2017 global distributed energy company of the year award · 2017 global distributed energy company...

2017 Global Distributed Energy Company of the Year Award

GLOBAL DISTRIBUTED ENERGY COMPANY OF THE YEAR AWARD

2017

BEST PRACTICES RESEARCH

© Frost & Sullivan 2017 2 “We Accelerate Growth”

Contents

Background and Company Performance ........................................................................ 3

Industry Challenges .............................................................................................. 3

Visionary Innovation & Performance and Customer Impact ........................................ 3

Conclusion......................................................................................................... 10

Significance of Company of the Year ........................................................................... 11

Understanding Company of the Year ........................................................................... 11

Key Benchmarking Criteria .................................................................................. 12

Visionary Innovation & Performance ..................................................................... 13

Customer Impact ............................................................................................... 13

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 15

The Intersection between 360-Degree Research and Best Practices Awards ..................... 16

Research Methodology ........................................................................................ 16

About Frost & Sullivan .............................................................................................. 16



Background and Company Performance

Industry Challenges

The global energy sector has been rapidly transforming in recent years. It is shifting from

large, centralized conventional power sources to decentralized power generation, much of

it coming from renewable sources. This shift in the energy mix is causing challenges for

system operators as renewable generation is intermittent and does not materially

contribute to underlying grid stability or "system inertia". As a result, electricity systems

are now more complex and more volatile than ever. The growing penetration of variable

electricity generation from renewables is increasing the need for better data about the

status of networks and for faster responding and dynamic grid balancing measures.

The high volume of decentralized energy is making cost-effective system management

considerably more challenging. Increasing spare capacity from conventional generation is

one solution, but this would contribute to increased carbon emissions and investment

costs for system operators which would ultimately result in increased energy bills for

consumers. Reactive's cutting edge telecommunications technology is the other solution.

It enables system operators to efficiently handle the shift to a lower carbon energy mix,

safely operate in a low inertia energy environment and deliver value to consumers.

Visionary Innovation & Performance and Customer Impact

Excellence in Addressing Unmet Needs

Reactive Technologies’ unparalleled commitment to innovation is a boon to the energy

industry. The company has a clear understanding of evolving market needs and

continually innovates to ensure that its product offerings are ahead of their time. Its

targeted innovation focusses on creating solutions based on the current and future market

needs.

Reactive’s ground breaking demand side response (DSR) solution “Tradenergy®” identifies

pre-existing flexible capacity within industrial and commercial energy users' assets and

enables their participation in DSR. This helps system operators meet their need to rectify

system imbalance while also providing a future-proof, fully optimized and integrated

energy management solution for businesses. Tradenergy® addresses the un-met market

needs in a number of ways:

Its unique and sustainable approach to energy management makes DSR smarter

and redefines the traditional model which involves high investment and uncertainty

around returns

It empowers businesses by giving them the ability to actively manage energy risks,

ranging from energy price risk to imbalance risk to use of system charges

Its cloud-based platform leverages mass communication technologies previously



solely used in telecoms to maximize end users' inherent operational flexibility

Its ability to identify existing asset flexibility and remotely optimize energy

consumption of individual electrical assets such as HVAC, lighting, storage,

refrigeration, etc.

It allows system operators to decrease reliance on a small number of high output,

carbon intensive sources and instead be able to call upon high volumes of small,

low carbon assets more efficiently and cost effectively

It opens up access to a complete suite of intelligent energy management revenues

(savings) across the end user’s asset base by integrating different asset types and

geographical locations

Reactive’s unique ability to offer DSR with a truly holistic approach enables it to enhance

customer value multifold. Its Tradenergy® platform delivers an ultra-fast, future-proof

energy management and DSR optimization service. This next generation of sophisticated

DSR control connects to customers’ electrical assets via a secure, cloud-based platform

interface; furthermore, it eliminates the need for a costly physical interface to be installed.



Tradenergy® delivers accurate and safe optimization of customers’ assets in line with pre-

agreed operational parameters, ensuring customers stay in control of their assets at all

times.Case Study - Earlier this year, Reactive successfully deployed Tradenergy® in

France with retail giant Carrefour Hypermarchés, enabling them to deliver vital demand

flexibility to the French system operator Réseau de transport d'électricité (RTE).

