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Triads: Limejump Alerts and Model

What are Triads?

The Triads are the three half-hour settlement periods with highest electrical demand between November and February, separated by no less than 10 days. They are used by National Grid (NG) to determine charges for demand with half-hourly metering (also known as TNUoS) and payments to license exempt distributed generation.

Triads provide a benefit for export, and a charge for import during these three half-hours. National Grid announces the Triad dates in late March, with payments following around Summer 2018.

Why are Triads Important?

If you are an exporter chasing Triads, or an importer avoiding Triads, this can equate to a benefit or saving o

f around £45,000 per MW, based on the UK average. Any energy consumption should be minimised for import of electricity, whereas, electricity generators should maximise output by avoiding maintenance and planned downtime during the Triad period.

Limejump Triad Alerts

Historically, electricity demand reaches a peak on working days around sunset. The highest demand for the year will occur between Nov-Feb and is typically driven by temperature/weather. However, it is impossible to know the exact date and time of the Triad events as this is only known once announced by NG. Limejump have further developed a model that will send out alerts around 10:00am* about potential times (of an hour period) that the Triad event is likely to occur.

Limejump’s model is based on machine learning techniques to predict Triad events. During the Triad season, the model will be sending three types of daily alerts (1) Low, (2) Medium, (3) High, relating to increasing likelihood of the Triad event happening according to the model. Based on the alerts received from Limejump, the site should implement their own Triad strategy, and plan to respond. The customer’s decision to respond should be determined by their risk profile and other information sources.

Historic performance of Limejump’s model alerts over the past 5 years

 

*The model may send a secondary alert during the day if the likelihood of Triads has increased, around 15:00.

Note: Limejump’s Triad model is a forecast model and therefore past performance is not an indication of future performance, and the number of alerts can also vary from the above table.

Limejump’s Virtual Power Plant (Issue 2; Part 1)

The need for a Virtual Power Plant

Energy generation in the UK is experiencing vast changes. With the ongoing deployment of more renewables, the mix of generation sources is becoming more diverse. The increase of renewable generators that have been constructed and are feeding the grid has created a new energy mix in the UK. Figures from National Grid’s Future Energy Scenarios Conference suggest that, on average, between now and 2030, wind generation capacity will increase from 12GW to 26GW, and solar will increase from 5GW to 20GW. Coal, meanwhile, is set to reduce to 0GW by 2025, having already closed a large number of plants in the past 12 months. In addition to this, batteries are becoming more prominent with National Grid expecting 0.8 GW- 4GW by 2030.

All of these changes creates a need for flexibility to balance the intermittency that is an unavoidable factor of renewable energy sources. This grid needs flexibility as two problems arise from the changing energy mix: (1) guarantee of supply which is forecastable i.e. increase in demand during winter evenings, (2) a reactive ability to balance the grid i.e. grid frequency. Grid frequency must stay within the tolerance levels of ±1% of 50Hz as going over/under this threshold can have an impact on events such as power cuts. Organisations have been helping to achieve this for some time through participation in schemes such as Frequency Response; adjusting their consumption to respond to short term fluctuations on the system in return for healthy revenue streams. A fast/slow response is needed by National Grid to maintain this frequency, and assets that can have a positive impact on Grid frequency instantaneously are in demand – creating significant opportunities for businesses with the ability to turn up/turn down energy consumption when the grid is overloaded or under stress.

It is for that reason that we have created Limejump’s Virtual Power Plant (VPP)- a technological control system that uses cloud infrastructure to aggregate small distributed assets across the country, mimicking services of a tradition power station. This allows for assets to unlock their full flexibility potential and gain access to the rewards available for doing so.

Limejump’s VPP Portfolio

One of our VPP products is Portfolio Frequency Response, using real time response. This includes all types of assets which respond in concert to help balance the grid. Limejump’s portfolio entails different types of assets such as CHPs, Chillers, Coolers, Freezers, HVAC, pumps, compressors, furnaces, but also contains assets that have different types of responses- from slow or traditional assets such as peaking plant and base load generators, to faster responding assets such as batteries, refrigerating units etc.

