203 - The Electrification Benefits Episode

Gary C 0:00

Hi, I'm Gary, and this is episode 203 if EV Musings, a podcast about renewables, electric vehicles, the things that are interesting to electric vehicle owners. On the show today we'll be looking at the unseen benefits of electrification.

.: 0048

Our main topic of discussion today is electrification. More specifically, the benefits, often unseen or unheralded, that come along with going electric with your car or van. You can leverage cheap overnight electricity tariffs. This means that you can put your heat pump heat up overnight if you have a heat pump, and dry clothes without needing a dryer. Or is that just me. You can also leverage energy saving sessions otherwise known as demand management, which is something that you just can't do with gas. Now on the topic of gas, my mother is with British Gas for her sins for her electricity. Now I've tried to get her to move across but the perceived pain of movement outweighs the benefit despite the fact she complains about them regularly. On Sundays, she gets something like four hours of electricity at half price under a specific British Gas scheme. This isn't connected with any other published National Grid demand reduction scheme. But she uses it to do a week's washing and tumble drying, as well as putting her dishwasher on. Now I want to talk a little bit more about the saver sessions because they do offer a great opportunity for those of us who can take advantage of them with things like demand reduction, batteries and solar panels. Now I recognise this isn't everyone. But it's always worth being aware of these things, as it then becomes an incentive to try and move forward with them as and when you move over to an electric vehicle. If I was to go through what our American friends would call energy 101 It will go something like this. We need a minimum amount of power to keep the lights and heating on as a country and this is called the baseload. Now on top of that is a variable amount of energy which will depend on what is being called upon at any particular moment in time. In summer, if people have air conditioning units running, this will put a high demand on the grid. In the evening when people come home from work, take a power shower, put the oven and the TV on and cook dinner. That creates a high demand. The demand is met by a combination of all the sources of power that the national grid can provide. In some cases, this is renewables it might be nuclear, it might be energy that we imported from Europe along interconnectors, which had been installed. Wherever possible National Grid tries to minimise the amount of energy that's produced by burning coal, or methane, the real name for natural gas and for the rest of this discussion, I'll refer to it as me saying, as the UK has virtually phased out coal from the mix, it is essentially only me saying we're talking about when we refer to fossil fuel generation. But what we have is two moving targets to try and meet, we have the variable demand that occurs when weather changes. And when people's habits change, I switching from work mode to evening mode. And we also have variable supply, which is related to how much renewable energy is available, how much nuclear is available, and how much methane is needed. Now as a general rule of thumb, when two evenings between 4pm and seven 7pm. Our peak demand times people want their homes to be warm, they didn't need to be cooked in their water to be hot for washing. That's often also the time when solar power is low. And when wind energy can be low. Although it has to be said that recently, the big storms we've been having here in the UK have increased the amount of renewable wind, wind energy we're generating to such a point that it's accounting for over 50% of all energy production at times. Also, despite the popularity among certain segments of the energy community, nuclear power isn't dispatchable a you can't turn it up and down instantly to cope with demand. Yes, you can can vary the power output from a nuclear plant, but it takes time and money, and usually has to be scheduled in advance. So to make up for the shortfall, the grid calls upon what it's referred to as peaker plants. These are power stations fueled by me saying which burn, create steam, turn generate a turbines and produce electricity. Fun fact, all power generation via fossil fuels produce the turbines that spin at 50 hertz, which is why our UK power system is at 50 hertz, nothing more, nothing less. If you were to graph this demand, you will see the demand for energy peaking between about 4pm and 7pm. During the night when people see it generally off, nobody's cooking and the lights are out, the demand drops to a daily low. Now, wouldn't it be great if we could take some of the demand that occurs around the peak time and shift it to take place overnight when the demand is lower, and capacity is higher? Well, that's the theory behind saver sessions on what the saver sessions are meant to do is to encourage people to reduce the amount of energy they are using during the peak times and shift it to later points of the day. When these moves are successful, the graph of energy demand between 4pm and 7pm will change. And in many instances, the need to use fossil fuel methane peaker plants will disappear. This means renewables, nuclear and interconnects can provide the energy needed. As a result, the grid doesn't need to price electricity based on the marginal price of that last kilowatt hour of production, a me saying and the whole grid becomes a cleaner and be cheaper. Now, to incentivize people to do this, the grid have decided to pay people for energy saved at these times. There are numerous ways that this can occur. And one of these is through demand management sessions or saver sessions, as they're known. Other ways are by incentivizing customers to charge their cars at different times of the day, for example. Now, this can be a tedious process to check your charge and match it against the grid demands and determine whether it's appropriate for you to do that or not. Luckily, you don't have to do that.

