Origami Energy: upending the idea of energy as a commodity

22 March 2018 (Last Updated April 9th, 2018 15:02)

Energy technology platform provider Origami Energy has referred to the traditional model of selling power as a commodity rather than a service as a turkey voting for Christmas. Patrick Kingsland spoke to the company’s head of strategy and innovation, Alex Howard, about the value of providing real-time energy control and why utilities must re-invent their business models.

Origami Energy: upending the idea of energy as a commodity
“The old utility model was to sell more and more kWh of a carbon-intensive energy product.”

Two big transformations are simultaneously taking place in today’s energy sector, Alex Howard, head of strategy and innovation at Origami Energy, said in a speech at last year’s Ecosummit conference in London, UK. According to Howard, the transition from brown to green energy and the growth of sophisticated sensor, communication and data processing technologies are the key movements in the modern industry.

Origami Energy, a start-up company based in Cambridge, aims to bridge these two worlds with its distributed energy technology platform. With the transition to renewable energy expected to increase volatility in electricity grid systems, Origami Energy believes technology such as this will be the key to an efficient, cheap and secure green energy future.

Here, Patrick Kingsland meets with Howard to discuss evolving electricity needs, technologies and the importance of business agility.

Patrick Kingsland (PK): Your CEO described the old utilities business model as a “turkey voting for Christmas”. What is the model and why it is flawed?

Alex Howard (AH): The old utility model was to sell more and more kWh of a carbon-intensive energy product. With decarbonisation of the energy system, this model must change – customers want to use greener energy and to use less of it, so they reduce costs as well as reduce their carbon footprint.

Utilities can continue with the old model and kick the problem down the road, but many are realising that they need to align their interests with their customers’. The timing and direction of energy flows and value of energy and when it is consumed are changing. Some energy suppliers are recognising the need for change and see the value in selling the commodity alongside services, such as energy flexibility, i.e. the value of when energy is used.

These more forward-thinking suppliers are embracing changes to the energy model, they see the value in delivering better customer propositions, which are less dependent on volume; developing deeper relationships with their customers and improving trading positions, enabled by partnering with technology companies like Origami Energy. These utilities can buy better, sell better and trade better, by harnessing the power of technology.

PK: How can technology help intelligently control energy demand?

AH: In the new world environment, we need to make best use of renewable energy to help decarbonise the electricity mix. Much of the renewable energy in the UK is intermittent in nature, this means we need energy flexibility – the ability of an energy asset to turn up/down or on/off – to help balance the electricity system. Historically, we would rev-up supply to meet demand. Today, with technology, we can rev demand up and down to meet supply, and intelligently and efficiently balance the system.

Technology enables us to manage both energy supply and demand, as well as the costs of energy. By shifting demand away from system peaks in demand, we can reduce energy costs by using energy at cheaper times. We are working with large energy users who can change when some or all their energy is used. We use our technology to intelligently monitor, communicate and control energy both reactively and autonomously to help balance the electricity system and deliver additional value for these energy consumers. The growth of storage and the development of technology, such as data processing, communications and intelligent monitoring, brings new business models and will, in time, seamlessly automate demand shifting to better meet supply for all users.

PK: What advantages does an intelligent approach to supply and demand have for consumers and utility companies?

AH: This intelligent approach to supply and demand means we are enabling more renewable energy on the electricity system at the most efficient cost. Historically, network operators would just build new infrastructure to cope with system peaks, which is then only used for a small proportion of the year. This inefficient capital expenditure eventually makes its way to fossil fuel plants and ultimately customer bills.

More intelligent and efficient use of the system means these costs can be kept in check. Using technology provided by companies like Origami Energy means that industrial and commercial consumers can also quickly and easily become providers of flexibility services, generating new revenue streams and reducing their bill costs – shifting the value away from large-scale, carbon-intensive generation to consumers.

Our technology enables the utilities we partner with to improve their own and their customers’ trading positions, as well as developing deeper and closer relationships with their customers through innovative propositions.

PK: Please can you explain Origami Energy’s technology platform – how it works and what it offers?

AH: We connect our customers’ distributed energy assets – generation, demand and battery storage – to our Technology Platform using our purpose-built energy router. The energy router is capable of continuously streaming sub-second metrology data to our centralised technology platform, which processes and stores it in our Big Data system.

We use advanced analytics and machine learning to solve various operational optimisation problems and derive new insights for medium and long-term strategy. For example, to forecast when an asset will be available, the value of flexibility and how an asset should best be used to derive most value.

Our technology platform provides a single portfolio view across all of a supplier’s distributed energy assets. It allows them to monitor available flexibility across their portfolio in real-time and dynamically make changes to how flexibility is used to improve trading positions. Our technology platform uses a private cloud to provide almost unlimited scalability with the security of a private network. It is architected for global deployment.

PK: Tell us a bit about the microgrid simulation and testing laboratory

AH: It is critical for the country that the electricity system is safeguarded, similarly for businesses, that their electrical equipment is used appropriately. Contrary to much of the industry, we believe it is important to first test changes to how equipment will be used, with real electrical assets in a representative environment, prior to implementing changes.

We have built the UK’s only dedicated microgrid emulation and testing laboratory to allow us to rigorously test new applications, algorithms and asset classes, such as batteries and electric vehicles, prior to real-world deployment with our customers. We developed our microgrid to minimise risks and disruption to our partners and their customers.