To deliver frequency service response to the grid, it is critical that the portfolio is able to ramp up or ramp down in less than a second, with high accuracy to a specific volume. Slower assets participate in big deviations and deliver the bulk of the response, whereas batteries and faster assets are used for the finesse aspect (i.e. noise of the frequency), and are able to have a fast reaction time, and smooth the portfolio response. By combining fast responding assets such as batteries with a mixture of assets with differing speeds of response, we are able to deliver the same quality of real time DFR as a large scale power plant.

Limejump raises GBP 3 million in Series A funding round

London/Düsseldorf, 26 July 2017. Limejump Ltd, UK’s leading next-generation energy utility, has closed a GBP 3 million Series A funding round led by Statkraft Ventures. Limejump’s current investors, Passion Capital and Angel CoFund, also participated in the round. The company will use the funding to scale its customer base and further commercialise its Virtual Power Plant technology. 

 

“We are excited to have Statkraft Ventures on board; we had plenty of financing-options but their investment team has a sound understanding of the energy marketplace and is very visionary about the disruption that is needed to take the market forward,” says Erik Nygard, Limejump’s CEO.

 

Statkraft Ventures will operate as a pure non-strategic financial investor.Limejump developed the necessary software stack in order to digitise the full value chain serving asset owners in power generation, demand and storage in a lean and efficient manner, explains Alexander Kueppers, Investment Manager at Statkraft Ventures GmbH. Utilising a portfolio approach within this “triangle of flexibility” gives Limejump´s customers a maximum return on their respective asset.”

 

Limejump is re-engineering the energy utility model, enabled by its market-leading software expertise in the application of big data and machine-learning tools. Its technology platform integrates batteries and a mixture of other assets in its Virtual Power Plant to take advantage of price arbitrage, ancillary services and real-time optimisation opportunities. This provides even small, distributed assets access to market opportunities that they are often unable to access alone.

 

About Limejump

Limejump Ltd is already the largest aggregator of distributed batteries in the UK, currently managing 26MW of capacity, and currently has sales in excess of £20 million per year. The company has more than two hundred customers, which include large commercial and industrial organisations, as well as owners of solar farms, anaerobic digestion sites and other forms of distributed generation.

www.limejump.com

 

About Statkraft Ventures

Statkraft Ventures GmbH is a European Venture Capital fund working with exceptional entrepreneurs disrupting the energy sector. The company is exit-driven and backed by the Statkraft Group, Europe’s largest producer of renewable energy. Statkraft Ventures invests on common financial Venture Capital terms. The company operates in an evergreen structure with EUR 10 million to invest each year.

www.statkraftventures.com

InfoJump: How Are Power Prices Derived? (Issue 1, Part 3)

Typical Marginal Costs

The electricity market does not act as a ‘normal’ commodity market, demand for power is generally inelastic which means that it is not completely responsive to price. The electricity price is the production cost to generate electricity to meet the demand of the day. The price to produce electricity from different types of generators are affected by their individual marginal costs (the cost of production) (i.e. the fuel type used, oil is more expensive than gas).

The UK market price is almost always set by a coal unit or gas unit (which is why Limejump includes this in the Daily Market Report). This is because the current UK plant mix is: renewables (25%), nuclear (19%), others (2%), gas (38%), coal (16%), meaning that the generation stack is still largely dominated by fossil fuel generation. Nuclear, hydro, interconnectors and renewables all have virtually zero marginal cost (as they have little fuel costs) so the power price in the UK is set by the last coal or gas unit needed to ensure demand is met.

As shown on the graph below; carbon floor, EUA and fixed costs are higher for coal, this currently makes gas the cheaper method of producing power and is why we have recently seen a lot less generation from coal in the UK.

The efficiency levels for coal and gas differ vastly. On average, when coal is burned, only around 37.50% is converted to electricity, with the rest lost as heat waste, noise waste etc. On the other hand, gas typically is 49.13% efficient and some plants can reach up to 60%.

What does a power price consist of?

