Georgia:

Hello, and welcome to “Watt's up with energy?”, a gridX podcast. I'm your host, Georgia.

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Today, we are continuing to talk about the German energy regulation that is shaking things up a bit, Paragraph 14a of the Energy Industry Act.

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And with me today, I have Ingo Schönberg, founder of PPC, Power Plus Communications.

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And yeah, let's just dive right in. So thank you so much, Ingo, for joining me today.

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Ingo:

Yeah, you're welcome.

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It's a pleasure for me.

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Georgia:

Great. Can you start by introducing yourself and what brought you into the energy sector?

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Ingo:

Yeah.

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My name is Ingo Schönberg.

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I'm the CEO of Power Plus Communications PPC.

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We are in the German market, the market leader for smart metering gateways, which are used, let's say, to measure energy consumption as well as to remote control of devices around the energy transition technology.

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Let's say we are in this market since the very beginning.

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We are the pioneers of the smart meter gateways here in the German market.

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We are always the first mover and launch the first products to the market and have, let's say, sold so far approximately 1.3 million devices to the German market.

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Georgia:

Oh, wow.

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And, sorry, how long have you been around?

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Ingo:

So, we are existing since 1998. Yeah, we started very early.

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Yeah, but let's say, when we started with this business, we had to focus more on power line technologies, communication technologies, and later on, at the beginning, let's say, in 2008, 2009, we made management out of the company because the company in former times was owned by a utility, and then we started simply as a startup in the area of network for smart grids.

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And when this smart meter gateway came up about 10, 12 years ago, we fully focused on this, let's say, this business with smart meter gateways.

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Georgia:

Okay.

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And can you talk about what it's like to be the founder, and maybe why did you decide to create your own company rather than joining one?

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Ingo:

Yeah, it's very simply because we had a clear idea what will come up in the future for the energy networks.

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We saw that it's required to have a digitalization of the energy transition, because without, let's say, interactions in the market, this will not work.

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And that was a decision we made with a small team more than 10 years ago, and let's say started this company.

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And of course, it's much more interesting to have your own company starting, let's say, towards, let's say, in the direction of a clear target.

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But of course, if you are, let's say, the owner of your own company, you enjoy in brackets all the ups and downs.

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And to be a startup in a business which is in the utility area, always a little bit slower developing than expected, it's of course, it can be a hard time, yeah?

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But let's say, now in the past years, of course, the development of the company is great.

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We have more than 100 people now here inside, have additional 300 people in the production fab.

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And so it's developing fast now for us.

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Georgia:

Okay, and you're not based in Munich, right?

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Ingo:

No, we are based in Mannheim, yeah.

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Georgia:

Okay. And then going into what I've been talking about with people for the past few episodes.

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So Paragraph 14a of the Energy Industry Act.

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Ingo:

Everybody knows what 14a is.

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Georgia:

Yeah, right. Yeah, it's been a very hot topic for a while.

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So in your opinion, what have been the main drivers behind the implementation of the amendments to this paragraph and what have been the challenges?

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Ingo:

Yeah, when we are talking about, let's say, energy transition, we have always two sides of the coins.

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Yeah, the one side is the production of renewables, let's say, all the things which we have typically in a private level with a PV on the rooftop.

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But on the other side, we have all the new loads, where electrification happens in the energy sector of heat and also of mobility.

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And if you have these new loads with heat palms and with electromobility, of course, you have an issue, because everybody is coming home at five o'clock in the afternoon and then is plugging in his electromobile, this cannot work in the network.

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Vice-wise not, and also from the operation of the network.

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But what you have to have, let's say, you have to bring in a way the rhythm of the load into the rhythm of the renewables.

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So you need to have some flexibilities.

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And part of this flexible generation is the rule of 14A.

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On the one side, there's the right of the private household to connect each device he wants to connect.

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And on the other side, we have the right of the network operator really to take, let's say, care of, let's say, some peaks in load and other ones, and in worst case, have access to the devices and remotely, via remote control, reduce the load of the devices.

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The advantage for the end customers, of course, if he can, let's say, offer the utility of this 14A right, he get a compensation of up to €150 a year. Yeah.

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Which is a lot of money.

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Georgia:

Yeah. Yeah.

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Since it's been in effect for over a year now, have you noticed any impacts or changes?

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Ingo:

Most of the things are on most of the utilities, and also the service operators are now, let's say, in trials.

