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Ask the Expert: George Penny, Associate Director, Strategy

By Mara Jul 12, 2022

Ask the Expert: George Penny, Associate Director, Strategy

For this week’s “Ask the Expert Series,” we met with George Penny, Associate Director, Strategy, at Moixa. George has been working with us for almost four years. His role focuses on carrying out market and strategic analysis to help inform the major decisions we make as a company.

Before joining Moixa, George worked as a materials engineer in the steel, oil & gas, and space industries. He holds a PhD in chemistry.

George shared his views on the complex challenges of the current energy space and how flexibility and VPPs can play a pivotal role in creating the energy system of the future. Read on for the full interview.

Hi George, thanks for taking the time to talk to us.
To start with, we wanted to ask you: given the difficult situation worldwide, in your opinion, what are the biggest global energy challenges today? What can be done to help tackle them?

One of the most frustrating challenges for me is the pace of progress. Even if there were no more technological advances and no real innovation, we could still make huge reductions in humanity’s carbon footprint with the technology we have today.

We know how to do it: electrifying heat and transport, market reform and a decentralised energy system with renewable generation at all scales (and probably some baseload nuclear generation too). But there is resistance to walking this path – short-termism, loud lobbying voices of those invested in the status quo, fear of change, and risk aversion.

What can be done to help accelerate change? Education, repeating our message to decision-makers. Hopefully, innovative companies like Moixa can help blaze the trail!

How do we define flexibility in the context of the energy system?

When we talk about residential flexibility, we are talking about the ability to change the time at which energy is imported (or exported) from a home. We are used to having energy on tap – and being able to turn on any appliances whenever we want, with the energy system ensuring the right amount of supply to meet demand.

As we move to a system with more renewable generation, we will need to start influencing demand to make the most of the supply that weather-dependent renewables provide to us. This can be done by customers – by choosing to program their dishwasher to come on late at night or by cooking their meals earlier than they otherwise would have. Batteries add significant flexibility to a home: for example, they could allow behaviour to continue as normal, whilst powering the house for a period and eliminating grid imports if that is required by the energy system (in other words, you can cook your meal when you want).

Ultimately, we think shaping of residential load will be done by software, automatically adjusting grid import and export, or “load shape” by controlling batteries, EV chargers, and other appliances. When orchestrated across thousands or millions of sites, a significant amount of flexible power can be made available. Such an aggregate group of controlled sites is sometimes called a virtual power plant (VPP).

What do you think the emerging areas of innovation to watch in the flexibility space are?

There have been many trials focusing on proving the technology for software control of residential assets to form VPPs, typically focusing on energy storage systems (ESS), one and two-directional EV charging, and electric heating.

Energy systems are now reaching a stage where commercial residential VPPs are emerging. For me, innovation in business models and consumer offers for participation in VPPs is a really interesting area which lags behind technology maturity. Working out how to engage customers, educate them, gain their trust, and reward them for participation is key to progress and the democratisation of energy systems around the world.

What can be done on a policy level to unlock these flexibility strategies and accelerate the deployment and integration of distributed energy resources?

That’s a big question, and it varies from country to country. Energy systems were designed around central controllable generation and the energy transition is about managing the change to the future democratised, digitised, decentralised decarbonised grid.

Some ideas for system changes that would help: varying demand must be seen as equal in value to varying supply by the energy system (currently, the system values changes in supply more highly than changing demand). Wholesale energy prices do not currently reflect the physics of the system – if they did, the energy suppliers and consumers could be more easily incentivised to help the grid. Regulations do not currently allow for peer-to-peer trading of energy (e.g. one person selling their solar to a neighbour when they are not using it), and this should be allowed.

Globally speaking, artificial restrictions such as charging batteries from the grid (not allowed under the Investment Tax Credit incentive in the US for example) should be removed. Energy pricing should correlate with grid carbon intensity. Any fossil subsidies should be removed – in my view, gas should be more expensive than electricity per kWh.

What does a successful business model for VPPs with residential assets look like?

Business models can only be successful if the value of flexibility can be shared in a win-win-win fashion: the end customer offer is foundational for any successful VPP business model. Consumer participation in VPPs should be a no-brainer, and offers must make participants better off than if they had not participated.

Flexibility orchestrators like Moixa must get enough value to cover their costs and make some profit. Flexibility buyers must get a competitive source of flexibility compared to what they can purchase elsewhere (e.g. from gas-fired power plants or commercial VPPs).

Of course, as well as this win-win-win structure, the participation in grid services by the end customer should not compromise the devices’ ability to do their primary job, be it heating their home or charging their EV. Unfortunately, there are examples of consumers being somewhat forgotten in early business models.

In the race to net zero, how important is it to be able to bring consumers on board?

My answer has been forecast somewhat in the other responses: it is essential. Democratisation is one of the key “D’s” of the energy transition (alongside decentralisation, decarbonisation, and digitalisation) and consumers will be at the heart of the future energy system, so they better be brought on board!).

A huge thank you to George for sharing his views on flexibility and the latest innovations in the space. You can connect with George on LinkedIn here.

Do you want to join our team and help us build a future powered by renewables? Visit our careers page and see if there’s a role that suits you, or get in touch directly with our Talent Acquisition Manager Gail Solomon.