Georgia:

Hello, and welcome back to “Watt's up with energy?”, a gridX podcast. I'm your host, Georgia Knapp, Content Manager here at gridX, and I am joined once again by our Chief Growth Officer and co-managing director, Tim Steinmetz, who today is joining me from his home office. So, Tim, thanks for coming back.

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Tim:

Thanks a lot, Georgia, for having me again here in the podcast. And yeah, looking forward to our conversation today.

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Georgia:

So today is our last episode to talk about interoperability. And then in one of the next episodes, I will be talking with Sungrow about interoperability. But today, I want to kind of dive into what are some of the big trends we should be expecting with this.

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So, what are some of the big trends we should expect with interoperability in the next decade?

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Tim:

Yeah, first of all, I think Sungrow is a really nice podcast partner for the next episode, so I am going to definitely make sure that I am listening to that as well. But coming to your question, yeah, that's of course a big question. So, I try to orientate myself a little bit, and also structure it a little bit because the word interoperability, of course, can have a broad meaning.

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So, for me, it always means things like interoperability between different asset classes, like, for example, PV inverters, heat pumps, wall boxes, for example. So, that's the thing we can talk about. And we're going to see lots of, I would say, trends there in the upcoming future to see improvements, basically, when I talk about interoperability. 

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But it's also things like being interoperable between assets and other third-party services, like, for example, energy management providers, like gridX or other players in the market. It's also about being interoperable between energy management, so controlling these assets, but also connect that to tariff providers, right?

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So, that's basically super important to not think only in hardware, to not only think in energy management and controlling, but connect that always to tariffs, so electricity and supply contracts, and get the most out of it in combination.

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And what else? I could think of big trends in terms of aggregated flexibility portfolios, so combining thousands and millions of small assets, and taking their flexibility on when and how to use energy, and to produce and store energy, and connect that to different kind of markets, like spot markets, or even more closed OTC markets, so over-the-counter markets, or buying-selling flexibility options.

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So this needs to be interoperable, it needs to work with each other, the requirements on the one side, and the capabilities on the other side.

And then if you look at a big trend and topic, you certainly also need to name the whole DSO topics, so grid operators, they have control systems, and monitor – and live monitor their grid areas with their new kind of systems, but they need to be interoperable in the future also with energy management providers to make use in certain situations, also of flexibility and of options to avoid shutting down whole grid areas when the grid is not in balance.

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And then maybe one more, last but not least, the whole smart home topic. So, many people use the smart home term for more, let's call it comfort based services in the home. And I think also this is going to be a trend in the future that you see comfort based smart home systems being more and more interoperable with more energy management related smart home services.

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So, I think in all these areas, they're going to be big trends because you need to look at it from different angles and interoperability always plays a big role in that.

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Georgia:

Yeah, I mean, that's definitely what this whole season has been teaching me. That we just, I mean, as we were saying before, interoperability is the bread and butter of the energy management world. And it's just becoming even more clear in my mind as to why I've been hearing that.

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You mentioned energy storage just a bit ago. And I know that that is one of the technologies, as you were saying, that's really advancing the energy sector. There was a McKinsey report last year that projected that the global battery market will grow fourfold by the end of the decade. So it will be reaching a value of over €370 billion. How might this impact interoperability?

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Tim:

So, yeah, also a good question, Georgia. And to be honest, I don't know the numbers from the study by heart. But generally, I think there's a big connection between the two. So, battery storages and interoperability. Basically, they need to go hand in hand, right? They are strongly connected with each other.

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And as mentioned, renewable production is inherently intermittent. So, if you want to use most of the renewable production, battery storages are basically essential to shift supply from PV production, for example, or wind production into times of very high demand needs.

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And with this attribute, basically, renewable energy can be much better integrated into, for example, wholesale power markets, as well as grid congestion management schemes. So, basically, from my point of view, there will be a big impact. So, without batteries, there won't be a successful energy transition from my point of view.

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And also with regards to the growth projection, you mentioned some numbers of the study. This makes generally sense to me. Also, if you compare it to the development technology, the development of solar, and also cost development of solar in the past decades, if you look at battery storages, we are much, much more in front of the curve.

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So, we'll see a lot of technological developments there, which will show big results over the next decade, which then basically means much lower costs and better performance like today. And with that, also faster adoption and rollouts in the markets.

