A few weeks ago, Arenko announced that we’d been selected by Ørsted to provide the digital infrastructure behind the Iceni battery system at Hornsea. It’s a 300MW, 600MWh asset, making it one of the largest battery systems built anywhere in the world, and it’s co-located with the Hornsea offshore wind farm, sharing a connection point with critical national infrastructure. As far as we’re aware, it’s the first time a battery has been co-located with offshore wind at this scale.
I recently went on the Leaders in Clean Tech podcast to talk through the deal with David Hunt, and the conversation ended up covering a lot more than the announcement itself. It touched on how Arenko got here, why co-location is becoming a bigger part of the market, and what that means for owners and operators trying to work out where to focus next.
From asset owner to software provider
Arenko started out in 2014 as a battery developer. We built and operated Bloxwich, a 41MW system that was among the first in the UK to enter the balancing mechanism and trade across multiple markets. Running that portfolio meant building our own internal software to manage it, because trading flexibility in real time is a fundamentally different problem to trading traditional generation assets.
In 2020, we sold the infrastructure side of the business and focused entirely on turning those internal tools into enterprise-grade software. That’s now Nimbus, and it’s used by a growing number of large energy companies to manage trading, asset management and integrations across their portfolios.
The distinction that matters here is between an optimiser and a platform. Optimisers effectively subcontract a customer’s trading capability to a third party. What we’ve built is different: an end-to-end operating system that lets customers run their own trading strategy through it, rather than handing that IP over to someone else. Most of our customers already have strong in-house trading teams. They don’t want to outsource that expertise, they want better tools to apply it.
Why co-location adds a different kind of complexity
We already run Nimbus across a range of co-located configurations, including onshore wind and DC-coupled solar. Iceni is the first time we’ve applied that to offshore wind, and the complexity is real. When a battery shares a connection point with critical national infrastructure, the system has to manage two assets with different operating characteristics and constraints in real time, without compromising the wind farm’s ability to export.
Nimbus handles this through what we call a configurable constraints engine: a rule set that governs how the assets interact, combined with live data that lets the system operate within those rules continuously. A hybrid solar and battery site, for example, might give the solar asset priority on the grid connection, which then constrains when the battery can charge. The specifics change with every configuration, but the underlying requirement is the same: understand the rules, then optimise within them in real time.
What this points to for the wider market
Iceni is a single project, but it reflects a broader shift. Co-location is already being encouraged more actively in some markets. Spain has relaxed its regulatory approach to co-located solar following the blackout there a couple of years ago, and we’re fielding growing interest across Iberia as a result. As more renewable capacity connects to the grid and volatility increases, storage becomes a way for large, diversified portfolios to internalise value that would otherwise be lost.
We’re also seeing the financing structures around batteries evolve. Standalone merchant assets were the norm when 50MW was considered large. Since then we’ve moved through floors, then tolling arrangements, and now increasingly to big energy companies building or acquiring capacity outright rather than renting it. That shift favours organisations with lower costs of capital and larger, more diversified portfolios to manage, which is part of why we expect to see further consolidation among the biggest players over the coming years.
None of this points to an end state. Grid constraints remain a significant barrier, and the growth in data centre load is likely to add further pressure to a system that’s already managing a lot of change. If anything, this is closer to the start of the transition than the end of it.
Listen to the full conversation
I go into more detail on Iceni, Arenko’s journey from developer to software provider, and where the flexibility market is heading next on the Leaders in Clean Tech podcast with David Hunt. You can listen to the full episode here:
Apple Podcasts: https://podcasts.apple.com/gb/podcast/rupert-newland-arenko-group/id1442356042?i=1000785543574
Spotify: https://open.spotify.com/episode/59oX3rSsxyqHJFEqkdUop4?si=0761e6784fee40c3
YouTube: https://youtu.be/fGQD3gIl28Y?si=RjErillqr9LuUWts
