Georgia:

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Hello, and welcome back to "Watt's up with energy?", a gridX podcast.

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I'm your host, Georgia Knapp.

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Today, we are still talking about time of use.

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And with me, I have Merlin Lauenberg, the Managing Director of Tibber.

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So let's just dive right in, because I think we have a lot of interesting things to talk about today.

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So hi, Merlin, thanks so much for taking part in our podcast.

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Merlin:

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Hi, Georgia, thanks for having me.

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Georgia:

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Before we get into the topic, can you just introduce yourself and what brought you to the world of energy?

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Merlin:

Yes, happy to.

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So I'm Merlin, I'm the MD of Tibber Germany since mid of 2023.

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I have a finance background, I studied in Copenhagen for my masters, so there's already a little bit of a connection to Tibber as a Scandinavian company maybe.

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And after a couple of stops within the startup space, but also in the corporate space, I ended up at Viessman in a very exciting time.

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When the fourth generation Max Viessman transformed the company, and I got to do a lot of exciting stuff there.

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And I think that was basically my first time, when I was in touch with the energy space in a wider context, right?

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Viessman is the biggest manufacturer of the biggest single brand for heat pumps in Germany, until it sold its heat pump business to Carrier.

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And after five years at Viessman, in Berlin, which in Berlin terms is an eternity, especially if you're still in your late 20s, beginning 30s, I was looking for a new challenge, and I actually looked for, I was open for different things, exploring different things, but then Tibber reached out with this exciting position, and my wife always laughs at me when I say, there's no more exciting space to work in right now than the energy space.

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She thinks I'm pretty nerdy, but I think that's really the case, and I'm super happy to now be with Tibber for almost two years, and to be part of, I think, something new and disruptive in the energy industry.

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Georgia:

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Nice, I mean, obviously, I'm biased, but I agree with you.

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There's no other exciting place to be than the energy space.

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Thanks.

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Can you tell us a little bit more about, like in case listeners are not familiar with Tibber, what exactly they do?

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I know you just said that they're a Scandinavian company, but I believe you're with Tibber Deutschland, yeah?

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 Merlin:

Correct.

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Georgia:

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Okay.

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But yeah, if you can just explain a little bit more about what exactly Tibber does, how long it's been around.

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Merlin:

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Yes, happy to.

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So Tibber is a green energy company and a pioneer for dynamic tariffs.

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That means that our core product, our hourly dynamic tariff, basically enables people to benefit from the fluctuations of the electricity price at the electricity exchange.

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So we pass on the hourly, the different hourly electricity price to our customers.

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And in combination with the Tibber App, that enables them to use energy when it's cheap, which is also most of the time when you have the highest percentage of renewables in the grid, right?

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So you can save money, and you get to behave in a more sustainable way, consume energy in a more sustainable way.

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And we have been founded by Ed, one of our founders, a Norwegian guy, and Daniel, our Swedish co-founder in 2015, and are by now in four markets, Norway, Sweden, Netherlands, and Germany.

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In Norway, we are actually already among the, I think the second biggest energy provider.

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In Sweden, we are among the top five.

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So there, we've already gained quite a foothold, and we are in the German market since beginning of 2020.

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And I have been growing quite a bit since, and now, especially with the various changes, the smart motor a lot, we have, yeah, we're very positive about the future.

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Georgia:

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Nice, and then, in one of the previous episodes, I was talking to someone about more of the technical side of time of use and asked him if, in his mind, dynamic tariffs and time of use tariffs, do you see those as synonyms of each other?

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Is there anything differentiating the two?

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 Merlin:

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Well, the good thing is, I just looked that up some days ago, because I actually was 100% sure.

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And to my understanding, dynamic tariffs are tariffs where the electricity price changes all the time, right?

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So, for example, if you have an hourly or even so, quarterly, right?

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50 minute based time of use tariff, then that's a dynamic tariff.

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And time of use tariff, what you would refer to as a time of use tariff is basically a tariff that just has a different price that enables you to use, let's say, at a certain time that might last longer, one price, and then at another time, a higher price.

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So, for example, the night time might be a lower price, and then the daytime might be with a higher price.

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So there, you basically just have a general advantage of shifting your energy to another time.

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But the electricity price doesn't have to change constantly.

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Georgia:

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Ah, okay. Okay. So very...so the terms would be very similar, like reaching the same goal, but in...

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Slight...not slightly different ways, but...So not direct synonyms.

