Ep. 31: Farhan Farrukh, Business Development Manager at NODES - Local Flexibility Markets, DSOs and the Future of the Grid

Welcome to the Smart Charge by RiDERgy podcast. This is Claudio Geyken, founder and CEO of RiDERgy. This is your show to learn about all things, energy management and smart charging innovation for electric vehicles and fleets.

Welcome to Smart Charge. Today's guest is Farran Faro. This conversation begins with Charge BNB or charger sharing startup that won 100,000 from the postcode lottery in Norwegian grants for Pilot in Halden. The pilot exposed market and tech. Frictions. Schneider 22 kilowatt units without built-in connectivity that needed costly on-site activation. Older OCVP versions, quirks where chargers showed available but failed in use, late stakeholder approvals. In a postal fleet pilot that stalled as funds ran out. With a six-person team, the verdict was clear, thin margins and fragile

user experience make sharing hard to scale. Something even players like the most advanced charger backends touch only at the edges. From there, we move to nodes, a Nordic global flexibility market that tackles congestion from trading, not just grid upgrades. Nodes models the grid at node level, from street level, low voltage to city scale, medium voltage in every trade is defined by location, price, volume and time. DSOs can reserve long flex months ahead and call short flex near delivery. In Norway, last season's 100 megawatt hour of

availability, about €20 per megawatt hour, saw under 10% activation. Prompting a new army mechanism so DSOs and TSOs can stack value from the same assets. We'll link this to real projects across Norway, Sweden, Finland, Belgium, and Canada with research in Greece, Switzerland, Spain and the UK. The platform runs with a web app for grid companies and APIs for aggregators or flexibility service providers, already connecting 15,000 of approved assets in a pipeline above 50,000. From EV chargers and batteries to heat pumps and commercial sites, that's the

journey today. From a sharing pilots, hard lessons to a market model that turns flexibility into simple contracts, clear activations, and reliable settlement. The energy transition faces huge challenges that distribution system operators like DSOs need to face. This episode is fundamental to understand how we can solve this. Let's dive in. Farran, nice to have you today. How are you? I'm doing very well, thank you for inviting me. Sure, uh, happy to have you coming from Oslo and it worked well that you could make it to the

podcast studio here in Berlin. That's uh awesome. And before we jump into detailed topics related to your work, introduce yourself, please. Yeah, first of all, thank you again for inviting me. So my name is Farhan Faro. Um, I've been uh a global citizen, I call it, uh, because I was born in the Middle East, uh, in Saudi Arabia, um, but then I was actually a national of Pakistan. Uh, my parents lived in Saudi for, for, for several years. So I, I grew up in, in a

in a different, uh, desert, uh, environment, uh, with a different kind of, um, you know, cultures and, and experiences. Uh, then moved back to Pakistan, did my education there, uh, and, and, yeah, then moved to Europe. Uh, that's where I met you as well, uh, while I was studying in Belgium, uh, doing master's inner energy engineering. Uh, and then after that I moved to France. So I did a bit, uh, the second master's there in smart grids and buildings, and then after that, I ended up

in Norway. So right now I'm working on flexibility, uh, so, uh, really about local flexibility markets, uh, and working with a lot of, uh, the whole value chain of the energy industry, and, and it's really. Exciting and I think we'll talk more about that. Yeah, for sure. Thanks. Yeah, we knew each other from the Ino Energy community days. I think we both were quite passionate about that project as well, vision of uniting sustainable energy change makers and you were super active as a community leader and

you studied one of the masters as well, such as me as well. So also for the listeners, yeah, that's the background and I'm happy to have you. I think you're one of the first guests from the Inno Energy community. And uh and uh happy to have more in the future as we you will see there's plenty of interesting work that uh people coming from that community are are doing. So you said you came to Europe first you said global citizen. What motivated you from your Saudi

experience in Pakistan, then come to Europe? Yeah, so, so my, as I told you, like my bachelor's was from Pakistan, so I studied electrical engineering. Uh, I majored in power systems. Uh, so right after graduating, I did went to Saudi, uh, that's, uh, in 2016. Um, try to look, uh, if, if I would be, you know, uh, back to my, my childhood living environment and, and will get a work, uh, experience there, uh, but at that time Saudi was not doing great as an economy, uh

so there was not many projects on the electrical power side. Uh, so then I moved back to Pakistan. Uh, I found a job, uh, at a very, actually a very small company, a startup, uh, almost, uh, that was actually doing. A very technical work. Essentially they were partners with General Electric, the large US company, so they were installing protection and control system equipment inside medium and high voltage electrical grid stations. So, so the government of Pakistan in 2017 started to upgrade a lot of these electrical

substations, so they had this contract to upgrade them. Uh, so then, while I was working there, that was super interesting, uh, but it was a lot of technical details that I have to work with. So you design circuits, you're really into the engineering stuff, which, which has its own, uh, fun. Uh, but one thing I was missing was the, the, the new things that you hear, uh, uh, you know, in the news and also online. What is this energy transition, uh, thing happening. And really looking

from the outside and never been in Europe, never, never have visited even before that, uh, it was like Europe was the leader in back in 2017. If, if you ask any, any young person outside Europe, if you tell them uh energy transition or sustainable. or sustainable energy and all these uh keywords, uh, every young person would say, oh yeah, this is something happening in Europe. Uh, so that was the main motivation to, to become part of that community or that society where something is happening, which

is actually, uh, quite important, uh, and then I found this masters with Inno Energy, which also was combining not just the energy engineering and energy and sustainability topics, but also was combining innovation and entrepreneurship. So that was like a best of two worlds for me. Uh, so just getting into the sustainability topic, but while also, uh, having this, you know, uh, very much a hobby, uh, to become an entrepreneur, uh, so, you know, a, a naive hobby at that time, didn't even know what an entrepreneur

really means. It was a cool thing to do, but, but that's, that's how I ended up in Europe and with, with those two passions. Energy and and sustainability and then on innovation and entrepreneurship. OK, and one step back again because it's also something that is a lot in the news right now where we're seeing geopolitical tensions here and there and uh um borders being set by the US for example for especially people coming from from abroad with their H-1B visa and I'd be curious to know

like it's I think for there's not so much light shed. Into how many people from Pakistan or India and and other regions are actually living in Saudi or in in the Arab countries there in the Arabic Peninsula. Like what's the share of population? What led your parents to move there? Yeah, that's a very interesting question because uh my generation has seen actually the global community more connected. It's much easier to move. Between countries. Uh, but back in the day when my parents uh were, you know

uh, this is like 60s and 70s, um, that when Saudis, or not even just Saudi, but the whole Middle East, uh, had this oil exploration, right? Really, uh, that was the, the big, uh, function in that society that really enabled them to hire a lot of uh skilled workers. Uh, so my dad actually. to work in the public sector of, of, of Pakistan. So we have a public company that that operates, you know, all our electricity grid, but also all our hydro dams. So he used

to work at a hydro dam up in the north of the country and then, uh, like the the Saudis were hiring a lot of skilled people because they were really shortage and they really needed a lot of the, uh, like the new infrastructure to be maintained and developed and operated. And that's how a lot of people migrated from from Pakistan who are skilled people to to the Saudi, but the same thing happened, I believe in in in Dubai or UAE also in in Qatar and Kuwait

and all those countries which are very much, you know, quite closely linked. Uh, but most of them have one thing in common was that they had shortage of skilled labor and, and the countries which had a lot of population, but also a lot of skilled labor, uh, they migrated to those countries. Uh, so living there and growing up, um. I would say like my school was also had 3 sections in it. So one was a Saudi section which only the Arab students were were were studying

Uh, then we had another floor on that school which was Pakistani section we used to call it. So all the Pakistani students were studying there and and then uh the curriculum we were following also was coming from the embassy of Pakistan or or the government. That was teaching uh the uh the curriculum that we were following and then we had another floor on top which was the Indian students. Uh, so, so they, they had their own curriculum from the Indian government which they were following as

overseas as well as citizens. So it was an interesting experience. Uh, you had three different layers within the same, I would say premises of the school. Uh, but we, yeah, we will play with the, with, with the Indian kids, uh, from time to time. Uh, also football we'll play with the, with the Saudi kids because they were, yeah, so we'll play cricket with the Indians and play football with the Saudis. So that was an interesting experience. Funny anecdote. And coming back to Europe, uh, after your

studies, what did you do? Uh, so I, I, I finished in, uh, uh, with my second master's in, in Grenoble, uh, in polytechnic, uh, uh, in France. Uh, so from there I started reaching out, uh, to my network and, and seeing, seeing what are the different possibilities to start working in, in Europe. I wanted to stay in Europe, uh, build my career here and gain some experience, uh, so I, I had a friend actually who also graduated from Ino Energy, but one year ahead of me

uh, he was working on, uh, European Horizon projects. So, you know, Europe, uh, European Commission sets out an agenda. Every few years and and they have a a a certain amount of funding that is allocated to innovation, research, and also some uh some of the academic uh related activities. So I joined a company called Smart Innovation Norway which was a uh a research institute, uh, but a private one, but doing a lot of research with innovation so really high end of the technology readiness. which is

a term used by the European Commission to define whether your product is in the lab or is is closer to entering the market from NASA. Yeah, exactly. So, so, so that's something that has been my goal was to work on creating new projects, so putting a lot of consortiums together like 1617 organizations. This would include companies, universities. Academic institutions, research institutions, uh, also sometimes startups, uh, and then all together we will put a new proposal or a new innovation concept for a challenge that has been

set in these horizon calls, uh, which is done by the, which is designed by the European Commission experts. So I would create those proposals, submit it to the commission. Uh, and then you will get, uh, you know, feedback whether you got funded or not, uh, and whether if you are funded, then, uh, the second role of my job was to do project management or, or also, um, uh, one of the projects I, I did manage was, uh, to do, uh, as a pilot coordinator. So we

