EQUINOX (Equitable Novel Flexibility Exchange)
Project Partners: SP Energy Networks (SPEN), Octopus Energy, PassivUK, Welsh Government, West Midlands Combined Authority (WMCA), Sero and Guidehouse.
| Funding mechanism | Network Innovation Competition (NIC) |
|---|---|
| Duration | Mar 2022 - Dec 2025 |
| Estimated expenditure | £15.375M |
November 2023
The project’s trial kicked off early this month, with events successfully being held with the three suppliers with over 1000 customers recruited. These trial events include the three commercial arrangements and variety of notice periods up to real time scheduling. The reward customers receive depend on this notice period, and whether they are part of the higher or lower payment band at this point in the trial.
The start of trial survey has been completed and results are being analysed, but initial insights from this suggest a more diverse pool of customers than in the previous trial.
The third Ofgem deliverable, design of novel commercial methods & technical integration, has been finalised this month ahead of the 30th November deadline.
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November 2023
The project’s trial kicked off early this month, with events successfully being held with the three suppliers with over 1000 customers recruited. These trial…Project Description
EQUINOX is the first NIC project dedicated to addressing the challenges DNOs face with the electrification of heat. The project will develop novel commercial arrangements and supporting technologies that unlock flexibility from residential low carbon heating, while meeting the needs of all consumers, including the fuel poor and vulnerable.
Problem(s)
The UK government recently announced a target to reach 600,000 heat pump installations per year by 2028. Unless new solutions are developed to manage this new load, DNOs will witness a substantial increase in peak demand, triggering significant network reinforcement throughout the later years of RIIO ED2 and ED3. Currently, limited viable solutions exist for DNOs to unlock the flexibility from residential low carbon heat at scale in a reliable, cost-effective, and equitable way.
Method(s)
EQUINOX is developing three novel commercial methods that are designed to maximise participation in domestic DNO flexibility services. The range of methods will demonstrate how varying risk/reward frameworks between DNOs, suppliers and customers can influence the amount, cost, & reliability of flexibility from portfolios for varying customer segments incl. fuel poor and vulnerable. The three novel commercial methods are:
- Method 1 - ‘Save in advance’
In this method, the energy supplier, and in turn, the end-customer, receive an upfront flexibility payment in return for offering a fixed, minimum obligation of flexibility.
- Method 2 - ‘Save as you go’
In this method, the energy supplier, and in turn the end-customer, are not committed to a fixed, minimum obligation but instead have more control over the flexibility they offer based on (near) real-time signals delivered in an automated way.
- Method 3 - ‘Save in advance & boost as you go’
The method will combine aspects of both upfront flexibility payments (M1) and dynamic price signals (M2).
FAQs
EQUINOX is an innovation project supported by Ofgem and funded through the regulator's Network Innovation Competition. The project will test new billing schemes to reward households for temporarily altering their heating choices without compromising on comfort. This will help create a balance between electricity supply and demand over the course of the winter. EQUINOX will run from 2022 to 2025, with the project’s first trial being rolled out in the winter of 2022. EQUINOX is a key study to help integrate low-carbon heating into the UK's future energy system, and will look to achieve three main goals: 1. Supporting the energy transition by decarbonising in the most cost effective and equitable manner 2. Helping trial participants save money on energy bills while designing future tariffs that could be rolled out nationally 3. Helping balance electricity supply and demand and therefore avoid costly grid upgrades EQUINOX is led by National Grid (Electricity Distribution), in partnership with Octopus Energy, Passiv UK, Sero, SP Energy Networks, Welsh Government, West Midlands Combined Authority, National Energy Action (NEA), Scottish Power Retail, and Guidehouse.
The purpose of the trial is to test several new billing schemes which aim to incentivise households to alter how they use their heat pumps to relieve stress on the electricity network. We will be seeing which schemes can best empower households to save on heating costs while maintaining their preferred level of comfort and contibuting to balancing electricity supply and demand on the network, which keeps costs down for everyone.
By shifting your heating patterns, you will have the potential to save money on your electricity bill while lowering the stress on the electricity grid in the winter months. You’ll be playing your part in the sustainable energy transition without sacrificing comfort-level. You will also receive a bonus payment for signing up to participate, in return for the useful data and feedback you will provide throughout the trial! There may be further incentives available throughout the course of the trial if you choose to take part in feedback via surveys, focus groups and interviews.