The marginal cost of coal and gas units comprises of:

(1) Fixed costs: Coal freight or gas transmission entry and exit charges.
(2) EUA (European Union Allowance): A freely tradable product representing the price of one tonne of emitted carbon dioxide. The EUA market was designed to act as fund to offset the damage that carbon emissions cause to the environment.
(3) Carbon Floor Price: An extra fixed price tax on carbon emissions that is unique to the UK (and not charged to generators in any other country). It came into force in April 2015, and in April 2016 the tax almost doubled which marginalised coal generation even further.
(4) Fuel: Either thermal (steam) coal or natural gas.

 

Why the change in Summer and Winter prices?

As demand for electricity is inelastic, power prices directly correlate with demand, so when demand for electricity increases – so does the power price. In the UK we have very little air conditioning load and many households still have electric heating, this is why we have higher demands for power in the winter than in summer and is why winter prices are at a premium to summer.

The same is true for prices within a day, power prices over the evening peak (when people turn on lights and use electric ovens) are generally the highest, whereas in mid-afternoon prices can be much lower as solar generation is at maximum and demand for electricity is not as high.

InfoJump: The Electricity Marketplace (Issue 1, Part 2)

UK power is largely traded in 3 markets, the different markets allow traders to hedge, balance and speculate on their positions over different timescales. The three markets work in a consecutive order from Over the Counter (OTC), to Power Exchange, to Balancing Mechanism (BM).

The Over The Counter market is where the majority of hedging volume is transacted and typically allows participants to trade out to 2 years ahead, however deals can be agreed over greater timescales if the buyer and seller agree.

The UK Power Exchanges run the day ahead auctions and generally trades done on the exchange are for timescales for the next day or less.

The Balancing Mechanism is a very different market, participants cannot negotiate prices, National Grid can either accept or ignore the prices that are submitted at gate closure.

Both the Power Exchange and Balancing Mechanism are continuous markets allowing users to balance their position at any time of day or night.

Optimising revenue: the Virtual Power Plant way

If your business is already involved in Demand Side Response schemes, you may believe you’ve exhausted all the options available to you. Alternatively, you may have decided not to take part because you believe your business or asset constraints create too many obstacles or that ROI would be low, rendering participation inviable. Either way, it might be time to look beyond these pre-conceptions and explore the revenue creating options available to you through Limejump’s unique Virtual Power Plant technology.

 

Unparalleled access to market opportunities

 

The Limejump Virtual Power Plant (VPP) uses big data and cloud technology to enable generators, energy storage and businesses to access to the same market opportunities as large power stations. Not only that, but the Limejump VPP unlocks the door to the highest earning opportunities of DSR, even for individual assets without the ability to provide sub-second response. Our portfolio approach allows us to optimise the revenue available to a broad mix of assets with different generation or response capabilities. So, if you are currently only accessing lower value Static Frequency Response revenues, or your volume doesn’t meet the minimum requirements of a traditional response scheme, adding your assets to our Virtual Power Plant could be the key to expanding your opportunity and optimising your revenue.

 

Here’s how it works…

 

Limejump’s Virtual Power Plant is a powerful combination of specially designed hardware and completely unique software that’s capable of handling 155GB of data each day, around 50 times more than the typical energy supplier. It combines and controls the capacity available across a portfolio comprising wind, solar, biogas and batteries alongside the flexibility available from industrial and commercial assets such as compressors, CHP and HVAC systems. Using sophisticated algorithms and real-time data fed in from both the asset portfolio and the energy marketplace, the VPP manages all aspects of energy trading and risk management to optimise the response to grid and, therefore, the revenue available to participants.

 

Together, we’re dynamic

 

Our energy infrastructure is evolving. With the UK’s sustainability agenda and zero-carbon goals as the central focus, we’re moving steadily away from a linear supplier-to-consumer model. The future will see us all as active participants on a decentralised energy grid. The nation’s decreased reliance on fossil fuel and increased dependence on infinite but intermittent renewable energy sources, means that businesses have a vital role to play in keeping the grid balanced and our system cost-effective for everyone. The key to this is flexibility; an ability to respond quickly and dynamically to correct any imbalance.

