Transcript

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‍Georgia:

Hello, and welcome back to “Watt's Up with Energy”, your podcast for all things energy. I'm your host, Georgia Knapp, and today we're diving in once again to the topic of interoperability. And I'm thrilled again to welcome our Chief Growth Officer and Co-managing Director, Tim Steinmetz, back to the podcast.

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Welcome back, Tim.

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Tim:

Thanks, Georgia, for having me again. So, I feel very honored that I'm able now to join the podcast a second time. Looking forward to the conversation.

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Georgia:

So, in the last episode, we were discussing how decentralization is a natural byproduct of decarbonization and why digital solutions are crucial in leveraging the full potential of decentralized systems.

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Tim:

Yes.

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Georgia:

Today, I wanted to dive a bit deeper into interoperability, which as I described in the last episode, is the bread and butter of energy management. For our listeners who might be new to the term, and maybe the last episode didn't clarify it completely, could you start by explaining what interoperability means and why we're calling it the bread and butter of energy management?

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Tim:

Yes, sure, I can do that. So, let me start with interoperability, difficult word. So, I would say this refers to different aspects. So, the first one is, and we touched on that as well in the last episode, the ability of the physical energy assets of different manufacturers to communicate with each other, right? So, basically talking the same language that they can exchange information properly.

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Second one is, from my point of view, the ability that different service providers, energy service providers, can connect their systems basically with each other to provide a seamless solution for end users.

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So, there are different puzzle pieces which are relevant, and they're very often not only single players who provide the end-to-end solution, so that needs to be interoperable as well. For example, between energy tariffs and energy management solutions. That's a common example. 

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And then last but not least, I would say the ability to provide pools, virtual pools of connected energy assets to different energy markets over time. That's also super important and needs to be interoperable because, in the end, if you want to monetize the flexibility out of these energy assets, if you want to get the most out of it for the presumers, but also for the market, it's very important that you stay dynamic and agile on that, because from time to time, different value pools or different markets will be more attractive than others, and this changes over time.

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So, you need to be also able to be interoperable by connecting to different markets over time. I hope that helped a little bit. Different layers of interoperability, but you also asked a question about bread and butter, right? So, why bread and butter? Yeah, to explain it very easily, I think it's basically the very basics or the foundation of what gridX also wants to provide, making clean energy accessible and basically affordable for everyone.

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Georgia:

Nice. You also just reminded me that saying it's the bread and butter, that could be a very English phrase. Do you have that in German? It's the brot und butter?

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Tim:

Yeah, definitely. So, I think we use it the same way. At least I do.

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Georgia:

It just suddenly occurred to me that I might have just used a really weird topic, that I've only spoken about in English with people, or a weird phrase.

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Tim:

I think that's also interoperable between cultures.

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Georgia:

See what you did there.

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I liked in the last episode when I asked you about the superpower that any household could have, and you said that they could, all that different assets could just speak the same language in a snap. And that actually kind of makes me think of our gridBox and XENON, because we compare it a lot to being a polyglot translator, or it's sort of like a meeting of the United Nations, and the gridBox slash XENON is the little earbuds that the diplomats wear that translates everything to them. And that definitely makes me think of interoperability and everything that we're talking about.

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What has been the response with current energy players about this and what's been the level of progress towards a truly interoperable system?

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Tim:

Yeah, good question. I think the response of the current energy players, of course, it depends on what kind of players you're talking with, but the players we are working with every day, I would say all of them totally understand the importance of interoperability.

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As mentioned before, they also understand the situation that there are not many players or almost no players which can provide proper end-to-end solutions which are also future proof. So, as I said, I would say most of them totally understand that, and have also made their strategic decisions to work in these kind of open ecosystems. But of course, implementing this approach can sometimes also have many barriers.

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So, integrating assets into a holistic system is sometimes very time intensive, and sometimes technically also challenging. So, meaning, you need to, if you, for example, produce inverters, or if you produce wallboxes, you need to invest a lot of time and money into making it interoperable towards other players in the market. It's really a time invest, and can be technically sometimes very challenging for players which are not used to that from the past.