were deploying actually uh micro grid um uh optimization solutions across three countries, uh, Romania, uh, Spain, and Norway, and then I was the main pilot coordinator for all those three sites, so I had to coordinate with the vendors. are supplying equipment, a university who has developed a new algorithm to optimize their energy consumption, and then with the site itself, the site manager who's operating that site on a daily basis. So it was a kind of interesting multi-stakeholder engagement, but within the energy side. And also then

really working with European, uh, you know, funding schemes and really understanding like this is quite complex coming from outside of Europe, to be honest, but when you start seeing the different trends and different themes, uh, you can start to learn, OK, how does this work, what's the benefit of it. And one of the things that I felt was missing there was that the impact of these projects, because the European research, you know, can go up to a certain level and then it has to end, and

then it has to enter the market because that's where the commercial, uh, you know, interest will take it further and develop some value for the society. Uh, and that's where I thought like maybe that is just a bit slow, uh, compared to, you know, commercial world. And that's where, where I, uh, yeah, I stopped working there and, and moved to the, to the next role. And the next role was, uh, the next role was, uh, uh, with notes, uh, so as a business development manager, uh

so here, uh, I actually, interestingly, uh, within my last job I was doing an R&D, uh, research and development project with notes, um, where I already saw their platform, um, uh, and, and look. I looked at it like it was very interesting. Uh, it's a, it was a new concept, uh, to create new local flexibility markets, uh, which I, which I had a little bit of knowledge but not really, uh, and I just reached out to my contact there and, and, and just asked them like

hey, this looks really cool, uh, and I, and I'm more interested in really commercializing, uh, these, uh, new innovations, uh, and, and your platform is already at the stage which is, which it can be commercialized. Uh, so I joined this company in 2023 and, and still, yeah, we've been working there. OK, and before we deep dive into that one, I think there is one episode that I know that could be interesting is Chart B&B as well, that you could be elaborating a bit as well what

what that was about. The, the name is catchy. Yeah, absolutely. Uh, so while I was working in this research organization, uh, or the research institute in Norway, um, uh, actually, one of the things, uh, that was really interesting in Norway, and, and I think most of the listeners will also, uh, will, will catch on to that, that Norway has a lot of electric cars, right? Uh, and that was one of the things that I also felt when I reached there and start living there is that

uh, when I need to get a car, let's get an electric one because you're in Norway. But one of the biggest problem I faced was that, uh, the place where I was living, uh, I was renting a home, uh, and, and the landlord. I had one electric car charger, and that was for his own car. And then I could not charge on it, uh, really with any commercial model. Uh, I, I had to charge, then I have to, I would have to manually calculate how much

I charged, which was something, uh, not really fair for him and also maybe not fair for me. Uh, but really where I was living, there was a school that was like 5 minutes away, uh, really by walking, and they had like 8, uh, 22 kilowatt chargers installed at that school. And the school only, you know, uh, works, uh, the people coming there were charging from the morning till till the afternoon. The school closes, the charger sits there, and then I was looking at them all, all

day whenever I crossed the school, and I was thinking like, why I can't charge there? I mean, uh, in 2020 and from there to 2021, I, I, I looked at it, uh, there were many of such charges in a small town in Norway. Um, and then I, uh, I, I, I got contacted by one of my, uh, old mates, uh, who was living in the Netherlands, uh, and he had this idea that, uh, in a hackathon that why don't you do Airbnb of charging? And I

told him like, I, I'm actually facing this problem in Norway, so this is actually a real problem which you are, you know, you're describing to me. So let's join hands together. Let's create a startup, you know, become that entrepreneur that I talked to you about earlier. So, so we, we created the company, um, and then we, we faced the first challenge, uh, that was an immigrant challenge that you as a, as an immigrant in Norway or, uh, or I think most of the countries, uh, until

you have lived there for certain years, you cannot create a company just on your own. Uh, this was the immigration requirement that you need to have a Norwegian citizen. Involved, yeah, or, or a permanent resident, uh, so I, uh, so I, I was not a citizen or a permanent resident, uh, so we, we involved, uh, another colleague of mine who, who was that, and he was also, uh, bringing some experience of the Norwegian society, uh, and, and, and a bit more knowledge of the Norwegian society

So we were 3, that we started it. And then we realized quickly that uh uh as soon as we learned the first, uh, you know, keyword, uh the OCPP, uh, what is that, uh, and suddenly we hit the wall that none of us has the software development skills, uh, really needed to develop a platform that can be, that can allow the Airbnb of charging. Uh, that's when I reached out to another student there that was studying in the same town where I was working. Uh, and

he joined us as a full stack developer. He was also from Pakistan and he, he came there for studying, and he had, you know, a lot of experience of developing full stack applications. Uh, so we, we, so we became 4, so you can already start to see that, uh, as a, as a startup, we were like a big team, uh, not yet really validated the problem in a real life market. And that soon became the biggest challenge that we we really were pushing to get the

market moving instead of the, the really the the market calling us and and we were starting to onboard. uh so, so we did end up actually winning a lot of the the competitions in in Europe so we won actually uh um a big prize. From postcode lottery, they have this green challenge, so they operate this in 5 countries, and we were chosen the winner in Norway as the best green startup. So we got 10 €100,000 of funding with that, yeah, and then we also had some

grants from the Norwegian government. Uh, to, to help really build this concept, uh, and, and in the end we did some pilots, uh, so we did a pilot with the local municipality of this small town, uh, called Halden in, in the east side of, of Norway. Uh, we were sharing the charges from, from two schools, uh, with the community there. But soon we saw a lot of challenges of the of of having a multi-vendor system there. So we had the chargers, the two pole chargers of

Schneider, 22 kilowatt. First we had to find out whether they had the internet connection at that site, which was not enabled, so we Had to hire a local electrician or a networking guy uh who would go in and and open the charger, and he was the only authorized person to to do that, uh, from the company. Uh, then first, that, that has cost for every charger that we had to on board because these chargers were installed by the municipality and when they installed it, they never

had this as a requirement to make them already enabled with the internet. Uh, and then, so, so that was a challenge. Then we, when we start sharing the chargers, we also saw that a lot of the time, um, the, uh, at that time, I think it was OCPP 1.8, if I'm not mistaken, uh, that it was like not communicating quite well, uh, like we will have the, the, the chargers saying the status was coming that as, as charging, but actually the, the customer is telling us

that my car is not charging, it's actually just sitting there. Uh, so we had like a lot of like bad communication between the, the two systems, uh, and also on our side as well, I think we were learning how these protocols work and how to integrate them with the chargers. Uh, so, so there were also a lot of those, you know, really, uh, delivery challenges. Uh, finally, we, we, we finished that pilot. Uh, it had some results, but not really great for the municipality to say

OK, we're gonna do this all across, uh, because it also involved the municipality to have a lot of actors to get approvals and a lot of, uh, paperwork to be done, which was kind of complex for them. And on the other side, we were also already talking to this, uh, to to the large fleet operator in Norway called Postan, which is the National Postal Services, uh, and, and they have had actually some, uh, depots, uh, which were, um, uh, taking their vans, so they had electric

vans, uh, that would charge at night at the depot station. Uh, take the mail in the morning or all the deliveries and go out in the field and then, uh, you know, deliver those mails. But when they were in the field, uh, those chargers were sitting idle, uh, and the concept again was to share those as Airbnb of charging. We, we had the approval from the, uh, from, from their management to, to do this pilot. Um, but essentially all the approvals came so late that we

were out of the, the funding as well and also, also I would say also the motivation, uh, because we were quite a big team by that time, like 6 people, but not really validated the product and everybody, you know, kind of felt that there is something here, but is, is it really moving? Uh, and then we all, you know, agreed that let's move forward from it, learn, take all the learnings, and I think that's one of the things that I, I really appreciated that when you

have a failure or, you know, which is quite appreciated in the US, maybe less in Europe, uh, these days, but, but it's, it's really learns teaches you actually a lot, and you learn so many things along the way, uh, that actually you can use in, in, in your life later on, uh, which is both from technology. Uh, really, uh, culture of, of the team and also the dynamics of how to deal with customer and do the product market fit, which is a term, uh, which we

learned quite late, I would believe, as a first time founders. Uh, but yeah, overall, it was a great experience, uh, and that has also helped me, uh, in, in the new role that I'm, I'm currently working on. Yeah, very, very interesting story. Thanks for sharing. Just one more thing on that one. How do you um look back at this problem, the fundamental problem you wanted to solve? If you look around, there are still so many charges that are not being shared. It's a big topic in

the industry. What's your view? Why isn't it commonplace? Why aren't there other people that have solved this problem, uh, with the same second charge B&B? Yeah, I think that's a very good question. Uh, I really wish there should be a solution like that, but like you said, there is still a problem. That needs to be solved. There are a few solutions that are working in the UK, uh, that I last checked that they are able to scale it to a certain level, but that's really a

community approach to that, right? It's not really a very much, uh, plug and play solution like you have now on the, on other sides of EMSP solutions or CPO solutions. Uh, this really sharing of charger has not scaled. Uh, even though, you know, one of the, one of the largest player, uh, uh, Monta from Denmark, right, they started at the same time in 2022 when we did, uh, but the founders had really great experience from X Tesla, and they scaled the platform. Actually, their initial product

the app had this option of sharing your charger. But over the years, I think they also saw that the profit margins are higher on the other side where you have this platform approach to connect different uh systems and different um locations and so, so their major revenue portion, I guess is from there, uh, so they, they still, um, I think enable you to share the charger, but it's not really the core business. And I think the main issue that I feel in this idea or this

