Solar and wind may be the cheapest forms of energy today, but they do create a lot of headaches for grid operators. Thomas Folker, co-founder and CEO of LEAP Energy, spoke to Clean Power Hour host Tim Montague about how his company works as a player in the middle. They take on a lot of coordination challenges for their customers, while delivering revenue benefits.
A "virtual power plant" that connects electric vehicles, solar storage, battery and smart thermostat companies to the grid, Thomas says LEAP has the tools to integrate with the market, "and actually turn a pretty sizable revenue" for these companies' customers.
"We are leaving money on the table that would normally go to power plants and you can distribute this to your customer . . . it makes the investment in an upgrade in energy efficiency or in a new water heater, for instance, really attractive," according to Thomas.
"One big tool in the toolbox of grid operators nowadays is something we call demand flexibility," a subset of which is what we know as demand response, the reduction of demand based on a price or price incentive.
"So instead of trying to meet increased demand . . . with increased supply, by firing up a power plant, you can also meet that with decreased demand, or demand response," explains Thomas, and also energy from virtual power plants . . . "So there needs to be a player in the middle that coordinates it all. And that's what we provide."
How does it work?
To the grid, it doesn't really matter if supply and demand meet, because increased demand is met by increased supply or generation, and you reduce demand somewhere else in the grid.
"Say my data center uses a megawatt, and I reduce it by 50%. Now, I only use 500 kilowatts, that is 500 kilowatts worth of power that the market will pay you for. But there's also data centers with batteries on site. So you can also decide, okay, I'm producing 500 kilowatts, but I'm discharging my battery for the next 500 kilowatts. So to the grid that looks like I'm using no power at all . . . that's worth a megawatt."
When that data center, for example, is connected to LEAP software, "they tell us on an hourly basis how much availability they have to either reduce their demand or sell energy to us," he explains. "We don't coordinate all those bits together and put in the wholesale market, competing with other power plants for the same price."
How does LEAP save money?
"It could well be that the market needs 20 gigawatts, and the supply is 22 gigawatts. The last two gigawatts will not be called upon, because those are the highest priced," says Thomas. "We're somewhere in the middle, cheaper than traditional power plants, because we don't have any fuel to burn or any upkeep.
"And really to the grid operator, we look like any other power plants. We compete just with traditional 'peaker plants' as we call them. So for a data center, this is a really interesting revenue stream," Thomas adds. "You get paid like a power plant, and you decide how much you deliver based on a price that you tell to the market."
Listen or watch the full interview for more on how LEAP works, and on some of the challenges they help customers working in the energy industry overcome. https://www.cleanpower.group/podcast/episode/7a8d915e/thomas-folker-ceo-of-leap-energy-or-the-one-stop-shop-for-grid-services-ep76
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