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Merlin: 

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Exactly.

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So I think you could say that a dynamic tariff is a type of time of use tariff.

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And there, we see a constant change of a price, while time of use tariff generally means that you just have different price windows, which don't necessarily need to change all the time.

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Georgia:

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Okay.

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And then with Tibber's dynamic pricing model, how do you see this approach empowering consumers to use energy more wisely?

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So I would say that Tibber has a very purest approach, right?

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Merlin:

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We have an hourly dynamic tariff.

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So basically, we really just pass on the prices of the electricity change, including obviously grid fees, tax, et cetera.

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But we're actually not earning anything on the kilowatt-hour sold.

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And the idea behind that is that if we don't modify this electricity change price in any way, if we don't hedge it, we don't apply additional costs to it, right?

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So in the long term, you will likely or you should always have the lowest average price, because we don't artificially hedge it or anything, right?

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And how does that work?

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So we have a Tiber app, and in the Tiber app, you can always see the prices of a current day at the next day.

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We purchase our energy on the day head market.

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And then you can either change your behavior, you know, by, for example, switching on your dishwasher during noon, when you usually have low energy prices.

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But of course, that still involves a bit of effort.

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So we also have what we call power-ups, which is basically integrations with OEMs of larger steerable devices, such as EVs and heat pumps and home batteries, etc.

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And with those power-ups in the app, you can simply automate the smart behavior of these control devices.

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So your energy will automatically be consumed in the time when the prices are low.

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Georgia:

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OK.

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And have you seen customers engaging with this type of dynamic pricing?

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Merlin: 

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Yeah, very much.

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So I think this is probably one of the things that we most focus on, right?

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Making the different engaging experience.

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Because at the end, you have to realize energy is quite, so the energy space is quite complex.

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And also the topic of energy, not everybody's as enthusiastic about it on day one as you and I are.

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So you want to make it engaging and fun, easy to understand, and we see really high engagement.

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So the vast majority of our users visits the app every day, checks out the prices, checks out basically how they're saving energy, how they can save even more energy maybe, look at the life consumption that they can also basically have displayed in the app.

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So yeah, it's definitely a high engagement product.

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Georgia:

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And with the majority of your customers, have you noticed them having kind of like a full fleet of assets, like the battery, the PV, the EV, or are they also engaging a lot just having like a PV and a battery, which we sometimes talk as like the gateway to starting your renewable energy journey?

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Merlin:

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Yeah, I actually like that idea of, you know, a start or a gateway to a renewable energy journey, right?

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Because I think not everyone wakes up one day and decides to get a whole complete energy system installed, right?

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With a photovoltaic, with a home battery, with a wall box for an EV.

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So basically, what we want to offer is an easy start to your smart energy journey.

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You can sign up to Tibber as you can sign up to any other energy provider.

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We only have a two-week cancellation period, so if you're not happy with it, you can basically switch to another provider after two weeks already.

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So it's a very simple start, right?

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And then you can basically see how you can further enhance your setup to save even more energy, to consume energy in an even more smarter way.

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But I think it's quite diverse.

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We have a lot of really techy first movers who have super complex setups at home and really thrive in building a very, very smart system for themselves.

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But we also have people who just use us for smart charging of their EV, right?

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So that's very different.

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And I guess what you also have to mention is, we only work with the cloud to cloud integrations that are available in our app.

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And obviously, we try to work towards the best coverage of all OEMs, right?

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The best compatibility.

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But we don't have every OEM integrated yet.

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So we see, I would say, the strongest of the most integrations around the EV space right now, where we have a lot of compatibility, I would say 70 to 80 percent with the wall boxes, but also the EV OEMs that we have integrated.

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And step by step, we're also in the other areas, the large ones, heat pump, battery, solar, building more and more integrations that then can also bring more and more people to us that have their home energy systems integrated with Tibber.

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Georgia:

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And as consumers, like they start working with Tibber, they start using the dynamic pricing model, have you guys seen any noticeable differences from when maybe a consumer starts working with you, then they obviously start kind of figuring out where, how to save money.

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Have you noticed then a shift in their behavior at all, or does it largely stay the same?

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Merlin:

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So, definitely we see people evolving here, and the more people look into the app, the more also they find out about ways to, yeah, consume energy in a smarter way.

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And obviously, as I said in the beginning, you can do that manually, you know, by just watching your own behavior and manually shifting, for example, dish washing, washing machine runs into certain types of day.