problem solving is the margins, because if you do a revenue sharing model, which is quite common in the charging industry, then your margins are so thin on, on, on maintaining this, um, kind of a platform. And then the second problem with that is the is the experience, the user experience for the customer. If the charger breaks, it might not be your fault, but then the customer starts blaming your app, and then you start to see the scale not hitting and you're already kind of have a

bad press. People don't rely on that in the EV charging world because everybody who's charging their car, they really want it to be charged. Because if you have once a bad experience, in our case, that was the case when we were doing the pilot, uh, if there was someone who had one time, um, uh, the charger didn't, didn't start it and it was not our fault, it was the charger itself not responding. Uh, but the customers stopped using our app and, and got out of the

pilot scheme, and that's also I think it's really important for this idea to stick. So someone has to find a very good business model that makes it to scale and also have a really good user experience where it works. All right, now moving forward and looking at the present. Tell us all about nodes. What is also there? The problem that the company is trying to solve first? Yeah, absolutely. I think, uh, so, so, so the problem really started actually on, on the concept where Nords was

born. So, um, let me take you back a bit. So, so Nords was actually created, um, uh, in 2016 from a concept, uh, where, uh, the local grid company in south of Norway, uh, was facing a congestion issue on a, on a, on a large transformer station. Uh, so congestion, meaning, um, just for the audience who doesn't know that, is that you are not able to supply enough power, uh, or the energy, uh, through your electrical grid because it's almost full. Uh, so then they, uh

brought together some experts and thought, OK, what is the new way we can solve it instead of putting a big transformer. Uh, so they gathered actually a lot of experts from Microsoft, uh, and also a lot of the other companies. Um, even Nordpool was involved at that time, the wholesale market operator, uh, so they together designed the Nord's first market design, uh, which was essentially based on the clean energy package in Europe, which already talked about this role of aggregator and, and prosumers. And, and also

then, uh, local flexibility markets so the clean energy package for the listeners, that's the package that the European Commission and parliament, um, decided in 2021 and went through that will apply to all member states and involves a lot of things, a lot of regulations and directives that, uh, in one of them here this year. Yeah, yeah absolutely thank you for for clarifying that, uh, so, so that's something. Um, is in that clean energy package, uh, in the earlier draft, I think the 2015, 2016 draft, uh

it said that the DSO, uh, the distribution system operator may use market-based systems or solutions, uh, to solve their problems. Uh, so this, uh, this kind of small group, uh, together, uh, designed this market design and created a platform. Uh, and the platform was really designed to be a nodal concept. So that's why the name nodes comes from. So grid node is, is a really important concept in the platform because what you are doing essentially is you're creating a replica of your physical network on a

digital platform. So your grid is connected from point to point. So you have a, have a low voltage connection point connected to medium and medium to high voltage. That's how our electricity grid works. So you can create a similar replica of that in the nodes platform and the twin, yeah, exactly. You can call it digital twin or you can call it simplified grid model, so there are different terminologies that are used for it. Uh, but in this case it's really about taking, uh, one, feeder or

one line of your, of your electrical grid, uh, or even one transformer, uh, station, and, and then you can say, OK, this is my child node. I, I will, I will, uh, I want to, uh, have some visibility on this node, uh, at this node in this case would be like a line or what is a node? let's clarify that. I think that that's a, that's a good question. So, so in our platform right now it can be anything. So it's really up to the grid

company how detailed the model they want to develop in the platform, whether they want to take the approach of connecting every line, so maybe at a street level uh from 400 volts up or or or they prefer to maybe start at a medium voltage level, so covering the whole city. So that's really configurable and and we have seen we can call it level sort of node would be like, yeah, another synonym for level, yeah, exactly. So it can be like a really low. Low level of

the grid, uh, and then you start connecting that low level up, up, uh, on the chain, so really uh taking each level up and the really the concept this enables is that you can really solve very local problems and that was the really the issue that was in 2016 where we, where we, where this platform kind of was a proof of concept so it did actually result in getting some uh flexibility from the grid and and solving that congestion problem for the for the electric grid

company. Then, uh, essentially that just here again just to set the basics, uh, and the, and the scene perfect. So the fundamental problem is what you said congestion which was already defined so that not enough capacity can flow through the grid. And the uh you're already going through the solution now that is flexibility right that is delay and defer certain consumption basically or production uh or reduce the the the production of renewables that's that's the two levers right exactly. So, so what if I just summarize

what Nord's platform. does is that it facilitates the trading between the grid company and the and the flexibility service provider, where the concept is that you buy flexibility top down, so, so really from the grid, and then you sell flexibility from really the assets. So it can be electric car charging, it can be batteries, it can be heat pumps, all kinds of assets, so there's no limitation on that. So the really the objective here is that you are a generation or a consumption asset. You either

increase your generation or reduce your generation, so we call it up and down regulation, and then the opposite for the demand. So if you are consuming electricity, you can increase your electricity consumption or decrease, and that's where the flexibility is, right? What you explained. Uh, so what we have done in this platform is that as a distribution grid company, uh, to start with, uh, they can really create a locational market. So that's why we call it a local flexibility market where this grid company can say

OK, I'm facing a problem at this transformer. I have essentially two options one, put more copper, uh, put a big transformer, or the other option is that. I can use what is already inside my grid, which is these new uh distributed energy resources, uh, you know, that's another term DER being used right a lot of these days, which means solar photovoltaics on, on people's home or on buildings or or batteries, heat pumps, electric car charging, all that is, is in this term DER, right? Uh, so

the grid company essentially uh can do both functions and that's what we have seen. That they might plan to upgrade that transformer over the next 5 years because you cannot just build it in a day. It takes time with all the permitting requirements, the documentation, getting the equipment, tendering for it, uh, all that. In the meantime, uh, we see that there is a lot of companies who are making a business model on where they can actually enable this flexibility. So again, uh, demand turning up or

down or generation turning up or down. And they see this as a revenue stream, right? So, so that's where we call them as a flexibility service provider. Uh, so their function is essentially is that they have aggregators or aggregator is another term exactly. Um, so, so the in virtual power plant, because that's also a common term, do you call them like that? So, so that's why we we have termed them all of them as flexibility service providers. So it can be a virtual power plant, it

can be an aggregator, it can be a battery operator, it can be even a CPO, charge point operator. So it can be, you know, different roles. So we have categorized them as. Sellers in the market or call it flexibility service provider or short FSPs and and then on the other side we have the buyers and those are typically the grid companies uh so we start really at the at the local level so so uh exactly so so we started with the DSOs to validate the concept

uh in Norway uh with this uh. The south of Norway DSOs, then it's scaled up to involve also the TSO and there we have seen actually different concepts coming along where the DSO and the TSO can buy flexibility using the same platform and using and also then buying flexibility from the same asset. That's also very important to know that because in the end the physics doesn't change. You have electric power flowing from one to the other and and the other direction, you have the battery who

might be injecting back into the grid, then you have one battery which might be needed by both the transmission level or the distribution. Uh, so that's something we have also now seen in, in our recent market launch in Finland where both the FinGrid and the DSO in Helen, Helen Sakowerco, both are trading on the same platform and are competing for the same asset. So whoever has the. need will pay you the highest amount and that's how we have also seen the translation company company and so

you need to convince the stakeholders, mostly the so the flexibility service providers now, let's call them FSPs to make it more efficient than the compensation. And the utilities or the DSOs in particular, mostly I guess is a business case you have to calculate OK how much money can you save compared to copper and transformer for DSO and how much money can you make uh with uh this extra flexibility source there might be some cannibalization or. Um, other values that the FSP might actually lose by participating

in that market, or maybe it's just a value stack. Can you elaborate on these two points? Uh, absolutely. So, so essentially the, the platform allows the, the, uh, the, the market to have four common parameters between the buyers, the grid companies, and the FSPs, the sellers. It is location, price, volume, and time. So with these 4 parameters, they are actually a trading flexibility among themselves, uh, using the platform. So, uh, uh, as a first point, what we need to enable the market is, uh, a, a

great company to join the platform. So they are currently, they are the prime customers for nodes, uh, because they are the ones that have the job to supply the electricity to all, all of their customers, and they are starting to see that as being a big challenge in coming years. Uh, some of the countries already face that challenge. For example, in the Netherlands, uh, the, the, the grid is so full that you might need to wait several years to install a heavy duty charging station, right

at the highway, right? So, so they have the need. So that's why they are our prime goal to first get the grid company on board so they create that grid nodes on the platform, so the areas where they see they need the flexibility. So it's really a map where you put a signal saying that OK, this area is where. I'm gonna open a market, a local flexibility market where I will need services. Then we go on the other side. So, as soon as the DSO decides

where to buy the flexibility, we can start making that available on our website, so Nodesmarket.com. And if you go to Nords platform, you will see the map which, which the, where the areas are visible. And then we are, what we are doing is essentially, essentially, We are inviting all these FSBs to start joining the market, where, where they see location on the map, they have an asset. So an asset, as I described, it can be any type of distributed energy source or a generation resource. Then

uh once they start to sign up on the platform, the, the grid company and nodes essentially starts to design the market rules because these markets, uh, as the other markets we know the wholesale market or the transmission system operator market, all of them have some rules through which you participate. So these distribution level markets also have some rules. This is where our experience comes in because we have been doing this now for, for more than 89 years with a lot of different grid companies. Uh, so

we bring them uh, uh, a very simplified set of rules, uh, where the grid company would tell us, OK, uh, the minimum bid size on this market, what do you suggest? We would suggest to them, OK. In our platform you can go as small as 1 kilowatt, and then you can aggregate up to several megawatts. So the grid company might say, OK, 1 is OK, or they might say, no, I think I prefer 50 because I have certain needs for my operation desk. That means 50

should be the minimum size. OK, we can figure that. Then the second point is that, OK, as a, as a grid company. What do you want to solve? Whether you wanna solve the uh the deferring of your investment, so delaying the investments in the grid, then you might want to launch uh a reservation contract. So you wanna launch a long flex we call it, so a long term contract where, where, where the DSO or the grid company is saying I will, uh, uh, buy flexibility, uh

for a capacity and reserve it for myself, for myself meaning for the grid company. And I will pay the flexibility provider an availability fee because they are making a service for me where they are making this asset available. Uh, then, uh, this is, this is the amount which is paid to the FSB as a, as a base, uh, price which is, uh, normally lower because you, it's a capacity price exactly, um, and, and the DSO then decides for the second problem where they might have an