Tradenergy® aggregates and dispatches load flexibility from HVACs and chillers across a

portfolio of Carrefour’s sites, made up of distribution centres, hypermarkets and

supermarkets. This next generation of sophisticated DSR control provides Carrefour with a

single stop energy optimisation solution that extracts full value across all existing

opportunities. This type of partnership is replicable with the deployment of Tradenergy®

anywhere in the world.

Blue Ocean Strategy

Reactive’s Grid Data Measurement System (GDMS) is a ground-breaking communications

solution that broadcasts data messages through an entire grid using existing electrical

infrastructure. The company has made history by breaking all barriers involved in sending

and receiving digital messages through an electricity grid and building a commercial

business case on the back of it. What in the past was considered financially prohibitive and

was limited to geographically restricted applications is now made possible on a national

level and seamlessly so; thanks to Reactive’s GDMS technology. It allows electrical

devices, ranging from industrial chillers to energy storage devices to domestic appliances,

to participate in Demand Side Response (DSR) without the need for an internet/cellular

connection or any type of advanced interface. GDMS works by systematically modulating

the 50Hz signal that carries the electricity, creating a unique code within the frequency

signal that is carried to all corners of the grid and devices connected to it. The receiving



devices are programmed to detect these frequency changes, identify the unique code and

decode the messages. These messages automatically instruct the device to carry out

particular actions, for instance, to turn up or turn down according to a schedule (i.e. time

of day), customer preference or grid frequency changes. These codes/operational

instructions are highly secure and can only be read by the recipient devices.

By providing electricity system operators with sophisticated insights into the behavior of

electrically connected assets that generate, consume or store electricity, GDMS effectively

addresses the network planning challenges pertaining to limited visibility of low voltage

networks. Using GDMS to provide services to the domestic sector represents a clear “blue

ocean strategy”. While this sector has been deemed too difficult, expensive and

fragmented to access and mobilize by existing technologies and legacy players, Reactive’s

GDMS technology is able to address these major challenges in a unique, secure, reliable

and cost-effective fashion.

GDMS is indeed a true “World First”. Frost & Sullivan believes that Reactive’s GDMS

technology will accelerate the company’s growth globally and play a crucial role in

securing it a leadership position in a potentially “uncontested” market.

Visionary Scenarios through Use of Megatrends

Creativity is embedded in the DNA of Reactive Technologies and forms the core of its

innovative capabilities. One of the key success factors of the company is its ability to

create visionary scenarios by constantly analyzing Megatrends and creating revolutionary

solutions to address these developments. Its GDMS technology is a vivid testament to

this. One of the key megatrends in the energy sector is the increasing traction in

embedded generation; as a result, remotely measuring and verifying the status of

electrical assets along with offering visibility into electrical consumption is becoming

increasingly important.

Inertia decline in an electricity system causes even smaller changes in the overall power

balance to have larger and longer effects on the safe operation of the grid. This results in

a substantial increase in the amount of money needed to be spent by system operators to

procure reserve services to deal with a more physically volatile grid. As the trend is



moving us away from reliance on fossil fuel power stations (for both baseload supply as

well as energy flexibility) and towards distributed forms of generation and demand, there

is an urgent and increasing need for advanced system inertia measurements along with

accelerated response times to deal with grid destabilization events. Over the last 12

months, Reactive Technologies has expanded its GDMS solution to address this challenge

for system operators.

Reactive has developed and successfully launched GridMetrix, which is a powerful grid

measurement and analytics platform that delivers unique system data and deep insights

to help manage electric systems in real-time and drive critical grid investment and reserve

services procurement decisions. GridMetrix is the first technology on the market capable

of accurately measuring system inertia, along with other critical data points such as sub-

synchronous oscillation and regional frequency, which is imperative to enabling grid

operators to maintain security of supply cost-effectively in an increasingly volatile energy

environment.

This again, is a true “World First” and Frost & Sullivan’s finding is that Reactive’s

technology is undoubtedly the optimum solution in the global market to address these

megatrends. This new level of insight will enable system operators of national power grids

and distribution operators to see and understand the physical operation of their power

grids and the impact of increasing amounts of renewable generation in a totally different

way than before. Furthermore, Reactive are not just able to provide unique insights and

measurements for system operators but also provide next generation control and

response measures designed for a more volatile and unstable energy environment which

requires system operators to deliver even higher levels of technical performance than

currently exist in the marketplace.