- Bill savings: By engaging throughout the trial and shifting how you use your heat pump to heat your home, you can save money on your energy bills through the new billing schemes being trialled.
- Promoting sustainable heating: These bill savings can help to make heat pumps more affordable and make it easier to replace gas boilers with a more sustainable heat pump. Equinox can therefore help us decarbonise how we heat our homes, which is a big step towards the UK’s goal of reaching net zero greenhouse gas emissions by 2050
- A more agile and resilient electricity network: As we move from gas heating to electric heating, and petrol cars to electric vehicles, we will start using a lot more electricity. If this shift is not properly planned, network operators will have to spend huge amounts of money on costly cable replacements to account for all the extra electricity. By testing how to incentivise people to shift their heat pump usage whilst maintaining their comfort levels, Equinox will help us understand how to spread electricity usage across the day. This will create a more agile electricity system, delaying or entirely avoiding the need for cable replacements.
- Lower total costs for customers: By preventing costly cable replacements and network reinforcement, Equinox can help to keep network costs low, saving all consumers money on their electricity bills.
The first trial took place from November 2022 to March 2023. The following two trials will take place one each winter from 2023/24 to 2024/25.
Each trial is expected to last two to three months over the winter.
To be eligible households must meet the following criteria:
- Have a heat pump installed in your home
- Have Octopus Energy or Sero as your energy supplier / service provider
- Be located in the area served by the distribution network operator National Grid Electricity Distribution. Find out who your DNO is here: https://www.energynetworks.org/operating-the-networks/whos-my-network-operator More specific eligibility requirements are still being defined. Customers who meet the above criteria who are interested in participating will be further assessed for trial eligibility as requirements are defined.
Unfortunately, participation in the trial requires a household to have a heat pump installed.
Yes, you may be able to participate once you have a heat pump. To be eligible you also have to live in one of the areas serviced by National Grid Electricity Distribution and have Octopus Energy or SERO as your energy supplier / service provider. We are also exploring partnerships with additional energy suppliers to expand the opportunity to participate to more households.
The trial will consist of multiple two-hour periods (events) across the winter where you may be asked to alter your heat pump usage. This process will be slightly different depending on the trial group (i.e., billing scheme). Some groups will be asked to allow control of their heat pump to a trusted third party during these events, with the ability to opt out before or during each event. Other groups will be asked to manually shift their heat pump usage during these events, by turning their heating down. All participants will be asked to fill out a short (3-5 questions) survey after each event to explain what they chose to do and whether they experienced any problems. All participants will be asked to fill out three longer surveys across the winter – one before the trial starts, one in the middle, and one towards the end – to collect information about participating households and their perspectives on various elements of the trial. Participants may also be asked to take part in additional focus groups or interviews as part of research activities being undertaken to help us evaluate the trials.
You will receive a communication via email and text, asking you if you can manually shift your heat pump usage, or asking if you would like to opt-out of allowing control for an upcoming two-hour period (event). The exact message will depend on the trial group (i.e., billing scheme) you are in. The time between the communication informing you of the upcoming event and the start of the event period will vary across the trial, from being notified a day in advance to only being told a few hours in advance.
The methods are designed to empower you to save money by changing your heating behaviours--without sacrificing your comfort--for short periods on occasional winter days. This savings will come in the form of energy bill rebates. How you save money and how much money you may save will depend on the trial group you are in, but the trial is designed to ensure that you will not be worse off than you were with your normal energy bills.
This project aims to be the largest of its kind in the United Kingdom, with at least 1000 participants over the next three years. We plan to start with a small trial in the winter of 2022-2023 and then expand the number of trial participants over future winters.
We will be collecting a variety of data throughout the trial, including: - Smart meter readings to understand household electricity usage at certain points throughout the winter, including during two-hour periods where households are asked to alter their heating usage - Household heat pump electricity usage, where this is possible to collect directly - Household decisions on whether to opt in/out of responding to requests to shift their heat pump usage - Household demographic information to understand how certain characteristics may impact trial results Feedback from trialists themselves will also be collected via surveys, interviews,and focus groups and wil be important to understanding how customers felt about and experienced each new billing scheme. Information collected may include feedback on technology, perceptions of comfort, and whether the bill savings from participation felt proportionate to any concerns that arise throughout the process. All personal data collected will be managed carefully in accordance with General Data Protection Regulation (GDPR). More details on data to be collected and how it will be used, will be outlined in the sign-up terms and conditions.
