How SaaS is driving the consumer energy revolution

How SaaS is driving the consumer energy revolution
Source: Kraken

Kraken, part of the Octopus Energy Group, is an ‘all-in-one’ energy management platform for utilities and other players as a software-as-a-service (SaaS).

Well into 2023, new clean energy investments are continuing apace as the key 2030 climate targets come ever closer.

For example, in Europe, the REPowerEU and Green Deal plans are aimed at energy independence, while in the USA the Inflation Reduction Action Act is enabling major projects from new solar ventures in Ohio and massive battery storage complexes in Colorado to new renewable initiatives by large utilities such as Duke Energy.

While the time is right for these projects, utilities need the right energy management technology and business model approach to get them off the ground.

“The SaaS business model is ideally suited for the new assets that we’re adopting as part of the energy transition,” says Devrim Celal, CEO of KrakenFlex, a subsidiary of Octopus Energy Group.

“In the ‘old world’, massive power plants came with extremely customised software systems that are no longer fit for purpose. In the ‘new world’, the SaaS model works well as it doesn’t require a big upfront capital expenditure, its costs can be scaled with the adoption of renewables, and it can be updated regularly to be always fit for purpose.”

In addition, he comments that being cloud-based, individual components can be selected by users according to their business needs and in-house capabilities.

“It’s the perfect way to start digitising,” he says, commenting that with Kraken’s platform, a site can be easily onboarded within just a matter of days.”

Software-as-a-Service: Energy tech platform

Kraken is the energy tech platform of the UK-headquartered renewable energy group Octopus Energy and was developed as an ‘all-in-one’ solution for today’s utilities.

“It’s the only technology platform that can address issues in all corners of the energy ecosystem,” comments Celal, pointing to its development “by technologists working alongside energy teams”.

He describes Kraken as composed of essentially three dimensions:

  1. Customer-centred software and operational models for retail energy providers    
  2. Market-leading asset management, AI-powered, data-driven optimisation, and control for energy resources of any size, scale, or type, and   
  3. Real-time monitoring, and data-enabled analysis and management of transmission and distribution networks.

With this broadly modular structure, users are then able to adapt and add to the specific applications for their business.

“We have been able to quickly adapt Kraken to different regions. We’re also seeing that as the energy transition takes speed and there are growing amounts of renewables on the system, where the system operators need a different set of tools to help manage it, and we’re able to rapidly configure the platform for this.”

Kraken is now in use in the UK and thirteen other countries from the USA and Canada to Japan and most recently New Zealand, covering some 42 million licensed accounts and 5GW of contracted power.

Another key emerging market for Kraken is France. With Octopus Energy Group’s recent announcement of a billion-dollar investment in renewables in France, Kraken is following with the implementation of a ‘technology hub’ to support further development and innovations to the Kraken technology within Europe.

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AI and machine learning

Artificial intelligence and machine learning is key for automation of platforms such as Kraken.

“We use AI in a number of different ways,” Celal says.

One, the most common to date, is for natural language processing with the formulation of responses to consumer queries.

A second, an emerging topic, is for forecasting human behaviour. Celal cites as an example the use of the ‘Intelligent Octopus’ tariff for electric vehicle drivers to provide the lowest cost charging of their vehicles.

Drivers can specify what state of charge they want and when they want it (e.g., 80% by 7am the following morning), and while that is achievable for individual customers, as the numbers grow – currently around 40,000 (as of April 2023) – it becomes more complex.

“Our traders need to know how to trade that volume to make sure they’re maximising the green but also cheaper electrons to charge these cars with. To be able to do that, we need to forecast when every customer will plug in their car, what its state of charge will be and what their requirements will be,” he explains.

“There’s a lot of machine learning built into that because we need to understand consumer behaviour under different circumstances. Using AI, we’re now able to get extremely accurate every day.”

Celal adds that with the emergence of next-generation AI in the form of generative AI and digital twins, Kraken has the potential to play into those.

“On a single day, Kraken ingests 1.5 billion packets of data – 17,000 every second – which is approaching the same number of transactions by Visa. And that number is growing. This volume of data allows us to build models like the kind needed for EV charging. It also allows us to build accurate digital models of energy assets and networks, which enables better optimisation of existing infrastructure and reduces the need for capital expenditure that would otherwise be required for adding more renewables.”

Decarbonisation and emission monitoring

While deep data enables the design of digital twins for the investigation of network operational scenarios, it also supports broader decarbonisation and monitoring initiatives, such as Al Gore’s Climate Trace.

Celal comments that decisions on the scheduling of assets such as batteries are typically optimised against market prices, and through Kraken these can be correlated closely with renewable energy availability. In addition, considering the carbon intensity, scheduling decisions also can be based on the availability of lower carbon generation on the grid.

“That’s how we have the biggest impact,” he says.

He also notes as another initiative the introduction of ‘Saving Sessions’, in which Kraken users were encouraged with gaming and rewards to reduce their consumption to support peak demand reduction.

“That ability to have that data to set the goal and then track the consumer behaviour is exactly the kind of thing we can do to help the system but also decarbonise it because with that we’re lowering peak consumption.”

Looking ahead for Kraken

In addition to the ongoing development of Kraken, prospects include further international expansion and in particular the further deployment of distribution and transmission operator services, including our partnership with the Elia Group.

Another development is the building of a consumer technology centre in Manchester for the integration and pre-testing of new consumer devices with Kraken, which will enable customers of utilities using Kraken to sign up and benefit from tariffs like “Intelligent Octopus.”

But Celal says the “biggest and most exciting” for him is consumer flexibility: the Intelligent Octopus EV offer is growing at a rate of around 30% every month, without any marketing.

“That’s digital energy – the whole end-to-end process is automated. Consumers sign up for the tariff, register and authenticate their devices, and register their preferences. Then Kraken calculates the optimum charging schedule, purchases the required power, and charges the car – all without anyone at Octopus Energy having to do any work.”

A similar offer has been launched in Texas and in New Zealand and is in prospect in Japan and Germany as well as elsewhere.

“To me, that is the consumer energy revolution.”

Online discussion

Listen to an engaging online discussion where Devrim and his two colleagues unpack this topic. They discuss the essential role consumers will play in the future of energy, and how utilities, retailers, and system operators can use new technologies to collaborate with consumers. Register for the on-demand session here