Arenko first provider to successfully offer non-Balancing Mechanism Units (“BMU”) Real Time Monitoring (“RTM”) for Dynamic Containment. Stacking Balancing Mechanism, Dynamic Containment and wholesale power offers immediate revenue uplift

Arenko, a leading software platform provider to the global energy asset automation market, is pleased to provide an update on its Dynamic Containment service provision. Arenko is providing this service to National Grid ESO with 51MW batteries owned by Gresham House Energy Storage Fund and Gore Street Energy Storage Fund, the two leading listed energy storage funds in the UK and has been involved in the service since its launch in October 2020.

Arenko first provider to successfully qualify for Non-BMU Real Time Monitoring

Out of a total 405MW of battery assets delivering Dynamic Containment, there are currently 207MW across 15 batteries delivering the service which are not registered as Balancing Mechanism Units (“Non-BMU”). From 1 April 2021, these assets need to qualify for Real Time Monitoring (“RTM”) or they will be ineligible to continue delivering Dynamic Containment to National Grid ESO.

Arenko has become the first provider to qualify a Non-BMU RTM battery, by successfully completing the process at Gore Street’s Lower Road 10MW battery. The process includes setting up high resolution operational metering and accurate, automated communication channels with National Grid ESO in order to pass complex Conformance Testing. This process was completed on 9 February 2021.

Arenko’s RTM solution is fully transferable onto any of our customer’s batteries. Arenko have a strong track record in rapidly onboarding new customers into dynamic containment as evidenced by our recent integration at Lower Road battery system where Arenko took one working week from attending site to passing the Independent Technical Expert certification to deliver that system into Dynamic Containment.

Stacking Dynamic Containment with Balancing Mechanism and wholesale power offers immediate revenue uplift of 3%

Arenko was the first group to offer our customers Balancing Mechanism and Dynamic Containment stacking when this was permitted by National Grid ESO on 27 January 2021. National Grid ESO have allowed batteries to rebalance their state of charge in the Balancing Mechanism rather than on the open market. This is a first step to offering full two-way stacking and allows batteries to help balance supply and demand in the grid, whilst at the same time, maintain the strength of the system by helping to manage the frequency.

Arenko’s algorithmic, fully automated software has been successfully three way stacking Dynamic Containment with Balance Mechanism and wholesale power rebalancing in real time without impacting the integrity of any service. This includes charging the battery when power prices have been negative.

This has reduced the cost of delivering dynamic containment from £0.69 per MW per hour to £0.17 per MW per hour. The £0.52 per MW per hour saving represents a 75% reduction in cost and an overall revenue uplift of 3%, which our customers benefit from. We expect a 3% to be sustained going forward which will be supplemented further through new stacking strategies which are currently in development.

Rupert Newland, Founder and CEO of Arenko Group, said:

“We are delighted to be the first to offer non-BMU Real Time Monitoring and Stacking to our customers. Our flexible software solution enables us to quickly respond to market changes so that we can rapidly offer new features to our customers and our automation technology allows us to deliver best in class performance. Today’s announcement is yet another example of Arenko’s consistent track record on being the first entrant to new markets and of how software and automation can contribute towards a cleaner, greener future.”

Arenko, a leading software platform provider to the global energy asset automation market, is pleased to announce the signing of a new contract with Gore Street Energy Storage Fund (“Gore Street”) and the commencement of services to the electric grid. Arenko was selected by Gore Street to provide its market-leading automation platform as a route-to-market for an operational 10MW energy storage project because of its track record of breaking ground in fast-changing energy markets. Gore Street is a leading and innovative listed energy storage investor.

Arenko was chosen by Gore Street to implement its AI-driven, automated software platform to optimise and transact the battery asset, significantly enhancing the asset’s financial and technical performance. Arenko implemented its solution with validation from an independent technical expert in under a week, enabling Gore Street to maximise the value of the asset immediately. This contract with Gore Street is further evidence of Arenko’s strategic shift to being the software partner of choice for battery and renewables owners globally.

With this partnership, Arenko manages 51MW of operational assets with a further 100MW contracted and scheduled to come online over the next 18 months. Arenko believes digitally connected, highly-automated battery storage assets are an essential part of the energy transition story, helping provide instantaneous power and frequency support to the grid. The COVID-19 pandemic has increased the speed of the reshaping of the UK power network, resulting in renewable power now meeting up to 60% of daily demand and highlighting the essential role that will be played by battery storage and other flexible assets in the net zero grid of the future. Arenko’s software platform is designed to maximise the availability and profitability of energy assets and will help accelerate the transition towards a fully decarbonised power system.

Rupert Newland, Founder and CEO of Arenko Group, said:

“We are pleased to have signed the contract with Gore Street Energy Storage Fund, a leading energy storage fund. The project will see Arenko deliver technical software from its leading, AI-driven, automated software platform. We look forward to working with Gore Street and other forward-thinking asset owners to help them maximise the value of their assets in the future.”

Alex O’Cinneide, CEO of Gore Street Capital Limited, the investment manager of Gore Street Energy Storage Fund, added:

“We are delighted to announce Gore Street’s partnership with Arenko to implement their AI-driven automated software platform on one of our 10MW assets within our significant portfolio of energy storage projects. Further international investment in energy storage will be critical for meeting global renewable energy investment goals and we look forward to working closely with Arenko to maximise the efficiency of an important asset.”

Dynamic Containment Service: a stepping stone to a low carbon electricity system

Arenko is an energy asset optimisation and automation company using software and hardware to integrate batteries and renewables into existing and evolving electricity markets. Dynamic containment is a post-fault frequency service launched by the UK National Grid ESO (Electricity System Operator) in September 2020. This week marks the 8^th week of this service being live.

