Transmission & Distribution
Paul Lazarevic, RLtec: “Our bi-directional technology is free and provides carbonless balancing”
RLtec is in the business of ensuring the UK’s national grid is balanced at all times. Paul Lazarevic, MD of the start-up, speaks to us about how its algorithm and business model have become major breakthroughs for the national grid and energy hungry companies.
Interview by Katherine Steiner-Dicks
RLtec is in the business of ensuring the UK’s national grid is balanced at all times. Paul Lazarevic, MD of the start-up, speaks to us about how its algorithm and business model have become major breakthroughs for the national grid and energy hungry companies.
Interview by Katherine Steiner-Dicks
In order to have a reliable and stable electrical power grid, supply and demand must be balanced at all times. And in the case of the UK, a stable grid frequency of 50 Hertz.
While traditional, centrally-controlled electrical power networks for real-time balancing is often implemented by adjusting large-scale generation to fluctuations in demand, this ‘load following’ strategy is becoming increasingly difficult with the onset of renewable and distributed generation (DG-RES), which is not as easy to control or forecast, according to a research report coming out of the Netherlands.
The costs of the UK balancing service market is £216m, but that figure is projected to grow in excess of £1.1bn by 2020 as more renewable energy sources come online.
While the National Grid pays for these balancing costs, those costs are passed on to industry and residential power users.
This cost issue is a market opportunity for any company able to create more cost and energy efficient balancing generation technologies. With this in mind we thought it apt to speak to a company that is pushing zero carbon smart grid balancing technology into the mainstream conscious of big multinationals.
Paul Lazarevic, managing director at RLtec, a UK-based smart grid start-up, speaks to Smart Grid Update about its market first frequency balancing technology; how its technology also comes with a zero price tag to its clients and what its recent deal with supermarket chain Sainsbury’s will mean to the business.
Q: Paul, in a nutshell how would you describe RLtec’s business?
A: “Our strap line, while a mouthful, describes us best: ‘the world’s first bidirectional dynamic demand frequency response service’.
Q: There are other balancing service providers already in the UK market, and while your algorithm enables bidirectional balancing, which is ideal for processes, such as refrigeration and heating, are there any other benefits to your technology?
A: I should start from the beginning here to give you a better idea of how the balancing set market works. There is a generation capacity that works alongside the national grid system, which is very good at being able to forecast what demand will be in the system at any given time.
But what the national grid system cannot forecast are variables, such as huge spikes on the system caused by an unplanned event.
The traditional types of balancing set generators, sit in reserve and run permanently at sub-optimal levels at around 60%., which is inefficient . Now while this is useful for the grid if they have to ramp up or down power into the grid to balance frequency, it means that CO2 is being pumped into the atmosphere.
One balancing service, for example is a hydro station in a mountain in Wales, which uses pump storage. Effectively, it pumps water up a hill and it then water runs down into a turbine, then the water is pumped back up again.
Now I just like most people view water as green and friendly, but this represents only 15 % of the balancing requirement.
The majority of traditional balancing service is provided by coal or gas fired power stations. The main concern is that it is pumping a high amount of CO2 into the atmosphere to create this ability to boost the power to 80% to 100% or down to 60% to 40%, etc.
The national grid is obligated to be always running at half a hertz above or below 50 hertz. And the grid can be penalized by the government if it were to experience a major event exceeding the 50 hertz balancing parameters. That is why, for operational purposes, the national grid stays at 0.2 above or below 50 hertz.
So, back to your question as to other benefits out technology can provide…All of the demand response technology that exists today is blunt and single direction, which means that it responds to a spike on the grid by turning things off and lops off the peaks, which reduces demand on the national grid system.
But this may not be beneficial if, for example, your appliance or process turns off, since it is not being able to continue what it is supposed to do. The single direction technology only works if your process allows continuous operation with it not being on for a certain amount of time.
