Scaling time and location-based flexibility is hard. So much of the value it could unlock – and thus pay – is still missing. Missing data = missing incentives = missing data and so on, in an endless loop. Or, maybe not – value orchestration can fix this.
The opportunity
For the first time, both rapid grid expansion and affordability are at the top of the agenda – together – and that combination changes things.
It poses a unique opportunity for flexible DERs – think both larger batteries, commercial and industrial processes, and aggregated household heating, cooling, car charging systems.
These DERs can provide flexibility that both helps expand the existing capacity of our generation infrastructure and delivery infrastructure: lowering overall energy systems AND getting paid to do so.
So, why hasn’t DER flexibility skyrocketed yet?
Well, in many ways it has: particularly on time of use flexibility.
In the UK, companies like Ovo, Octopus, Grid Beyond have already aggregated GWs of flexibility.
Likewise, in the US, you have virtual power plants (VPPs) like Voltus, Renew Home, Energy Hub, Tesla all controlling over 1GW of flexible load.
So we don’t seem to have a supply problem in DER flexibility.
But we do have a buy-side problem – particularly when you start trying to layer location of use over time of use.
And make no mistake, we do need to layer location of use data onto time of use if we want to expand time of use markets without risking grid reliability – let alone if we want to use flex to expand distribution and transmission capacity and not just generation capacity.
This is because most congestion occurs on the distribution grid, which now accounts for over half of utility CapEx. Relying on system-wide load shifting and peak shaving without considering local constraints will strain the grid further, driving up costs for consumers.
What’s missing?
On the buy side, on both sides of the Atlantic, the business case for pricing and purchasing flexibility is still very complicated and under evolved.
In the UK, distribution utilities have already taken big steps in using flexibility to defer or accelerate network upgrades, with up to six gigawatts already contracted. But they still lack ways or incentives to value flexibility in four key areas:
- Option value of flexibility: Recognising the availability and pricing data from DERs and VPPs can be used to encourage smarter, better-timed, and scheduled investment decisions when you are actively looking to build new grid instead of asset deferral.
- Faster connections: Incentives should reward distribution network operators and utilities for using flexibility to speed up new connections – turning available capacity into societal and economic value sooner.
- Curtailment reduction: Paying network operators and utilities for reducing curtailment aligns affordability, efficiency, and carbon goals by maximising every megawatt already connected.
- Whole-system coordination: Incentives data sharing would make flexibility a bridge between local and national markets, not a missing link.
In the US, the journey’s often even earlier – especially when it comes to location-based pricing. Many of the utilities to whom we speak are still struggling to understand how to value DER flexibility – where they need it, what it’s worth, and how even to pay for it (and recover that), and all that as a precursor as to whether to even believe in it!
Closing the gap with value orchestration
That’s where we come in.
Rhythmos’ grid analytics solutions helps utilities understand where they have flexibility; where they need it now and in the near future and how much it’s worth. This creates the foundation for new programs and markets that engage third-party DERs.
ElectronConnect’s multi market and program solution exposes this need and value to the DERs and operators who can do something about it. And serves that third-party availability and value data back to distribution networks.
In doing so, we bring more value to VPPs and distributed assets, accelerating the transition to abundant, affordable energy.
That’s what we mean by value orchestration: connecting the data of utility value with the data of DER value to build a cost-efficient, flexible energy system.