Karl Bach 7:16

So what we do is we connect electric vehicles, batteries and other assets like heat pumps and electric heat enter to flexibility markets. So we take advantage of the flexibility potential of these assets to help decarbonize the grid.

Gary C 7:31

That's Karl Bach.

Karl Bach 7:33

So I'm Karl Bach. I'm the co founder and CEO of axial energy.

Gary C 7:37

So Karl, would you call yourself an energy company or software company?

Karl Bach 7:42

software company,

Gary C 7:42

The principle is very simple, the grid can send signals out to various entities like Xcel Energy, telling them that either there's not enough grid power, or there's too much grid power. And these entities can take those signals, and control different aspects of the power usage. There's many ways to look at this, you will have heard the old adage, the sun doesn't always shine and the wind doesn't always blow. So we can't really rely that much on renewables.

Karl Bach 8:06

First of all, there is some broad truth and I said the electricity grid needs to stay in balance every second of every minute of every day of the year. And today, we're predominantly reliant on fossil fuels on gas power plants that can get ramped up and down to make sure that our electricity supply meets electricity demand in real time. As we decarbonize the grid, that becomes harder, because we can't control when the sun shines and the wind blows. And it does mean that the costs and complexity of keeping the electricity grid imbalance is rising in lockstep. At the same time, we do have this wave of electrification that I've talked about, such as these other assets. And the nice thing about that is those assets can be used to help manage those issues. So for smart about how and when we charge EVs, we can make sure that we charge EVs when the sun is shining or when the winds blowing. So today in Scotland, we throw away plenty of wind power that we don't have the capacity to move to where electricity is most needed. And EV drivers are getting paid today to soak up that extra wind power by charging their car when that's available. So broadly speaking, this is a real challenge, but we do have the tools available to solve it and to create a low cost reliable decarbonized grid.

Gary C 9:30

th of January: 2024

Karl Bach: 10:07

So we're not currently working directly with octopus. So in that sense, you could say that they're a competitor because they offer something relatively similar to their customers. As the octopus approaches, at the end of the day, they're an energy supplier. And they think of the world through tariffs, and they'll offer the octopus go or intelligent octopus go tariff. And if you want everything bundled up in a tariff, that's great. Of course, there's a trade off there. So getting cheaper charging overnight means that your electricity will be more expensive than the other hours of the day. For some people, that works well for others, they prefer to stay on their existing tarrif and receive the benefits of EV flexibility, as additional revenue, as cash sent to their bank account each month.

Gary C: 10:50

Extra revenue. Sounds great, right? So how does that work, Carl?

Karl Bach: 10:54

So let's say you have a Podpoint charger in your home and Podpoint is one of our clients. So Podpoint may tell you that based on where you live, there's a local constraint on that grid, and that your Podpoint charger can help you manage those local constraints, and you'll get paid for that participation. So you'll see an offering maybe by email from Podpoint or in the Podpoint app, you'll say, Yes, that sounds great. Sign me up, you'll click a button. And all work great. For the most part, you know, you'll see some updates in your app, but you probably won't notice what else is happening. And behind the scenes, we'll be working with Podpoint to make sure that your EV charger is is helping and not covered in news local constraints on the grid

Gary C: 11:39

Here's the fundamental difference between Axle Energy and someone like Octopus Energy. With Octopus, they are the 800lb gorilla in the room, you work with them, you use their software and processes and you pay their tariffs. With Axle Energy. They're an additional layer of software between the grid and the charge point,

Karl Bach: 11:58

we sit behind the scenes. So we're a service provider for our partners. And in some cases, they want this this whole offering to be branded as their own. So in many cases, we don't disclose who we work with. So we're we're one of the largest providers of EDI flexibility in the UK today. So if you see an offering from your Evie, charger, manufacturer, those there's a very good chance it's us behind the scenes.

Gary C: 12:25

What this means is that if you want to use Axle Energy to help save you money, you can't. They don't appear as a service you can purchase as an end customer.

Karl Bach: 12:34

Today, you'll need to go to your your EV, charger, your battery, etc. Go into the app and see if there's any offering for flexibility. If there's not send them an email, give them a call and ask why can't I use my my EV charger to help the grid? We're rolling out quickly. So we expect this will be available to pretty much everyone quite soon. But of course, this is something that's still quite early. So we're working as hard as we can to make sure it's it's available and make sure that everyone's able to benefit from it.

Gary C: 13:10

Presumably all you need from a hardware point of view is a smart meter and a compatible EV charger and/or batteries. Is that correct? or is there other requirements that you need?

Karl Bach: 13:21

No that's correct.