However our technology is a world first because not only does it turn things off it turns things on, so you can help frequencies that go above and below 50 hertz; that is true dynamic demand.
It sits in the control systems of our client’s appliances; any type of thermal store appliance, and even works with lighting, which we can dim. Most importantly because it turns on or off, it provides balancing with no impact to the end user.
Q: How often do these blips happen on the national grid?
A: Constantly. I am looking at our dashboard in our office as we speak .A red line represents the 50 hertz level and we are watching the national grid’s frequency, which anyone can get from their web site; we have constant volatility. The frequency is constantly being balanced at around 50 hertz.
Q: How does your software work while it is connected to a client’s appliance?
A: Our technology, which is a bi-directional balancing service, sits inside their appliances’ controllers and we have our own device at our client partners site, which monitors and controls the messages to those units.
We are the first balancing technology that does not require any type of energy to be burned or a big capital asset to produce the load since we harness the energy already generated.
Our algorithm sends a request to the control units of all the appliances about an event on the national grid and asks if it is ready to be turned on or off. The grid requires that any load we control has to switch within two seconds and deliver within ten seconds.
One of the key components of the technology is that it asks each appliance whether or not at any point in time if it is able to switch, so we can harness their load.
If one appliance is unavailable many others will typically be available to respond, so any loads that can increase or reduce their demand will do so.
We never override the control parameters of the appliance and all of this process happens in a fraction of a second. So if an appliance is not in a position to turn off for any reason, it is unobtrusive and only turns off those appliances that are in a position to do so.
Q: All this sounds great, but what investment will any of your clients have to put in to integrate your software?
The other key factor to the technology which is particularly pertinent in the current economic environment is that no one has to pay for it.
When we speak to most finance directors or corporate responsibility officers they say they need to be green and I believe them. But the problem is if your business is having its budgets slashed left right and centre it is tough to be as green as you desire to be.
If being green means having to let people go or not being able to pay dividends, companies have to weigh up a risk and reward analysis of going green. In our situation there are no budgetary requirements for applying our technology as we pay for the installation.
Because we are not burning anything to harness the loads, we provide carbon savings at the point of generation, which means carbonless balancing, in addition to any other carbon saving messages currently employed at the point of use.
Q: If companies are not paying for your technology, where does Rltec make its money and what is the business model of the business?
A: We are effectively a balancing generator, albeit a virtual one. We sell the amount of load that we can harness via frequency regulation agreement with the national grid and they pay us for that load and our balancing service.
The national grid looks at balancing generators as an insurance policy as whilst they are very good at predicting expected consumption, there are x-factors which will inevitably cause imbalance..
For example, we could tender for the month of April whereby we are willing to supply a set value of high and low response and the national grid will either accept or decline that tender just as they would any other balance service from a traditional carbon emitting generation set.
If they accept, we ensure that the load is there and we constantly provide load into the grid to balance the frequency.
Q: Ok, now tell me about that Sainsbury’s deal and how it came about.
We have been working with Sainsbury’s for two years. The main part of our deal is to have our technology, which is a patented algorithm and controls process, operating in the control units of their HVAC appliances (heating, ventilation and air conditioning) across 200 of their stores.
Q: With such a landmark deal under the company’s belt and being a start-up, will the company be fundraising anytime soon to accelerate growth?
A: Yes, we are currently fundraising and will be looking to raise a double digit million pound investment. We’ve raised more than £11m in venture funding to date from investors, which include Low Carbon Accelerator, NAXOS Capital Partners and Carbon Trust Investment Partners.
Paul was formerly Head of Corporate Sales at npower Business where he was responsible for all sales to the UK's major industrial and commercial users. His industry experience ranges from project managing the design and construction of embedded refinery power-generation projects in the USA and Far East, to setting up a gas trading operation in the UK and running a risk management team.
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A carpenter whose former Manhattan basement is the scene of the search said through his lawyer Friday that he had no involvement in the disappearance.
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