SME Stories: Iván Castro, Co-Founder of Levelise

Published: 13 May 2020

The intelligent energy management kit developed by Levelise has huge potential to cut consumer bills, ease strain on the electricity network and reduce carbon emissions.

The company’s co-founder Iván Castro recalls how his small R&D project transformed into a 13-strong business, and how the Energy Launchpad helped simplify their message to customers and take a strategic view of the future.

Business Name: Levelise

Founder(s): Iván Castro

Location: Oxford Science Park

Year established: 2017

Number of employees: 13

What is the elevator pitch for your business?

Levelise allows you to monetise your home energy assets – usually lithium-ion batteries co-located with solar panels. What we do is proactively coordinate their operation across hundreds of homes, so we end up with a reliable virtual power plant from a highly unpredictable source.

This unlocks significant new revenue streams for our customers and helps to stabilise the power grid. Using Social Energy, (the consumer facing stakeholder in Levelise), we distribute this additional revenue among customers . This delivers return-on-investment right now, so buying a battery system is economically viable, whilst we can continue to enable more renewables on the network and remove polluting power plants.

What do you think is the opportunity to scale the business?

We created an AI-led flexibility-as-a-service solution for the residential market from scratch. It currently manages 5000+ li-ion batteries co-located with rooftop solar and distributed across UK.

From being the first in UK to provide dynamic Firm Frequency Response with domestic assets back in October 2019, we have now scaled up to 5MW in just six months and it has become business-as-usual. Nevertheless, as one can easily imagine handling 1.6M datapoints per household per day through home broadband to autonomously model, predict and orchestrate operations of each site in a secure & cost-effective way is not a trivial thing. Also, it required to completely streamline the pre-qualification process, as well as to automate bidding.

How did you get the idea?

It all started six years ago as an R&D project at Sharp Laboratories of Europe. Looking into how to make domestic lithium-ion batteries economically viable for people, without having to rely on subsidies. So, we started looking into the business model and investigated how to operate these batteries to provide flexibility services for the grid whilst preserving self-consumption. That led to our key differentiator, a cloud service which can stack multiple revenues streams, is automated and scalable.

What made you confident that the idea could be translated into a successful business?

In our previous jobs, we had been exposed to many competitors in this area. Back then, we were only focussed on optimising batteries for homeowners, not yet the aggregation or trading side. We realised that the hard work was in real-time operations and data processing, especially optimising and forecasting at the homeowner level.

As you can imagine, the way you consume energy is very different to the way I consume energy – so that was the hardest problem to cope with. That led us to take small steps to building it up in a more commercial setting.  But I think in the end you must have a bit of belief in your work and take data-driven decisions to turn ideas into reality.

What is your background and how did you become an entrepreneur?

I’m originally from Asturias a small region in the north of Spain where I studied Industrial Engineering, and I’ve always been passionate about science & technology. I think this career path was an organic process. Right after graduation, I started working in R&D for the European Centre for Soft Computing, particularly in data mining for neuroscience applications.

Then, the opportunity to start a PhD in Newcastle University sponsored by EPSRC arose, and it seemed logical to continue learning and getting the right set of skills. So, I started looking into how to deal with uncertainty in power systems, which was part of the fundamentals of the R&D project that kickstarted the activity & critical in our core proposition right now.

I suppose what was left were the business modelling & corporate skills that I gained at Sharp when transitioning out of academia. Thus, when the entrepreneurship opportunity appeared, I suppose I was ready to contribute as I was surrounded by the right people, who also had the right set of skills to take it forward. I think we would not be in the very same position otherwise, as we complement each other.

What is it about the ongoing transformation of the energy system that you find particularly exciting?

We started all of this as an R&D project, so it was purely theoretical. Then we took it into the lab – we tested, validated, and we set up small trials. In October, we are starting a commercial contract, so we’re thrilled that is now becoming a real solution, and real people will soon get lower bills because of our technology, and they are the first in the country to experience this.

We are also working on grant-funded project for  the Department for Business, Energy and Industrial Strategy looking at hot water tanks. There are nine million of these in the UK, representing a 27-gigawatt opportunity for demand-side response – which is huge. Currently, these hot water tanks are just sitting there not doing much, but we can use these to drive decarbonisation and lower people’s bills. This is another project that the Catapult is helping us with through their consumer insight expertise.

How did the relationship with Energy Systems Catapult begin?

The Catapult invited us to one of their workshops where they pitched their programme, which started the discussion about how they could help us.

They were able to provide us with the niche skills, particularly on how to tailor the proposition to a consumer. The Catapult were also able to help scope out future scenarios, upcoming trends, and what our business should be focussed on in the long term. The Catapult enabled us to take a more strategic view. We’ve had help identifying potential opportunities overseas too in the areas of electric vehicles and heating.

All these things happened in the space of two or three months. We are now in a two-year relationship with the Catapult, and we are looking forward to continuing that relationship.

How has Energy Systems Catapult helped you grow and develop?

Energy Systems Catapult provided key know-how on developing the consumer proposition. This helps remove any potential non-technical barriers to engage with consumers. So through Catapult insights we obtained a better understanding on how our technology is perceived and what the appropriate service models are to ensure its wide adoption can be achieved – not only for early adopters such battery owners, but also for all representative archetypes.

The Catapult has changed the way we (including Social Energy) pitch to customers. It is now more refined thanks to the testing they delivered with focus groups, who scrutinised the way we do things. This resulted in many changes to the pitch. All to simplify and maximise the appeal for our customers.

We are now going through the same process with our proposition for DSR-enabled hot water tanks, because many of our customers currently don’t understand what energy flexibility or demand-side response means, let alone why they should care about these things. It’s a complex concept that requires a lot of explanation, and the Catapult is really good at finding ways to convey the message in a way that the customer understands.

How is the trial going?

Thanks to Energy Systems Catapult, the BEIS-funded pilot we are running as part of the USER Project is now in a stronger position as they provided us crucial niche skills, particularly on consumer insights. Also through its expertise in pilots, the Catapult is now ensuring the triallist experience is as smooth as possible – its feedback is already providing us ways to improve our processes.

What does the future look like now?

We’re now focusing on accessing new domestic assets, starting with hot water cylinders which are omnipresent in UK. Hot water heating represents a latent opportunity for residential flexibility and will allow for it becoming mainstream. Hence, we’re focusing on enabling the operation of both new and existing cylinders to provide flexibility services.

We’re extending the range of flexibility services we provide within UK, regardless of the type of domestic asset. We’re pioneering services to distribution networks which bring a different set of challenges in terms of the location of the response.

The next focus is on overseas markets. The opportunities that the Catapult helped us identify have set the scene for us expanding into markets like Germany or Australia. We now know who the main players are in those markets, who we should be talking to, and they’ve provided us with some direct links to those stakeholders.

Despite all now working remotely because of COVID-19, we continue to make progress at similar pace.

What advice would you give to other entrepreneurs looking to set up in the energy sector?

Try to be honest and as scientifically accurate as possible, because this will empower any argument you may have to defend in front of anyone.

Find out more about the Energy Launchpad to see how we could help your business.