To achieve this, Reactive has developed a new grid control technology called “Inertia

Optimized Frequency Response (IOFR)” which provides a new level of technical

performance to system operators across the world. IOFR is able to detect a system

destabilization event seconds before it would otherwise be detected. Once the event is

detected, Reactive can dispatch real-time instructions, which take the magnitude of the

system event into account, to physical assets which provide response services. The speed

of response is swifter than even the fastest grid mechanism currently available.

Implementation of Best Practices

Reactive’s excellence in energy management can be attributed to its deep rooted and

sophisticated know-how in mass communications technologies and energy systems. The

company successfully concluded an innovative demonstration project called Project

Samuel with Scottish Southern Electric (SSE) and National Grid UK to do a national proof

of concept of GDMS. Project Samuel was successfully executed in April 2016,

demonstrating its ability to cost effectively send and receive data across the entire grid in

the UK. Reactive completed an exciting follow up demonstration project with National Grid

called Project SIM in July 2017. Project SIM proved that GridMetrix is able to measure grid



inertia accurately, which is a second “World First” for Reactive.

Best Practice Example: Example from National Grid in GB

This example of an interconnector dropping demonstrates a grid destabilization event and

how Reactive’s technology could resolve it faster than the existing market, therefore

saving National Grid money they would have had to spend on purchasing additional

ancillary services. In an increasingly volatile system, such fast responding services will be

imperative to keeping the lights on and responding to events that could otherwise trigger

system failures with negative consequences to business and consumers such as black-out

events. In this case, once the interconnector drop occurs, the static DSR response only

kicks in when the frequency level drops below 49.7 hertz. In Great Britain, this event/fault

reaction is called the “Static FFR (Firm Frequency Response)” – where an energy change

occurs at a pre-set frequency and remains at a set level. National Grid UK also employs

more advanced DSR response mechanisms to improve management of the system

frequency closer to the fault time. These are called “Dynamic FFR” and “EFR (Enhanced

Frequency Response)". Currently EFR is considered a game changer being 2-4x more

effective than static response. If you imagine that IOFR shaves the detection and response

time down even further, the potential savings of IOFR become potentially significant.

Source: Reactive Technologies & National Grid, UK

Superior Price/Performance Value

Reactive’s IOFR technology is able to pinpoint the scale of a grid destabilization event and

trigger a response faster than the fastest DSR mechanism currently available in the global

market. Frost & Sullivan firmly believes this to be a step change in the energy industry

and a boon to the utilities and system operators. There are two facets to this. Firstly,

IOFR is able to provide material cost savings by minimizing utility expense on balancing

services. For instance, the UK’s National Grid currently spends £1bn a year on balancing



services to match power supply and demand and to maintain correct voltage and

frequency across the network. According to National Grid, this amount is expected to

double over the next five years. Reactive’s GridMetrix technology is designed to

significantly reduce this expenditure. The other aspect is the substantial reduction in cost

and effort required to resolve a fault, ultimately leading to higher availability and

opportunity cost savings. By offering utilities the luxury of exponentially reducing the

response and reaction times, the company is set to bring about a transformation that

would shake-up utilities’ perspective on grid management. Furthermore, the other key

element in this intriguing equation is the cost savings bestowed upon the consumer –

balancing costs of utilities have a direct impact on the average household electricity bill.

Industry Leading Customer Ownership Experience

It is Frost & Sullivan’s finding that Reactive’s cutting edge technologies will be highly

successful in helping system operators improve grid efficiency, maintain security of

supply, reduce energy costs, and contribute to a sustainable use of resources. This will

allow system operators to realize the full potential of the smart grid. Significant strides

made by Reactive in this space demonstrate its relentless pursuit of enhancing the overall

customer ownership experience. With Reactive’s unique capabilities it is able to obtain an

unparalleled insight into the grid, with which it is able to detect grid instability issues

much sooner and take action before a problem is even flagged. With the IOFR technology,

it empowers system operators to directly and uniquely manage significant de-stabilizing

system events to maintain safe and effective operation of the grids. With GridMetrix,

Reactive also allows them to assess and quantify the impact of renewable generation on

the physical operation of the grid and to ensure that counter-measures are as

commercially and technically effective as possible. The other cornerstone of Reactive's

technology is GDMS and its inherent ability to seamlessly communicate with hard to reach

assets. Since its messages are able to travel to wherever power travels, it benefits from

extensive coverage using existing, secure infrastructure – the electricity grid. This

coverage is not only wide but also deep, in a sense that its messages reach all the way to

individual assets at the end of the electricity line.

