an asset is going to be dispatched because it's already running, like a CCGT on standby, remained a hurdle to DER platforms like Kiwi's.

And for one particular asset, battery storage, it was a chicken-and-egg situation, Jennings acknowledged.

"Battery managers need to see the value sitting in the market to justify a move into it, and National Grid needs to dispatch the assets to show the value. We're stuck in a rather frustrating world where there aren't enough assets in the market."

Lifting the cap

This could be about to change.

In July the government pledged secondary legislation to lift the 50 MW cap in England and the 350 MW cap in Wales on storage projects.

This would be done by removing onshore and offshore electricity storage (except pumped hydro) from the UK's Nationally Significant Infrastructure Projects regime, which has a 50 MW threshold.

"Removing barriers for energy storage projects, which are discouraging bolder investment decisions in larger battery facilities, could treble the number of batteries serving the electricity grid," the Department of Business, Energy and Industrial Strategy said.

"There is a lot of excitement around going big," Jennings said. "Once we get to the hundreds of megawatts in a single battery storage asset, then we'll see a real push to change the market as the Grid moves away from using fossils," he said.

"We're moving away from aggregation and towards asset management, extracting the greatest amount of value out of the asset. Operators are now coming to us because they see the market is changing and there is new value to be had via the platform. I see the number of assets on the platform increasing exponentially," he said.

In the UK DER assets operate ostensibly in the short-term operating reserve and frequency services markets.

"At the moment the focus remains on these ancillary markets -- they return the most per MW," he said. "What interests me is gauging at what point other markets become more valuable, and when do I switch to them."

Instantaneous dispatch means Kiwi is focused on short-term opportunity. "When I'm looking at new assets being added to the system, I'm looking at how much instantaneous power they're going to provide. Interconnectors, for instance, are generally baseload and direct current. How are these new projects going to impact instantaneous dispatch? It's the switch. When DC interconnectors switch, you've got a sudden drop or increase in power into the network," he said.

Rooftop solar was another interesting variable.

"That equals less demand, so again it is interesting to see how that is modeled, and whether the midday trough if being forecast accurately," Jennings said.

Carbon benefit

While confidence and volumes may be an issue, there is no argument on the emissions front, even if the battery is storing grey power.

On dispatch a CCGT has to run for what is known as a minimum non-zero time, a set number of hours that ensures its safe operation.

Moving a CCGT up to its standard export limit, which is normally around 200 MW, provides four hours of upward flexibility to solve any supply shortfalls or increases in demand.

"From a carbon point of view, calling instantaneously on storage to iron out fluctuations in demand is a far more economical way to run the network," Jennings said.

"It's all about demand, and for us, confidence in the platform," he said. "All the modeling, algorithms and data are irrelevant if you can't dispatch at the point in time it's needed."