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They try to find out how to operate it best. Yeah.

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Because the one side is the legal framework, the other side is the technical solution. Yeah.

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Because it's a mass market, and this means we have to implement, let's say, this 14a operation to a mass market.

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And therefore, you have market processes, all the processes which are required on a technical level. And we have now a way, let's say, try an error phase, which we will see at the beginning of 25.

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And over the year 25, we will have more and more bring it to the regular operation of the utilities.

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Georgia:

Do you know, because in my mind, when I knew paragraph 14a would go into effect at the beginning of 2024, I mean, I would think everything is in place, but it sounds like you said that now there's still like testing, trial and error.

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Why did that not happen before 2024, like before the paragraph went into effect?

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Ingo:

Because after the, let's say, the regulation framework 14a was implemented, based on this implementation on a legal level, we have also to develop the processes.

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And this was designed by the technical authorities, let's say, to define the standards for operation, all the processes.

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And these were, let's say, these were defined in 2024, for example, by VDM and consulted around.

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And now, let's say, we are in the implementation phase of all these things.

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From a technical point of view, it's not a big issue. Also, for the end customers, it's not a problem because he can go to his utility and ask for the 14a rule. He will get the deduction of €150 whether it's used or not.

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And so, let's say, this is a good story for the end customer.

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He gets the money anyway.

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But let's say, the benefit of using the 14A for the utility is something which he is implementing now step by step.

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Georgia:

Okay. And then when 14a, like the trial period is done, and it's really fully in effect and being implemented, in your opinion, who is most likely to feel the changes that that would make?

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Would it be consumers or service providers?

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Ingo:

I think the both. The consumers, of course, have, let's say, by the 14a, and also by other things like storage devices, other things, they can use really the benefits of variable tariffs.

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They can use the benefits of having their own rooftop PV on top in combination with electromobility so they can use the value of all the flexibilities.

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That's the one side of the coin.

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Let's say prosumer, especially prosumer, will have a big, let's say, advantage of using this 14a and all the other things which are around on the regulation level.

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On the service provider side, on the utility side, of course, the service provider can offer their, let's say, offers to the customers and offer them some beneficial contracts combined with variable tariffs, and having also some remote control on it.

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They can aggregate customers also on a load level, and so this is an interesting business model we're just developing there.

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And for the utilities, of course, if they can do a little bit of peak shaving, yeah, of course, this reduces their costs on the networks and uses their cost on the operations, and offer them also resilience within the network, because you do not want to have a critical situation in the energy network with outage and other things, so you want to have a stable operated network.

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Georgia:

Okay. And then, what's been PPC's role in the rollout of this regulation?

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Ingo:

First of all, of course, the one side is we are providing the technical platform to do so.

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There's a smart meter gateway as well as the so-called CLS devices, means the systems which you can use, let's say, for remote control or where you have, for example, a platform to have applications on this platform.

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So we are, let's say, offering the full technical equipment.

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And on top, of course, we have dozens of, let's say, proof of concept solutions with application providers.

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The providers of, let's say, even with gridX or with other providers, the energy management system, with the companies offering PV or heat pump solutions, and all these companies who are dealing, let's say, with solutions use cases around the 14a.

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And so we are ongoingly developing jointly products, solutions, which will then be, let's say, part of their offer or our offer to the market.

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Georgia:

Okay. And then for any of our listeners who might not know, could you explain how exactly your offerings would help utility companies comply with 14a?

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Ingo:

Let's say our business is always in the B2B area. So we do not have an end customer business. So we are not offering anything to the end customers.

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We are offering solutions, let's say, to the service providers or to the utilities or the measurement system operators.

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So we are never going to the end customer. So we can only provide the tools to enable use cases and business models.

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Georgia:

Then with you offering the services, like your B2B, you offer it to the providers. I guess, can you explain how the smart meter gateway interacts with paragraph 14a?

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Like, why is it even a topic when we're talking about this regulation?

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Ingo:

Of course.

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But what you need, of course, when you have a 14a is how is a signal coming to, for example, an energy management system.

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So what the smart meter gateway is doing is to provide, let's say, the access to the backend systems, where the signal is generated.

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The backend system can be the backend system of utility or even of a service operator.

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And the smart meter gateway is forwarding this signal to, for example, energy management system or remote control devices.

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At the same time, the smart meter gateway is controlling, let's say, whether the signal is transferred or not.

