The potential for battery storage to help meet national energy security and sustainability targets has recently shot up the agenda, receiving public and political attention thanks to Tesla’s high-profile announcement of ambitions in this space.
Upside, a start-up technology firm founded by geophysicist and technologist Graham Oakes, is happy to see storage in the spotlight. He is working with the UK arm of the Sharp, owned by the Japanese conglomerate of the same name, which is alrady making a successful business of selling batteries to domestic households in Germany backed by subsidies linked to installations of photovoltaics. He is hopeful that Upside can help stimulate the uptake of consumer-scale electricity storage in the UK.
Perhaps uniquely, however, among those hoping to carve out a space in the small-scale storage market, Upside’s primary proposition does not rely on the widespread penetration of domestic storage systems, which could take years. It plans to unleash the potential of around 6GW of storage already lying dormant in the UK in the uninterruptible power supplies (UPSs) owned by all kinds of businesses, mostly to back-up computer servers.
“The grid was built with a massive emphasis on reliability and a huge amount of redundancy, and therefore has created risks for itself.”
Oakes explains the play to Utility Week: “We’ll use those batteries for, say, ten minutes once a week to provide frequency response services to National Grid. So when the frequency goes low, we will just run servers on battery rather than off the grid.”
Unlike established players in the demand response market such as Flexitricity and Kiwi (recently acquired by Engie), Upside will target small and medium-sized companies and those with “interesting” demand response portfolios – such as telcos, whose many mobile phone towers each have their own UPS.
“When you think about a mobile phone operator with 10,000-plus cell phone towers, then individually those towers aren’t interesting to established demand-response side-aggregators because they are too small,” Oakes says, “but collectively, there’s 50-100MW there.”
Among the first UK organisations to work with Upside to maximise the benefit of its UPS is Greenpeace. As well as giving Upside “lovely green credentials” early in its life, this partnership should prove that an office employing around 50-60 employees with a UPS for its servers can “take 10KW of load off the grid very easily”.
The proposition will open up the opportunity for businesses to have a pleasant experience around their energy use. Rather than just being billed for consumption, they will receive regular, if modest, payments. As a bonus, Upside will alert them as to the conditions of the battery in the UPS.
“The classic failure mode on a UPS is that the first time you use it, the battery is dead because a battery only has a defined lifetime,” explains Oakes. “If we’re testing that battery every week, then we’re able to tell the business what the state of the battery really is – so there’s a maintenance benefit to them which is probably more valuable than the money we give them.”
While business customers’ UPSs are one side of the story, Upside’s real customers are in the energy industry, and it is working on a range of value-added products for as many players in the sector as possible. The scope of its offerings could expand if domestic storage takes off, and also as electrified transport and distributed energy generation gain traction.
Oakes is ambitious for his start-up firm. It will run trials to prove its proposition at scale later this year, and is in the process of recruiting the senior management team it needs. But as well as the commercial opportunity, Oakes is also driven by a belief that Upside can address some of the fundamental quandaries the UK’s traditional, asset heavy energy infrastructure faces as it grapples with the trilemma of affordability, sustainability and security of supply.
His thinking – which he expressed in Ofgem’s recent consultation on non-traditional business models – is that: “The industry is not very good at sweating its assets.
“The grid was built with a massive emphasis on reliability and a huge amount of redundancy, and therefore has created risks for itself because it means the cost of investment is so high. It’s so hard to justify investing because you’ve got to allow for that excess reliability. You’ve got to find a way of – not loosening the risk management, but managing the risk differently – so that you look at systemic risk, not subsystem risk.
“If you do that, then you can probably find ways of getting a better risk-reward trade-off that would make it more attractive for investors.”
To download pdf of full article as if appeared in Utility Week, click here