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Georgia:

Okay. And I've heard that Europe is actually at the forefront of pushing greater interoperability. Are there any initiatives out right now that are helping with that?

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Tim:

Yeah, I would say initiatives for sure. So, for example, if you look at the European Green Deal, I would say that's a significant drive towards achieving a more integrated energy market. And this only works, as discussed already, if the market players collaborate, right? So, I think that's a driver, of course, but also coming from the more historical view, I think Europe was always on the forefront of interoperability, because of the nature of Europe, right? It's much more fragmented. You have basically different, if you look at regulation, different specifications, or national specifications of laws, which basically have the same European headline, but if you look into the details in each single country, it's specified differently.

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And I think that's one of the reasons why in Europe, things only work if they are interoperable. If you look at other markets, like the US for example, or Asian markets, there also closed shop systems are sometimes more common as in Europe.

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Georgia:

Can you give an example of where interoperability is being implemented successfully right now?

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Tim:

Yeah, I would say I have many examples in my mind, in my head. So, if I would choose one, I would say maybe the Scandinavian energy market is one good example. So, if you look, for example, at countries like Sweden or Denmark, they've been basically pioneers in creating kind of smart grids that not only allow to consume energy from various sources, but to really integrate smoothly prosumers and consumers into one market, meaning they can produce and sell energy back to the grid through, for example, full dynamic and index tariffs, so index to the power spot prices, spot exchanges, as well as different flexibility markets, which is sometimes very easily accessible even for residential customers, which is not the case, for example, in Germany.

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And this level of integration is basically supported by a very strong regulatory framework and also advanced digital infrastructure, which is, as I said, in other regions, not the case. And I think also other regions are sometimes looking a bit jealous at, for example, adoption rates, or, for example, dynamic tariffs and interoperable approaches like in Scandinavia.

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Georgia:

On the opposite side, where are there gaps? Like, where in Europe do things still need to improve?

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Tim:

Yeah, my favorite example is always the standardization of communication technology. And that's not only a European topic, right? It's a worldwide topic. And we already touched on that in the last episode, a little bit at least.

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And another big gap is, for example, the common specification of the energy market regulation. So, that's what I mentioned in my answer before. So, I think if you would achieve that across Europe, directives of the European law are specified in the same way for different nations, it would be much, much easier to basically adopt innovative energy solutions and interoperability across Europe much, much faster.

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Georgia:

In addition to the different regulations, there's also a varying degree of technology across Europe. How long do you think it would take to adopt something like that? Like, what could companies, energy companies do right now to push interoperability as quickly as possible, given the technology barriers that might exist?

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Tim:

Yeah, thanks for that question, Georgia. I really like that, because, I think personally, and also that's the gridX attitude since the beginning, you should never wait for the perfect regulation, for example. You need to push, and from a technology point of view, there's so much already possible.

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So, yeah, my answer to your question would be basically the willingness to modify the technology of these companies, so products of these companies, to fit basically state-of-the-art requirements from end users. That's something you can do right away, right? And basically, the more interoperable their products are, the better is their competitive advantage, and the better are their positions against competitors, right? Who are entering their home turfs, for example.

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And if we look at gridX, so ourselves, one of our initiatives is, for example, the Ready for gridX initiative, where we very closely collaborate with the major manufacturers, so OEMs of different energy assets.

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So, we want to push that program and label to the market to really help companies out there, and also customers out there, by making a kind of standard of interoperability, and to ensure that different assets of manufacturers are talking very easily to each other in a seamless way.

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Georgia:

So, talking about Ready for gridX, because I think that's a really great initiative that we're doing, does this, does it exist anywhere else at the moment, or does anybody else do something similar to Ready for gridX, or is this a new thing that we're doing for the market?

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Tim:

At least not to my knowledge. So, I would rather say it's new. I mean, in the gridX history, we very often discussed that kind of topic, not as we launch it now, but in different kind of ways. So, the answer is, I think it's not existing.

