25 Years later: Recalling the early days of energy modeling software PLEXOS

As we celebrate Energy Exemplar's 25th anniversary, there is no better time to reflect on the journey. After all, not unlike modeling in PLEXOS, understanding the fundamentals can indicate what might lie ahead. So, together, let's run some LTs, and explore opportunities and challenges from the early days.

This blog includes quotes from a live interview, which can be watched here.

How it all started – The desire to create a tool that could model everything

Dr. Glenn Drayton is the Founder and Chief Scientist at Energy Exemplar - still to this very day - and our story begins with him. In the late 90s, Glenn was working on his PhD thesis in operations research. The paper looked into the efficiency of various electricity and ancillary services market designs.

While comparing scenarios with small cost differences, Glenn realized that, instead of just comparing heuristic outcomes, it would make more sense to compare optimal solutions. This led him to work with linear programming-based electricity market designs and simulations. Next, he sought to compare market designs that were very different in detail, without having to hardwire the Linear Programing (LP) formulation for each case.

“I needed something very flexible because I needed to change the market design easily. I also wanted to do scenarios on quite small differences in these designs. So, I needed a really accurate tool. I definitely needed optimization,” Glenn recalls​​.

So, Glenn went about creating code that would automatically build the LP formulation based on his data and settings. This was the kernel of the PLEXOS software. At the time he called it ‘Wemsim’ (Wholesale Electricity Market Simulator). 

Despite not being a trained programmer, Glenn’s dedication and innovative thinking allowed him to build an engine that connected to LP solvers, making simulation easier and more efficient.

“I got a C-plus in computer programing... I just went to the final exam and opened the textbook,” Glenn humorously admits​​.

From university project to commercial engine

Fast forward to post-university days, Glenn’s need for a tool that could simulate market scenarios with high precision persisted. The initial challenge came while working at a consulting firm that used existing commercial models which often produced results that "didn’t make sense". This led Glenn to dust off his own software.

“I ran the simulations with my old software... and very sneakily hardwired my own simulation results into the project's results, because that was the only way to make sense of it,” Glenn shares about his eureka moment​​.

With the realization that he had something valuable coupled with the desire to go back to working in jeans and t-shirts, Glenn left consulting and started his own company. The uniqueness of what came to be PLEXOS lay in its ability to optimize and simulate complex market scenarios, a capability that set it apart from other models of the time.

“The name PLEXOS was derived from the Greek word 'plexus', meaning an intricate network of things, with the ‘OS’ standing for Optimization and Simulation,” Glenn explains​​.

Finding the right talent to build a business

Being based in Adelaide, South Australia, one of the most significant challenges Glenn faced was building a team. Finding experts was difficult and for the first six years, the company consisted of just four or five people. Glenn’s solution was to form partnerships with consulting firms worldwide that had the people and the expertise required to apply the software to the areas where it could be effective.

This proved a successful strategy. The expansion of PLEXOS into international markets was facilitated by partnerships with TXU (Milorad Zecevic), MMA in Melbourne (Ross Gawler and Nicola Falcon), Elan Energy Consulting in Amsterdam (Twan Vollebregt), as well as Mark Henwood, Eric Toolson, and Wenxiong Huang.

"In the early days the ‘office’ was the laundry at home. One day the phone rang in the middle of the rinse cycle. It was Anna Geevarghese from the California ISO," Glenn recalls about the first steps into the US.

At the time, in the wake of the 2000 California Energy Crisis, the ISO was having difficulty finding software vendors in the US and thus widened its search beyond its shores. A recommendation from initial users at SMUD and NCPA led them to discover PLEXOS. 

Despite the initial challenges, this project proved to be pivotal for PLEXOS and Energy Exemplar. This was the breakthrough that turned PLEXOS from a small-system-focused model to a full-scale commercial tool.

The evolution into Energy Exemplar

Partnerships were crucial to getting PLEXOS off the ground, but in 2007, Glenn wound up all reseller arrangements and merged everything under 'Energy Exemplar'. The transition from PLEXOS to Energy Exemplar marked a consolidation of the brand and a commitment to bringing all support and data management in-house. This strategic move allowed for greater control and better service for clients.

Glenn recalls: "From the very start I had offers to buy the business outright, but I never felt like the business was anywhere near ready. I needed a partner to turbocharge growth and corporatize the operation."

Preparing the company for sale took several years and in 2016 private equity firm Riverside acquired Energy Exemplar. Riverside helped to build the management team at Energy Exemplar, delivered on the manifesto outlined in the Information Memorandum, and much more.

Reflections on future growth opportunities

Looking ahead, Glenn sees significant opportunities in the evolving energy landscape. Trends like the rise of renewables, energy transition, hydrogen, and AI are areas where PLEXOS and Energy Exemplar continue to innovate.

“There’s a clear need for better weather and load forecasting, distribution level modeling, and the electrification of everything,” Glenn highlights​​.

Reflecting on the past 25 years, Energy Exemplar's journey from small, unproven software to a global leader in energy modeling and simulation software is a testament to Glenn's innovation, collaboration, and resilience. The challenges faced and the milestones achieved have shaped PLEXOS into a platform that continues to influence the energy industry profoundly.

As we look to the future, the spirit of innovation and commitment to excellence that drove Dr. Glenn Drayton to create PLEXOS remains at the heart of Energy Exemplar. Here's to the next 25 years of pioneering advancements in energy modeling and simulation.