N minus 1 issue. Or a real-time congestion issue as they go towards the delivery hour. So the long flex of the reservation is happening maybe months ahead, uh, for example, in, in Norway or in Sweden, uh, the, the grid company reserves flexibility for the winter because that's where the grid is really strained. Uh, so they reserve this for 3 months or maybe 4 months, uh, the long flex contract. Then as you move towards more of the real time or close to the delivery hour. The, the

grid company will, uh, will come, uh, will, will start trading the short flex, which is mainly the energy or the activation part. So you have the capacity contract, then you have the activation of the energy contract. The short flex is where uh actually you have a competition happening, so you can have many flexibility service providers coming in and offering their flexibility and the grid company looking from their operation desk, they, they have done their own tools, which is, you know, normally load flow analysis they do

and they will find out, OK, at this location, I am going to face an N minus1 issue. Then they can. Buy everything in the in the in the market, so 1 is the day before, right? Uh, so, and, and so that is D minus 1. N minus 1 is that you are losing one critical component of your grid, so meaning you, you are getting supplied from two transformers, let's say, and one of the transformers got a fault, a problem, and then you only are relying on

one. And if that goes, then there is a blackout in that area. So that is a really critical situation. Uh, and, and just for the context for the listener here as well that the European law actually dictates that the grid company cannot just disconnect people for the sake of it, which is in some other countries it can happen. They don't get penalties, but in, in Europe the penalties are really, really harsh. So for them, the alternative is either, as, as I said, to build the grid

which they probably are doing on the way, but still get some service from the FSBs for and then pay them a good amount. And what is the good amount, uh, so this is where, uh, your original, I think question was as well that we have seen, uh, like the, the prices range of different from different countries and also from, uh, from one DSO to the other DSO as well. And, and the reason is that it really depends on what is the situation of the grid, uh

uh, today, right? So we have seen that, uh, uh, in Norway the last season. There was almost over 100 megawatt, 100 megawatt hour of availability contracts that the DSOs bought. So this is not transmission, this is distribution very local, but they still reserved over 100, uh, almost 100 megawatt hour of of of the of the reservation. This was 1 hour each block, so. Megawatt hour of that and they were paying around €20 per megawatt hour to reserve so that was a small portion of money. But

last year also our team did an analysis and saw that actually the DSOs were buying more reservation. They were trying to secure their grid, but they were only activating only less than 10% of that contracts. Uh, so this season, uh, this coming winter season, we are enabling a new product called Long flex but with arming. Uh, so what does this mean is that if an FSB offers the flexibility to the DSO, let's say at €20 per megawatt hour, they will get that. That is guaranteed revenue

but, uh, you will not be armed if the DSO does not need you. So let's say the DSO procured you in summer for the winter from November till February, let's say in Norway. Uh, and they are paying you €20 per megawatt hour. Then when it comes November, they do their, uh, again the load flow and they see that actually it's not a harsh winter or maybe we can manage it because we already have capacity in the grid. They would actually release your asset, so it's, it

will not be armed and then you can value stack your asset to the transmission system operator market and the timeline of this is set in a way that the DSOs do the long flex contract in summer. Then D minus 2, so 2 days before the delivery, uh, the, uh, the uh, in Norway, the, uh, the market for the transmission system operator, the, the MFRR market, uh, and also the others, the FCR, others open up. Uh, so then the, the, if the flexibility service provider does not

get this arming signal, the flexibility service provider is open to participating in the transmission level market. So this is uh is very popular, I think now with the, with a lot of uh players in Norway right now and we also uh are, are starting to see the discussions happening in other markets where we are operating as well. So the goal here is essentially uh to really enable the value stacking and enable a new market because DSOs were not really buying from FSPs, right? So there was

no price attached to it. But now with this, uh, you can actually do the value stacking from DSO then to the TSO and then within the. DSO you already have multiple markets, right? Uh, and this is where you will get the full scale of all the, all the revenue streams that you get here and is there some numbers you can give related to DSOs benefiting from the, uh, product in terms of savings? I imagine it's not so easy to quantify the value proposition you offer compared

to what they know with building more cables and transformers. Um, yeah, this is a very important question, to be honest, and there are actually two things attached to this. So there is one, about doing this cost-benefit analysis, right, uh, for the grid company, what is the value of Flex. Uh, now there is, uh, the other aspect that is also very important, that how the. Companies are getting paid today because uh just for the recap, they are regulated entities, right? and and the majority of revenue for

them is essentially uh passing the electricity through their cables and and to the end customer and and the end customer uses the electricity, right? And the end customer pay a grid rent or a grid fee and that's how they get back. They cannot make huge profits on it, right, because they are regulated entity. They have a societal function and they need to do that. Uh, the current regulation in most of the countries where we are operating, there is, uh, a capex model. So the more investments

these companies do in the grid to supply that electricity to the end consumer, the more money they get back. So the incentive there is really to put more copper in the ground, and that is also, uh, a big topic, yeah, so, so exactly, and that is a big issue, um, in, in most. The discussion that I have with the uh the grid companies uh that they see there is no incentive for them. However, we have been now seeing the discussion happening on the EU level. Uh

there is a policy change being discussed. We will come back to that, I think, as well, um, uh, but also at the national regulators, uh, agencies, the NRAs are really pushing the grid companies to think about also OPEC as well as, as, as a key component. We have seen the most mature local flexibility markets are in the UK because the model has been adopted by the regulator there for a to tax approach, so a total where the CE plus OPEC is calculated and then the grid

company gets, uh, essentially the money. With this, and, you know, change in regulation, there will be a big incentive for the grid companies to uh not just think about more copper in the ground, but also other, other services like flexibility. Now the other side of it, the value of the of, of, of, of, of investing in the grid. So there was a study from the Smart and Group, which is a Brussels-based lobby group on on demand response, and they have estimated that almost around €600 billion

of investments have to be made in the European grid in the next coming 5 to 6 years, and, and the, the majority of that investment, uh, more than 300 billion, will go to the distribution level of the grid. And their estimate is that if from that $300 billion if you could invest at least $10 billion in the flexibility, you would already gain several billion euros worth of efficiency in your grid because then you will be also enabling the grid to be more responsive to the demand

and the generation that is locally present. So that is a big number. I mean, in, in the next 5 to 6 years, you will see this as, as, as one of the key enablers. And that is why uh actually last week I was in, in Finland. Actually, uh, the few days back and, and the European Commission, um, uh, one of the representatives presented that they are also working on a common methodology on assessing, uh, how the needs assessment for the DSOs, uh, and there will be

uh, something coming out from the commission as well where the common methodologies of how to value flexibility and investments in the grid. And that methodology probably will also serve a lot of the great companies in Europe where the flexibility has not yet, you know, been on the agenda, and, and this is, is, is something really, you know, important we believe that going forward, uh, more the regulation will come in, but also at the same time the, the, the markets we are running, the data is being

generated. So there are 22 things that will come together to really convince the, the, the grid companies that have not yet started on this journey yet. And are there like, uh, I think you're already active in different geographies. What, what's your thought on the regulatory you already mentioned also the UK being very good and favorable to this type of um flexibility markets. There like countries where you could not operate even if you wanted to, or how do you look at geographical conditions if you want? Yeah

so, so NRes currently is operating in Europe and in Canada as well in North America. Uh, so our, uh, so we are dividing the markets, the initiatives that we have in essentially two different categories. So one is commercial. Uh, where we are getting clients to, to ask us to, to, to procure our platform, so it's normally a public procurement or, or, or, or, or a, or a public plus private procurement, uh, of our platform. So our core markets are currently Norway, Sweden, uh, Finland, uh, Belgium

Uh, in Europe where we have already commercial markets and also in Canada we have a flexibility initiative, which is slightly different to the market because they are still starting to see flexibility as a tool. Uh, so this was a summer flexibility initiative we did in in Ontario region in Canada and apart from that we are working in the second category which is the research and, and, and market design studies that we, we do and the market design methodologies that will work in that country. Uh, so

there we are working in Greece, uh, with the transmission and the, the distribution operator there, uh, and also, um, in, in, in, in, in Switzerland with the DSO there on the Italian side of the of the country and then also in Spain as well. So these are the three where we have on the European side, uh, where we are working on the research side and then we also have in the UK a project, uh, a community DSO project. So this is where. Actually two energy communities

are actually supplying flexibility to the grid company through the Nords platform, and that has also been in the in the research space. So, so these are the two models where we have been, uh, we have been working together and, and we have been really now starting to see a lot more public procurement happening of our platform. Uh, we already see in other countries, uh, I cannot name them right now because we are in the process, uh, but already in Europe we see other countries where, where

the, where our platform is being procured, uh, by the DSO or the TSO or both. Uh, that's also interesting that the TSOs and DSOs are joining hands to, to launch a market together. Uh, and then in Germany we have been really trying to, to build, uh, bring this message forward. We had some European research projects here in Germany with some DSOs, uh, but it didn't cross that. Uh, one of the biggest challenge, biggest challenge I think has been on the regulation side here as well, uh