Smart meter data and/or heat pump electricity usage data will be used to assess how much participants were able to lower their heat pump electricity usage during each two-hour period. We will see how this varies across the different billing schemes being tested, and also how it varies across different household types (for instance, by the number of people living in the house, whether the property is a flat or semi-detached house, and so on) This data may also be used to build more accurate models of how different household types typically respond to different payment incentive schemes and event schedules. This would provide an understanding of what the total reduction in electricity consumption if the impact was scaled up across National Grid's entire licence area. Depending on the trial group (i.e., billing scheme) you are assigned to, the metering data might also act as a form of validation to confirm the energy savings achieved, which are passed on via a bill rebate payment Participant feedback throughout the trial will help us to track their comfort during, engagement in, and perceptions of the trials. This allows us to identify areas in the billing scheme design and customer experience which require improvement. These can be altered in line with the feedback for the subsequent winter trials. In this way, we will use the various data collected to design the billing schemes into the best possible solution which can be rolled out across the UK following the conclusion of the project. All personal data collected will be managed carefully in accordance with General Data Protection Regulation (GDPR). More details on data to be collected and how it will be used, will be outlined in the sign-up terms and conditions.
No. We will be conducting the trials based on the heating system already installed in your home.
No, access should not be required.
Octopus Energy and Sero are conducting outreach to recruit interested customers. If you are interested in participating or would like more information, please contact your energy supplier / service provider.
- Octopus Energy customers can register their interests here: https://octopus.energy/blog/equinox-flexibility-trial/
- SERO Homes customers can find out more here: https://help.sero.life/hc/en-gb/articles/8603776570642-The-EQUINOX-trial
- If you are a ScottishPower customer and would like participate in the Equinox project please email: spsmartcities@scottishpower.com
It will depend on where you are moving to and if your energy supplier, service provider or home heating system may change. If you are planning to move during the trial period, please let us know during sign-up. If you need to move house during the trial, please contact your energy supplier who will work with you to determine if you can continue to participate at your new home.
The project is being led by National Grid (Electricity Distribution). As one of the UK's distribution network operators (DNO), they own and operate the cables and wires that deliver electricity from transmission pylons to homes and buildings in the Midlands, South West and South Wales. They are not an energy supplier. The other partners involved in the delivery of the EQUINOX project include: Octopus Energy, Passiv UK, Sero, SP Energy Networks, the Welsh Government, West Midlands Combined Authority, National Energy Action (NEA), Scottish Power Energy Retail, and Guidehouse.
You can visit the project webpage: https://www.nationalgrid.co.uk/projects/equinox-equitable-novel-flexibility-exchange. You can also contact your participating supplier / service provider: -You can contact Octopus Energy at hello@octopus.energy. - You can contact Sero at hello@sero.life. - Please remember to mention "Equinox" in the subject line for a quicker response.
The project will be delivered via five workstreams, described below:
- Workstream 1 – Commercial Arrangements.
This workstream will build on concepts developed in the FSP and make use of preliminary customer engagement results, primary market research, and stakeholder workshops to inform a prototype design of the commercial arrangements and processes. Project Partners will jointly assess the risks and value of different commercial arrangements and develop pricing and contractual agreements that suit the objectives and risk-reward profiles of all involved parties, including customers. These arrangements and approaches will be adapted throughout the trials based on ongoing results and feedback.
- Workstream 2 – Technical Integration and Automation.
This workstream will develop and build the technical infrastructure needed to deliver the commercial arrangements in a way that provides HP owners with a seamless customer experience. This includes leveraging existing systems and applications as well as the development of new technical interfaces and APIs. The workstream will address any cyber security requirements needed to ensure secure delivery of flexibility services.
- Workstream 3 – Customer Engagement and Experience.
This workstream will seek to understand customer perspectives as well as monitor customer engagement, experience, and satisfaction throughout the trial to ensure that the project is benefitting end-customers. This workstream connects to workstreams 1 and 4 through transversal activities such as the experimental design and behavioural data analysis.
- Workstream 4 – Trials.
