Kiwi Power seeks to bring its European expertise in virtual power plants to North America
Over the past decade, London-based Kiwi Power has operated a gigawatt of flexible commercial and industrial loads in 10 European countries in energy flexibility grids behind the meter, capable of serving wholesale capacity, reduce pressure on distribution networks and respond to second-by-second frequency regulation signals. More recently, it added 80 megawatts of behind-the-meter batteries to its portfolio of virtual power plants.
On Tuesday, Kiwi announced its first step in North America, starting with an ongoing project with investor Engie, the French energy giant that has built a large portfolio of batteries, electric vehicles and C&I energy services. in North America.
Kiwi is working with Engie on a project to harness Distributed Energy Resources (DER) for price arbitrage in energy markets run by Texas grid operator ERCOT, where short-term price spikes can reach $ 9,000 per kilowatt hour. This market dynamic creates business opportunities for energy storage, but distributed energy has so far struggled to overcome market barriers.
“At a high level, we add load, and we allow that load that could be on an indexed contract to reach surprising situations,” Stephan Marty, Kiwi’s commercial director, said in an interview. Although he didn’t provide much more business details, citing the competitive nature of Texas energy markets, he said, “You can think of it as an insurance policy for high prices. “
At the same time, Kiwi and Engie will seek opportunities to use the same behind-the-meter assets to serve ERCOT’s ancillary service markets, such as its emergency response services market. “Our technology platform allows us to do both – and we have the ability to do one thing at one time and another at another time.”
Engie operates large banks of batteries behind the meter through its Engie storage unit (formerly Green Charge Networks); it brings together energy storage for wholesale markets in regions ranging from Massachusetts to California. But Engie is not Kiwi’s exclusive North American partner, Marty noted. It is also open to licensing its technology to other energy service providers, DER aggregators and utilities.
An example of the latter approach is Kiwi’s work with Canadian utility Lakeland Power. Beyond using DERs for distribution grid flexibility, the utility is working with the Province of Ontario grid operator IESO on an effort to integrate behind-the-meter assets into market operations wholesale. “The app is a little different, but it’s all on the same technology platform.
European leader in the integration of distributed energy resources
Kiwi is far from being the only European company to target distributed energy market opportunities in North America. Centrica Business Solutions, a subsidiary of UK utility Centrica, purchased Belgian Demand Response and Virtual Power Plant Aggregator REstore Power in 2017 and offers a wide range of energy services for US and Canadian commercial and industrial customers.
The North American renewable energy subsidiary of French energy giant EDF has acquired American solar and electric charging companies for electric vehicles looking for distributed energy opportunities. Meanwhile, Shell bought US electric vehicle charging provider Greenlots, microgrid developer GI Energy and solar battery installer behind the Sonnen meter.
Europe is ahead of the United States in allowing the full participation of DERs in energy markets. The UK, in particular, is breaking new ground in demand side flexibility, with distribution network operators, including UK Power Networks, harnessing hundreds of megawatts of DER flexibility.
Kiwi is one of the many aggregators who have won UKPN’s recent “flexibility tenders” to allocate DERs that can reduce loads on distribution channels and avoid having to invest in their strengthening or upgrading. replacement. It is also working with another distribution network operator in the country, Western Power Distribution, on its “IntraFlex” project, which aims to enable the DERs used for the postponement of distribution to also serve the markets of energy imbalance in the United States. scale of the transmission network operated by National Grid.
This is one of the first examples of DERs enlisted simultaneously for distribution and transmission services, a challenge both technical and regulatory, as we covered at GTM Squared this month. Beyond that, US utilities have not fully engaged in the clean energy transformation that has driven European energy giants over the past decade. The state-by-state regulatory framework for the utilities industry in the United States also creates a more fragmented market for DER integration.
Lagging behind Europe, the US and Canadian markets are starting to open up to virtual power plants, at least in their simplest forms. More advanced services are expected to emerge in the coming years as interstate grid operators open up their markets for energy storage behind meters under Federal Energy Regulatory Commission Order 841 and FERC undertakes its long-delayed procedure on the broader integration of the DER. .
“There’s a lot of flexibility out there that isn’t being clawed back right now,” Marty said.