The value that led Enel to buy Demand Energy

Demand Energy installations are impressive... but it's the invisible energy storage software controlling them that is the real attraction for Enel. Pic: Demand Energy

Demand Energy installations are impressive… but it’s the invisible energy storage software controlling them that is the real attraction for Enel. Pic: Demand Energy.

By Jason Deign

Enel’s buyout of US project developer Demand Energy last week was largely down to a secret ingredient that has been cooking for several years.

While Washington State-based Demand Energy has a decent portfolio of projects in New York and closed last year with a microgrid deal in Costa Rica, the real lure for Enel is understood to have been its software platform, DEN.OS.

DEN.OS, which stands for ‘Distributed Energy Network Optimization System’, is a cloud-based platform for integrating energy storage and distributed generation that Demand Energy has perfected over the last eight years.

A critical early challenge facing the company was how to adapt its software to work in New York, a market characterised by longer-duration storage applications.

The market was of interest because the state’s Reforming the Energy Vision plan was creating new opportunities for storage to complement distributed generation in reducing demand, shifting load and adding resiliency. 

Cloud-based storage aggregation

This led Demand Energy to create one of the first cloud-based storage aggregation systems that could operate flexibly and stack value streams on a single asset.

A further benefit of the system is that it can automatically learn how to deal with any billing scheme or battery profile, greatly reducing setup and rollout costs and timescales.

In New York, the value of this approach has paid off with a number of projects that can adapt to changing market dynamics and rate structures, and deliver benefits for asset owners via systems with more than four hours of storage.

Last month, for example, Demand Energy announced that it won a deal to design and deliver a lithium-ion battery system as part of the first microgrid to be deployed under Con Edison’s Brooklyn-Queens Neighborhood Program.

The multi- resource microgrid will be implemented at the 625-unit Marcus Garvey Apartments in Brooklyn, owned by L+M Development Partners, a large owner/developer of affordable housing. 

Optimising how resources interact

The microgrid comprises a 400kW solar PV system and 400kW fuel cell, supported by a 300kW, 1.2GWh lithium-ion battery system and controlled by DEN.OS, which optimises how these resources interact and perform.

The setup demonstrates how Demand Energy, via DEN.OS, is able to integrate and support complex systems with a wide array of hardware assets.

But the flexibility of DEN.OS has also been demonstrated through its deployment in very different energy markets, such as Costa Rica.

There the developer teamed up with Latin America microgrid pioneer Rio Grande Renewables to commission a battery storage-plus-solar-PV microgrid at Establishment Labs, a Costa Rican medical manufacturing plant.

The microgrid is said to be the largest in Central America and includes a 500kW, 1MWh lithium-ion battery connected to 276kW of solar PV.

On-site and grid assisting services

The system is designed to provide multiple on-site and grid-assisting services, including peak demand reduction, solar variability smoothing and backup power for critical loads in the event of an outage.

The value of DEN.OS to Enel is clear from the language used in the press release announcing the acquisition last Wednesday.

Enel referred to Demand Energy as “an intelligent control software provider, project developer and operator specialising in battery storage optimisation.”

It appears that Demand Energy’s ability to tackle complicated projects with a sophisticated software platform was a core selling point for Enel.

What is clear is that the kinds of projects being handled by Demand Energy, with detailed modelling and business case development, and the integration of multiple components, were different from those being seen elsewhere. 

Expanding the use of DEN.OS

Following the purchase, “Enel will work with Demand Energy to expand the use of the company’s DEN.OS energy management software, which enables real-time optimisation of storage systems,” it said.

“Through this transaction we will be able to greatly strengthen our position in the growing battery storage market with a complementary partner and innovator,” said Francesco Venturini, Enel’s head of global renewable energies.

“By combining our global presence and expertise in systems integration with Demand Energy’s software and established product offering, we will expand the development of renewables and storage both in the US and globally,” he said.

Demand Energy, which has carried out 24 projects since its creation, totalling 3MW/9MWh of installed capacity in the US and Latin America, was bought through Enel’s Enel Green Power North America renewable energy subsidiary.

The purchase confirms the growing importance of software for energy storage systems and follows a spree of US start-up buyouts and investments by major European power companies. 

Acquisition by Enel

“Our acquisition by Enel underscores the strategic intersection of renewable energy production, energy storage and an intelligent software controls platform,” said Gregg Patterson, Demand Energy’s president and CEO.

“Our DEN.OS energy management system, based on patent-pending controls and economic optimisation technology, facilitates the design, integration and operation of energy assets and services on both sides of the utility meter.

“We’re very pleased to become part of Enel, which will lead to expanded product and service offerings and global market opportunities.”

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