Go behind the scenes of our Equinox trial for heat pump owners
Our flexibility team work on amazingly geeky stuff to help automate and optimise energy use in the future green energy system. Today, I want to take you behind the scenes of some of their trials.
They're not looking for new participants at the moment – so this blog is one for the energy nerds out there who might be interested in what our flexperts are up to.
It’s called EQUINOX, it's for customers with heat pumps, and it's designed to unleash the very greenest home heating - saving customers cash in the process.
To pull it off, the crack-squad of ‘flexperts’ from Octopus’ Flexibility Team are joining forces with Western Power Distribution DNO (a network operator, responsible for pumping electricity down the wires to your homes). Together, they’re unlocking the ‘flexibility’ we need to streamline the electrification of heat, and bringing the benefits - lower energy bills and a greener grid - to people like you and me.
In 2020, home heating (largely dirty gas boilers) were responsible for an eye-watering 19% of the UK’s total carbon emissions. And as you might expect, reducing our dependence on gas is vital for hitting the UK’s Net Zero targets, and it couldn’t be more important as gas prices go through the roof. Fortunately, there's already a tried and tested alternative solution: heat pumps.
These clever devices are green, reliable, and incredibly energy-efficient – and we're investing millions to bring affordable heat pumps into homes up and down the UK.
Electrifying heating will take a huge amount of carbon out of the atmosphere, and it’s exciting to see heat pumps overcoming challenges left right and centre: they’re getting cheaper to build, install, manufacture, and are easily capable of heating the home to the same temperatures as gas boilers.
Still, all these heat pumps will need power, so Octopus’ Flex team are also working out how to address the resulting rise in electricity demand. With that in mind, we’ll need to unlock more flexibility on the grid, and via EQUINOX (the Equitable Novel Flexibility Exchange), Octopus’ flexperts will be rewarding customers for getting involved. They'll make sure the trial reaches a broad cross-section of energy users so we can better understand how flexibility benefits a wide range of homes. They’ll also be committed to ensuring vulnerable customers and those experiencing fuel poverty can benefit too.
So what do we mean by 'energy flexibility’?
To give a bit of background, our electrical grid must always be well balanced. Energy supply (ie all the electrons generators produce) and energy demand (what everyone in the UK uses) must always match up to avoid power cuts or damage to grid infrastructure. To function healthily, the grid must be flexible, able to ‘turn up’ and ‘turn down’ supply and demand to ensure they always match up. That wiggle room means the grid can adapt easily when either supply or demand changes unexpectedly.
- One path to energy flexibility involves adjusting energy supply; turning energy generation ‘up’ or ‘down’ in line with demand. For years this has meant turning dirty fossil fuel generating stations on when the country begins to use more energy. But as we leave fossil fuels behind, this increasingly means calling on batteries and other energy storage devices to release any clean, green energy they’ve been holding on to.
- But in a world powered by renewables, we also need to flip flexibility on its head; we can't just make the sun shine or the wind blow whenever we want. We can unlock huge amounts of flexibility by encouraging people to adjust their energy usage in a way that lines up with the availability of green electrons. This is consumer flexibility.
This people-powered flexibility might involve rewarding customers with cheaper power for using energy when the grid is chock full of cheaper, greener renewables, and disincentivising energy use when energy is in high demand, the grid is stressed, and there is a risk that the UK will have to turn on more fossil fuel power stations to meet that demand. (This happens more often during the troublesome ‘daily peak’ - between 4-7pm, when the sun is low, and demand is high).
In the past, it was assumed that individual people's flexibility wouldn't make much of a difference to the wider grid. Yet a wide range trials have shown that collective smart energy use can make a MASSIVE difference. For example, Octopus' Crowdflex trial used smart tariffs test the potential for home-energy flexibility and found that ordinary people could reduce the grid's peak demand by a massive 10%. This is exactly what EQUINOX hopes to explore with regards to heat pumps.
Lessons from CrowdFlex: the UK's largest domestic ‘demand-side’ flexibility study: technical level 🌶️
Octopus will be drawing on the lessons from another similar trial: ‘Crowdflex’. Crowdflex revolved around using cutting edge smart tariffs like Agile Octopus and Octopus Go to explore the (huge) potential for unlocking home energy flexibility - as EQUINOX looks to do with heat pumps.
CrowdFlex was the first phase of a study investigating how households can help balance the grid by shifting their electricity demand to match renewable energy supply. In partnership with smart charging platform Ohme, Octopus worked with National Grid ESO and Scottish & Southern Electricity Networks (SSEN) to analyse over 25,000 households' energy consumption patterns from 2020 onwards, providing insight about the ways behaviour can be influenced by price signals and quantify the value of flexibility available.