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Is it properly, let's say, transferred to the device?

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It's measuring the energy consumption, the time where a signal is sent to.

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So all the things around, what you need, let's say, at the end of the day to create the benefit, create a bill and all the informations which are required for this is done by the smart meter gateway.

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Georgia:

Okay. And then you and I both know, and I think if our listeners have been keeping up, we know that paragraph 14a, it's just in Germany at the moment.

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In your opinion, how does Germany's approach to regulations like 14a compared to how other countries would maybe approach an energy regulation?

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Ingo:

When we go to the rest of Europe, we do not have in other parts of Europe, this similar market and network integration.

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In most of the parts in Europe, we have only a market integration by measuring figures quarterly, our measurements, and other ones, and offering tariffs.

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We do not have a direct connect in other parts of Europe to the network operators.

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And so everything which is happening in other parts in Europe is driven by a variable tariffs. Yeah.

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And let's say the variable tariffs or the price of the tariffs then is used as an incentive to the end customers. Yeah.

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The advantage of having a direct connection to the network operators is, first of all, we have by law the right for each household to connect a device to the network.

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So, the 14a enables, let's say, this connection because the deal is, as I said, if you want to connect a device, the utility or the network operator requires a remote control for the worst case situation, but you cannot reject, let's say, you as someone who wants to connect, for example, a heat pump. Yeah.

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So, you have the right to get the connection.

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And this is, let's say, by law. Yeah.

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And with the 14a, you have the instrument, the commercial and technical instrument, that there is a balance between the end customer requirement of having connectivity to the network and then the smart grid side of the network operator who wants to make sure that this, let's say, connected device is not causing big problems. Yeah.

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And so, in the German market, we have this combination of having market access to service providers, variable terrors, and at the same time, with the device, also an access of the local network operator who can, let's say, use this connection in worst-case situation to have direct influence on the devices of the end customer.

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Georgia:

Okay. And then, do you think other countries are kind of watching Germany as an example to see how this is going to impact the energy landscape?

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Ingo:

With, let's say, with the development of the energy transition, having more and more renewables in the network, and having more and more electromobiles, heatsum, you're coming to a point where you cannot simply integrate it into the electricity networks, because there are limitations.

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And this is something which we have in Germany in a very early stage.

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We have now more than 60% renewables. The share of electromobiles and heat pumps is increasing. Yeah. And so we are closer to this point where we have the limits.

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And that's the reason why we need to have this 14a.

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Yeah.

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In other parts of Europe, yeah. They need to, let's say, the closer they are coming to this situation, that they need a smart integration in the energy networks, the more they are going also to solutions like we have here in the German market, where market integration and network integration has to be combined on a local level.

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Georgia:

Ah, okay. So that's why Germany would be the European country to implement something like this, whereas others have not had the need to?

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Ingo:

For example, in Italy or France, you have only in records a dump meter, which is sending some signals.

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You do not get, let's say, quarterly hour reads. You do not get excess in real time. So you do not have this performance like we have here in the German architecture.

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Georgia:

What about in a place like Norway or Sweden, where they have a great smart meter rollout? Would they benefit from something like 14a, or do they already have something like that?

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Ingo:

They have something in place, which is, let's say, not as advanced as we have here, but they have something in place.

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And especially in Norway and Sweden, of course, they have very strong electricity grids because they are used to lose more electricity, for example, for heating.

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In these Nordic areas, you have much more electricity in the heating area than we have here.

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And so the starting point is much better than we have here in the German market. Or, for example, in the Netherlands.

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The Netherlands just started, let's say, a process now for their next generation solution, which is quite similar to what we have here in the German market.

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Georgia:

Okay. And do you foresee any innovations or technological advancements that could make compliance with 14a easier or more impactful?

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Ingo:

I'll tell you, of course, you can have always, let's say, more intelligence inside the building.

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So, the best way, of course, in the future would be to have a smart meter gateway on the one side and to have an energy management system on the other side. This is the perfect combination for the future.

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But meanwhile, of course, you have a situation that you do not have in each building, an energy management system. In some, you have only a control system, for example, for a heat pump or for an electromobile.

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And this means there you have to have dedicated solutions which are only working for this individual, let's say, device and not for, let's say, the whole building as a combination of load, storage, and generation.