Furthermore, Reactive's Tradenergy® platform is based on a gain-share model, therefore

Reactive is incentivized to extract as much value as possible for customers as the

company’s financial success is inherently tied to the financial gains of their customers.

This ensures that it does the utmost to leverage value for its customers by optimizing

them across all available opportunities.



Conclusion

Reactive Technologies continues to exert its leadership position by yet again proving its

excellence in visionary innovation resulting in a positive customer impact. In spite of being

a relatively young company, Reactive has firmly secured its place as a forerunner in the

global distributed energy industry. Its strong R&D culture combined with extensive

intellectual property, with 50 patents now granted and 90 patents pending, provides it

with a unique edge in the market. It has an uncompromised focus on creating a difference

in distributed energy industry with an eye for developing revolutionary and path breaking

solutions. It is Frost & Sullivan’s finding that Reactive is a company that is obsessed with

continuous improvement; a trait that is expected to drive its success to even greater

heights

Because of its strong overall performance, Reactive Technologies is recognized with Frost

& Sullivan’s 2017 Company of the Year Award.



Significance of Company of the Year

To win the Company of the Year Award (i.e., to be recognized as a leader not only in your

industry, but among your non-industry peers as well) requires a company to demonstrate

excellence in growth, innovation, and leadership. This kind of excellence typically

translates into superior performance in three key areas: demand generation, brand

development, and competitive positioning. These areas serve as the foundation of a

company’s future success and prepare it to deliver on the two criteria that define the

Company of the Year Award (Visionary Innovation & Performance and Customer Impact).

Understanding Company of the Year

As discussed above, driving demand, brand strength, and competitive differentiation all

play a critical role in delivering unique value to customers. This three-fold focus, however,

must ideally be complemented by an equally rigorous focus on Visionary Innovation &

Performance to enhance Customer Impact.



Key Benchmarking Criteria

For the Company of the Year Award, Frost & Sullivan analysts independently evaluated

two key factors—Visionary Innovation & Performance and Customer Impact—according to

the criteria identified below.

Visionary Innovation & Performance

Criterion 1: Addressing Unmet Needs

Criterion 2: Visionary Scenarios through Megatrends

Criterion 3: Implementation Best Practices

Criterion 4: Blue Ocean Strategy

Criterion 5: Financial Performance

Customer Impact

Criterion 1: Price/Performance Value

Criterion 2: Customer Purchase Experience

Criterion 3: Customer Ownership Experience

Criterion 4: Customer Service Experience

Criterion 5: Brand Equity

Best Practices Award Analysis for Reactive Technologies

Decision Support Scorecard

To support its evaluation of best practices across multiple business performance

categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool

allows our research and consulting teams to objectively analyze performance, according to

the key benchmarking criteria listed in the previous section, and to assign ratings on that

basis. The tool follows a 10-point scale that allows for nuances in performance evaluation.

Ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Visionary Innovation & Performance and

Customer Impact (i.e., these are the overarching categories for all 10 benchmarking

criteria; the definitions for each criterion are provided beneath the scorecard.). The

research team confirms the veracity of this weighted scorecard through sensitivity

analysis, which confirms that small changes to the ratings for a specific criterion do not

lead to a significant change in the overall relative rankings of the companies.

The results of this analysis are shown below. To remain unbiased and to protect the



interests of all organizations reviewed, we have chosen to refer to the other key

participants as Competitor 2 and Competitor 3.

Measurement of 1–10 (1 = poor; 10 = excellent)

Company of the Year

Visionary

Innovation &

Performance

Customer

Impact Average Rating

Reactive Technologies 9.5 9.5 9.5

Competitor 2 6 6 6.0

Competitor 3 5 5 5.0


Criterion 1: Addressing Unmet Needs

Requirement: Implementing a robust process to continuously unearth customers’ unmet

or under-served needs, and creating the products or solutions to address them effectively

Criterion 2: Visionary Scenarios through Megatrends

Requirement: Incorporating long-range, macro-level scenarios into the innovation

strategy, thereby enabling “first-to-market” growth opportunity solutions

Criterion 3: Implementation of Best Practices

Requirement: Best-in-class strategy implementation characterized by processes, tools, or

activities that generate a consistent and repeatable level of success.

