With just one day to go until the doors of Birmingham’s NEC open for Solar & Storage Live, Clean Energy News spoke to David Hill, commercial director at Open Energi, before he takes to the stage to discuss the role of artificial intelligence and machine learning in the UK energy system.
Speaking alongside Paul Massara of North Star Solar and The Sun Exchange’s Abe Cambridge on the final day (Thursday 5 October), Hill will relate his experiences from Open Energi, which has been using these technologies to provide demand response services from its customers’ assets.
Hill began by explaining growing recognition of the technology throughout the industrial and commercial sector.
How are customers shaping up to the opportunities offered by artificial intelligence (AI) and machine learning for demand response?
In the context that we've been doing AI and machine learning demand response for the last seven years it is safe to say that the amount the market has grown in the last year has completely outstripped what happened in the previous five. Our customers now fully understand that there is huge value to be gained from them by creating flexibility and being able to change their patterns of demand predictably, reliably and without disrupting their business.
The biggest challenge is just making sure you get the value right but once you can prove in a certain area that there's value and a decent strong investment case then scale will follow.
Is battery storage now going to make those kinds of technologies even more commonplace in the UK energy system going forward?
Yes, 100%. The cost reductions in batteries is known but also the communications technology we’re using to integrate main services with appliances is coming down in price. So the cost of communication and data are all moving in favourable directions for distributed optimisation of assets.
Outside of C&I applications, how big an opportunity is there going to be for your technology in the wider energy system?
I think that's where the lion's share of the value is. Fundamentally the majority of applications and technologies around demand side flexibility have been taken to market via National Grid procuring certain services - STOR, demand turn up, FFR - which have been the only party in town in terms of buying flexibility.
However, they only need a certain amount of capacity to keep the system in balance and I think National Grid is only responsible for about 3% of the total volumes of energy traded in the electricity market. The remaining 97% is left up to the market to balance itself using just market incentives, so that market is huge. It's basically the entirety of the electricity market and that's where you're going to see a lot more DSR getting involved when suppliers start incentivising flexibility in their PPA structure. That's when you'll see people like Open Energi use the same platforms and infrastructure we're using for National Grid to try and get involved in energy trading effectively.
Do you see there being a big market for DSR on a domestic level?
Eventually I do but there's not really that much flexibility on a domestic level in the UK because most comes from heating which is gas-driven, so you don't actually have many flexible assets.
The thing what's going to drive household flexibility massively is electric vehicles or stationary storage for solar optimisation, that's when you're going to start getting interesting domestic propositions.
If you get AI and machine learning to act on a domestic level, would there be a push back against the privacy issues around data collection as well losing control of their own home and the decision making?
I think the whole future of DSR, if it is going to take off and be a significant asset on the energy system, has to be automated, invisible and AI-led. That's always been the approach Open Energi take and all of our software has a very AI-approach to it in that it's totally invisible. We've made over a billion switches to industrial and commercial process over the last 6-7 years and none of our customers have ever seen us.
If you start from that point then you enter the world of trust and I think industrial and commercials are way more comfortable dealing with it as a straight up commercial proposition at that point.
On a domestic level it's interesting to think who's going to win in this space because it might not even be the person with the best technology; it's going to be the person who's trusted the most and that’s not necessarily going to be electricity suppliers.
You're going to see a lot of people come into the energy supply that you wouldn't expect, like your television or broadband provider. People who are trusted as a connected technology and automation provider; suppliers are not trusted as connected world creators whereas technology firms providing you with energy is a realistic change you are going to see in the market.
David Hill, commercial director at Open Energi, will take part in the ‘Blockchain, data and AI – finding smarter ways to increase revenue’ session on Thursday 5 October at Solar & Storage Live. Tickets for the paid conference at the event are available here.