Key Points:

• Dynamic Containment is the latest frequency market from the ESO to help manage the stability of the electrical system as it evolves into a sustainable, low carbon network
• Arenko is the only company to have been successful in winning each of the daily auctions and of providing the service without any unavailability or underperformance penalties since it began
• The daily auction winning prices have consolidated on a price of £17/MW/h. This is 2-3 times the price of other frequency response services
  • This represents a net income of nearly £150k per MW per annum and a highly attractive return for battery owners
• The Independent Technical Expert who reviewed Arenko’s performance said the following: “About as close to 10/10 as you can get”
• The key next steps for this service from Arenko’s perspective is the vertical stacking of services alongside Dynamic Containment

Roger Hollies, Chief Technology Officer, said:

“Arenko see huge value to the ESO, and thus to the consumer, in facilitating participation of assets providing Dynamic Containment into other existing markets such as the Balancing Mechanism, in addition to future markets such as voltage support and thermal load management. This stacking has compound benefits of diversifying and increasing revenue streams for battery asset owners and in reducing total costs of balancing services for the ESO, ultimately reducing the cost to the end consumer. Arenko is excited to be on the front line of helping shape future, sustainable and low carbon electricity networks.”

Dynamic Containment: What is it?

The system that provides the whole country with electricity, the national grid, has a frequency: 50Hz. This is the speed at which the engines of that machine, the generators, are designed to rotate. As the system comes under load that engine slows down (just like a car working to go up a hill). As more generation comes on, the engine speeds back up again. This frequency signal is (nearly) instantaneous across the country, you can plug a basic power meter into a 3 pin plug anywhere and see the balance of supply and demand across the country by looking at the frequency measurement and how close to 50Hz it is. This frequency characteristic guides local generators to help balance the supply and demand on the grid by providing power or demand relative to the frequency.

Dynamic Containment is the latest frequency market from the ESO to help manage the stability of the electrical system as it evolves into a sustainable, low carbon network. As a relatively islanded grid with a growing percentage of our power sources from renewables, the UK is taking a global lead in developing systems that facilitate a low carbon grid. Dynamic Containment is a shining example of this as one of the most advanced frequency response services in the world. It is a post fault service and, for the moment, only provides low frequency response. That is, in the scenario where a large generator or an interconnector has a fault and trips off the system, there is a huge loss of power and the frequency plummets. Providers of Dynamic Containment respond very quickly, delivering lots of power into the network to help bring the system up to speed. The response is dynamic, meaning that power is proportional to the frequency: the worse the disturbance, the more power gets injected into the grid. The response is non-linear: when frequency deviations are low, the power response is shallow. But in the case of a drop greater than 0.2Hz, a stability target for the system operator, the response steepens rapidly to full power at 0.5Hz.

Graph 1 showing 2 way dynamic frequency response: % response with changing frequency. For the initial soft launch only the low frequency response is being procured as a service.

Initial power response is required between 250ms and 500ms with full power delivery occurring between 500ms and 1 second. Finally, the power must be provided within 3% of targeted response. Because of the speed and accuracy of this service, it is ideally suited to batteries. Batteries are capable of managing power to a fine level of control because their activity is managed by electronic power controllers, or inverters, which makes them capable of controlling power with extraordinary precision.

In batteries, power is managed by electronic power controllers (inverters) and capable of managing power to a fine level of control.

The Dynamic Containment service was launched on the 1st of October as a day-ahead auction for service provision in the following 24hrs. Arenko is the only company to have been successful in winning each of the daily auctions and of providing the service without interruption since it began.

This service pays a big reward for high performing assets

The daily auction winning prices have consolidated on a price of £17/MW/h. This is 2-3 times the price of other frequency response services. This represents a net income of nearly £150k per MW per annum and a highly attractive return for battery owners. It is important to point out that this still represents excellent value for the ESO, the price is capped at a level that is less than the cost of the alternative action, that is what else the ESO would have to do to maintain the levels of stability they require. It is an interesting development for battery owners as this revenue stream is valuing fast and precision control with high-resolution data provision as appose to the alternative trading strategy where value is largely driven by optimisation of trading strategies. For Arenko we see the real opportunity is being able to combination both, we come back to this vertically stacking markets later.

So why is Dynamic containment so valuable?  In post fault management, quicker is better: the sooner power can be dispatched to support the network, the less total power is required to resolve the issue. Imagine knocking over a heavy marble statue: if you catch it early, it is easy to keep upright, but try to catch it once it has gained momentum and you’ll need a lot of power to keep it upright. What happens if we let this statue fall over? Blackout: loss of power across large areas of the country. This is what happened in August 2019.

It is expected that these high prices commanded by early entrants will reduce as new providers enter the market and ESO’s demand for this service is satisfied, but this is not happening quickly. The ESO have an initial requirement of 500MW, increasing to 1GW next year. At the moment, less than 300MW are bidding. This is because the service is challenging to qualify for and to deliver.

The pre-qualification tests are hard

Arenko are world leaders in understanding and controlling batteries and these tests represent the most challenging qualification and delivery criteria the Company has come across. Furthermore, Arenko believe them to be the most stringent criteria of any service in which batteries can participate globally. The two key difficulties are:

• Timing the response: 500ms for an initial response is pretty easy for a battery. If tuned properly with rapid control loop interfaces, batteries can have power at the meter in less than 100ms from a power signal. What made this difficult was the limit on being too quick across a range of target power. In order to deliver both full power and down to 5% of full power to the same timing limitations, Arenko had to use a narrow range of ramp rate and initial response delay with very little margin for error.
• Response accuracy at low power. Again, accuracy to within 3% of nameplate power is easy for software defined power control. However, that same tolerance was applied to full power and down to 5% of nameplate power. 3% accuracy on 5% of nameplate power is requesting power with a tolerance of 0.015% of system nameplate power

See the graph below showing the results of test 2: the ramp test. Pink is injected frequency and green the power response. You can see the response elbow showing the low power response at low deviation.

Graph showing the results of Dynamic Containment Prequalification test 2: Ramp test

That said, Arenko made it through qualification and submitted its test results. The Independent Technical Expert who reviewed Arenko’s performance said the following: “About as close to 10/10 as you can get”. Asset owners are taking notice: Arenko is working with several who are seeking to ensure that their assets can participate in this lucrative market.

There’s lots of data

Due to the speed of response required, this service is controlled locally (at the battery) on very quick control loops. In order to understand that providers are correctly delivering this critical service the ESO requires two data flows.

• Operational Metering data is provided every second, direct to the ESO control room for a live view of what assets are doing: This data contains critical parameters such as measured frequency and delivered power at the meter.
• Performance Reporting data must be provided with a similar set of data but measured at 20Hz resolution. This data is batched up and submitted every hour of service delivery.