Gary C: 13:22

Yep I mentioned batteries. They're Axle Energy and not just connected with smart chargers. They do batteries as well.

Karl Bach: 13:28

I can give give one example here. So we work with give energy, which is the largest residential battery company in the UK, they also sell me the charger. We participate in the demand flexibility service and lots of other programmes of energy. That's what Octopus brand is saving sessions. And we had paid out well over 100,000 pounds directly to battery owners by the end of December and that number is continuing to rise. And then just to put that in context that programme started in the summer

Gary C: 13:59

So there's money to be made there. But how big is the market?

Karl Bach: 14:03

Yeah, so today we're participating in markets with about 12,000 customers to 12,000 households and businesses. We also support commercial as well. The rated capacity is about 65 megawatts. So flexibility across its customers, the, and of course what you're actually participating in at any given time varies based on the demands of the specific household and etc, etc.

Gary C: 14:31

As I sit and think about this, it occurs to me that there's going to be those people out there who will think "I can get a save a session via my Octopus energy account. Plus, I can leverage the Axle Energy integration via the particular charger I have'. How can you stop people gaming the system this way?

Karl Bach: 14:48

That's a very good question and something that happens all the time. The short answer is there's a central registry, so we'll need to register that meter number or a given property that has an EV charger or battery whenever else. And there is a clear rule that that meter can only participate in one programme. And if that meter is participating and octopuses programme, they can't participate with us. And vice versa.

Gary C: 15:13

If I put my economics hat on, I'm thinking, well hang on, you've got an extra layer in there. So you're obviously going to need some to make some money from this. So what's the incentive for companies like Podpoint to do this and get you involved, rather than doing it themselves?

Karl Bach: 15:28

There's a couple of reasons. So first of all, most of these flexibility markets, which is what we're participating on behind the scenes were designed for large fossil fuel power stations. And one of the implications of that is it tends to mean that you need quite a bit of volume to participate in those markets, there's something like one megawatt, perhaps in a region of the country to actually participate. And many of our clients don't necessarily have the volume themselves to do so. The other bed is, if you think about what these companies are good at, if you're making EV chargers, your focus is make the best hardware for the most competitive. And that's what you're, you're working on. And that's where you want to win. That's a bit different from building the software and technical integrations into a number of energy supplies. So there's also a question of specialisation, where we can build that back end infrastructure. And because we're able to provide this to many providers, we can do it at a at a relatively low cost, that they're able to participate in markets without going through the development work themselves.

Gary C: 16:35

As we've already discussed, Axle Energy also worked with some of the top battery manufacturers to ensure they can leverage the benefits of home storage during the demand management.

Karl Bach: 16:44

Exactly. But let's say we're connected to your battery, that typically means we get a data feed from your inverter. And what we can see based on both the inverter and what's happening at the overall home level is the power curve from from the different aspects in your home. And of course, the heat pump has a specific curve and the charger has a specific energy curve. And so when we're thinking about how to best optimise that battery to lead to the best results, or that individual household, we're taking that into account, so that you're still able to use your solar to charge your battery, which is then able to charge your EV once you plug it in later on.

Gary C: 17:24

So, Karl, what's your business model? How are you, Axle Energy, making money out of this?

Karl Bach: 17:30

So the short answer is we'll participate in these markets by taking 10s of 1000s of EVs, batteries, etc, figuring out what flexibility they have, and bidding those in the market will take a cut of the payment we receive for participating in the market. So then the rest will get passed on to to our partners and ultimately, the EV drivers.

Gary C: 17:54

So if I was an end customer looking at this, there'd be a couple of questions that would have. well, not me specifically because I think I know the answer is because of the area I work in. But if I was somebody who was fairly new to this, I'd be thinking, well, how good is this for my battery, because you're maybe taking energy out, you're maybe putting it in, this is going to degrade it over time. And the other aspect is going to be well, I want to make sure that when I wake up in the morning, I have 80% in my battery. And I can guarantee that, can I. So how would you address those questions?

Karl Bach: 18:28

Let's start with the first question. So the vast majority of people who have an EV today are not exporting energy back to the grid as you go. So what we're doing is we're not charging the EV anymore, we're just being smart about how and when we charge. So, so that's not putting any additional strain on the battery or on the car. And of course the car will always be charged in the morning when it's needed as as the default. That the other thing I'd say there is that the EV driver always maintains control. So a common pattern is we might pause charging during the evening, when the grid is constrained, say, from five to 6pm. If somebody needs their car to charge from five to 6pm, they can go into their app or speculator their charger and press charge now and their car will charge now. So they don't lose the ability to charge their car if they need it. It will still be charged more than we're just adding some smarts to how and when to do so.