This workstream will deploy experimental design principles to divide customers into representative groups and test the suitability and effectiveness of the commercial arrangements, and processes in unlocking HP flexibility on a large scale. Customer behaviour and feedback from the trials will be analysed to quantify solution benefits for the network and its customers. EQUINOX will use modelling and simulation tools to understand how network benefits of the methods scale into BaU.
- Workstream 5 – PM & Knowledge Dissemination.
This workstream will manage the scope, schedule, knowledge sharing and budget on a daily basis, coordinating across workstreams and Project Partners to ensure effective project delivery.
EQUINOX is a first of a kind project that will answer key questions on how DNOs can help decarbonise heat in the most cost-efficient manner for customers. The project will pave the way for how DNOs will leverage flexibility from heat, to manage the increasing network demand while maintaining network reliability, consumer choice, and comfort within homes.
Once implemented, the EQUINOX solution will result in:
- Significant financial, capacity, and carbon benefits
Associated with a) deferral of network reinforcement (at primary and secondary substations) required to address the increase in peak demand due to the addition of HPs to our network, and b) improved liquidity in flexibility markets and corresponding reduction in pricing. These financial, capacity, and carbon benefits have been quantified through business case modelling, as described below:
o £1,107 m in direct financial benefits up to 2050 across GB, which will benefit the customer though network savings resulting in lower customer bills, and through enabling access to DSR markets at a lower cost
o 779 MVA capacity released up to 2050 across GB, in the form of demand reduction.
o 1,900 tCO2e of direct savings up to 2050 across GB.
- Faster adoption of heat pumps
A current barrier to the adoption of HPs is the total cost of ownership. Reducing this total cost of ownership by providing incentives to shift electricity usage will contribute to reducing the financial hurdle associated with the adoption of HPs.
- Increased efficiency in flexibility procurement from leveraging LV connected flexibility over HV connected flexibility
The procurement of LV flexibility to resolve an upstream constraint (or ESO balancing requirement) will frequently have a superior effect than procurement of same quantity of HV or EHV flexibility. As an example, typical line loss factors[1] (from National Grid’s Charging Statements) are in the region of 1.013-1.019 for HV & EHV networks, while range between 1.066-1.075 for LV networks. Therefore, procurement of one unit of LV connected flexibility (demand turn down), would create an additional 4.5% reduction in load flowing through an upstream constraint than the same amount of upstream flexibility. This leverage effect associated with LV flexibility (specifically demand turn down) potentially grants DNO greater efficiency when procuring flexibility. This beneficial effect would also be noticed by the ESO.
- Increased opportunity for value stacking
Because the LV network remains the load centre for network flows, any capability to dispatch flexibility from the LV network is likely to benefit all network constraints up and down the network. In comparison, use of HV or EHV flexibility will only ever benefit constraints that are located upstream. Therefore, LV flexibility is likely to have application across more network constraints than its upstream neighbours. This effect will be experienced as greater efficiency in DNO flexibility procurement, as the same flexibility would be likely to improve more than one network issue.
- Benefit for the National Grid ESO (NGESO)
EQUINOX may contribute to system balancing cost reduction due to improved coordination with NGESO. The domestic flexibility unlocked would help NGESO reduce the procurement of other services (e.g., ancillary service procurement avoidance), and hence address transmission network constraints while having the potential to benefit marginal generation costs too. This benefit will be further discussed with NGESO throughout the project and documented the business case update following trial completion.
Project Direction and FSP
Progress Reports
Project Progress Report - April 2022 - September 2022
Project Progress Report - October 2022 - September 2023
Horizon Scans
Customer Perceptions on Unlocking Flexibility from Heat Deliverables
Primary Market Research Quantitative Report
Customer Engagement Method Statement
Customer Perceptions on Unlocking Flexibility from Heat
Insights on Effectiveness of Commercial Methods Deliverables
Initial Insights on Effectiveness of Commercial Methods
Initial Insights on Effectiveness of Commercial Methods - Webinar Slides
Customer Perceptions on Unlocking Flexibility from Heat
The webinar below covered an overview to project EQUINOX, how the first trial has been conducted this winter, along with our baseline understanding from pre-trial survey results to understand how UK Consumers currently heat their homes, as well as their attitudes towards low carbon heating options.
Initial Insights on the Effectiveness of Commercial Methods
Trial One Learnings Webinar
The webinar Q&A can be viewed here.