This is a lot of data: Over 1.7 million data points a day or more than 50 million data points for the month of October alone. There are very clear and well laid out performance calculations that use the data provided so there is no hiding underperformance. Penalties for non-delivery are punitive as befits a critical service such as this. These data provisions must be fully automated and are thus are ideal for a vertically integrated platform like Arenko’s. The assets under Arenko’s control are performing exceptionally well: 100% availability and zero penalties for underperformance. Some statistics: Arenko’s average deviation from target power is 0.02% and the maximum deviation the Company has seen 0.9%. Penalties start at 3% deviation and a single data point of more than 7% deviation causes a zero payment penalty for the service period.

Rebalancing the rebalancing asset

As mentioned above, the service is a one-sided, low frequency response only, which means Arenko is only discharging power. To be available for this service, the asset must always be able to provide 15 minutes of contracted power. The service must be delivered continuously over 24 hours so to stay in for an entire delivery period, assets must manage their state of charge (SOC). The service allows rebalancing power, however these charging schedules must be done in half hour blocks and communicated to the control room at least an hour ahead of time. Initially, Arenko set up a simple automation logic with a target SOC that would automatically schedule the required charge volume if Arenko dropped below a certain SOC. Arenko has now started to optimise this charging based on pricing opportunities in order to minimise the cost of the energy used to deliver the service. Arenko has already seen 1-2% net revenue increase due to this early optimisation. The first weekend in October, Arenko was paid to charge the system by targeting negative price periods for the rebalancing. This is the dream, and a form of stacking. Negative prices are a sign that there is too much power on the grid and a market signal for participants to take power—Arenko is providing two services to the grid at once. As flexible assets, batteries can respond to this signal and support the network. Even whilst delivering a critical service like Dynamic Containment.

Technically difficult but physically easy

Whilst the response, rebalancing and reporting requirements of this service have their technical challenges and their value is inarguable, assets delivering Dynamic Containment are just not used that much! For the majority of the time, grid frequency deviations are low (the system is not in fault) and because of the shape of the Dynamic Containment response curve, the necessary power volumes are low. This means the batteries charge and discharge, or cycle, very little. Since the start of this service delivery Arenko is seeing an average of 0.23 cycles per day. See graph below of how this cycling compares to previous months when Arenko has been active in combinations of other markets. As you can see even compared to the Sept 19 month in pure FFR the cycling is very low and way below the warranty-linked target of 2.2 cycles per day. It is also worth noting that all the cycling is shallow cycling. Here we define shallow cycling as single charge/discharge actions that account for less than a 50% change in SOC: it’s a simple metric that separates the short, sharp power cycling from the more long high power actions that, for the majority of modern battery chemistry causes slightly more ‘wear’ to the battery cells . The battery is designed to do an even split of both types so again this demonstrates how, in terms of cycling, Dynamic Containment is gentle on the battery and importantly how much cycling capacity there is left for the battery to be doing other things.

Graph showing the average daily cycling of a battery asset for months if different markets

It’s an important service that has already proven its worth

Since the start of the service there have already been 3 major system events in which grid frequency rapidly moved to outside the 0.2Hz range. An example of these events, occurring on Friday 3^rd October, is shown in the graph below. The graph shows the grid frequency (pink) and the asset response (green). This frequency deviation was caused by a fault that caused an interconnector with France to drop 1GW of power off the grid instantaneously (3% of the system at that time). The asset delivered a near-perfect sub-second response and helped the ESO stop and reverse the frequency deviation in seconds. In the end, Arenko helped bring the system back to normal within two minutes of the fault.

Graph showing frequency and response power during system event 3rd of October.

Next steps

Arenko is ready to go with the two-way service (up and down) once the market comes online, and the Company are continuously working to bring more assets into the service and optimise delivery. The key next steps for this service from Arenko’s perspective is the vertical stacking of services alongside Dynamic Containment. As mentioned above, batteries in this service are not used much in terms of cycling. Batteries, if designed and controlled correctly, are incredibly valuable assets capable of providing a variety of services at once. Arenko see huge value to the ESO, and thus to the consumer, in facilitating participation of assets providing Dynamic Containment into other existing markets such as the Balancing Mechanism, in addition to future markets such as voltage support and thermal load management. This stacking has compound benefits of diversifying and increasing revenue streams for battery asset owners and in reducing total costs of balancing services for the ESO, ultimately reducing the cost to the end consumer. Arenko is excited to be on the front line of helping shape future, sustainable and low carbon electricity networks.

Arenko, a leading battery software services provider to the global battery automation market, is pleased to announce the appointment of Jacob Monroe as Commercial Director.

Jacob joins Arenko from Advanced Microgrid Solutions, San Francisco, where he held the position of Vice President of Business Development. During his time at Advanced Microgrid Solutions, Jacob led the team that sourced, negotiated, and closed the rights to real estate and electrical load for more than 300MWh of distributed energy storage. That storage formed a virtual power plant that delivered vital electrical capacity to the grid in the wake of a retired local nuclear generating facility. It did so from behind client meters in an agreement with Southern California Edison, provided significant savings to commercial and industrial hosts including Fortune 500 companies and major public agencies, and qualified for State of California incentives. In overseeing business development of the portfolio, Jacob was part of the leadership team that commercialised a ground-breaking new asset class with a $200m project finance vehicle led by the global infrastructure financier Macquarie Capital.

Prior to his four years at Advanced Microgrid Solutions, Jacob led sales and customer service teams selling the Tesla electric vehicle during a period of rapid corporate growth and limited public understanding of EVs and their infrastructure.

Jacob has an Economics Major and German Minor from Willamette University, Oregon, USA.

Rupert Newland, Founder and CEO of Arenko Group, said:

“I am delighted to confirm the hire of Jacob Monroe as Commercial Director for the Group. Jacob brings a wealth of experience with him from his time at Tesla and more recently Advanced Microgrid Solutions. We see the hire of Jacob as a key component for the next stage of growth and we are confident that he will be a great addition to the Arenko Team.”

Arenko Group, a leading battery software services provider to the multi-billion-dollar global battery automation market, is pleased to announce that CEO, Rupert Newland has spoken on the Leaders in Cleantech Podcast with David Hunt.

