Project Summary
Balancer will explore energy equity within the UK's net-zero transition by enabling communities to participate in flexibility markets and benefit from emerging low carbon technologies. The main objective of Balancer is trialling innovative business models utilising cutting-edge front-of-the-meter community batteries strategically placed at the grid-edge.
These batteries can offer various services and benefits to both the network and communities they serve; aspects which haven't yet been fully explored. By balancing the battery's functionality into separate parts of automatic grid-support and consumer-oriented functionalities, they can reduce network costs, ensure power quality, and increase network capacity, while delivering wider benefits to customers.
Innovation Justification
Balancer aims to challenge regulatory barriers and develop an innovative commercial and technical framework for front-of-the-meter community batteries that can provide multiple services to communities, flexibility providers and DNOs. The project will focus on giving access and enabling disadvantaged customers to participate in flexibility markets using this novel front-of-the-meter community storage proposition -- a first of its kind under UK market regulation.
Behind-the-meter LCTs provide options for consumers to participate in the energy transition, however for many, the upfront costs are a barrier. Allowing DNOs to enable the installation of third-party front-of-the-meter storage to support the electricity network, issues such as system needs, balancing and power quality can be resolved. Balancer aims to demonstrate how DNO, and community-led placement of storage could maximise the benefits for both DNOs and customers. Balancer can also enable more local renewable generation by offering additional capacity.
To date, innovation projects carried out by DNOs have experimented with different technologies and market schemes to enable this consumer segment. Examples include Urban Energy Club, Resilience as a Service, LV Connect & Manage, SHIELD, and DS3. All these examples have offered learnings at the nexus of new technologies, business models and solutions for underprivileged communities. However, no project has developed a scalable and profitable storage solution for enhancing front-of-the-meter community batteries benefits.
The technology for a front-of-the-meter battery with automatic grid support, developed by EcoJoule, already exists but their discharge and charge priority algorithms will be adapted and novel (TRL 7), based on business models which will be tested (CRL 2).
The project requires strong engagement and innovation to develop a commercial and value proposition for all stakeholders involved. This includes understanding the complex regulatory framework and possible regulatory or policy sandboxes required for Beta demonstration and business-as-usual rollout. The project will also remove barriers for disadvantaged customer segments, focusing on societal benefits while also delivering network benefits, hence aligning closely to the phased approach to the SIF rather than other funding options.
Behind-the-meter solutions and varying commercial models have been tried previously. Efforts to involve underprivileged communities in the energy transition and flexibility markets while reducing their energy costs have yet to scale and make a difference. This is largely due to the value proposition and capital cost requirements. Balancer focuses on a new approach to understand if front-of-the-meter storage involving the DNO can be the missing link in the UK's energy transition.
Impacts and Benefits
Financial - future reductions in the cost of operating the grid:
Front-of-the-meter storage with automatic grid support placed in highly utilised networks can act as a non-wire alternative, reducing the need for traditional grid upgrades. In a previous study presented to CIGRE by Ausgrid, largest electricity distributor on Australia's east coast, and Ecojoule, one EcoVAR (part of the grid support offered) was five times cheaper than traditional upgrades. The battery will also function as a flexibility platform, reducing the need for costly upstream upgrades.
Metrics: reduction in grid reinforcement costs
Financial - cost savings per annum on energy bills for consumers:
Through market mechanisms such as battery-as-a-service, peer-to-peer sharing, and participation in flexibility markets, customers with access to the storage device will subsequently have reduced energy bills. As a reference, the Urban Energy Club saved customers £6.67 monthly on their energy bills as well as £87 through flex services.
Metrics: costs saved by consumers
Environmental - carbon reduction - indirect CO2 savings per annum:
Adding more capacity to the network, while adding more financial incentives, for LCT installations, will further reduce CO2 emissions. Balancer will also facilitate more local, faster and quicker renewable generation.
Metrics: rise in number, frequency and duration of LCTs installations deployment, penetration of renewable generation in previously excluded local areas
Revenues - improved access to revenues for users of network services:
The focus of Balancer is to provide access to flexibility markets to those who currently cannot afford to participate in the energy transition. Additionally, those who have access to PV installation, will be able to access more revenues from a load shift and value stacking of flexibility services.
Metrics: rise in flexibility access, rise in revenues from load shift and value stacking of flexibility
New to market - products:
Front-of-the meter community batteries are a never-before-tested product in the UK.
New to market - processes:
To enable community batteries to benefit the community, DNOs, and flex providers, completely novel business processes need to be applied. These might include local system needs around charge and discharge, co-ownership structures and capacity priorities, automated flexibility options from physical network signals among others.
New to market - services:
Services such as front-of-the-meter non wire alternative, battery as a service models and shared flexibility value stacking will be novel in the UK.
Impacts and benefits
In the Discovery Phase, our work allowed us to better understand the high-level benefits that could be delivered through this project, and the practical steps that would be required to develop detailed business model(s) to enable these benefits. As the project identified the potential for benefits to all parties in the business models, all partners are considering the most effective method to continue pursuing development of this proposal.
Financial - future reductions in the cost of operating the grid:
· Front-of-the-meter storage with automatic grid support placed in highly utilised networks can reduce the need for traditional network upgrades to increase power quality. If the business model is rolled out at scale, DNOs could avoid reinforcement costs through this alternate method of addressing power quality issues.
Financial - cost savings per annum on energy bills for consumers:
· Enabling more customers to access market mechanisms such as peer-to-peer sharing, or participation in flexibility markets, customers with access to the storage device will subsequently have reduced energy bills.
Environmental - carbon reduction – indirect CO2 savings per annum:
· Unlocking more capacity and higher power quality on the network, while adding more financial incentives for LCT installations, will reduce CO2 emissions. Balancer will also facilitate an increase in local renewable generation at pace.
Revenues – improved access to revenues for users of network services:
· Provide access to flexibility markets to consumers currently facing barriers around homeownership, affordability and space requirements of existing LCTs. These barriers are currently reducing their ability to participate in the energy transition. Additionally, those who have access to other LCTs such as heat pumps and solar panels will be able to access more revenues from a load shift and value stacking of flexibility services.
New to market – products, processes and services:
· Front-of-the meter community batteries are a never-before-tested product in the UK. This project aims to develop novel business processes that enable community batteries to benefit key stakeholders such as disadvantaged communities, DNOs, and flex providers.
