Along with energy experts from across Imperial College London (and other academic institutions) we also like to have people from industry come in and talk at our weekly energy seminars. Earlier today we had Dr Graham Oakes of Upside Energy discussing open innovation and his company’s Virtual Energy Store. You can also download a copy of his slides [PDF].

How many times a day do you hit a power switch?  Lights on.  Lights off.  Boil the kettle.  Switch on the TV.  Dozens?  Hundreds?

Every time you hit a switch, somewhere a power station has to respond.  It ramps up a little to deliver the extra 12 Watts your lights need; ramps down a little when the kettle finishes boiling and switches itself off.  Dozens, hundreds of times every day.  Just for you.

With tens of millions of people across the UK, that’s an awful lot of ramping up and down.  Of course, often our actions cancel each other out.  I turn on the lights just as you turn off the TV.  But there are still a lot of residual fluctuations in our demand.

Power stations are just like any engine.  They like to get to a steady speed and stick there.  Ramping up and down is inefficient.  It burns more fuel.  It costs more.  Just like driving a car – if you want to drive economically, you drive smoothly, not with constant fluctuations in speed.  If we could smooth out our demand, we’d eliminate both costs and emissions.

And renewable generation doesn’t help at all.  The sun doesn’t shine more brightly just because you’ve turned the kettle on.  The wind won’t die down when you turn the TV off.  As we bring more renewable generation onto the grid, we have fewer and fewer power stations capable of ramping up and down on demand.  So those power stations have to ramp up and down more.

We really need to find a way to smooth out those fluctuations in demand.

We could try to coordinate ourselves.  I’ll call my neighbours and see who wants to switch the lights off just as I’m turning mine on.  But I don’t think that will work.  We need to find some way to automate this.

That’s where distributed energy storage comes in.  If we all had batteries in our homes and offices, then those batteries could smooth the demand.  When you hit a switch, you’d get the energy you need from a local battery.  With intelligent management, it could then smooth demand on the grid – recharging when demand is low, discharging when demand is high.  Batteries are good at this.  They’re not mechanical, so they don’t mind ramping up and down.

There’s a bit of a trade-off here.  Batteries incur efficiency losses as they charge and discharge.  So that management really does need to be intelligent.  If we use the battery too much, we cancel out all the benefits of smoothing demand on the grid.

That’s what Upside Energy is doing.  We’re building a cloud platform that can integrate tens and hundreds of thousands of small batteries in people’s homes and offices, and coordinate them to smooth the flow of energy across the grid.

That orchestrates them into what we’ve called our Virtual Energy Store.  To the grid, it looks like a single large battery absorbing some of the fluctuations in demand and creating the flexibility necessary to integrate higher proportions of renewable generation.

This is really valuable.  The grid pays good money for such smoothing.  So to the house or office, we’re creating a way to earn a share of this money.  We turn their batteries into moneyboxes.

Doing this requires a couple things to make it work.  First, we need the batteries.  The core innovation behind Upside was the realisation that there are thousands of batteries or similar energy stores out there already – in backup power supplies, electric vehicles, hot water tanks and so on.  And with access to that money from the grid, we make it economic for people to buy even more batteries.

Second, we need the intelligent algorithms to coordinate all those batteries.  That’s why we’ve defined our unique open innovation model.   We’re developing a way to work with researchers to access our data and hence define new algorithms for managing the virtual energy store, and hence to share in the benefits.

Those benefits are huge.  With intelligent use of batteries, we can reduce the cost of energy in the UK by billions of pounds.  We can eliminate millions of tonnes of greenhouse gases.  And you can go on hitting the switch, knowing that the energy system will just work as you need it to.