The link to the podcast can be found here: https://leadersincleantech.com/rupert-newland-arenko-group.

In the podcast, Rupert discusses the evolution of Arenko, the energy transition debate including the evolution of battery energy storage and how he sees the sector evolving over the coming years.

Arenko Group sells development rights on two new 50MW projects to Gresham House Devco (Gresham House).  Arenko has also signed services agreements for the optimisation of these projects.

Arenko, a leading battery software services provider to the global battery automation market, is pleased to announce that, following the sale of its 41MW Bloxwich energy storage project to Gresham House Energy Storage Fund plc (“GRID” or “the Fund”), on 3 July 2020, it has sold development rights relating to two additional 50MW energy storage projects to Gresham House. Gresham House has acquired these projects to add to GRID’s pipeline.

Arenko, using its AI driven, automated software platform will optimise and trade both batteries upon completion, which is expected by Q1 2022. Both projects will be connected directly to National Grid’s transmission system.

Arenko’s software platform is designed to maximise the availability and profitability of battery storage assets to help accelerate the transition towards a fully decarbonized power system. Arenko’s software platform currently manages 41MW of operational assets with capacity to rapidly scale up to service a growing energy storage market driven by the influx of renewable power to the energy market.

Through this transaction, Arenko is expanding its relationship with GRID, the UK’s largest owner and operator of energy storage projects (with a 20-30% market share), whilst continuing its aim to become the partner of choice for battery asset owners across the UK.

Rupert Newland, Founder and CEO of Arenko Group, said:

“We are pleased to have entered into a further service contract for these two new projects that we expect to be owned and operated by GRID, which runs the UK’s largest operational battery storage fund. We are building a business with recurring revenue streams, through long term service contracts. This contract forms part of our ambition to help multiple battery storage owners to fully optimise their asset performance by using our software. We believe our AI software platform is world-leading and we look forward to working with other battery owners as part of the global energy transition story.”

Ben Guest, Fund Manager, Gresham House Energy Storage Fund plc, added:

“We are delighted that Gresham House has acquired these project rights to add significantly to GRID’s pipeline, and that these projects will be optimised by Arenko. These would count as the Fund’s first transmission-connected projects.  We continue to believe that having access to a large, exclusive pipeline (which GRID defines strictly as shovel-ready project rights owned exclusively for the Fund) as a strategic advantage for the Fund as the market burgeons.”

Arenko is pleased to announce the successful completion of the initial stage of its first-of-its-kind battery reserve trial with National Grid ESO. Having announced this innovative trial in May 2020, both parties have agreed to further trials as we move towards unlocking the full potential of batteries as a source of balancing flexibility to the de-carbonised grid of the future.

Headline results:

• National Grid ESO confirm in their statement that batteries offer a cost-effective option for upward and downward reserve
• The trial demonstrated that the Electricity National Control Centre (“ENCC”) can effectively request the availability of sustained upward and downward reserve through existing operational arrangements
• Further trials are planned for July and then September 2020, when a broader number of batteries will be involved

Arenko’s flexible software architecture and automation technology was able to rapidly deliver a reserve service to National Grid ESO which allowed them to use cost effective, digitalised battery technology in a market previously dominated by thermal power plants and Combined Cycle Gas Turbines (“CCGT”). This trial presents a clear path for National Grid ESO to be able to deliver a carbon free system by 2025 and to manage the substantial deployment of renewable energy expected over the coming years without having to unnecessarily switch on polluting, expensive power stations.

A link to the National Grid ESO statement can be found here: https://data.nationalgrideso.com/plans-reports-analysis/covid-19-preparedness-materials/r/trial_review_-_reserve_from_storage_in_the_bm

Arenko and National Grid ESO have agreed to two further extended trials in July and September 2020 to build on the success of this first trial as this service gathers momentum towards being a business as usual option available to ENCC.

National Grid ESO have recently published their System Operability Plans (“SOP”) indicating 1-2GW of ongoing requirement for upward and downward reserve, and this trial represents a major step forward for our software to be able to access additional revenue opportunities for batteries in an important and established market which has previously been inaccessible to batteries.

This is a clear example of how batteries can establish themselves as an integral future technology for balancing the electricity system outside of just the frequency response market.

Rupert Newland, founder and Chief Executive of Arenko said:

“We are delighted that National Grid ESO see such value in the potential and cost effectiveness of using batteries, operated by our software, to deliver upward and downward reserve. This innovative approach is a further example of Arenko creating value for our customers. We look forward to these extended trials and ultimately establishing upward and downward reserve as a core market for our battery customers to generate additional revenue from their batteries.”

National Grid ESO stated:

“National Grid ESO want to thank Arenko for their proposal and working with us on the initial trial, and all other parties who worked with us to access additional flexibility at pace this summer. We believe that short burst trials are a positive way to for the ENCC to learn at pace and support providers looking to enter the market and provide solid foundations for operating carbon free by 2025.”

Arenko Group, a leading battery software services provider to the multi-billion-dollar global battery automation market, is pleased to announce the sale of its 41MW Bloxwich battery asset to Gresham House Energy Storage Fund PLC (“Gresham House”), Great Britain’s largest operational battery storage fund, for a total cash consideration of £20.1 million, with further potential earnout payments.

The Bloxwich project was developed by Arenko and utilises their recognised and leading battery software and controls platform and, post-acquisition, will continue to operate and optimise Bloxwich.  The sale of the Bloxwich battery asset significantly strengthens Arenko’s balance sheet to enable the Company to fund expansion of its software and services platform as it becomes a fully digital business.

Arenko provides an AI driven, highly automated software platform that enables 24hr autonomous operations. The platform maximises the economic value of its clients’ assets by optimising trading across the UK’s physical electricity Balancing Mechanism market, European Power Exchange (“EPEX”) and other ancillary service markets.

