Energy management solutions firm Kaluza has partnered with flexible energy company Flexitricity to provide a new combined grid flexibility service in the Balancing Mechanism in the UK.
The service will create a much-needed demand response for the UK energy system, helping to alleviate constraints that have recently caused prices to reach as high as £4,000 per MWh in the Balancing Mechanism.
In order to meet net-zero by 2050, the UK will need to electrify much of the economy and increase the volume of renewable energy on the system. Creating more dynamic demand and the appropriate reward mechanisms are essential components for a resilient and affordable transition. By unlocking the energy storage potential of electric vehicles (EVs) and other in-home devices, this new service will provide a valuable balancing resource for the grid which in the future will scale to millions of devices.
The partnership will allow domestic half-hourly settled customers with EVs and/or energy storage to participate in the Balancing Mechanism and be rewarded financially for their participation through cheaper rates and lower bills. The Balancing Mechanism is one of the main tools that National Grid ESO uses to balance supply and demand in real-time. It’s a profitable market where providers can offer to increase or decrease their generation or demand to help balance the system. Now, as the country decarbonises, National Grid ESO has made changes to encourage smaller, more agile energy assets to contribute. This presents a huge opportunity for a range of flexible energy consumers, including EV users.
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The collaboration between Kaluza and Flexitricity will allow the aggregation of domestic smart chargers, vehicle-to-grid (V2G) chargers and batteries, enabling National Grid ESO to harness this flexibility to support grid balancing and benefit end customers with lower energy costs.
The new offering addresses several key priorities outlined in Ofgem’s recent report on the transition to electric vehicles including ensuring the network is prepared for mass uptake of EVs, maximising the consumer benefits of smart charging and developing V2G technology.
Kaluza’s technology platform combines electric vehicle smart chargers, V2G chargers and domestic storage batteries as part of a single flexibility service both to local networks and now at a national level. Its AI software leverages real-time data from wholesale energy prices, supply levels and the weather to optimise connected devices to charge at the cheapest and greenest times while meeting customer needs.
The Kaluza platform is able to manage the half-hourly settlement of these devices via its energy retail partners – a critical requirement of participating in the Balancing Mechanism ahead of the industry shift to market-wide half-hourly settlement in 2025. This enables customers to access market-leading propositions powered by Kaluza’s technology that reduce carbon emissions and energy costs, such as OVO Drive Anytime – the UK’s only type-of-use EV charging tariff that allows customers to charge on a cheap 5p/kWh rate at any time of day. The platform capability also means that Kaluza-connected V2G chargers, will be made available to provide residential flexibility in the Balancing Mechanism for the first time, helping customers earn hundreds of pounds.
Flexitricity brings experience in Balancing Mechanism operations as a supplier and was the first UK aggregator to become a Virtual Lead Party (VLP) – a new route to access the mechanism. The collaboration enables faster scaling of flexibility and simplified asset onboarding.
Marzia Zafar, Director of Sustainability and Policy at Kaluza, said: “Today, industrial batteries provide the majority of our system’s flexibility while the storage potential of millions of smart devices in homes goes untouched. This partnership is an important milestone for the industry in enabling end customers to play a role in a greener, cheaper and more resilient energy system, and be rewarded for it. Kaluza has proven the value of its intelligent software across a number of local networks and markets, and we look forward to pioneering a new frontier in domestic flexibility at a national level with domain experts, Flexitricity.”
Andy Lowe, Chief Commercial Officer at Flexitricity, adds: “Electrification of transport presents both a huge opportunity for suppliers and customers and a challenge for networks. The partnership with Kaluza allows us to take a leap forward in demonstrating what flexible EV charging can deliver to help balance the electricity system.
“This partnership has the potential to revolutionise the way the EV market operates and most importantly it will make a significant impact on our 2050 net carbon zero targets.
“Flexitricity made history last year when we were first to utilise the Balancing Mechanism Wider Access arrangement to trade one of our customers’ battery assets. Now we’re looking to do the same with a network of EVs.”