Households were incentivised to shift their energy consumption through price signals from our Agile and Go smart tariffs (prices change every half an hour according to the price of wholesale energy, offering cheaper energy when renewables are more abundant). They were also given instructions from Ohme's smart EV chargers and mobile app. Big Turn Up and Big Turn Down events were run to gather data on participation rates and behaviour patterns, and they also looked at these smart tariff customers' historical consumption patterns - aggregating and anonymising results - to see what insights could be drawn.
The results were incredibly powerful: the data shows that households are responsive to price signals through time-of-use tariffs and that domestic consumers can play an important role in grid balancing services. They also showed that EVs will be one of the largest contributors to people-powered flexibility.
Octopus used the results to estimate the technical potential of the home energy flexibility that households may be able to provide the system across Great Britain (GB) in 2030.
Customers on Octopus Energy’s time-of-use electricity tariffs (Octopus Go and Agile Octopus) lowered their usage during the evening peak by 15-17%. Households with electric cars slashed their usage even further, reducing demand in the same timeframe by 23%.
Over the coming decade, EV uptake in the UK is predicated to soar. In a 'High EV uptake scenario', Octopus found that consumer flexibility could reduce ‘peak demand’ by up to 10% (6.8GW), suggesting a 37GW demand turn up flexibility potential.
With that in mind, we also need to factor in the growth in electricity demand from heat pumps, and look at how that demand could be addressed by domestic flexibility...
So where does EQUINOX come in?
Given that electrifying heating is set to increase energy demand, EQUINOX aims to offset that rise in energy use by laying the foundations for a more ‘flexible’ energy system. Such a system would incentivise, encourage and enable people to ‘shift’ their heat-pump usage in a way that grants the grid additional flexibility.
In other words, EQUINOX customers will save a ton of cash if they can avoid powering their heat pumps when energy is high demand, which is usually during the troublesome 4-7pm ‘daily peak’ (when renewable electrons are generally harder to come by, energy is more expensive, and the grid comes under more strain).
Now, at a glance, shifting your heating might seem inconvenient, but because of the way heat pumps work it couldn’t be easier. Where combi boilers are designed to be reactive (you say ‘heating on’ and the boiler will burn loads of dirty fossil fuels at several hundred degrees to heat your water up right then and there), heat pumps warm your water - and so your home - gently, for longer, and much, much more efficiently.
In fact, the longer and more gently your heat pump warms your house, the more efficient (and cheap) it is to do so. This means that in winter, you can start heating your home several hours before you arrive home. This is exactly what EQUINOX will encourage people to do, rewarding them for shifting electric heating to times when energy demand is lower (again, usually outside the daily 4-7pm ‘peak’).
At a time when gas prices are high, trials like EQUINOX could not be more important. On one level, switching to electric heating will obviously reduce our reliance on gas as we ditch gas boilers. But that’s not all. When electricity is in high demand and renewables are scarce, the National Grid generally has to turn to expensive gas generators.
By shifting heat-pump usage away from high demand - customers will reduce their contribution to troublesome peaks and in doing so, the need to turn on as much gas power. This should help customers, and the grid, save vital cash at a time when gas prices are through the roof.
Home energy flexibility’s potential to reduce strain on the electricity grid is also set to remove the need for expensive network upgrades. As it stands, customer-driven flexibility, as pioneered by the EQUINOX trial, could save the UK £8bn a year according to the National Infrastructure Commission.
How will EQUINOX work?
Octopus’ Flexibility team is developing several different incentives, along with the tech that will enable customers to shift their energy usage in a way that helps unlock flexibility (and lowers bills). EQUINOX will offer three ways you can actively participate in (and benefit from) getting involved:
- Save in advance: where the energy supplier (and the customer) are paid upfront for shifting a certain amount of their energy usage outside of peak times, affording the grid a fixed level of flexibility
- Save as you go: where the energy supplier (and the customer) can adjust their ‘flexibility offer’ based on the price of wholesale energy (energy prices will be higher when demand is higher and the grid is generally full of dirtier energy). This method gives consumers more control, and aims to unlock a varying degree of flexibility from sources that are not 100% ‘firm’ or reliable.
- Save in advance & boost as you go: this option combines aspects of both previous methods, making use of upfront flexibility payments and dynamic price signals.
Each method will give us hugely valuable insight into consumer behaviour, and the potential for incentivising flexibility. They will be trialed over the next three years, beginning in March 2022 and finishing in December 2025. EQUINOX plans to enroll participants by 2023, at least half of which will be Octopus Energy customers.
Laying the blueprint for a greener energy system:
Octopus is committed to bringing the benefits of the green revolution to people like you and me. From the Windy Day Fund to the Big Dirty Turn Down, EQUINOX is only the latest in a series of cutting-edge Octopus trials, designed to reward people for getting involved in the quest for a smarter, greener, fairer energy system. At a time when energy is already expensive, trials like this - which reduce our dependence on dirty, expensive gas - couldn’t be more important. Watch this space.
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