Gary C: 19:29

And when people talk about demand management, primarily they're thinking about high power demand and low supply such as in winter when everybody's heating the house, et cetera, et cetera. But the other aspect of this is when we've got high supply and low demand, such as hot days in summer where people don't have any heating on, their cars might be full, they might have solar coming in off the roof. Is there any aspect of that with which you work?

Karl Bach: 19:56

Of course. So there are broadly two ways is to look at EV flexibility there is turn down and turn up. So turn down is pausing charging when there is is a constraint on the grid, there's there's not enough supply to meet demand. Turn up. This is the opposite, which is what you're saying, which is there is too much supply to meet to meet or it is exceeding demand at that point in time. So in that case, you can get paid to to charge your car at that specific time. So I mentioned we're already seeing that in Scotland today from wind power. And that's because this wind power otherwise gets curtailed, which is literally thrown away. So these typically offshore wind farms are getting paid to just let the wind disappear into the ether instead of produce power. And if you think about an EV perspective, in many cases, that happens overnight when the wind farms are chugging along at full capacity, but demand for electricity is quite low. That's a great time to charge an EV. So of course, that's a win win.

Gary C: 21:04

We all like Win Win situations, don't we? Many thanks to Karl Bach for chatting with us. Now, as Karl said, they do work directly with the customers so you can't sign up to use their services. But you can sign up to charger operators who use their services and get paid for letting them manage your charger and battery, which is always nice. This season we're looking at raising the awareness of carbon literacy with our listeners. One way we're doing that is with a carbon factor as rode by carbon literacy trainer, Anne Snelson.

Anne Snelson: 21:34

Flying is one of the most climate change inducing things we do. So if you can cut your flights please do. You may have heard about sustainable aviation fuel. But if we want to keep flying at the rate we're doing we'd have to transfer half the UK is agricultural lands to crops are flying. And then what an earth would we eat?

Gary C: 21:53

It's time for a cool EV or renewable thing share with our listeners. You'll no doubt be aware that the range of public charge of pricing coupled with the propensity for CPOs to arbitrarily up their prices, often without telling anyone means that it can be difficult to know who charges what for public EV charging. Well puzzle no more. Although podcast sponsors Zapmap provide stats showing average pricing across all charge point operators. If you want specific up-to-date pricing for any charge point operator, I recommend you check out a site called chargenet. Although the website itself looks like something from the GeoCity's web design area, garish colour schemes, lots of text with bold neon background, and a general lack of a clear definable user interface, it does have some great information on there. If you can find a link to it, there's a page that shows the price per kilowatt hour for all the major charge point operators in the UK. It also shows the contactless payment pre authorization amount, and where appropriate, the maximum charge speed of the chargers. The beauty is in the colour coding of the information though. You can see at a glance where the specific network operator sits in the big scheme of things when it comes to pricing. CPUs with a red colour are expensive, Amber - moderate, and green - cheap. Well quote unquote cheap it's relative to the rest of the operators. It's a great little site to access for charge your pricing information

And that's the show for today. I hope you enjoyed listening to it. If you want to contact me I can be emailed at info at ev musings.com. I'm also on Twitter Musings EV. If you want to support the podcast and the newsletter, please consider contributing to becoming an even using patron. The links in the show notes. Don't want to sign up for something on a monthly basis. Well if you've enjoyed this particular episode, why not buy me a coffee? Go to Ko-fi.com/evmusings and you can do just that KO dash FI .com/evmusings example pay to have a couple of ebooks out there she wants something to read on your Kindle. So you've gone electric is available on Amazon worldwide a measly sum of 99p or equivalent and it's a great little introduction to living with an electric car. If you're looking for installing solar panels storage battery and heat pump try so you've gone renewable also available on Amazon for the same 99p and if you've got Amazon Prime and you can use the Kindle lending library, you can read them for nothing. Why not check them both out. Links for everything we've talked about in the podcast today are in the description. If you enjoyed this podcast, please subscribe it's available on iTunes or wherever you get your podcasts. Please leave a review. It helps raise our visibility and extend our reach in search engines if you've reached this part of the podcast and are still listening thank you. Why not? Let me know you've got to this point by tweeting at MusingsEV with the words 'power at the axle man'. Hashtag ifyouknowyouknow nothing else. Thanks as always, to my co founder Simon, you know, he's building up quite an inventory of different personal electric vehicles. He's had the electric skateboard, the electric, one wheel, several electric unicycles. And I always wonder how he manages to ensure that he knows which ones which how much it's worth, and whether he should sell or upgrade. It can't be easy, right?

Karl Bach: 25:20

The short answer is there's a central registry.

Gary C: 25:22

Thanks for listening. Bye