Last April, UK Research and Innovation awarded £51 million from the government’s Industrial Strategy Challenge Fund to four innovation projects, all focussing on the development of smart local energy systems. As they now move into their second year, Utility Week speaks to the leaders of two of the projects to discuss the progress they have made so far, what’s still to come and the knowledge they hope to glean.
Local Energy Oxfordshire (LEO)
Local Energy Oxfordshire represents an attempt by Scottish and Southern Electricity Networks (SSEN) to trial the distribution system operator (DSO) model being adopted by local electricity networks as part of the drive towards net–zero emissions.
Distribution network operators have historically taken a passive “fit and forget” approach to the management of their assets, simply building enough capacity to meet peak demands.
Under the DSO model, local electricity networks will be actively managed in a similar way to the national power grid to make the best use of capacity and avoid the need for expensive reinforcements. This includes procuring flexibility services from distributed energy resources to help cope with congestion and constraints.
There are ten project partners in total: SSEN, Oxford City Council, Oxfordshire County Council, the University of Oxford, Oxford Brookes University, Piclo, EDF Energy, Nuvve, Origami Energy and the Low Carbon Hub.
Project director Melanie Bryce says the first year of LEO has been spent implementing and testing the “minimum viable system” (MVS) needed to operate these services from procurement and dispatch through to verification and settlement.
LEO is initially making use of the partners’ own resources. “Between the Low Carbon Hub, Oxford City Council and Oxford University there are a lot of assets that are already out there that we can actually use,” says Bryce.
These include batteries used by the Oxford Bus Company to charge its vehicles, air conditioning units in the University of Oxford’s Sackler library and the Sandford hydro plant owned by the Low Carbon Hub – all three of which have been trialled on the MVS. Bryce admits there was a small hiccup in the case of Sandford, which failed to dispatch properly due to a problem with one of the sluice gates.
Now that it is up and running, Bryce says the focus has shifted to growing and refining the system. New assets will be incorporated, including a small fleet of vehicle-to-grid chargers being installed across Oxford by Nuvve.
The project will eventually be opened up to allow those outside the consortium to take part. “At the moment, because of Covid-19, we’re using our resources to get our stakeholder plan really well in place so that when the restrictions are lifted, we are able to go out more into the community and recruit assets,” she adds.
Bryce says they will explore how flexibility can be provided to both the local and national networks – “so running trials where we can potentially stack services and see how that works in practice” – as well as being bought and sold between peers: “We have a capacity exchange element and an energy exchange element.” Tenders will be held on Piclo’s online marketplace and EDF Energy will provide a customer app for peer-to-peer trading.
SSEN is identifying suitable locations for this to happen. Bryce says there are “a lot of very enthusiastic people wanting to be involved but we need in order to trial the system services with a concentrated amount of distributed energy resources behind a primary substation.” The company is currently looking at 12 potential candidates in a variety of areas – rich and poor, urban and rural and on and off the gas grid.
The local councils have been doing a “mapping exercise” to find sites for more renewable generation, while Origami Energy is helping to recruit the “next tranche” of commercial participants.
Bryce says the consortium is looking to learn a number of things from the trial – first and foremost, how energy policy needs to change to create the right price signals for the efficient operation of local energy systems.
“We’ve run some market rules simulation games,” she explains, firstly internally, then with project partners and finally with the wider industry: “We’ve brought in people from the suppliers, aggregators, generators, the system operator”.
Teams were given an imaginary energy portfolio and allowed to trade with each other before bidding to provide grid services in mock auctions. “There’s always some quite interesting behaviours that come out,” she remarks. At the end of the session, they asked participants to try to deliberately subvert the rules to “flush out any unintended consequences”.
The consortium also wants to explore potential models for community ownership of energy resources and gain a better understanding of the public’s willingness and ability to contribute flexibility to local energy systems: “If someone has a low risk appetite, then they would want their car fully charged every morning. But if their appetite risk was a bit higher, then they would be able to participate a bit more in the markets.”
She continues: “If you live in the middle of town and you don’t own your property, for example – so if you are just renting – you won’t be able to make the same decisions for what you want for your house.”