Thus, Frequency Response becomes both a vital service for our grid and a potential new revenue stream for your business. An event on the grid requires an almost-instant response – a role traditionally fulfilled by fossil fuel plants. Through Frequency Response, businesses are stepping forward to fill this gap, with the rewards for doing so increasing broadly in line with the speed of that response: participation in Enhanced Frequency Response schemes provides much higher earning potential than those in Static (or slower) Frequency Response.

Our Virtual Power Plant  allows us to combine the capabilities of assets which can provide a sub-second response with those that respond slightly more slowly but can hold their response for longer. Going far beyond what a typical aggregator can offer, our combined portfolio means that more businesses are able to meet DFR requirements and therefore benefit from the higher rewards on offer.

 

Your on-site considerations

Joining our Virtual Power Plant causes no disruption to your daily processes and no damage to your assets, also leaving them firmly in your control should you need to override the automatic responses for any reason at all. By installing one of our carefully developed smart boxes we can remotely enable assets to respond to data signals within the parameters dictated by you. The smart box will operate within temperature and availability limits as required and will link up to the VPP, where data from the weather, Grid frequency, wholesale prices, and system supply and demand are monitored in real time; generating over 85,000 automated reactions a day. You’ll have complete oversight of every Grid event, your response performance and the rewards you can expect, all via our online portal.

The Limejump Virtual Power Plant offers your business a simple, low cost, risk-free way to access untapped revenue streams whilst providing a greener, more sustainable approach to energy. Sound interesting? Why not get in touch today to find out more…

 

Batteries – Understanding the opportunity for your business

As business energy costs continue to rise, future-facing organisations are seeking new ways to reduce or mitigate the extra strain on their annual budget. For some such businesses, installation of a commercial battery ‘behind the meter’ could provide the answer – bringing value to the business not only by helping to reduce energy costs, but also by creating the always welcome financial boost of a new revenue stream. If you’ve always thought that commercial batteries are beyond your business budget, it may be time to re-evaluate; the cost of lithium ion batteries has halved since 2014, and the revenue potential continues to grow – all adding up to a solid business case for investment in commercial battery storage.

Unlocking your revenue potential

The UK’s reliance on ‘green’ and therefore intermittent energy sources is growing – pushing batteries and their capabilities to centre stage. As a fast, flexible source of low-carbon power, the potential for batteries to play a vital role in keeping our energy system balanced and the nation’s lights on has only just begun to unfold.

Stand-alone plants connected directly to the National Grid (‘Grid-scale’ projects) are already becoming an established part of our energy mix, but the number of businesses realising the benefit of housing a ‘behind the meter’ battery is now also growing fast – and with good reason: a correctly optimised 1MW battery has the potential to earn a business up to £240K each year. The size of such a battery is comparable to a shipping container and will not therefore be a feasible addition to every business, but could be suitable for a wide range of commercial properties, from commercial refrigeration and distribution units, to utilities providers and manufacturers.

Earning revenue from batteries: how it works

When it comes to getting the maximum benefit from your battery, it can help to enlist an expert partner; as knowledge and timing is everything when it comes to energising your battery, optimising its performance, and securing the right agreement. Once set up however, earning revenue should need minimum or no intervention and cause no disruption to daily, business-critical processes. Keeping this in mind, two primary revenue earning mechanisms for behind the meter batteries are summarised below:

  1. The Capacity Market: From winter 2017/18, businesses can receive payments through the Capacity Market by making themselves available to reduce consumption or switch to on-site sources during potential Grid Blackouts. Whilst most organisations secure ‘unproven demand side response’ contracts, batteries enable businesses to secure a different class of long-term agreement and a more solid financial return. T-4 Capacity Market agreements secured for this type of contract to date have been between £18-£22.50/MW. To make this an even more appealing prospect to business considering batteries: switching from import to battery should take only seconds, making it a far simpler process than reducing consumption or shifting load, and far faster than switching to on-site generation from a diesel generator.
  2. Dynamic Frequency Response: The fast response times of batteries also means businesses can participate in Dynamic Frequency Response – by far the most lucrative type of frequency response contract. Batteries can be automated to instantly respond to fluctuations in Grid frequency – enabling businesses to reduce their import load when demand is high. Those who participate can expect to receive in excess of £160K pa for doing so.