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But what we do see is that with our Tibber store, so Tibber has a store where we sell products of OEMs that are already integrated with Tibber, people start buying more products that help them consume energy in a smarter way, start buying a Go-E wall box, for example, that we have integrated to have the best smart charging experience for AV, for the AV or by the Tibber Pulse.

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So that's basically an optical reader that you can put on a digital meter, and then that shows you the life consumption in your app.

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So, we definitely see a lot of customers who are really interested in how they can improve, how they can consume energy in a smarter way, and evolving along the way.

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Georgia:

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Okay.

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And what have been some of the biggest challenges Tibber has faced in scaling time-of-use-based solutions, especially across different countries in Europe?

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Merlin:

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So, I think we're a bit spoiled coming from the Nordics, right?

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Georgia:

Yeah.

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We are there.

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In Norway, we have 100% smart meter coverage, and over 90% of households use time-of-use tariffs.

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Georgia:

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Oh, wow.

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Merlin:

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In Sweden, we have almost also full IMS, so smart meter coverage, which also brings people to adopt dynamic tariffs.

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There's a high adoption, and dynamic tariffs are also already like a fixed part of the market.

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Georgia:

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Yeah.

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Merlin:

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Maybe not fixed.

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Maybe fixed is not the right word.

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A substantial part of the market, right?

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But I think when we come to the Netherlands and in Germany, both markets are also quite different, actually.

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Which is a little bit ironic, of course, because in the end, electricity is a commodity, right?

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But the markets and also customers' demands are very, very different.

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And in Germany, obviously, the biggest challenge for time-of-use tariffs is the very low coverage of smart meters.

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Georgia:

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Yeah.

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That's unfortunately pretty well-known, and I feel like we talk about it every podcast season at this point.

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I guess my question should have been not your biggest challenges across different countries.

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It should have just been your biggest challenges when you came out of the Nordics.

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Merlin:

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Yeah, but I can elaborate a little bit on the challenges in the German market, right?

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Georgia:

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Yeah.

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Merlin:

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Yeah, basically, I mean, when you look at the two biggest challenges for Tibber coming to the German market with a dynamic tariff, right, an hourly dynamic tariff, that is our core product.

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We basically have the smart tariff, right, which we have already, we touch upon every time, just as you said, right, and it comes up every time, and that is one of the key challenges in the German market.

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And the second one, I think, is also a cultural one, right?

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I mean, the Germans are, of all our four markets, the most risk-avoiding.

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Germans are known or maybe best described as risk-avoiding savers, right?

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They like to save money, but they also don't like, they don't have such big risk appetite, and they might perceive an hourly product, hourly dynamic tariff, as risky.

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So we have to do a lot of them.

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We have to educate the market how basically the technology basically mitigates your risks as, of course, when you have the Tiber app and the Tiber hourly dynamic tariff, we will make sure that your large steerable devices will never consume energy during the high prices, right?

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But we'll always shift the consumption to low prices.

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So I think these are probably two biggest challenges that we see.

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Georgia:

So is that, because I was going to ask you what exactly are the risks?

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Because obviously working in this industry, I see nothing but the benefits of dynamic tariffs.

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But is the risk that your car will suddenly charge when prices are really high?

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Or like, what's the fear that people have with adopting the time of use tariff?

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Merlin:

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So I think the fear that people have is just lack of predictability, you know?

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Georgia:

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Okay, yeah.

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Merlin:

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That is what people think is a risk, maybe, of dynamic tariffs.

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And I guess we have to educate the market to a certain extent, get people to understand better that, yes, it is an electricity price that is changing by the hour.

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So that might sound scary in the first moment.

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But since you have the technology behind it, which will ensure that your large steerable devices will never consume energy during the high prices.

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That is basically the hatch that, you know, fixed tariffs have by buying a lot of the futures, you know, and forward contracts of energy to artificially create a fixed price.

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Georgia:

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And I guess shifting gears just a tiny bit, how do you see partnerships within the energy industry, like, pushing this initiative forward?

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Merlin:

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So partnerships are really important for us.

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I think one of our biggest growth channels, so just to highlight a few, we, for example, are the exclusive partner for the ADEC, for smart charging, right?

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The ADEC, the German Automobile Association, which they always tell me, which is now bigger than the German Catholic Church, is quite a force to reckon with in Germany.

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They have a lot of trust by their members, by consumers.