Criterion 4: Blue Ocean Strategy

Requirement: Strategic focus on creating a leadership position in a potentially

“uncontested” market space, manifested by stiff barriers to entry for competitors

Criterion 5: Financial Performance

Requirement: Strong overall business performance in terms of revenues, revenue growth,

operating margin, and other key financial metrics

Customer Impact

Criterion 1: Price/Performance Value

Requirement: Products or services offer the best value for the price, compared to similar

offerings in the market.

Criterion 2: Customer Purchase Experience

Requirement: Customers feel they are buying the most optimal solution that addresses

both their unique needs and their unique constraints.

Criterion 3: Customer Ownership Experience

Requirement: Customers are proud to own the company’s product or service and have a

positive experience throughout the life of the product or service.

Criterion 4: Customer Service Experience

Requirement: Customer service is accessible, fast, stress-free, and of high quality.



Criterion 5: Brand Equity

Requirement: Customers have a positive view of the brand and exhibit high brand loyalty.

Decision Support Matrix

Once all companies have been evaluated according to the Decision Support Scorecard,

analysts then position the candidates on the matrix shown below, enabling them to

visualize which companies are truly breakthrough and which ones are not yet operating at

best-in-class levels.

High

Low

Low High

Cu

sto

mer I

mp

act


Reactive Technologies

Competitor 2

Competitor 3



Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices

Frost & Sullivan analysts follow a 10-step process to evaluate Award candidates and

assess their fit with select best practice criteria. The reputation and integrity of the

Awards are based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify Award recipient candidates from around the globe

Conduct in-depth industry research

Identify emerging sectors

Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

Interview thought leaders and industry practitioners

Assess candidates’ fit with best-practice criteria

Rank all candidates

Matrix positioning of all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

Confirm best-practice criteria Examine eligibility of all

candidates Identify any information gaps

Detailed profiles of all ranked candidates

4

Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

Brainstorm ranking options Invite multiple perspectives

on candidates’ performance Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5

Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

Share findings Strengthen cases for

candidate eligibility Prioritize candidates

Refined list of prioritized Award candidates

6

Conduct global industry review

Build consensus on Award candidates’ eligibility

Hold global team meeting to review all candidates

Pressure-test fit with criteria Confirm inclusion of all

eligible candidates

Final list of eligible Award candidates, representing success stories worldwide

7 Perform quality check

Develop official Award consideration materials

Perform final performance benchmarking activities

Write nominations Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8

Reconnect with panel of industry experts

Finalize the selection of the best-practice Award recipient

Review analysis with panel Build consensus Select winner

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform Award recipient of Award recognition

Present Award to the CEO Inspire the organization for

continued success Celebrate the recipient’s

performance

Announcement of Award and plan for how recipient can use the Award to enhance the brand

10 Take strategic action

Upon licensing, company able to share Award news with stakeholders and customers

Coordinate media outreach Design a marketing plan Assess Award’s role in future

strategic planning

Widespread awareness of recipient’s Award status among investors, media personnel, and employees



The Intersection between 360-Degree Research and Best Practices Awards

Research Methodology

Frost & Sullivan’s 360-degree research

methodology represents the analytical

rigor of our research process. It offers a

360-degree view of industry challenges,

trends, and issues by integrating all 7 of

Frost & Sullivan's research methodologies.

Too often companies make important

growth decisions based on a narrow

understanding of their environment,

leading to errors of both omission and

commission. Successful growth strategies

are founded on a thorough understanding

of market, technical, economic, financial,

customer, best practices, and demographic

analyses. The integration of these research

disciplines into the 360-degree research

methodology provides an evaluation

platform for benchmarking industry

participants and for identifying those performing at best-in-class levels.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

and achieve best-in-class positions in growth, innovation, and leadership. The company's

Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined

research and best practice models to drive the generation, evaluation, and implementation

of powerful growth strategies. Frost & Sullivan leverages more than 50 years of

experience in partnering with Global 1000 companies, emerging businesses, and the

investment community from 45 offices on six continents. To join our Growth Partnership,

please visit http://www.frost.com.

360-DEGREE RESEARCH: SEEING ORDER IN

THE CHAOS

http://www.frost.com/

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