Under Arenko ownership, Bloxwich was the first battery to be autonomously traded in the Balancing Mechanism and has significantly outperformed other batteries in that market, which stands testament to Arenko’s innovative software architecture and neural network platform. In mid-May 2020, Bloxwich was used to provide upward and downward reserve flexibility to National Grid in the UK’s first-of-its-kind trial using an energy storage system (‘ESS’). Existing upward and downward reserve services are largely provided by large Combined Cycle Gas Turbines and other thermal generation at a significant financial cost and creating significant carbon dioxide emissions. ESS are an exciting and more cost-effective source of grid flexibility and are likely to be central to the zero-carbon emissions grid of the future.

Arenko believes digitally connected, highly automated battery storage assets are an essential part of the energy transition story, helping provide instantaneous power and frequency support to the grid. The recent COVID-19 crisis has reshaped the UK power network, causing renewable power to meet up to 60% of daily demand* and highlighting the essential role that will be played by battery storage and other flexible assets in the net zero grid of the future. Arenko’s software platform is designed to maximise the availability and profitability of battery storage assets and will help accelerate the transition towards a fully decarbonized power system.

This announcement builds on the statement of 15 June 2020, when Arenko expanded its platform capabilities from the physical balancing mechanism market into the intra-day EPEX market. This new module allows battery asset owners to diversify their revenue streams and increase the ultimate return on investment of their assets without incurring incremental costs.

Arenko looks forward to expanding its long-term service relationship with Gresham House and aims to become the partner of choice for battery asset owners across the UK.

Rupert Newland, Founder and CEO of Arenko Group, said:

“This is a transformational deal for Arenko as it marks our transition from an asset owner to a software service provider. Our ambition is to help multiple battery storage owners to fully optimise their asset performance by using our software. We see batteries and other flexible assets playing a meaningful role in the energy transition and believe intelligent AI software platforms will be a crucial enabler to unlock value from batteries globally. We look forward to working with Gresham House and other battery asset owners to help them maximise the value of their assets in the future.”

Ben Guest, Fund Manager, Gresham House Energy Storage Fund PLC

“We are delighted to have completed this acquisition. Arenko is one of only a handful of innovative and technically-capable operators and optimisers of energy storage systems in the market, as demonstrated by their recent announcements. We look forward to working with them as the market burgeons in Great Britain.”

Arenko Group, a leading battery software services provider to the multi-billion-dollar global battery automation market, is pleased to announce the launch of its European Power Exchange (“EPEX”) trading module. This marks the expansion of its platform capabilities from the physical balancing mechanism market, frequency response and other ancillary services to include the intraday EPEX power trading market.

Arenko’s platform is understood to be the first to provide full autonomous optimisation of a battery’s positioning, seamlessly stacking EPEX and Balancing Mechanism revenue sources to incrementally improve the trading performance from the asset. This new revenue stream adds a significant additional source of cashflows for battery owners in the UK and is the first of several additional services modules that Arenko plans to deploy over the coming year.

With Arenko’s platform being a fully autonomous system, it allows battery asset owners to diversify their revenue streams and increase the ultimate return on investment of their assets without incurring incremental costs whilst operating on a 24/7 basis.

Following a highly successful soft launch on Arenko’s 41MW grid scale battery asset in April 2020, this new module has proven a material value uplift for the battery system and confirmed Arenko’s expectations about deploying the battery’s capacity across multiple markets at the same time, using its sophisticated automation technology. Arenko now intends to roll out this software module and unlock additional value from concurrently delivering these markets for its current and new battery customers.

Over the last 12 months, assets operating through Arenko’s platform have made over double the return of the nearest competitor batteries on a like for like basis in the balancing mechanism as well as delivering frequency response and other ancillary services. Today we announce that we have added intraday EPEX to our fully automated services. This top tier performance is being expanded into more markets for our customers, increasing revenue flexibility and performance for flexibile assets. All of which is enabled by the innovative software architecture and AI that Arenko has developed.

Rupert Newland, Founder and CEO of Arenko Group, said:

“We are pleased to have launched this service, which is the first of several additional services modules that Arenko plans to deploy over the coming year. We will continue to innovate to help battery asset owners maximise their performance and increase their return on investment.”

Arenko Group, a leading battery software services provider to the multi-billion dollar global battery automation market, is pleased to be supporting National Grid by exclusively trialing a new upward and downward reserve flexibility from its 41MW Bloxwich battery asset in a first of its kind trial for batteries.

A link to the National Grid statement can be found here: https://bit.ly/2yXayvv.

Working closely with National Grid, Arenko designed a new software module to complement its existing platform offering to seamlessly adjust Bloxwich’s instruction algorithms to focus on delivering these additional flexibility services when they are needed most.

This innovative service is the first time a battery has been able to augment existing upward and downward reserve services provided to the UK grid from traditional thermal power plants and was made possible by Arenko’s flexible and fully autonomous software platform.

This current period of low demand on the UK grid has offered a window into the UK’s future energy system, where renewable energy will play an increasingly important role in the energy mix, but will also bring new challenges to the way the system is managed. Arenko’s automation software unlocks the potential for batteries to play a leading role in balancing the system and helping National Grid to deliver against its zero carbon target by 2025.

This trial represents a significant step forward for batteries and a further potential commercial opportunity for Arenko’s battery clients to use its software platform to provide this important service to the UK electricity grid. Using batteries controlled by Arenko’s proprietary software, National Grid are not only innovating by using Arenko’s cutting edge automation technology but should also expect to provide greater value for money for the consumers versus traditional generators and balancing techniques.

Arenko are delighted to take part in this trial and, if successfully developed into a business as usual product for National Grid, intend to rapidly scale up the provision of this important balancing service with new customers as it rolls out its proven, industry leading battery automation software.

Rupert Newland, Founder and CEO of Arenko Group, said: 

“This is further evidence of the capabilities of our proprietary automation software to deliver flexible, cost effective, carbon free balancing services to National Grid as well as being a superb opportunity for our new and existing battery owners to access new, additional revenue streams from their batteries.”

Andy Hadland, Chief Product Officer of Arenko Group, said:

“Batteries have a crucial role to help meet the ESO’s Net Zero operability ambition by 2025. We hope to open up new ways for batteries to provide services and competition to the ESO versus current methods using thermal power plants. This should ultimately reduce the cost of balancing the system and provide better value to the end customer.”