that the DSOs have been using cost-based redispatch instead of market-based. Uh, we, however, see that it, it is in the end the value of, of the, of having it redispatched through market base could actually unlock real value for the transmission system operators as well because then you can have the transmission system operator, uh, which are, you know, multiple in Germany, could also access flexibility down in the low voltage grid. Um, one of the biggest, I think, challenge has been here that the, that the grid companies

do fear that their grid will be violated by if someone coming from the, from the high level of the grid and activating flexibility in the grid, and that creates reliability issues. Which is a valid concern, to be honest, because if you have a high voltage company or, or a grid company that does not have observability in your area at the local level, they might activate too much flexibility and that creates maybe a reliability issue for the local distribution. Uh, so there we, we actually are enabling

uh, a new module in the, in the platform already being used in Finland and also in Greece, uh, where it's called, uh, the TSO DSO coordination module. Uh, so what happened is that the local distribution company, when uh, when they are creating this local flexibility market, uh, they can already create constraints per grid node, right? So creating limits, uh, so then if. The the higher level of the grid comes and buys from the same asset, right, if you remember our initial point, you have the same

battery or the same charger, but it's now being used for the high voltage service, then the low voltage grid company could already put those constraints. So that allows that initially that fear of having some problems in your grid, not not there anymore because the the. Activation component of the platform. We have an algorithm behind that, so the algorithm will warn the high level of the grid, the transmission companies saying that you cannot do that because this will create reliability issues. So this is something I think

could potentially enable in Germany as well the market to open up because here there are many DSOs, over 800 I guess, which is very unique to entire Europe. But if If you start to see this happening, uh, there could be a lot of challenges that could be solved with the low, low voltage or medium voltage grid, and then also would supply the country overall for the balancing as well at the transmission level. So that's something that we would like to definitely test. Yeah, I know it's

the constraints you're talking about a big topic as well when we talk about system flexibility or system friendliness where indeed. There must be some constraints at the cables level at the and and not at only regional but overall systemic level, uh, so that in all these value stacking of the different markets can play along, uh, correctly because without these constraints indeed. There will be stakeholders that rightfully are concerned about overcapacity and what is it that uh you need to set such a market up so if

I'm a DSO are there also elements that would um impede you to get activated because for example lack of meters I imagine. Yeah, that, that's, that's a very interesting question actually. So, wherever we, we work, uh, and we enable this market, so I, I explained to you earlier that it's a long flex, so you reserve something, and then short flex, you activate something. Uh, we also have a third product, uh, called Max usage, which, which is a kind of a virtual fuse contract, uh, which is

a simpler way to unlock a bit more capacity from the grid. Um, but essentially to unlock, um, uh, this flexibility or to deliver it between, uh, the grid company, the buyer, and the seller, uh, there must be a way to validate it, right? So whether you really delivered the kilowatts or the megawatts that you said you will going to deliver, and that is where we have a nodes metering hub, uh, so this is a platform to. Uh, Essentially upload your meter data, uh, which is normally

coming from the smart meters. Uh, this is a really crucial, I would say, uh, hardware component that needs to be there because you really need that resolution of the data to be uploaded on the platform. 15 minutes. Uh, yeah, so normally we have seen 15 minutes. It's, it's, I think also the standard size of the meters being rolled out in Europe. Um, so, so we, we see that when you have the smart meter penetration going up, uh, you already can start to, um, uh, to get

more, uh, different levels of the flexibility at more, uh, more granular levels, uh, from really from residential sector as well. Uh, but to get started, I think the grid company just needs a willingness, like someone's, uh, the grid company saying that, OK, let's try it out. Let's open maybe a big area, just one area at the medium voltage level, that's fine. Anyone below that can, can come and, and provide flexibility because in our experience, we have actually seen that when the grid company opens those areas

and we start reaching out to the flexibility service providers to come and register their assets. It sometimes is is a kind of a reveal of assets in their area which they really didn't know were flexible because they might have done a study several years ago and they found out oh we only have maybe 550 megawatts of flexibility, but real data or real assets, yeah, coming to your visibility is only when you create a real area and you create an incentive. You are really giving an. Incentive

that we are opening a market, come and register the asset. There is no obligation for you to buy your flexibility as a grid company. It's just a signaling that you are opening something and and let's connect. Then when the asset is registered and the meter points are uploaded, that's where we have seen that maybe if you don't have a higher penetration of flex of smart meters at all levels of the grid, you might start with bigger assets. You might start with a newly connected. battery which

might be at a at a at a smart meter point or, or you might connect a big industry first uh or a or a big sports arena for example, because we have seen all types of flexibility coming in and, and, and that might just start your journey as you penetrate with more smart meters, you will start to see more residential flex and, and also commercial flex coming into your market. And, and maybe it's a stupid question, but if my knowledge is also that the DSOs. Especially

in Germany, haven't, um, lots of smart meters in mostly most grids and, and at, at the medium and, uh, low voltage. How do they actually quantify their needs or flexibility needs to be then able to, uh, open this market in the first place? Yeah, so, so there are two ways essentially they can do the assessment, right? Either they can go through the smart meter data and doing the studies through there, uh, through that aspect, which is not available in Germany at at most of the grid

companies. Then the, the other side is that they might go through their SCA systems or or the or the distribution management system, the DMS. Systems, uh, this is where they would essentially have these systems installed by, you know, big, big players in this in this space uh like Siemens, Schneider, GE, uh, and also new companies coming in, uh, so they would actually connect to the grid company's local operation desk control system. Uh, which is traditionally, you know, has been a very simple Scada system that is

just getting the data from their substations. But now as we see that there is a lot more innovation happening on that area. So now we have more modern systems where they can actually with the data that is coming, they can actually really do accurate forecast. They can actually predict at different levels of the grid. Will be the overload coming or when it will be coming, uh, so they can already do that need assessment with those kind of tools on the grid side and many of the

grid companies already have such such systems either not fully deployed, so there are, you know, modules of these, so maybe it's not at 100% fully deployed, but they might be at a 50% and that still will give them a lot of visibility. Of the issues that are coming because remember they, if they have a blackout, they have a huge fine coming, which is not what they need so they already are investing in these tools to actually get that visibility that where we are, you know, getting

red, right, in terms of the, the capacity of the grid. And, and so that could already help them start this journey, yeah, and I understand it's at the substation level, for example, in Germany, but as there's not so many smart meters like compared to other countries, you cannot go much below that in terms of visibility. Yeah, exactly. So, so there is a challenge on, on, on going below that, uh, but we have a partner in, in Germany, Smite actually who has been able to, uh, unlock

a technology with installing, uh, sensoring data on the low voltage feeders. And actually they are able to bring that observability also from the low voltage uh grid and and surprisingly their biggest market is Germany so they have actually several customers who already have deployed those low voltage in observability uh equipment and the and the software with it. So uh so there is, I think a lot of control and and visibility on that side. I think that the challenge has been that there is not much motivation

to to go towards the market-based flexibility. And, and it's probably also because there has, there had been few trials in the past which had not been successful because there might not have been enough liquidity at that time. There might not be many new aggregator companies that were really bold enough to build those technologies and those business models, uh, so that has had, you know, maybe. I'm speculating here, but what I've heard so far from the market in Germany is that those trials didn't really made a

big success sound, and that resulted now in not going towards a market-based approach towards flexibility. And talking concrete projects, which ones are you particularly proud of? I mean, I would, I would say that I'm proud of all of them. But, uh, but our, our biggest market, you know, uh, in Norway, which started with one DSO as I told you in 2016 and 20018 and 2022, scaled to the 22 largest DSOs in, in Norway, uh, and now it covers actually eight of the largest DSOs, so it's

scaled up to almost 2/3 of the meter points of, of, uh, Norway. Uh, so, so that is a very large area that is being covered on the nodes flexibility market. Uh, and then also, I think, uh, in Gothenburg, it's very interesting, uh, because that's a very small area for, for a flexibility, uh, to be open, but the grid company there, uh, together with the, the local, uh, grid company in Moldahl, so these are two small towns in Gothenburg and Moldahl. The two grid companies have been

able to run the market for 4 seasons now, 4 years, so every winter season they run a market, and they have been able to attract over 30 flexibility service providers in just those small areas, and they have really interesting flexibility. They have, uh, you know, coming from EV chargers, batteries connected to heavy duty charging, but also there was a trial of V2G with Volvo there. Being present in Gothenburg, so they're also enabling price signals from the DSO, but also then allowing the, the commercial companies to

test new technologies and really validate whether they have a business case. If they tomorrow, let's say Volvo launches V2G for all their customers, uh, then if the grid company is willing to pay this much for, for that, then there is a business case that they can enable. So there is really interesting, you know, local players that have contributed to that market. And recently we in Finland, uh, we launched the first uh uh TSO DSO coordinated market where both FinGrid and Helen, I mentioned, buying in the

same market area, which is very unique because it was never done before because the TSOs always had their balancing markets and they never wanted to involve, you know, the DSOs in their markets because, you know, the scale is bigger in TSO level, uh, but this trial is really about solving congestion locally but also at the connection point to transmission grid. And it's, it's was very interesting, the, the Finland Flexibility Day we hosted actually two days back where, uh, where TSO Finrid is mentioning that the queue

of connecting is, is, is almost 70 gigawatt uh being requested in, in, at Finrid, uh, you know, network in, in the next 55 years or so, they have to deliver that. And, and this is a big, you know, rise, and this 70 gigawatts is the capacity being asked, and then there is terawatt hour of energy that they have to deliver in the next 5 to 10 years. So you can imagine the scale of, of the electrification and, and the, and the things happening there. So if

they don't really have data from these kind of local flex market and coordinating with the local distribution, they might be too late if they start it in 5 years ahead. So, so that, that's really interesting, and I think uh I will quickly also mention another one in, in Fluvius in Belgium because they have taken the approach of, of really what you were asking like what's the value of flex. So they have taken the approach of really defining six core parameters and, and really going from societal