A word on export metering: Those organisations with the appropriate metering connections can also take advantage of peak pricing in the market by switching to export, although the differential between import costs for businesses (ca.£110/MWh) compared to average market export prices (ca. £50/MWh) means that using a battery’s charge to avoid peak pricing and reduce import load can be far more profitable.

 

Batteries and energy cost savings

Alongside the benefits of an additional revenue stream, businesses with half hourly metering who introduce battery storage are also able to improve their financial outlook by avoiding the penalties that accompany energy consumption during peak times*. By switching to battery power during DUoS red band periods, in response to Triad warnings, and through Capacity Market season, a business can avoid the need to shift load or interrupt business processes to protect themselves from the increased non-commodity costs that could otherwise have a heavy impact on their bottom line.

*Savings earned will be reliant on a supply agreement with pass-through terms for relevant non-commodity costs. Checking volume tolerance is also advisable.

Balancing the risk of early adoption

Batteries offer businesses a sound investment option but, like any other commercial venture, success will depend on carefully planned and well timed action. Early adoption will allow businesses to secure lucrative contracts while competition is low and will reduce capex repayment periods, but it’s vital to choose a battery developer with proven capability as well as a supply contract with the right level of flexibility. For batteries under 1MW, working with an aggregator enables access to schemes otherwise out of reach. Again, choosing a proven expert with the right skills and technology to help you get the most out of your asset and quickly recover your investment will be key to making sure your battery helps to empower your business to face a competitive commercial future.

InfoJump: The Evolution of the Electricity Market (Issue 1, Part 1)

It is interesting to understand how the UK energy market landscape changed to form what we know today as the ‘Big Six’ companies. The timeline below gives an insight of the energy market transition from 1881 to 1998.

 

As a result of the privatisation in 1989, energy companies raced to take up market share and to reduce their exposure by becoming vertically integrated (i.e. owning both generation and supply). After a series of mergers and acquisitions, the ‘big six’ were formed.

 

The Energy Market Today

The UK electricity market changed profoundly in 2001 with the introduction of NETA (New Electricity Trading Agreements), this helped to align electricity with other commodity markets and allowed generators to compete based on their marginal cost (i.e. running cost). In today’s market, we are now experiencing a transition from a centralised generation system (large-scale power plants) to a de-centralised system (smaller distributed generation) with greater reliance on renewable generation such as wind and solar.

Three core drivers for this transition are the government’s commitments to de-carbonisation, a focus on distribution and a requirement for digitisation. In order to continue balancing the UK system securely and efficiently, companies such as Limejump provide aggregated services that enables control of distributed generation and demand.

 

 

We can now see the energy market landscape moving away from larger power stations to higher numbers of smaller scale generations such as solar, wind, hydro, landfill gas etc. Limejump provides an aggregation service for these small scale generations through our Virtual Power Plant (VPP) to help balance the system.

 

 

 

Written by Patricia Noble

Limejump portfolio to play vital role in keeping system balanced this summer

National Grid has published its Summer Outlook Report, providing the market with its forecasts for supply and demand for the coming summer and how it believes the system will cope (you can read the full report here). Demand for this summer is predicted to fall, while inflexible renewable sources will provide more power onto the system than in previous years. System balancing measures will be crucial: alongside curtailing some wind and fossil fuel plants to avoid generation output exceeding demand, maintaining Grid’s voltage frequency will also be a challenge.

Limejump’s Virtual Power Plant portfolio of energy storage projects, embedded generators and industrial/commercial assets will be playing a crucial role this summer to keep the Grid balanced. As a provider of dynamic frequency response, Limejump will be providing real time response to any fluctuation in Grid frequency, automatically commanding assets to turn up or down through our cloud-based optimisation technology, using the latest big data tools and machine learning algorithms. We are the only aggregator to hold both high and low service dynamic frequency response contracts, meaning our assets earn money from both turning up and down at short notice.