We are pleased to have produced an article in cooperation with Ashurst discussing how the recent COVID-19 crisis can actually offer us insights into a more sustainable future in which battery storage plays an integral part in enabling a high renewable energy generation mix. We believe AI software controlled battery storage assets and other dynamically priced smart energy systems like smart EV Charging will enable high renewable energy penetration rates and an accelerated energy transition.

Foreword from Antony Skinner, Global Co-Head of Power & Utilities (EMEA & US):

In a pre-COVID-19 world, the energy transition was at the forefront of the minds and policies of governments, corporates, developers and investors. For the last two months, everyone has been focused on COVID-19 and how to overcome its challenges and mitigate its impact. James Mills, Board Member at Ashurst battery storage client Arenko Group, discusses in this article whether COVID-19 has demonstrated how renewable energy and battery storage can generate a significant proportion of energy supply and could help pave the way to a more sustainable future.

Foreword from Nick Elverston, Global Co-Head of Digital Economy Transactions:

Social distancing and lockdowns have shown us the importance of digital technology and the need to keep it powered. Our clients Arenko are an exciting business, leading the way in the digital transformation from an asset based to a software and platform based business whilst demonstrating how intelligent technology will play a key role in the renewables revolution. We established our Digital Economy team precisely to assist with those transitions.

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Without diminishing the obvious human and economic cost of the COVID-19 crisis, the unprecedented global pandemic also offers a unique opportunity to imagine a more sustainable future. It provides ‘insights’ into sustainability in the broadest sense of the word, across a variety of economic and social spheres. This includes a reappraisal of supply chain robustness, addressing the resilience of excessively leveraged balance sheets and a discussion around the true value of essential workers, after a decade of stagnant wage growth. A broader theme is also the shift in global government policies towards fiscal stimulus as a response to the crisis, which invites an examination of a more sustainable approach towards infrastructure and energy transition spending.

From the perspective of Arenko Group, who provides a market leading software platform for battery storage assets, the crisis offers specific insights into how we can implement and accelerate a more sustainable energy transition in the coming years. Specifically, two central elements of the energy transition are worth examining in this context: the increased penetration of renewable energy generation and the electrification of the transport sector.

Most strikingly, the UK and to a broader extent Europe and the US, have experienced a test at national scale of the ability to cope with higher levels of renewable energy penetration. An immediate impact of the crisis was a significant decline in electricity demand, linked to a dramatic economic contraction. Arenko and market observers estimate this reduced UK power demand by up to 15% in the immediate aftermath of the March lockdown¹. Similar levels of demand destruction occurred across Europe and in specific US power markets such as NYISO and CAISO and intensified through April, albeit with the timing of Easter complicating annual comparisons². In the context of strong wind and solar production, this demand destruction caused renewables to increase their share of overall power generation.

Renewables had already generated a record 36.9% of the UK’s electricity throughout 2019³, but the crisis created conditions in which renewable output peaked at a new record penetration rate of 70% on Sunday 5^th April. This stress test of the UK’s capacity to cope with high renewable penetration rates suggests that National Grid is well positioned to meet its commitment to run the grid on a 100% net zero carbon basis by 2025. With the UK government committed to quadrupling offshore wind to 40 GW of capacity by 2030, in a market that has recently seen off-peak demand fall to 20GW, the outlook for a more environmentally sustainable and ultimately zero carbon generation mix looks increasingly positive.

Two other sustainable generation insights created by the crisis are; increasingly frequent negative short term power prices and a dramatic decline in daily average prices. Since the end of 2019, a couple of negative power price events have occurred in the UK’s physical half hourly balancing market, but the frequency of these events rapidly increased after the lock down. Multiple repeated negative price settlements were experienced, as the system coped with higher levels of intermittent renewable energy and significant changes in demand patterns. This impact was also felt in the day ahead futures markets, which recorded highly unusual negative pricing. These negative prices highlight the difficulties higher renewable penetration can create when stabilising an electricity grid. However, they also signal the role that dynamic pricing will play in incentivising battery storage, demand side management and most importantly, intelligent EV charging. At Arenko, our fully autonomous software platform was able to provide flexibility and rapid charge and discharge instructions during the crisis, to help reduce price volatility and enable higher rates of renewable power generation. This price volatility signals the future revenue potential for battery storage assets and shows EV owners a sustainable, renewable energy future should offer low or even negative priced charging opportunities.

Concerning the broader issue of falling average power prices, the 30% decline in the UK March settled price from a year ago to unusually low levels of £29MWh, was mainly driven by demand destruction⁴. However, it also highlighted a clear long-term trend across global electricity markets, where rising renewable penetration rates have driven down wholesale power prices, due to the collapsing capital costs and zero marginal costs of renewable power. In particular, utility scale solar and wind generation costs now significantly undercut gas power generation and dominated 72% of global power installations in 2019⁵. The crisis thus demonstrates that high renewable energy penetration rates are technically possible and will require dynamically priced demand management and storage solutions. In return, renewable energy will offer consumers structurally lower prices and opportunities to benefit from smart intra-day pricing strategies, whether in residential and industrial heating markets or the transport sector.

It is not only low electricity costs that will drive the electrification of the transport sector, but also the drive to reduce air pollution, especially in urban centres. It is here that the crisis offers a more intangible, if no less powerful insight into a more sustainable future. A key problem with shifting to an electrified transport system is that the current system’s true costs, or environmental externalities, are hidden from consumers, especially the impact of particulate and NOx air pollution. For most people, the physical health costs of air pollution caused by road and airline transportation only emerge gradually over time, but are still often deadly in their ultimate impact. Yet at the same time, this economic health cost is not directly borne by the consumers of polluting road and jet fuel.

Already there is clear evidence of the significant improvements in air quality caused by the crisis, whether the sudden emergence of forgotten Himalayan views in Northern India and the 44% declines in particulate pollution in Delhi, or the reductions in NOx emissions across Northern Italy⁶. Perhaps the most comprehensive data so far has come from San Francisco, where according to local pollution consultants Aclima, an early lockdown produced extraordinary declines of approximately 40% in NOx and black carbon, 30% in fine particulate emissions and 25%-40% decreases in localised CO₂ enhancements⁷. With the global population expected to reach 10bn by 2050, of whom 70% will be living in cities, this crisis has offered us a chance to temporarily experience for ourselves the direct pollution reduction benefits of a switch to a sustainable, fully electrified transport system. This does not diminish the challenges of deploying widespread charging infrastructure or preventing transport electrification from creating unjust affordability issues across society. However, the crisis allows us to step back from our existing hectic levels of urban living and clearly experience the pollution and health benefits of an electrified Energy Transition.