value of flexibility. So they are really. Uh, uh, engaged in, in making that market so it actually enables a real big value for the society overall. So I, I mean, I'll, I'll just stop here, but, but there are other, you know, initiatives as well which have been really interesting, uh, over the years. And, and let's talk also DSO DSO coordination. I think that's also a topic that you address because it's not a. Yeah, it doesn't go only, only from the low to the higher one, but

it also what it goes horizontally. So, yeah, this is, this is something, uh, uh, because the concept is the same, right? So, so the, if the low voltage, uh, grid company, the local DSO, um, has some constraints at their level, uh, but they have, uh, maybe, uh, a DSO that's a regional DSO above them, uh, that does not have visibility to the local DSO and who's connected there, how much flexibility they have and all that. So we have actually in Euroflex, the, the Norwegian flexibility market

actually two DSOs, uh, LV and Nordgisneth, who are actually doing this DSO DSO coordination, where the, the Norse platforms, again, uh, architecture of child parent, uh, grid node concept is being used, where the, where the local distribution company is inviting the flexibility providers who are connected to their level of the grid. To come register assets, the smart meter data is also being connected there, and then the flexibility, if it's not needed to the local distribution company, is being aggregated at, at a higher grid node and

being offered to the, to the regional DSO. Uh, so the regional DSO is able. To also access the the access, uh, the flexibility from the local one, but if the local one needs on their own, they can also, you know, just use it themselves and also define the constraints, uh, if, if they, if they have issues with those, um, uh, higher volumes being procured. Uh, the other example we had was in Stockholm. Uh, we, we, we did a project a few years ago, uh, where the

two regional DSOs were buying flexibility in each other of their areas. And then what they were doing is that they were also putting, um, uh, or that, or they were coordinating with the transmission system operator where if one of the DSO buys in. The other one's area, then the transmission system operator will be able to create a higher limit of their temporary capacity subscription up to the TSO level. So the connection fund to the TSO, they will automatically increase their value there and decrease for the

other one in the other area and then vice versa for, for, for the other case. And this was also interesting because then, uh, upstream to the TSO they were already paying the same amount, but if they haven't coordinated. Anyone who is activating more in the up direction or increasing the limit up to the transmission, they would have to pay extra fee to the transmission system operator, and this is a very concrete business case again for them in in Sweden primarily because the the the the regulation

is like that. The local DSO has to pay up to the regional DSO some fee if they exceed their peak capacity every year, so they, they have a defined limit every year of the peak. And then the regional DSO has to pay up to the transmission system operator. So, so, so there is already a business case, uh, where you can, if you just keep your peak below that, uh, by buying flexibility, you're already saving as a distribution company. And I think this is also something, uh

I have heard, uh, from, from the German DSOs that they also have to pay, uh, maybe you already know about it, but upstream as well if they exceed their peak limit. So there is already a business case where you, you, you're already seeing your peak increasing because there are people more electrifying, more, you know, uh, connections being done. So you could already have some flexibility contracted. Uh, and that's where our max usage contract has been really interesting because then you are saying that, OK, I have

a 10 megawatt connection, uh, but I, my, my peak, uh, as a battery operator or as an EV charging station is maybe 7 megawatt. So the other 3, I can rent it back to the grid company, and the grid company can use this, uh, either to reduce the cost upstream or to issue new grid connections. To the new customers that are waiting in the queue. So, so that has been also something, uh, some of the distribution companies. And let's talk more from a product angle. How

can I imagine the product being used by these FSPs and the utilities? Is it a very much API first product, or is it very, uh, is there like an app, web app, or yeah, good question. So, so it's, it is available. Both on the web, uh, as a web app and also on the API, uh, because we are working with two different stakeholders here. We have the grid companies who have been used to working on the, on the, on the web apps or or the applications

over the years. So their staff is really trained and they have capabilities to use the web application on the user interface. So that's why the user interface has been one of. The main focus for the application, but, uh, we are actually, uh, I would say very much, uh, I would say capable over the years to develop the API for the flexibility service provider because one of the early trials that we did in Norway, one of the main motivations was to bring residential flex into the market

And if you are working with an energy retailer who's also, um, uh, maybe an aggregator, uh, they are saying that they know how much flex they can enable, but they cannot do it manually. They have 1000 households, they would, you know, aggregate and provide you flexibility. Then you really need. The API for it, right? You cannot go one by one on clicking. Yeah, ridiculous. Yeah, exactly. So, so that's why the API has been developed over the years, and this is a very interesting mix because on

one side the buyers are maybe using the application, and then on the other side, the flexibility service providers are using API, uh, to trade, uh, but it's not a must, so you don't need to do the API. You can already start by just on the UI, but, uh, but we have seen that, uh, with the maturity, the flexibility service provider, they prefer the API. And what are regulatory trends that you're particularly interested? I think you, you, you already hinted upon a few, but, uh, yeah, the

one of the main ones that I'm really interested is the EU, uh, uh, demand response network code, uh, that is coming in next year, uh, and, and, and then, uh, being finalized in the year after with the, uh, which. Will be, you know, uh, also something that all the member states in Europe have to look at and have to adopt in different shapes and forms, but the, but the that network code for demand response, one of the, the main motivations that we have been contributing towards

it is to enable the local flexibility markets for the distribution. Because, as we discussed very early in the beginning that the Clean Energy package didn't really mandate it or really put it clearly that the DSO should use this. It said you can use it if you really want to, but it's not a must. Uh, so that's something we, we, I would be really exciting to see if they really put it in the, in the final wording that is something that. Should be used first because if

you use it first and you see it doesn't work fine then you can go to your other solutions, you know, disconnecting uh with flexible connection agreements or dynamic grid tariffs and there are a lot of other tools which are fine by the way because each of the grid company might have a different need based on their grid needs. So, uh, this is something I'm really excited about if that comes out and how the market shapes, uh, but also I'm, I'm, I'm also quite, quite interested to

see the. How the, how the overall, you know, landscape around climate change and now the, you know, we hinted earlier that the geopolitical level as well in the US is, is now a different focus, uh, but Canada is taking a big leap forward, uh, so the Ontario Energy Board is already being looking into flexibility, uh, so they are really, uh, looking into, uh, benefit cost analysis, uh, which is, uh, a way also to analysize an analysis, sorry, uh, of what. Is needed by the grid company

before uh they they invest in the grid uh and then uh connecting to that they have a new regulation they're called non-wires alternatives, so NWAs which was also something that they wanna uh really um uh promote flexibility for so it's, it's a lot of things I think happening uh in, in different regions, but these are the two I, I would say are really interesting, uh, to, to see because as soon as the, the shift happens, you know, from, from. Uh, climate change discussions to non-climate change

discussion in one region, then the capital starts moving right towards, uh, other countries where the climate focused groups will like to invest, and that is why I, I already seeing and talking to different flexibility providers where they are seeing a lot of capital coming in Europe. Uh, also in Germany where batteries are being built, uh, and, and a lot of big projects are being done like several tens of megawatts or hundreds of megawatts now, uh, in the UK it's already the case also in Germany, I

think there are a lot of projects underway. Yeah, yeah. So, so, so, so that is also something I'm really excited that this will help the flexibility because. You will have more capital deployed, more assets being enabled, and then what you need, you need the markets. You need multiple markets to make that return on investment, and that's something, uh, one of the bio. And how do you, you all hinted upon it right now? How do you position yourself compared to other forms of DSO flexibility like dynamic

tariffs we have here in Germany, this new law. Uh, the ENVG 14, like the energy, uh, law 14 that tries to solve the congestion via this more dynamic tariffs, is that, um, yeah, that, that approach worse compared to, to a market or in which way? Yeah, so I, I would say they both coexist, to be honest, uh, so it should not be one or the other. Uh, this is something, uh, I think, uh, it's quite clear in Norway, uh, we also have a step by step

uh, grid tariff. Uh, so, so, uh, there, it, it's already existing, uh, with our smart meter rollout, you can already, you know, have that. It's so in Norway, uh, if I'm paying my electricity bill, uh, I, I, if I'm above a certain peak, uh, with my average, 3 averages, I think it's taken, uh, over a month or, or, or. time period, then, uh, if my peak exceeds that, then I'm on the next step. So, so my tariff goes up and up. Uh, so it's, it's, it's

like, you know, step by step tariff, even though there the, the, the market is already, you know, being used as well. So, in my view, I think both can coexist, and it should be, uh, because if you consider the situation where everybody plugs in their EVs at night, and you might have a dynamic grid. At a very high value, uh, then everybody stops doing that. Then, uh, then the, the grid rent might be lowered, but the, the, the aggregator who's, who has already scheduled them, uh

has a big loss, and they might have taken a position, uh, with, with their energy supplier on the balanced responsible party as well, so they might lose their money there. So, so there is a, there is, uh, just not one solution for all because if you have both present, uh. You might, you know, uh, lose some, uh, revenue from one area because everybody has stopped their charging because of higher grade rent, but on the other side you might gain something from the flexibility market. Uh, so

so there is, you know, I, I think, uh, uh, possibility for both to exist and it should be, it should be that way, yeah, very interesting, also a bit complicated, uh, and, uh, yeah, that's, it's, uh, I, I think mathematically from an optimization standpoint. Trying to optimize very many different um things and markets at the same time. At least from what I did as an analysis gets quite complicated, nonlinear multi-criteria, multivariate uh problems are not the easiest ones to, to solve. Absolutely you can model all