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Georgia:

So, as we move forward to a truly smart grid, what do you think will be the most immediate impact on end consumers?

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Tim:

Yeah, a good point. If you differentiate consumers and prosumers, we also talked about prosumers. And if you make that differentiation, I think consumers, of course, have a bit less options to profit from the future smart grid. Because, in their nature, they have definitely most of their energy usage, which is not controllable, at least not automatically controllable.

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But even if you start just with very easy use cases, like transparency use cases by looking at more granular data of your real consumption from your smart meter, for example, it can give you great insights and also advice for adapting your behavior slightly or to exchange, for example, some inefficient appliances which consume too much power.

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And I think in the next step, it can also trigger or lead to more proactive thinking on energy generally. Because so far, for many people, it's not really an emotional product, but this can change. I think if you think about that, if you see more details, etc., this can change.

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And for example, if you think towards community ideas, it's actually just logical to connect these consumers also with prosumers. So, that in terms of oversupply of PV owners and operators, that consumers which are close by, for example, in the neighborhood, that they can use to access energy for a better price, for example.

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And speaking of price, I think if you look at consumers and also at mass markets, I think such approaches can then only work if you provide a service which has a very big focus on cost savings and affordability, because that's what's basically triggering most of the people.

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And there are already a couple of options in the market with energy community services available in some or in certain European countries. So, it's starting where consumers can participate, but it's just, as mentioned, it's just a start. And these kind of solutions need, from my point of view, the right and attractive regulation and incentivization for both parties to join in the future.

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Georgia:

When you said a second ago that it's, I think you said it's not an emotional product yet. You mean, like, smart energy technology isn't an emotional product yet?

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Tim:

Yeah, it's maybe strange that I'm saying that. So, for me, it is completely. And I think for many other people in the industry, it's very emotional and super motivating to work in that area and to create these products and bring it to the field. So, I'm fully convinced of that.

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But if you look at it from a mass market perspective, so people who don't know about the technology behind, don't know about the insights of what we talked about in the last episodes, for example, and rather looking at, I don't know, give you some examples, maybe cars or clothes or whatever products. These are products which are most of the time more emotional for somebody instead of getting the electricity out of the power plug, right? So, that's what I mean with it.

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And if you also look at studies, which triggers people mostly with regards to their energy bills, it's not that they think purely on sustainability and renewable energy, etc. Of course, the front runners and people who really take care of that, they do. But if you look at the broader masses, it's really affordability and price.

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Georgia:

Yeah, that's really true. Because you're right, now that I'm in the energy industry, I'm also like, oh, this is very emotional. But a year ago, when I was not with the energy industry, I wouldn't – I would have thought more about cars being sustainable, again, recycling, not how to make my electricity at home necessarily sustainable. Now, that's all I think about.

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But that's just, that's a really good point of it needs to be made a little bit more emotional on a mass scale.

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Tim:

Yeah, that's a very good example. It needs to be easy to understand as well, easy to digest, easy to use. And in the end, I mean, it's also a bit the topic of the session here, interoperability.

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So, it needs to be interoperable with a normal person's life and not just working for person's who are let's call the tech nerds or absolute frontrunners, because then we don't create enough impact.

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Georgia:

Yeah, we need like an emotional Super Bowl ad commercial. That explains why you need advanced energy management systems.

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Are there any specific innovations or initiatives that you're particularly excited about when it comes to smart grid and smart technology?

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Tim:

Yeah, there are a lot of, of course, in the whole space of flexibility management. So, gridX is also currently working on that, which really excites me. So, we're ramping up a whole new team, which basically builds up a completely new product layer for our product portfolio and services.

And in the past, our energy management solutions, they mainly optimized single households or charging sites in the mobility sector, but always location-by-location and mostly behind-the-meter. And then we extended that last year already to cloud optimizations, which are based on day head prices from the electricity spot market, with which you can additionally save a lot of money and also in parallel support the grid in imbalanced situations.

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And then furthermore, we also added capabilities to incorporate external signals and incentives from grid operators. So, not only looking behind-the-meter, what can optimize, but also what does the grid operator on the external side of the location needs in terms of grid congestion. So, that was the next step, the third step, so to speak.