The Summer Outlook Report demonstrates that the low carbon transformation the UK energy system is now fully underway and finding flexibility is crucial to maintaining a balanced system during the summer months. Batteries, businesses and smaller generators are now able to support National Grid thanks to their ability to flexibly adjust output – which is why the Virtual Power Plant is so important because it automatically enables this.

Providing Grid with flexibility through a portfolio of batteries, generators and business assets is a cost-effective and low carbon way to balance the system and Limejump is ready to respond to any fluctuations between supply and demand this summer.

Limejump uses real time algorithms that monitor the system and provide sub-second response to fluctuations in Grid frequency. By combining fast responding assets such as batteries with large industrial assets and embedded generator flexibility, Limejump can respond swiftly and maintain a reduction or increase in output for the duration required by National Grid to help maintain frequency. Whilst Limejump is currently providing such a service alongside large scale fossil fuel power plants, we’ll continue to grow our portfolio to flexibility is being provided through low carbon sources rather than legacy polluting assets.

You can find out more about how Limejump’s approach is enabling more generators and assets to earn more revenue by participating in dynamic frequency response here.

Demand Side Response: maximising your earning potential

Static Frequency Response contracts have dropped by up to 70% in recent months – but this doesn’t mean your revenues need to suffer.

Changing mix means changing requirements

A changing generation mix and the corresponding intermittency of supply in the UK is evolving the way Grid works with businesses and generators to maintain a balanced and stable power supply.

To date, Frequency Response schemes have involved businesses and generators powering down (or up) when required, releasing the pressure on the Grid and providing valuable capacity support. This has come with a significant financial reward for its participants, with businesses increasingly benefiting from their participation in demand side response schemes, as both the ability to participate and the understanding of how to do so has grown.

However, as the changes in UK generation have altered the demands from the Grid, the schemes have changed too, and the decisions you make on how to take part can have a significant impact on what you could earn.

 

Speed is the name of the game

The majority of businesses and generators involved in frequency response schemes have been providing Static Frequency Response – turning consumption up or down within 30 seconds and holding at that level for 30 minutes with annual contracts of around £10/MWh available until recently.  However, as the requirements of Grid evolve, speed and time of response is the critical (and most lucrative) factor of balancing the system.

Assets that can respond instantaneously to fluctuations through the Dynamic Frequency Response (DFR) scheme are in demand, and as a result, Static contract values have dropped off significantly, falling to as low as £3MW/h. As this price falls, the incentives paid for faster responding assets is growing, making DFR by far the most lucrative type of contract.

Such instant response capability is mainly held within batteries and utilities, meaning many embedded generators and businesses miss out on the highest earning contracts – despite having fast-responding assets that can still respond within a matter of seconds.

 

The Limejump model: inside a Virtual Power Plant

There is an opportunity to be involved in the highest earning opportunities of DSR, even for individual assets without the ability to provide sub-second response.

At Limejump we provide the technology and platforms that enable you to automatically act on market opportunities to help balance the energy system and get paid to operate flexibly, regardless of your size or asset type.

By combining the flexible capacity of slightly slower assets to those that can respond instantly in our virtual portfolio, speed of response can be combined with the ability to hold a reduction or increase in consumption for differing periods of time, providing a vital service to National Grid and meeting Dynamic Frequency Response requirements.

This “Virtual Power Plant” approach automates response to Frequency Response events and removes the traditional constraints around taking part in DFR, enabling all to participate in the most valuable schemes and maximise earnings.

 

Whilst the market may seem complex, Limejump’s Virtual Power Plant approach removes barriers to demand response and makes it easy to participate in Grid’s DSR schemes, giving you open access to the most lucrative opportunities regardless of your asset mix.

To find out more about how to get involved, give one of the team a call on 020 8396 6848 or send us a message here.