The final element of the crisis worth examining is whether it will accelerate sustainable infrastructure investments by governments and individuals, as fiscal stimulus strategies become more accepted politically. Prior to the crisis, policy makers across the EU and the US had started promoting ‘Green New Deal’ spending policies⁸. With their classical Keynesian deficit spending mentality, these policies ran counter to recent orthodox thinking around budget deficits and austerity economics. However, the crisis has transformed the discussion overnight, with an almost universal acceptance that monetary policy can no longer provide a sufficient stimulus response to the crisis and that massive fiscal stimulus is required. In this context, it seems likely governments will direct much of this fiscal stimulus towards more sustainable infrastructure spending and industry support packages, especially those that create more robust and self-sustaining energy systems.

To a lesser degree this focus on robust and sustainable energy systems may also accelerate at the consumer level. The leading residential solar market of California had already seen a dramatic acceleration in residential battery system installations prior to the crisis. Primarily due to growing wildfire related blackouts, 40% of all new solar systems had residential batteries specified and analysts expected 2020 to show a 400% increase in battery installations⁹. With the crisis accentuating a focus on home working and domestic power resilience, it is likely consumers will accelerate further their domestic renewable generation and storage capabilities and take greater control over the sustainability of their own energy consumption.

In summary, the COVID-19 crisis has given us an insight into how we can transition to a more sustainable, low carbon future and is likely to accelerate the significant investment needed to decarbonise our economy. This will result in high renewable energy penetration rates feeding a less polluting and electrified heating and transport system, and hopefully occur in the context of a broader re-appraisal of how we create a more sustainable future.

Author: James Mills, Board Member, Arenko Group

Full Link: https://www.ashurst.com/en/news-and-insights/insights/arenko-guest-article—the-covid-19-crisis-offers-insights-into-a-more-sustainable-future/

Throughout the COVID-19 situation, our commitment has been to follow all Government advice and to put the safety and wellbeing of our team and our customers first and foremost. We believe this is what a responsible business should do and are committed to doing everything in our power to ensure that this is the case and to support our people to Stay at Home.

Continuity of services provided by Arenko 

Since the 13 March, the Arenko team has been working remotely, apart from essential preventative maintenance on our battery storage asset near Birmingham. Over this period of remotely working Arenko’s fully automated AI software platform has continued to provide important sub-second response flexibility to the electricity market, helping to manage the shift in demand patterns and facilitate the consumption and management of renewable energy across the system in real time.

We are pleased that our software has demonstrated resilience and has proven its automate capabilities even in the highly challenging stress tests environments which we are currently experiencing. Robust, automated software is the global future to allow flexible energy assets to continue operating under even the most difficult conditions.

With COVID-19 changing power demand patterns due to the enforced shutdown of some industries and increased remote working, the past fortnight has seen Arenko’s AI controlled flexible battery storage asset frequently used as an important balancing resource by National Grid’s control room.

We will continue to follow Government advice and respond to this evolving situation. Our software has proven its resilience and we will continue to do the right thing for our customers and our employees as the COVID-19 situation develops.

Rupert Newland

Chief Executive Officer

Arenko Group, a leading battery software services provider to the multi-billion-dollar battery automation market, is pleased to announce that its 41MW/MWh battery located in Birmingham, UK, has completed its first year of operation.

Highlights:

• Battery outperformed closest peer by 65% in the balancing mechanism
• 15GWh export and 19GWh import in the year from 23^rd January 2019.

The battery, which Arenko believes is the largest single-room battery in the world, has demonstrated Arenko’s modular software platform. The battery is a fully merchant battery system optimised across multiple traded and ancillary service markets.

The software platform joined with the battery is the only fully automated system balancing the UK grid.

Rupert Newland, Founder and CEO, said:

“We are delighted to have completed our first full year of operation. The battery has proven that our software platform delivers a market leading performance in its role to fully automate the balancing of the grid. In 2019, the system outperformed the nearest comparable software by 65%. We believe it will enable clients to boost investment returns by maximising revenues and minimising costs.”

Arenko Group, a leading battery software services provider to the multi-billion-dollar battery automation market, is pleased to announce that its Chief Product Officer, Andy Hadland was quoted in National Grid’s business plan for 2021-23.

Andy, who leads Arenko’s vision and strategy for the Company’s software products, said: “National Grid ESO’s processes and systems were designed for human-speed, but these both need to mature to match the speed of new energy technologies”.

In the paper, National Grid sets out why energy technology is the key to their ambitions and is embedded within their organisational strategy. National Grid plan to advance their use and integration of technologies to enable the running of a carbon free network. As part of this, they plan to support access for an even wider range of generation, demand and service providers such as Arenko.

Rupert Newland, CEO and Founder of Arenko, said:

“It is good to see National Grid reference Arenko in their upcoming business plan. We believe our software could be transformational for the efficiency of the UK grid and other grids worldwide.”

On 9^th August 2019, large parts of England and Wales suffered power cuts after a major network failure affecting around 1m people and causing widespread disruption to trains and roads across the UK. The issue was caused by the loss of two generators, one gas and one offshore wind, that connect to the GB transmission system, which led to a fall in the frequency of the electricity system.

Following the event, the National Grid noted that “other generators on the network responded to the loss by increasing their output as expected. However due to the scale of the generation losses this was not sufficient, and to protect the network and ensure restoration to normal operation could be completed as quickly as possible, a backup protection system was triggered which disconnects selected demand across GB.” ¹

During the blackouts, Arenko Group, a leading battery software services provider to the multi-billion-dollar battery automation market, was able to assist by supplying power from its batteries to help balance the Grid. Arenko’s software has a zero minute notice to deliver power, and was therefore one of the first balancing mechanism assets instructed to help. Arenko was issued an instruction at 16:53 to begin discharging 41MW at 16:54 for 6 minutes to help balance the demand for electricity and generate power to flow back into the grid system. Arenko was later issued a 41MW charge instruction at 16:06 to help offset later oncoming generation.

