Pictured: Duncan O’Toole, co-founder, Electricity Exchange; Karen Frawley, partner, Deloitte; and Paddy Finn, co-founder, Electricity Exchange
Limerick-based Electricity Exchange is a smart-grid technology and services company which avoids the need to build new power stations and grid infrastructure. Instead it helps to unlock the existing capabilities of electricity consumers in a process that can provide more electricity to the grid than many major power stations generate.
“Effectively, we operate like a power station as far as the grid is concerned,” said Dr Paddy Finn, Electricity Exchange co-founder and managing director.
“We aggregate electricity consumers to build ‘virtual power plants’, and we can currently deliver up to 126 megawatts of capacity.”
In contrast, Ardnacrusha power plant in Co Clare was one of the world’s largest civil engineering projects when it was built and has an 86-megawatt generating capacity.
Deloitte said Electricity Exchange achieved a growth rate of 1,442 per cent over the last four years. Electricity Exchange’s growth has not just been in revenue terms: the company has grown in capacity too.
“Last year we ourselves were at 86 megawatts, now it’s 126,” said Finn. “That’s an additional 40 megawatts being delivered to the power grid without the need for any additional infrastructure. We’re the power station that keeps growing.”
Rather than produce power, Electricity Exchange provides demand response technologies to deliver electricity from commercial and industrial electricity consumers to the grid.
“We use commercial and industrial customers to make power available to the grid [so] that electricity is delivered without pouring a single ounce of concrete, or building a single new pylon,” he said.
Finn said the approach Electricity Exchange took resulted in a new way of addressing demand on the grid.
“If there’s a peak on the grid, when people come home from work, for instance, traditionally EirGrid would turn on more power stations. Instead, when EirGrid call for more power from us, we automatically reduce the power our customers are using. The power they were using can then be redirected to other consumers like you and me.”
All of this happens from the company’s 24/7 operations centre in Limerick — and it can happen in under a second.
“Instead of turning on turbines, we send remote signals to our customers’ equipment to reduce their power consumption. The end result is the same as a power station producing more power,” said Finn.
“We’ve developed technologies that allow us to be incredibly quick: we can deliver enough electricity to power 35,000 homes in a fraction of the time that it takes you to blink your eye,” he said.
An energy company coming out top in a technology award is a clear sign of a changing world.
Electricity Exchange looks and acts very much like a ‘disruptive’ start-up despite being an established energy company.
Connection to the grid
Central to the firm’s work is IoTAS, its in-house-developed platform which is able to help in healing issues on the national grid in less than 150 milliseconds.
As more renewables enter the mix, too, a fast response is more essential than ever to ensure that the grid is able to compensate for these less stable sources of power.
IoTAS also ensures that the company’s customers are not inconvenienced when it comes to participating: it only reduces power that customers make available to be turned down.
Founded in 2013, the company began with an engineering-centric approach to business.
“At that stage it was myself, [co-founder] Duncan [O’Toole] and three employees in a three metre by three metre office,” said Finn. “Our first 18 months were development focused; instead of hiring salespeople, we hired engineers and developed our systems.
“The approach paid off, and early clients included the likes of Boston Scientific, PepsiCo and Keelings Salads who shared our vision for the future of the power system.
“We entered the market with them in 2014 [and] every year since then we’ve had over 100 per cent growth, year after year after year.”
Finn said it is not simply a case of thinking like a technology company so much as actually being one.
“As soon as we entered the market, we knew that in order to stay relevant we had to innovate. So, in order to stay at the top of our game as a power company we had to become a technology company,” he said.
Unlike many technology companies, though, Electricity Exchange has a concrete impact on the physical world by reducing the need to generate more electricity from fossil fuels.
“The same way the electricity market pays power stations to generate, it pays us [for capacity] and we pass the majority of that back onto the customer,” Finn said.
“Any one of our customers would be individually insignificant on the grid, but when we aggregate them, they become part of a meaningful quantity — and, in the blink of an eye, we can use them to help heal the power system,” he said.
This fundamentally changes the relationship the company’s clients have with power, said Finn.
“It turns electricity users into active power system participants that generate revenue in the same way that a power station does,” he said.
Like almost all companies in the Fast 50, Electricity Exchange has an eye on overseas markets.
Being a weakly interconnected island with ambitious renewable energy targets poses a significant engineering challenge for Ireland, but it also gives us an international advantage as technology leaders, said Finn.
He is quick to point to EirGrid as a forward-thinking organisation, and one that is globally recognised as an exemplar in the use of innovative technology to enable world-leading levels of renewable generation.
“Ireland is a number of years ahead of other markets around the world with the integration of innovative technologies like this,” Finn said.
“The traditional route was to build more power plants, change the nature of the plants, built new transmission networks, and so on. Here, EirGrid has been at the fore of doing things differently, and when we go to other markets, they all, without fail, look at Ireland and EirGrid as exemplars,” he said.
What is essential to understand, he said, is that Ireland has had to adapt faster than most to the challenges of dealing with power demand and renewables.
“As a weakly-interconnected island we are at a disadvantage to geographically diverse countries on continental power systems,” Finn said.
“The problems Ireland faces at 40 per cent renewables are the kind that other countries won’t face until they are 70 to 80 per cent renewable, so we have to be creative in our strategies,” he said.
The company is now using the expertise it developed at home to move into international markets, including Australia and the Middle East.
In the end, Finn said, what gets people’s attention is how cost-effective Electricity Exchange’s technology is.
“Famously, Tesla has a battery project in South Australia. That project cost in the order of $50 million.
“With our technology we could deliver the same service for less than $1 million and deliver the value back to consumers instead of battery manufacturers,” he said.
This is all simply because at the core of Electricity Exchange sits a technology for shutting off loads that already exist, thus no new infrastructure is required.