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And the innovation is, of course, to make it much more, let's say, integrated. So we have, for example, now solutions where, let's say, this remote control is also implemented within the smart meter gateway as a software solution or not outside the smart meter gateway as a dedicated hardware solution.

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So we can reduce costs, make it more flexible.

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And on the mid-term and long-term, we see this infrastructure, which is developed there as a kind of a platform, a technical platform where a lot of software applications can run on.

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A little bit like an iPhone in a smart store, an app store, where you have a platform, the smart meter gateway, CLS devices, and on this platform, you can operate whatever application software you want to have.

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Georgia:

Okay. And as the founder of PPC, what is your role or what is your vision of the role of technology in shaping future energy regulations like paragraph 14a?

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Ingo:

Yeah. Of course, as PPC and the founder, of course, we are building up now the technical platform, as said, with the smart meter gateway, with all the CLS devices, so this smart grid infrastructure, what you need for, let's say, a digitalized energy network.

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And the vision is, of course, that if you have implemented this platform, a lot of applications for customers can run on this platform and makes it very flexible and offer very flexible service models on this platform.

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And then really we have an integrated operation of network, electricity network and markets, and let's say enable at the end of the day, this energy transition vision where we have 80% renewables and where we have a high share of electromobiles and heat pumps in the network. Yeah.

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That's of course our job to make this happen. Yeah.

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Georgia:

Yeah. And then my final question before we'd get to the rapid fire round: If any policy makers were listening to this episode right now, is there any advice you would give them?

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Like coming from the tech side and kind of on the ground level of things.

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Ingo:

Make things faster.

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Georgia:

Yeah.

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Ingo:

Let's say, we are discussing too long about, let's say, the regulations and all the things, yeah.

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So we always try to make it 100% perfect in Germany, yeah.

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And sometimes it would be better to start even with a solution and then on an agile way, find out in the way how the best, let's say, solution can develop to, to, let's say, the next level.

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So we have much more flexible in developing and implementing technologies than we are today.

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Georgia:

Yeah. That's true. Yeah.

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Now I will get into the rapid fire round. So this is just, I have about nine questions for you.

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Ingo:

Yeah.

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Georgia:

And they're just to just answer whatever comes to your mind. And then at the very end, I have a few word association.

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So I'll just say a word, and you tell me the first thing that pops into your head.

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Ingo:

Okay.

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Georgia:

For a winter vacation, do you prefer skiing, snowboarding, or staying inside a cozy cabin?

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Ingo:

In former times, skiing today, let's say I'll stay better.

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Georgia:

What is the most important item for staying warm in winter?

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Ingo:

A good wine.

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Georgia:

What is the one energy asset you think every household should have?

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Ingo:

A smart meter gateway.

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Georgia:

Of course, yeah.

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Ingo:

And an energy management system.

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Georgia:

What is your favorite energy news or innovation from 2024?

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Ingo:

Let's say this is really the integration of remote control inside the smart meter gateway.

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Georgia:

Nice.

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Ingo:

Make software instead of hardware.

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Georgia:

Nice. I like that.

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What are you most looking forward to energy-wise in 2025?

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Ingo:

Let's say, I think in energy 2025, the energy area 25, we will have a serious growth in renewables again, and we need to speed up the development of electromobility.

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Georgia:

In your opinion, which European city is most prepared for the energy transition?

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Ingo:

Mannheim.

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Georgia:

Everyone usually says the city that they currently live in.

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What is the most overrated energy buzzword?

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Ingo:

Efficiency.

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Georgia:

What is your favorite part of working in smart energy?

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Ingo:

Sorry, I didn't get it.

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Georgia:

What's your favorite part about working in smart energy?

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Ingo:

The favorite part is really deploying technology to end customers and make them happy.

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Georgia:

Nice.

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And then this one is just, I'll say a word, just say the first thing that comes to your mind.

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A smart meter. 

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Ingo:

Is crucial for the energy transition.

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Georgia:

Battery.

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Ingo:

Is the flexibility we require urgently.

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Georgia:

Heat pump.

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Ingo: 

Is needed to bring, let's say, electricity to the energy market, to the heat market.

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Georgia:

Energy Industry Act?

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Ingo:

Yeah. It's a nice framework.

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Georgia:

And 14a?

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Ingo:

It's required to operate networks stable.

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Georgia:

Nice. Well, thank you so much for taking part in the podcast today. This has been very insightful.

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Ingo:

Thank you. Thanks a lot.

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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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