They are additionally formulating an “ethical framework” to ensure the costs and benefits are shared equitably, creating “smart and fair neighbourhoods”.
SSEN wants the trial to provide a blueprint for the rest of the country: “What we’re hoping is we’ll get some fast followers in terms of who can pick this up and start to run with it.”
Bryce says the company is already looking for other cities in which to roll out the model, ideally one of a similar size to Oxford, as “some of the larger cities such as a Birmingham and Manchester have already got quite a lot of funding and infrastructure for these projects”.
Potential options include Warrington and Dundee, the latter because of its greater preponderance of wind as opposed to solar: “It would be interesting to see how it would potentially work with a slightly different technology.”
Smart Hubs SLES (Smart Local Energy Systems)
The Smart Hubs trial led by Connected Energy will bring together a wide variety of distributed energy resources across West Sussex.
Moixa will fit solar panels and batteries in 250 houses and 100 schools and install electric vehicle (EV) chargers in the county, some with the ability to provide vehicle-to-grid charging. Connected Energy, meanwhile, will provide 300kW of second-life batteries to local businesses, construct a 12MW battery storage system and build a series of EV charging hubs powered by solar canopies. ITM Power will install a hydrogen refuelling station.
PassivSystems will also fit air-source heat pumps in 250 houses, some of which will be operated as hybrid heating systems in combination with their existing gas boilers, and ICAX will install a marine-source heat pump to feed a new district heating network in Shoreham Port.
They will all be merged together using Moixa’s GridShare platform to create a “virtual power plant” that can then provide to grid services to both national and local network operators.
However, Connected Energy chief executive Matthew Lumsden, says they are not just looking at how to get the most direct financial value from these markets but also how to maximise the indirect social benefits. “If we provide a lower cost EV charging solution, will that encourage more people to use electric vehicles?”, he asks. “Will that improve air quality?
“If we provide more economic heating in housing, will that encourage people to maintain the temperature of their housing stock? Will that reduce dilapidation and health care costs?”
Simon Daniel, chief executive of Moixa, similarly believes that the greatest economic opportunity will be for local optimisation: “The true value is in the local space whilst also being able to join the occasional national issue.”
He says the project will effectively create a “low-carbon island” on the UK mainland, which is itself an island both geographically and in terms of power: “We have to get this kind of balancing technology to work because we are exposed as an island as all of energy is local.”
“One of the reasons we think the UK is a leader is partly because it has to be. Because if it doesn’t get this stuff working then it will go dark.”
“A real challenge of these large-scale demonstrator projects is bringing something into a real-life environment and dealing with all the complexities, ranging from relatively new technologies right through to the contractual and commercial pieces,” adds Lumsden.
One additional complexity they now have to cope with is the coronavirus lockdown, particularly given the need to install new equipment in peoples’ homes. Lumsden says they are doing their best to work around the restrictions: “We’re taking to commercial sites in terms of installing EV charging infrastructure and energy storage systems etc.”
“I think it’s more difficult when you get to the domestic level. What we’re finding is that there is an interest in engaging with the projects. There’s a very motivated stakeholder base within West Sussex and we’re getting a lot of support.
“Ultimately the delivery of the project will vary according to how the lockdown changes but there’s certainly a lot we can progress at the moment in terms of developing business models, finding sites, putting together the commercial structure etc so we’re far from having ground to a standstill.”
He continues: “We’ve timed the delivery of the programme so we can progress the rollout of technologies and engage with the private sector and individuals once the implications of the pandemic have started to be less constraining.”
Lumsden says there may actually benefits to current situation, at least in terms of findings: “I think that the key thing about a local energy system is that it’s designed to provide flexibility, so one of the really interesting things about this project is it will show how the use of energy has been impacted by the world changing as a result of the coronavirus and ramping up again.
“All it will serve to do is provide us with more data that’s in response to a changing environment rather than the status quo. Given that it’s a learning project, I see it as a pretty positive thing.”
Lumsden says they fully intend to continue operating the virtual power plant once the trial is over: “We’ve really keen to explore how we can build further on this initial system and already we’ve been having discussions around that.”