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And now, after we already tried to get the most out of the decentralized assets, looking at it from a location-to-location perspective, we're now entering actually a completely new stage, where we will connect hundreds of thousands of these locations in the future, millions of these locations and assets, and bundle them, cluster them according to different criterias.

So, for example, grid areas, to make them basically interoperable with markets, we can buy and sell flexibility. So, you bundle lots of assets, you pool it, you forecast the flexibility for the future, and then you offer that on markets. Some people call that virtual power plants.

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And me personally also did that already in the past with another company called Entelios, which I built up for a couple of years. There we did actually the same, but with very large industrial customers. So aluminum smelters, paper mills, air separation locations, and stuff like that. Basically the biggest consumers with flexible loads in the market.

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And my personal motivation was always to do this on a huge scale with many, many, many, many small assets, because it's one of the masterpieces from my point of view of the successful energy transition.

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So, that's why, and maybe you hear it a little bit, that's why it's really completely exciting me. So, that's a really cool innovation from my point of view.

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Then maybe another thing which is top of my mind at the moment, is the whole Ready for gridX initiative. We also talked about that a little bit in one of the earlier episodes. So, that can be really a game changer, I think, for the whole market, this approach from my point of view. Because so far, there weren't many standards with regards to communication, for example, communication protocols, so how to exchange data between parties and assets, which would have a great impact on interoperability, of course.

And that's something we want to change.

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So, we initiated a new program at gridX called Ready for gridX, where manufacturers of DERs, so PV inverters again, batteries, heat pumps, etc., can make sure they will be interoperable with assets from other manufacturers, but also with third-party energy management providers like gridX or others.

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And super important with future use cases, like I just talked about before, so flexibility management. Because so far, not many of these manufacturers got in touch with these requirements of the future, and we want to make sure that we don't install hardware in the field, which is not capable of doing that and with that not future proof.

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So, to sum it up a little bit through this new kind of collaboration model, and also technical approach behind, we want to make sure that communication interfaces of hardware are future proof and interoperable. We want to make sure that we only install assets, which are ready with their performance for future use cases. We want to transform basically millions of analog and not yet connected legacy assets, which are already installed in the field into smart and connected assets through bigger retrofit campaigns with partners to increase basically their value for the energy transition in the future.

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And last but not least, we also want to make life for the installers out there in the field much, much easier. For example, with technical capabilities like auto pairing during the commissioning process to make it as easy and fast as possible to basically get interoperability to life.

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Georgia:

And then I think, speaking of installers, gridX is currently investing into indirect sales channels. Do you want to speak to that a little bit?

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Tim:

Yeah, that's a good connection. So, in the past, GridX was very focused on only very limited customer segments. So, we didn't address the bigger part of the fragmented market, for example, in Germany, also Netherlands, which is covered by smaller installers. Because our platform as a service approach is a little bit too heavy for that.

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And on the other side, if you want to address and cover big market share, you need to find, of course, certain channels, certain routes to the end user. And that's something we now invest a lot in.

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So, basically, we want to make our smart grid or energy management solutions better accessible for customer groups like small installers. And with that, accelerate basically the energy transition and of course, make every asset, which is installed smart and connected and interoperable, which is the topic here in the podcast.

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Because when small installers think of their hardware and try to install as cheap as possible on the customer location, they so far very often forget to install the assets future proof and also combine that intelligently with the right energy management and also with, for example, dynamic tariffs, which will be necessary actually to lift all the value, which is in these assets. Yeah, and I mean, like you said before, cost savings is a big pro for the end consumer, and definitely when you get in the dynamic tariffs and stuff there. That can go a long way.

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Georgia:

That actually brings us to the end of these three episodes. And, like I said, our next one will be with Sungrow, one of the world's leading suppliers of solo inverters, energy storage, and solar power systems.

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Before we wrap it up, do you have any last thoughts, Tim?

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‍Tim:

Yeah, maybe connecting to what you said, I would just encourage to stay curious, stay engaged, stay hungry and foolish. The energy sector is one of the fastest evolving industries right now, and it's always super cool for me to see people joining from other industries, to gridX, for example, and make the products we are talking about and the energy markets more tangible, more emotional, and bring that basically to the whole society.

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So, I encourage everybody to dig a little bit into the details there and try to get infected behind this industry. And, yeah, I think with every person joining us or joining the industry, it just can evolve better. So, looking forward to many new faces here also triggered through podcasts like this.

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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.