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UK demand response start-up Tempus in Oz expansion mode

UK based clean-tech start-up Tempus Energy has launched an office in Adelaide, and is looking for staff as it rolls out a pilot demand management project with Origin Energy. The company has a big end-game in sight – using artifical intelligence to help transform the energy market.

Tempus is recruiting for two positions to be based at its new office in co-working space, Hub Adelaide, founder and chief executive Sara Bell told The Fifth Estate.

The company’s technology is a demand-side platform that uses AI and machine learning to enable customers to use flexible load for their assets and building management system.

At this stage, Ms Bell said, Origin intends to pitch the product to commercial customers, however there is scope to extend it to residential customers in the future.

The technology enables the energy use of assets to be optimised to synchronise with periods of high supply of renewables into the grid, which is also when energy prices are generally cheaper.

This is what made South Australia the ideal place to launch, she said, as it has high penetration of renewables and a suitable energy market structure, where prices fluctuate depending on both supply and demand.

The initial discussions with the SA government started at COP21 in Paris, she said. This was followed by a meeting with premier Jay Weatherill.

The relationship with Origin began when the company was one of 12 start-ups participating in Free Electrons 2017 in California, an energy sector start-up accelerator sponsored by eight retailers, including Origin.

“We are looking forward to helping [Origin] explore the benefits and challenges of new flexible energy demand solutions and how this can contribute towards the transition to a lower carbon, stable energy system that can deliver tangible benefits to customers.”

Origin executive general manager future energy Tony Lucas said demand-side management could be part of the future energy mix.

“We’re excited to get our trial with Tempus Energy underway in South Australia so we can better understand the benefits and the customer proposition,” Mr Lucas said.

Ms Bell said the business model was founded on customers being able to see the value of utilising the technology for themselves.

She compared it to off-peak trains in the UK, where people can see the benefit of travelling during the periods when prices are cheaper due to lower patronage. The benefit for the infrastructure provider is better utilisation of the assets.

The machine learning behind the Tempus Energy software makes it a completely automated process, she said.

The software learns the assets energy use profile, and then matches that to predicted pool prices for energy to optimise demand in terms of achieving the lowest price.

For example, the software might instruct a BMS in a large commercial building to pre-cool a building during the off-peak in order to delay turning on HVAC when prices are higher.

It reduces the cost of managing a building and also helps manage the overall utilisation of variable renewable energy supplies in the system, Ms Bell said.

“Flexibility [in demand] is as important as energy efficiency.”

Ms Bell said the company originally started out as a retailer in the UK, and the technology was developed to add a benefit for its customers. Those customers included Tesla’s supercharging network in the UK, Hertz offices and several major food industry chains.

However, Brexit caused a rethink.

The company was at the point it needed to undertake further capital raising to build its balance sheet so it could grow the customer base, but Ms Bell said Brexit made it extremely challenging for UK firms to attract investment due to the uncertainty that resulted.

So the retail business was ended, and the focus turned entirely to growing the tech offering.

Renewables and flexible demand spell the end to coal

Ms Bell said the combination of renewable and flexible demand “means an end to the coal industry”.

“It is an unstoppable march. The challenge is trying to smarten up the existing system, because there is a challenge with incumbency.

“But customers will push this through.”

She said in the US demand response was “very well-established”, and was gaining traction in the UK, although the UK market also has all the incumbency challenges.

Customers there have a smaller amount of flexibility in terms of demand, she said, as retailers sets minimum demand thresholds that are quite substantial for large customers.

Making it work is a matter of getting the rules right at the retailer end. With the Australian rollout it will not matter what size a customer’s load is.

Rollout to residential scale is already being tested by some of the company’s research and development staff in the UK, she said.

Ms Bell is also trialling the approach in her own home, she said, with a smart plug added to the dishwasher that communicates with the home internet and turns the dishwasher on at night when there is an oversupply of wind energy from Scotland, making for cheaper energy prices.

The big picture for the company in Australia is to demonstrate value for Origin customers in SA, and then push out to the other states from there, she said.

The big test will be how much demand flexibility can be “teased out” by the technology, and whether that flexibility corresponds with high price spikes.

The other part of the agenda is helping other companies become flexible so they can “drive decarbonisation”.

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