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And this, of course, helps just getting people to trust a very new and disruptive concept, like hourly dynamic tariff, more in the German market, right?

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And other partnerships are often with the OEMs that we already have integrations with, right?

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So that can be car OEMs, like Ford, for example, that we have an official integration with, or that can be BSH, Bosch Siemens Home Appliances, Europe's biggest manufacturer of home appliances that has built an integration that allows people to automatically have their dishwasher started at the time when electricity prices are low.

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And that, of course, helps to build trust, but also just be more known in the market.

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Georgia:

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And when it comes to scaling time of use tariffs, what would you see are some of the key factors, like in terms of reliability, the integrating, the forecast, or obviously processing what I think is huge amounts of data?

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Merlin:

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Yeah, it is huge amounts of data.

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It is extremely product-heavy, because in the end, since this year, every energy supplier in Germany has to provide a time of use tariff.

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But in the end, just giving people a changing electricity price doesn't really help anyone.

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You really have to build the tech enablement behind it to allow people to use that in a smart way and to feel comfortable with that.

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Right?

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So it is extremely product-heavy.

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We have a product-driven company.

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We have a big product and tech team in all our markets, but especially sitting in Sweden, in the Nordics.

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And that is definitely one part of it.

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We have a trading team, right?

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That is purchasing the energy for our customers on the head market.

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And, as you can imagine, it's also not...

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It can also be a little bit challenging to always purchase the right amount of energy on the day ahead for your customers.

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And this is something that you basically have to optimize over time, which we're now really, really good at, by predicting the amounts of energy that will be consumed by our customers.

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So, those are definitely big parts of it.

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And obviously, you have to be trusted as a reliable partner by your customers.

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So, you have to invest in the reliability, the stability of your app, and build that trust among your customers.

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Georgia:

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What innovate, because we're getting a little bit close to the end of the interview now, what innovations in time of use tariffs or dynamic pricing do you see on the horizon, and how is Tibber preparing for these?

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Merlin:

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So, something that we have not talked about yet, but that is, of course, the biggest and most innovative and most exciting thing about time of use tariffs is the whole topic of connecting all of your customers' steerable devices, all of these EVs and home batteries to a virtual power plant, and marketing the flexibility of that on the flexibility markets, doing intraday trading with basically the energy that you've already purchased, and earning money of that, right?

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When I said in the very beginning, that we're not earning any money on the kilowatt-hour sold, that's true.

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And that is also something we do to build trust, right?

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We don't want to be like the traditional energy suppliers that don't have any incentive for you to consume less energy because they earn money on your energy consumption.

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We want to have a bit more of an incentive alignment there, so not earning any money off your energy consumption.

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So, what do we actually earn money with?

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We have a basic fee per month, or I pay six years per month, 599, for using the Tiber Electricity Tariff.

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We have a store, which allows you to buy devices that are integrated with our app already.

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And then the really exciting thing, I think also what we are, of course, working on building in the future, and already are monetizing in our other markets, in the Nordics and in the Netherlands, is the Virtual Power Plant, where we get money for inter-trading, intraday trading, but also from trading on the flexibility markets, from grid operators.

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And then part of that money is a revenue for us, and part of that money also goes to our customers in what we call Grid rewards.

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So that is a super big, super exciting thing that also is going to be launched soon in Germany.

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And then, I think, yeah, there's still a lot of innovation going on around improving smart charging, even further, smart heating, optimizing solar smart charging.

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So when our customer does not only want to optimize his grid-based energy consumption, but also has their own electricity production from portable tags, from solar, then we can basically find the best way for this customer to optimize between their grid-based consumption and their own self-consumption of their PV production.

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So there's a lot of different things going on, and I think, yeah, this is still the beginning.

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Georgia;

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Awesome.

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That actually answered my next question, was going to be, as Tibber continues to grow, how do you see yourselves and time of use, tariffs role supporting Europe's broader energy transition goals?

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I think you just answered that question, but is there anything else you would add to that?

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Merlin:

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So, I firmly believe that flexibility is one of the key solutions to our energy transition in Europe, right?

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In the end, we're moving from a time when our production has followed consumption, right?

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So, whenever consumption has gone up, we just switched on coal or gas plant, right?

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To increase production.

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And now, in Germany, we are well above 50% of our energy consumption being covered by renewables.

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And obviously, we can't control the production of solar or wind energy as we could in the past with coal or gas or nuclear.