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And if you look at the market, I mean, there are already millions of PV installations, batteries, wallboxes installed in the field across the different European countries and many, many of them are not connected. So, it's a little bit like lost potential. So, they are not managed, not connected. They don't talk to each other.

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And in the end, the Ready for gridX initiative also aims in getting these assets really into the market, getting these assets connected, and get the most out of it together with our partners and customers, and provide basically the end users, which are operating these assets, a much better experience and solution.

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Georgia:

So, that way an end user could just go buy the PV that they want, the heat pump that they want, and if it all has this Ready for gridX stamp on it, they can just bring it home, plug it all in and it all works.

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Tim:

Right, right. That's the ambition. And what you described is more the new installation scenario, right? That you install the assets at the same time, and by our initiative Ready for gridX and the partnership programs with the manufacturers, we make sure that the installation of these assets is much more seamless and even faster than today. So, that's one benefit.

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But imagine you're already having a PV system, and now you want to add a battery, or you want to add a wallbox, which is sometimes a bit tricky, because your PV system is maybe also, it's already in place for, I don't know, five years or so, and doesn't have the right software on it to be able to talk to the new wallbox you're buying now. That's something we want to solve as well, right? So, we want to integrate legacy assets, which are already in the field, which are not connected. We want to integrate that into the energy world.

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Georgia:

And then, I know I said the last episode, I like to kind of end with a fun question. And I know you like to play hockey. Although I have to ask, is it ice hockey or street hockey?

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Tim:

I love all of the hockey disciplines, but I used to, or I still play field hockey. So, I played it for over 15 years in my youth career, and now since five years again, in a more senior team in Munich. But that's field hockey, yes.

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Georgia:

Okay, coming from Chicago, whenever anyone says hockey, I only think of the ice.

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Tim:

Yes, yes, yes.

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Georgia:

So, drawing on that experience, how do you think the concept of teamwork in hockey can translate to achieving effective operability in different energy systems? Totally easy question.

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Tim:

Yeah, super nice question. So, even if you're the strongest individual player, I think you're going to lose the game if you don't create a great team, right? So, there's also a quite famous saying, not about a hockey player, but by Michael Jordan, famous basketball player.

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Georgia:

Yeah, also Chicago.

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Tim:

Which was also very often used by Andy, one of the gridX founders. And Michael Jordan always said, or once said, that “talent wins games, but teamwork wins championships,” right? So, only with a very strong team, you can win in the long run. And I personally also love the team spirit. So, with a great team, you can basically achieve everything.

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And that's definitely also my experience, and my attitude, and translating that now to energy systems, that was your question, basically. Yeah, I think there as well, you need to have very strong partners in the ecosystem. So, you can't do it alone.

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We also see that at gridX. We wanna build basically a very, very strong ecosystem up. We're also investing there in our team to make it more easily for ecosystem partners to collaborate with us.

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So, speaking of energy solution providers, manufacturers of energy assets, that's what we discussed, right? For example, with programs like Ready for gridX, with tariff providers, smaller installer companies and wholesalers, or for example, metering service companies.

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And yeah, I'm sure that when we build up this ecosystem approach, and then in fact be very interoperable with them, that we will be very successful together in driving the energy transition.

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Georgia:

Well, thank you again so much, Tim, for coming by to speak with me a bit more about interoperability. I feel like with each new episode, I'm becoming less of an energy newbie, more of an energy expert. I hope our listeners have also learned a lot, maybe also about hockey.

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And on the next episode, you and I are going to talk about interoperability again and specifically what we can look to in the future of interoperability and how that might be impacting the energy space.

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Tim:

Great. I really look forward to that. And thanks again for having me. It was very fun and looking forward to the next time.

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Georgia:

If you'd like to learn more about the world of renewable energy or energy management systems, be sure to check out our website, gridx.ai, where we produce regular blogs and glossaries about the subject.

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You can also follow us on LinkedIn, or on Twitter and Instagram @getgridX.

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