The Big Interview: Alastair Martin of Flexitricity
“It’s effectively instantaneous. Supply and demand have to be matched exactly every second of the day, and if they’re not, things go wrong pretty quickly – in a matter of seconds. It’s hugely important. You have to have reliable electricity for the economy to function – if you want to have industry, if you want to have services, if you want to have banking.”
Martin is founder and chief strategy officer at Edinburgh-based Flexitricity, which describes itself as a pioneer in the growing demand-response corner of the energy market.
The firm says it operates the first, largest and most advanced demand-response portfolio in Britain, and partners with organisations – from tomato farms to manufacturers, major data centres, blue-chips and public sector bodies – to provide reserve electricity to the National Grid.
“Basically, business energy users who are flexing what they do in order to help the lights on and keep the system cheap and green – that’s our role.”
Harnessing a 24-hour staffed control room and automated systems, the benefits include revenue-generation for organisations as well as helping to secure energy supply.
Martin started the energy technology firm from his spare room in early 2004, after a degree in engineering followed immediately by a PhD in oceanography (“although I did probably have an engineering slant on it”). But lacking enthusiasm to stay in academia, he joined what was then Mitsui Babcock. The energy services firm (which was in 2006 acquired by South Korea’s Doosan for £90 million) provided him with an education in power generation. “The industry then was dominated by big power stations and there was no view that renewables would ever be significant… nobody would have expected what we actually got to.
“What I learnt [there] was that big power can be efficient or flexible – but it can’t be both.” This lightbulb moment helped prompt the eventual creation of Flexitricity.
He later moved to Scottish Water, focusing on energy efficiency and renewables, and where he took heed of the fact that the electricity customer “can be flexible so that big power can be efficient”.
The idea of aggregating very small resources to reach critical mass “lodged itself in my brain… and I couldn’t get rid of the thought, so I started [Flexitricity] in order to basically do that”.
Now operating out of West Port in the shadow of Edinburgh Castle with about 35 staff, Flexitricity in 2018 celebrated the tenth anniversary of live smart grid operations, over that period surpassing the £20m mark in benefits for its customers and generating £12m in direct revenue for British businesses by helping them respond to shortfalls and excesses in the nation’s energy supply.
Last year also saw the launch in October of energy supply arm Flexitricity+, opening up the “financially lucrative” balancing mechanism – one of the tools National Grid uses to level electricity supply and demand – to selected customers.
In advance of the launch Flexitricity had recruited Rachel Maitland, previously of SSE and ScottishPower, to take charge of the new arm and lead the firm’s supply activities.
Flexitricity+ met the launch deadline, says Martin with pride (“getting that over the line has been my obsession for a good two or three years”), adding that it has flourished since.
He has also attributed the launch of the division to the electricity market changing, due in the main to the success in renewable generation.
Scottish Renewables noted last month that Scotland increased the amount of renewable energy it generated by 6 per cent between 2017 and 2018, driven by wind power, while the low-carbon and renewable-energy sector north of the Border has been found to support around 46,000 jobs and generating an annual turnover in excess of £11 billion.
Additionally, the Scottish Government aims by 2030 to generate half of the nation’s overall energy consumption from renewable sources, targeting the decarbonisation of the energy system almost completely by 2050.
Flexitricity was in 2014 snapped up by Alpiq, an electricity and energy services provider. The Swiss business said at the time that the deal tied in with its strategy of entering the decentralised energy-management market, adding: “In Europe, Great Britain is the most developed market for demand-response services. Flexitricity pioneered this market sector and continues to lead it in terms of volume and technical capability.”
Martin praises the transaction as “incredibly slick”, with only about half a year between the first meeting to closing the deal.
He also credits the Swiss firm with correctly predicting that energy markets across Europe were going to change – digitalising and decarbonising.
And democratisation – which fuelled by tech is gaining momentum in a number of fields such as travel, giving increasing power to the consumer and reducing the power of the traditional corporate – is another concept he forecasts in the energy sector. “It is understood now that the only way to properly balance variable renewable generation, make the best use of it and at the same time deal with the ongoing conflict in the industry between the domestic consumer and the big companies, is for the consumer to become central to the industry, to have control over it.”
And community energy projects have a key role to play, with Westminster paying close attention to such schemes in Scotland, he stresses. Indeed, Flexitricity was earlier this year chosen to take part in a pioneering project alongside partners including Honda to help local communities tap into cheaper and greener power.
The Edinburgh-based firm was selected to work on the Smart Hub local energy scheme demonstrator. The project, taking place in West Sussex, aims to integrate energy management across council housing, private residential properties, transport infrastructure and commercial properties – looking to use innovative technologies such as a hybrid hydrogen and electric vehicle filling station. Martin is now looking ahead to the electrification of transport “revolutionising” electricity, and Flexitricity is involved with a project that has secured multi-million pound funding to demonstrate a solar-powered car park supported by battery storage where motorists can charge their cars, with vehicles able to deliver electricity back to the smart grid, to power homes and businesses.
Flexitricity is overall intending to be a major supplier of power to electric vehicles, focusing on, say, workplace charging but also potentially serving the home market in a “behind the scenes” capacity.
But while Martin has no desire for Flexitricity to become a home energy supplier (“it’s a different world and it’s not one we’re set up for”), he states: “I expect that we will work with the more forward-looking of the domestic energy suppliers to provide them with the value from the flexibility that their customers inherently have.”
For now, adding to his in-tray is his significant engagement with regulation and government, explaining and making the case for the demand-response industry in those areas. He also works with the sector’s trade body the Association for Decentralised Energy.
And bullish Martin notes that in the demand-response industry there are various players, who “all came after us, every single one of them, and none of them are as successful as us… but we do all have very similar concerns, very similar asks of government regulation”.
Working in energy is a family trait, with Martin’s grandfather having been head of transmission and distribution for what was then the North of Scotland Hydro-Electric Board and at one point having to co-ordinate a recovery operation after an ice storm took hold (“as he put it, it did his career no harm at all”).
Martin’s own experience ranges from gigawatt-scale coal and nuclear power stations, through industrial efficiency, to small wind, solar, biomass and hydro generators.
And while the only area of energy he hasn’t worked on in detail is marine renewables, he spent a brief but highly formative period working for Professor Stephen Salter, who has been described as the “founding father” of wave power technology.
“I’ve never met a better teacher anywhere in energy – an absolute visionary,” says Martin, keen to stress the ripple effect of pioneers in their field more broadly. “Whatever effort people are making to innovate in a way that is beneficial generally, even if they’re only doing it locally, the merits can go beyond that one project.”