Rupert Newland, Founder and CEO, said:

“We are pleased that our battery software services were able to assist in rapidly supplying power back to the National Grid during the blackouts and help balance the electricity demand that was unable to be met due to the loss of the gas and the offshore wind generators that connect to the transmission system in the UK.

“The rise of renewables on the grid are great for the consumer because they drive down the cost of electricity and they are more sustainable. However, they are much more volatile than fossil fuels as the power they generate is reliant on weather conditions out of our control. If we get better at managing the renewable energy we create, in real time using batteries and battery systems like the one we provide, we will be able to limit the number and impact of these blackouts by ensuring that there is sufficient power on the grid.”

 

For a visual of the sequence of event of Friday 9^th August, please visit the National Grid site below: https://www.nationalgrideso.com/document/151061/download

¹ – https://www.nationalgrideso.com/power-cut-9-august-eso-statement

Arenko Group, a leading battery software services provider to the multi-billion-dollar battery automation market, is pleased to announce the appointment of James Mills, as a Board Observer and Advisor to the Chief Executive of Arenko.

James is an experienced energy investor and Board Member with a history of working in the asset management industry. After working at Mercury Asset Management and Tudor Capital for c.15 years, from 2013-2018, James was a Co-Founder and Managing Partner of SICP, a family office backed specialist energy investment firm focused on private equity opportunities. He is now a Director of private investments and business development at Arosa Capital, a U.S. specialist energy fund.

Quote from Rupert Newland, Chief Executive:

“I am delighted to welcomes James to the Board of Arenko as an independent observer and advisor. James’ experience of investing in companies over two decades and his focus on governance will in invaluable to us in the years ahead.”

 Arenko Group, a leading battery software services provider to the multi-billion-dollar battery automation market, is pleased to announce the launch of its 41MW/MWh battery located in Birmingham, UK.

The battery, which Arenko believes is the largest single-room battery in the world, will be used to demonstrate Arenko’s modular software platform. The battery is a fully merchant battery system optimised across multiple traded and ancillary service markets.

The software platform joined with the battery is the only fully automated system balancing the UK grid.

Rupert Newland, Founder and CEO, said:

“We are delighted to have launched our battery and are excited to demonstrate how our platform can optimise our client’s performance. We believe that our software platform can boost investment returns by maximising revenues and minimising costs. It provides clear insight driven by high definition data to help clients inform decision making and improve performance.”

• Arenko has selected GE to deliver a 41MW battery energy storage system capable of responding quicker and more effectively than traditional energy technologies to meet real time demand of consumers

• The new energy storage system will supply on demand power to approximately 100,000 UK homes and contribute to reducing energy bills for UK households and businesses

• This critical energy infrastructure will provide improved energy efficiency to the local community and the UK grid as a whole

• The system will help manage increasing renewable energy production and meet consumers’ changing energy demands as well as help create a more secure energy network into the future

London, UK – February 5, 2018: GE (NYSE: GE) and Arenko Group (Arenko) are delighted to announce a strategic alliance to build grid scale energy storage systems in the UK.

The companies will seek to leverage the advantages of combining GE’s battery technology solution, power electronics and advanced controls with Arenko’s leadership in operating batteries in the UK market and proprietary energy trading software platform.

Arenko has invested in a 41MW battery energy storage system supplied by GE, who is providing a fully integrated battery storage solution. The project is one of the largest in the UK and globally with the ability to provide affordable, on-demand power to the equivalent of approximately 100,000 UK homes.

This battery storage system is sited at a key strategic location in the Midlands and will commence operations in 2018. Once operational it will integrate GE and Arenko’s advanced control technologies and will be commercially operated though Arenko’s software to digitally deploy energy and access multiple services and system needs. The battery system’s reliability and performance will be underpinned and protected by GE’s long-term support.

The project will relieve pressure on the UK energy system and provide flexibility at times when it is most needed to deliver a more balanced, secure energy system and contribute to reducing the cost of energy to the UK consumer. The focus is on building long term commercial sustainable battery storage systems, which are not reliant on subsidies and incentives.

Changing consumer demands, increasing adoption of renewable energy and security of supply are driving the need for innovative energy networks to deliver a more efficient power system. As traditional centralised generation comes under increasing pressure, energy storage projects such as those announced by Arenko and GE today, will be crucial to maximise generation capacity, ensure efficient energy utilisation and improve the operational efficiency of the grid.

Mirko Molinari, Global Commercial & Marketing Executive, Energy Storage at GE Power commented:

“Energy storage will help balance supply and demand close to real time, avoiding frequency drifts and supporting the mid-term response to grid imbalances. The flexibility it offers smooths the fluctuating nature of renewable energy, provides quick reserves when needed, stores excess energy generation and much more. Energy storage will enable a more efficient system for a more reliable supply of electricity to consumers.

“Arenko are pioneers in the commercialisation of energy storage systems: this collaboration cements two years of working together towards the shared vision of creating a battery storage solution which addresses the ever-changing needs of a modern energy system.”

Rupert Newland, Chief Executive, Arenko Group commented:

Arenko’s new battery system will provide much needed flexibility to the UK grid, reducing waste and helping to make energy bills cheaper for households and businesses. This project is very significant in addressing the UK’s long-term energy security concerns, enabling the transition to a low carbon energy future.

“As a leading owner and operator of grid scale battery systems in the UK, we are delighted to have established this strategic alliance with GE to deliver large scale battery energy storage projects. We share the same focus and commitment to the sector and we have been very impressed by GE’s world class technology and project delivery of energy storage systems across the globe.

“This is a demonstration of Arenko’s strategy to partner with top tier corporates to make a major, positive and sustainable impact on the energy sector. We are focussed on addressing this complex but exciting commercial opportunity and helping to build the future of the UK’s energy system.”

GE has invested in Grid Scale Battery Storage technology since 2010. Arenko was established in 2014 to provide large scale energy storage solutions and selected GE, who has a strong reputation of reliability from a repeatable and well referenced design. This first project with Arenko will be GE’s 19th and largest grid scale commercial Battery Energy Storage Solution worldwide.