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So now, the consumption has to start following the production.

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And here, flexibility is the key, right?

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Shifting the consumption of our large cerebral devices that we will increasingly have, with the electrification of the mobility, with the electrification of the heating sector, right?

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Shifting that consumption two times when energy is cheap.

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And with that, I think, flexibility will be the thing enabling this energy transition.

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We actually had a look at the numbers, and me and Tibber believe that if we don't flexibly, if we don't flexibilize our energy consumption, we will likely have to build about four times the renewable energy production to cover our consumption at any time.

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Right?

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So, it is big.

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And also, when we look at the other solutions that we have, which is enhancing the grid and also building storage capabilities, battery storage, et cetera, then flexibility is still the cheapest and the fastest available option, right?

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Georgia:

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Yeah, yeah.

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Now, flexibility is also a very big topic with us in terms of energy management software.

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All right, and so this brings us now to the rapid question round.

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So, I have about nine to ten questions for you, but they're all very just chill, kind of fun, and just try to answer as quickly as you can.

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And then I have word association right after that.

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Merlin:

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And then the what?

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Georgia:

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Word association.

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So, I'll say a word, and then you just say the first thing that comes to your mind.

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Merlin:

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All right.

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Georgia:

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So, cats or dogs?

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Merlin:

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Dogs.

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Georgia:

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Beach vacation or city break?

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Merlin:

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Beach vacation.

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Georgia;

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What's the most unexpected energy hog in people's homes?

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Merlin:

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I would say, often it's an old fridge or...

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Georgia:

Okay.

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If time of use had an animal mascot, what would it be?

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Merlin:

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Probably fox.

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Georgia: 

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Oh, very nice.

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So, not including the Nordics, what European city or country do you think is most ready for time of use adoption?

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Merlin:

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So, that would probably be UK.

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Georgia:

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Ah, okay, nice.

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What energy saving hack do you use most often?

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Merlin:

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I live in a flat in Hamburg, so I don't have any big, stable devices.

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But what I still do, I have this function, my dishwasher, that allows me to start the dishwasher at a certain time.

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So, even though it makes only a small difference, I always use this function to then have the dishwasher start at around 2 a.m.

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where electricity prices are usually the lowest.

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So, I use that quite a bit.

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Georgia:

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Ah, nice.

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Yeah.

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I mean, every little bit counts.

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Merlin:

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Yep.

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Georgia:

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Marvel or DC?

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Merlin:

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Probably Marvel.

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Georgia:

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And so, of the Marvel superheroes, which one do you think would be the most likely to embrace time-of-use tariffs?

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Merlin:

‍

Okay, this is not a fast answer.

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I tend to overthink these things.

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But who of them is Techie?

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I don't know.

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Probably...

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Georgia:

‍

Isn't the Hulk Techie when he's Bruce Banner?

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Isn't he a scientist?

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Oh, wait, Iron Man.

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He's Techie.

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Merlin:

‍

Yeah, Iron Man, right?

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Iron Man, yeah, for sure.

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Georgia:

‍

All right, well, then you're not going to like...

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The next question is, who would be the least likely?

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Merlin:

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They would actually probably say the Hulk.

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It's, you know, just...

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I mean, that's...

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Yeah, when he's the actual Hulk.

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Georgia:

‍

Yeah.

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What's the most overused energy buzzword?

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Merlin:

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Probably VPP.

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Georgia:

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Your favorite thing about working in energy?

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Merlin:

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There's just so much happening.

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It's, I think...

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Yeah, it's a very decisive and exciting time, because the whole industry is changing.

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Georgia:

‍

Nice.

‍

And then this is the word association, so just say the first thing that comes to your mind.

‍

Net zero.

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Merlin:

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Renewables.

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Georgia:

‍

Clean tech.

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Merlin:

‍

Product.

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Georgia:

‍

Smart energy.

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Merlin:

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Smart consumption.

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Georgia:

‍

Time of use.

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Merlin:

‍

Shifting energy.

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Georgia:

And optimization.

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Merlin:

Small steps.

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Georgia:

‍

Oh, very nice.

‍

Well, thank you so much.

‍

This has been a really interesting conversation, and I really didn't know much about Tibber before this, or tariffs, really.

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So thank you.

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This was very useful for me.

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Merlin:

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Yes, this was a super fun conversation.

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Thanks, Georgia.

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And thank you.

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Georgia:

‍

Yeah.

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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.