day the grid, but, uh, the reality will always be the different. I think that that's the, that's the reality here, at least with the, the, with your um market-based mechanism for sure it sounds like a very sophisticated method to try to solve conge congestions compared to a. To a tariff maybe or or having both seems like a a Swiss Army uh um yeah approach is better to to solve this important issue which is probably one where the energy transition might might be very uh jeopardized and

and as you say there's like different sorts of flexibility batteries coming and of course EVs and and and others that have been already deployed the production that could be curtailed which obviously is not the best. Uh, so which, which source of flexibility do you think yield the largest potential for, for especially for, for DSOs? Yeah, so I think, um, uh, there is definitely in our data that we see in the platform, so we, we have, uh, already quite, uh, over 10,000 or 15,000 assets that are

approved, uh, so meaning they are not waiting to be registered. Uh, they are actually, uh, uh, approved by the distribution grid company, so they can start trading and they can supply flexibility. If I add also the not approved or, or pending or that is still to be connected, then it will go way above 50,000 or maybe over 100,000. So, so there is a lot more assets that are, um, in the pipeline, I guess, uh, to, to join. So we. We have seen that the EV charging

or smart charging, uh, is, is quite easier, um, to supply as a, as a flexibility, uh, so you, I think that really works, uh, nowadays, uh, from both the flexibility service provider, they can really plan it quite well, uh, for the, for the end consumer with their apps or, or whichever solution they have, um, and then. The grid company, in the end, they just need that uh peak period to be lower, so, so that, so the grid, you know, when it's congested, they, they can reduce

something and that really works well. Uh, we have, uh, uh, last I checked, if I'm not mistaken, almost 10,000, uh, from 15,000, uh, the, the EV charging. This also includes a lot of residential, which, uh, which is, uh, charging box as well, but there might be some, uh, which are also the EVs as well themselves because you can also, do you know, uh, uh, change the or set the state of charge from the, from the car as well. Uh, so it's, it's a mix there. And

then we, we have seen that a lot of the players, um. have started, uh, especially on the, on the, on the battery side, uh, batteries being really reliable on delivering flexibility, and then the value stacking there with multiple markets is really the thing to do with the batteries nowadays. So we see that the batteries that are being deployed just as a flexibility resource, they, they are quite reliable and they can also supply for the DSO, but now also with to the TSO as well with, with

this, I explained the long flex with arming concept. Recently we've also seen the batteries being deployed together with with heavy duty EV charging on highways in Norway. Uh, so where the battery's main function is to provide that extra juice to the, to the EV charging station when people are traveling for vacations, and it's a very small time period throughout the year, but the rest of the year this battery is just sitting. It's a resource for the for the customer who has invested in it. So now

we see that a lot of technical aggregators who have, you know, clever algorithms and, and, and different mechanisms, uh, they are able to hatch that battery both in the DSO market by creating this virtual fuse contract, the max usage, uh, so, so they get some revenue from the distribution company, the DSO, and then the, the rest of the, the, the below that peak that they have set, they are able to leverage it in the TSO market as well. So really getting the best of both worlds

for those assets, but still. Main function when, when, for example, in Norway the summer, people are going to the cabins, they're stopping at these heavy duty charging stations, the battery could do its job as well. Uh, so that's very interesting as well we have seen, and then we have seen a lot of demand response assets, uh, as well coming in. Uh, some of them are aggregated as well. Uh, so some of them are, maybe, uh, it's, it's your, um, yeah, it's, it's might be a greenhouse

uh, directly providing a, uh, uh, a demand response. We had some fish farms as well. We, uh, in Norway joined the market, um, uh, and then you might also have some residential, uh, flex which is then aggregated basis as well. Uh, so it might have an EV charging, uh, at your home, but might also have a heat pump, and then the end consumer is, is enabling in the app that, OK, I'm being flexible, and then there are different business models there that we have seen that

some of the grid, some of the, uh, flexibility service providers are also offering the. Consumers some reward, some rewards, sorry, uh, where they're getting some money back, uh, uh, on a monthly basis, which is still, uh, quite, quite decent to having nothing and still, you know, your resource being used. Yeah, so, so there is a lot of different assets that we have seen, but yeah, some of the ones that I mentioned are, are quite interesting and I, I, I see them growing, uh, day by day

How much does an EV driver get for this service, for example, if I'm, I'm home, I'm, I'm giving this service as a, yeah, so it varies. So I know that Tib has enabled this in the app. So as a Tiber customer, you can, you can be offered great rewards. So if the and then it's Tibor's job to maximize the value stacking from that EV charger of mine to multiple markets. So they manage it either in the DSO market or if they think that's maybe not valuable

for them, they might value stack it in different TSO markets because they're already pre-qualified. Uh, or they might also do, uh, essentially arbitrage in the wholesale market as well. That's also possible, um, um, so, so they would return, uh, maybe it, it varies, uh, so it's between 3 kroners, uh, in Norway, um, uh, Norwegian currency, uh, to maybe 10, uh, on a, on a given day or, or a week, uh, and it's also not, you know, a static, so it's not a guaranteed value, but it's

it's something that you, you get over the time. Uh, and, and maybe some of them, some of the people, uh, might get a lot more because they might have two big cars that are charging at their home and they might have a bigger home. Uh, so right now, I think in the app last I checked as a customer that you can only do with smart charging, but I think they are also promising now with the heating as well. So if you have a heat load as

well, they will combine both and then they might offer you higher grade rewards, uh, because then they essentially have more flexibility per per customer. Uh, and, but how does it work in the case of Tiber because they have, if I remember correctly, always a dynamic tariff. So as an end user, I would, I would enable then Tiber to start charging not only at the lowest. Spot tariffs but in combination with the other things so and I don't have to worry so and at the end of

the day the bill reflects both the spot and it should be not if I was charging at the spot price that is higher than what if what I could have charged. Um, if I hadn't activated the grid rewards, normally it would, it would still be lower, right? Yeah, absolutely. So, so they promise you, you know, the spot price charging, so at, at, at the lowest price of your car. So, so as for the energy cost for charging your car will be the lowest. But then if

you. great rewards essentially what what I understand this might be their proprietary knowledge, but what I understand is that they would be able to use these multiple flexibility markets, the transmission or the distribution, and then essentially use their value stacking algorithms. To provide me extra money, which is the great rewards. So, so the spot price is to have the cheapest charging for the car, which, and, and the comfort is there that you will get the car charged at the end of the day, right? If you

keep it plugged in. But then the grid rewards is, is the cherry on the top which is small right now, but as we see, uh, in the Netherlands, the, the grid is so congested it might happen, um, all over Europe, uh, and it might be the grid rewards might start to go up as well. So, so that's also, and also the balancing cost is also increasing in every country, um, and I think, um, uh, in Germany as well I think there has been a discussion that

the. The the TSOs here might have very high imbalance costs in coming years. So if they don't get, you know, extra assets from the from the different levels of the grid. So if you look at that, you know, overall picture from the market size point of view, it's, it's starting slow right now, but, but if you offer the end customer the cheapest charging. But at the same time use their flexibility in multiple markets and then start offering them rewards. This might enable, you know, the money

of the rewards will start to, you know, peak as well over the years. And what potential do you see for fleets? You already mentioned that you had some touch points with. The the Norwegian postal services, this type of fleet, but also companies having their own chargers at the offices for office workers, what potential do you see there for flexibility? Yeah, I, I, I think to be honest that's a very interesting asset class or overall the fleets as well because they. They have certain needs. Uh, in

the end, uh, most of the fleets in Norway actually are going electric. Uh, so we, uh, in, in Norway, I think most of the, the, the companies have a mandate to go electric, um, by 2025. If not, uh, they, they will be by 2020, by the end of 2026, so it's very soon actually. It's almost there. Uh, so we, we have seen that, uh, the commercial buildings, uh, where the, the, these fleets are, are being charged, um, they're, uh, essentially, it's, it's the one of their

um, technical aggregators or, or, or, or a commercial aggregator, um, working with them, um, to enable that, uh, flexibility from their asset, and then it's, uh, it's, it's normally a revenue sharing model, uh, most of the time, um, where, uh. The, the, the money made on the different markets. So, so as we discussed, DSO, the TSO markets all combined, then it's shared between the fleet owner or the fleet operator, and then between the company that is doing the service. It's different companies doing different models and

different approaches. So some of them have a direct connection to the car or, or to the van or whatever the vehicle type is. If it's larger fleets like trucks, then it's normally the, the customer who owns those, uh, or have leased those trucks has either an energy department in, in their own company, which is then, uh, making a VPP because they might have a facility, because it's a big truck, uh, it's being charged at their facility, so they might have also solar panels, uh, backup batteries

also the lights in it as for demand response, so their own department. Might have that capability to do the VPPs, but as you go towards a mid mid-size, I would say fleet operators, uh, you start to see this, uh, as, as a, uh, as a contractual arrangement with someone else, uh, and this is different, uh, you know, different models, uh, from different customers. And talking control actually then reducing and, and augmenting charge based on these signals, what is the. Are there any constraints by DSOs? In

my knowledge, there's also some technologies that are either enforced by the DSO or enforced even by the regulator where you need to install some extra hardware device that the DSO controls directly. Uh, these type of, um. Uh, are there these type of constraints because, and, and as I also a startup guy, uh, and of course I would prefer to have more flexibility in the level of decision of what type of control there is if it's via the vehicle as you said, or via the charge point

if you talk on the charging. Or if you actually need to install extra devices that were not really needed from a technological standpoint, uh, otherwise, yeah, and, and this is a very good question, and, uh, personally, I, I think, uh, the, the job of the DSO is to maintain the grid and make sure the connections are there so they can connect the customer. It's, it's, it's not their job to know how to control the asset. And that's one of the fundamental principle in the nodes platform

is that when you do the short flex energy trade, you don't get a direct control of the asset in the notes platform to the DSO, but you get a dispatch notification. Which can be configured over the API to the flexibility service provider. And then the flexibility service provider, uh, aggregator, VPP, whichever company name we use, they are experts in their own assets, uh, or the assets of their customers. So then it's their job to really, uh, steer that asset in the best way possible. And in

the end, the grid company, what really they need is essentially either up or down flexibility, right? So they should get that service. If they're getting that service, why install extra hardware, increase the cost overall for the society, because you will be installing not for one or two. If you look at the scale, you might be installing for hundreds and thousands, and then that extra cost is over the time will also need to be maintained, so that box or that extra hardware, that's an added cost to

that entire regime. And in the end you are getting the same result. You are getting that up or down flexibility, right? So, uh, that has been the fundamental principle, uh, in the notes platform that, uh, we, we have been always, uh, getting this question from the DSO that, you know, we, we have, we, we have to play at a very reliable grid. We cannot, you know, have blackouts and, and everything. So that's why we need this red and green button on our desk. We, we can

dispatch this battery or that charger. Uh, but we have always been, uh, you know, telling them trust the market because if you create enough good price signals, you will see the technology coming like, like, like yourself and a lot of other companies have developed really, really interesting technology that actually is enabling in the end that. Up and down of the flexibility, uh, so, so, so, so when the DSO don't start the the, the market, they have these questions, uh, as soon as they enter the market

their next biggest concern is to get the liquidity so really attract these flexibility providers, uh, into their market and get the assets. So the whole discussion about whether it will be reliable or not, that really doesn't come to the stage in most of the markets that I have been talking to the customers. So the way it's set up now is the way you suggest the DSOs to operate, which is not it's all extra. Yeah, exactly. So, so we, we allow them to put the buy order

in the market, which is their signal that where and which location and how much they are willing to pay for that service, and then it's the dispatch notification sent to the flexibility service provider who has offered that much flexibility. Uh, at, at a given price, uh, so, so the dispatch notification is then, uh, essentially the activation signal, uh, but then the logic of how to do that, that's up to the flexibility service provider. So no extra hardware, no extra direct control that is bypassing the the

flexibility service provider. So, so we started with uh Saudi and Pakistan and I'd like us also to uh end on, on those uh. Uh, uh, notes, um, what's the immobility are you following a little bit immobility developments in those countries and, uh, what can you share, uh, with us, um, yeah, we, we are very much focused a bit more on on Europe here, but we had a, a nice podcast about Ethiopia that I can also recommend to, to listeners. So what, what, what can you share

about immobility in, in those countries? Yeah, I, I mean, I think it immobility overall or, or, or sustainable mobility I would say is going on all over the world. Uh, so in Saudi, I think, uh, if I, if I start with that, uh, I've been following a bit of the development. So the, the, with the Vision 2030, uh, from the government there, they have actually attracted a lot of, uh, EV, uh, manufacturers. So Lucid, as you know, the big players, uh, from the US, they have

a big factory there. They have, uh, yeah, uh, been really the front runners in the Saudi market, uh, to develop it, uh, also train the staff there. So there is a huge shift of. Um, uh, taking the German actually automotive industry model there and applying it in Saudi but just for electric, uh, so their, their, their, I think permitting system and everything has been really easy and there is also, uh, probably a lot of investment from the, uh, from the Saudi investment fund, uh, being available

for such companies who are putting their, their, uh, yeah, companies and, and manufacturing there. Uh, apart from that, they also have launched other initiatives in Saudi on. Developing the whole value chain because if you have the car, which is electric developed or or a or a truck or whichever, then you also need the spare parts and you need the whole industry to come together because if you just stop at the at the vehicle getting out of the production line, uh, then the total cost of ownership

will never be lower than the uh the the diesel or the or the fossil fuel. So, so I think that that's also been a big focus. So there is a lot of other players that are coming in. From Asia, from China, from Japan and other countries, uh, to also establish the, the, the, the, the after sale services of the EVs there. So I think that's very interesting. And I think recently also I've seen that they are also investing huge on power to X or power to

hydrogen, essentially, uh, so they are installing a lot of renewables in different. Regions because, you know, as they have a lot of sun there and also, uh, also some uh some wind as well being installed, so instead of curtailing those, uh, when, when, you know, time of extra production, they are starting to also see generating hydrogen and then because the distances in Saudi or the Middle East overall is very large, you're talking about thousands of kilometers. So using an electric truck there is not maybe the

most optimal. So there, you know, the use case of hydrogen really works, uh, because then you can, you know, really refuel it at certain location, but it's, it's, it might be really valuable for the, for the, for, for the fleet operator to take the hydrogen truck from one destination to the other at the lowest, uh, you know, time span there. So I think that that's very interesting to see both different electric and hydrogen being used there. Uh, in Pakistan actually, uh, uh, the, the, the market

is slow for the electric, but we recently had the, the, the large Chinese manufacturer BYD, uh, launching in Pakistan with their electric, uh, you know, fleet of, of, of, uh, vehicles actually, uh, in, in there. So they're offering, uh, all kinds of vehicles that are also available in Europe, actually the same level of, of the car and, and the, and the service there in Pakistan, which is very interesting, um. Recently, uh, the, the, the government had some, some, some study, uh, so the, uh, being some

some, uh, some, I would say policy, uh, signals as well, uh, and I think, uh, uh, uh, UNDP did a study, uh, that, uh, that I looked at, um, a year or a year and a half ago where they, where they looked at the market share. In Pakistan, uh, which is quite similar, I would say, to India and Bangladesh as well, uh, where the dominant, uh, EV or dominant transport vehicle is the two wheelers. Uh, and if you combine two and three wheeler together, uh, then

you are looking at 80% of the market share, uh, for a country of 250 million. People in Pakistan, that's, that's a lot, right? 80% of the vehicles, vehicles, right, not, not the, not the population, but yeah, but 80% of the vehicles is, um, is two or three wheeler, and I think, uh, uh, I, I also looked at the number there, so that's almost 22 million or 23 million two wheelers that are running on the road as as of now. And, and an interesting contrast to that

is that the country. Is importing all this fuel, so Pakistan does not have, you know, huge oil reserves like the Middle East. So this is a big import bill to the country. So if the import bill could be reduced, uh, I think that's something they looked at, there could be a huge gain for the society where you actually shift your transport from fossil fuel, which is being imported today, to electricity or EVs, and then you, you can generate the electricity locally with the solar. So the

solar return on investment in Pakistan on a household is less than 3 years because the electricity cost is quite high there and if you just put the solar today on the on the rooftop of your home, uh, you already have a return on investment in less than 2 years. Yeah, if, if worst case it could be 3 years and and with that the whole market of solar installation has really peaked. I was just looking at an article, so it. It was stating that that in Pakistan

the installed peak capacity of the solar rooftops, together maybe with some centralized solar, is almost 4.9 gigawatts of solar, but the whole country's government and independent power plants, everything that was installed in the last 70 years or so, is 48,000 megawatt capacity. So you can already see the 48,000 is coming from hydro, from, uh, coal, from gas for the whole country. That's the peak in stall capacity. And then the actual use peak, the demand is only 30,000 or 35,000 in the summer when you have a

lot of air conditioning. So there is already a gap of your peak installed and and the demand. So if you can reduce that gap where you need to increase essentially the demand and to increase the demand, the the best way possible for the country could be to put electric two-wheelers, because then people will start charging them, uh, the demand will go up, but also the fossil fuel import for the country bill will go down, and in the end if you. Also have a home installed residential

uh, solar on the, on the, on the rooftop, then you can charge at home so the convenience will also be there for the consumer. Uh, so I think, I think that the policy has been there. I think they, they looked at the 4, main, I think, uh, parameters. What needs to be done in the next decade to really enable that is essentially the, the, the, the clear policy signal from the government. Uh, also, the global battery cost to go down because it's not a country with

high income, uh, per, per capita, so you need the battery to go down, so the, the vehicle itself is affordable. And, and then, uh, the charging infrastructure as well needs to develop because that is something also quite lacking, uh, right now and, and that maybe is also where the distributed charging, uh, could work. And then last thing I think they mentioned also was the localization of the supply chain, uh, so you also again taking an example what I was mentioning in Saudi, which is for the

bigger uh uh vehicles they were doing but similar approach of, of having locally assembled and, and, and created uh. Two wheelers or three wheelers and then also have the after sales market because a lot of these two wheelers, you know, break lights broken or something, so you can get that spare part inside the country, uh, so instead of, you know, importing it because again, 82% of the market that is driving two wheelers is not really, you know, at the upper stream of the income as well

So, so they really also need not just the lower cost of owning the, the vehicle, but also lower cost of. Operating the vehicle. So again, you know, coming back to the point with the EVs, you know, it's always been discussion the total cost of ownership should reduce, and that's something I think the UNDP report also highlighted that if this needs to happen, there must be the localization of the, of the, of the whole value chain there. OK, thanks for sharing. Is there a last message you

have for the listeners? Yeah, from my side, I think you can always reach out to me on LinkedIn if you're interested in flexibility or. The topic

and if anyone from the grid companies is listening from Germany or other, other areas, so reach out, uh, start somewhere with your journey of flexibility before it's too late and you are given the stick to do it with the regulation. It's better to to trial it, learn from it, create the data, and make sure you are ready for the, for the next generation of, of the, of the grid that is coming. So that, that would be my last message. Thank you, Farran and keep up the

good work. Thank you. That was Farran Farouk. The Charge PNB story showed that multi-vendor stacks, protocol mismatches, late approvals, and thin unit economics make charger sharing hard to scale, even with grants and awards. The shift to nodes shows a workable path. Flexibility is traded on location, price, volume, and time. DSOs can buy long and short flex and new arming lengths DSOs and TSOs value so assets can earn more than one revenue stream. Coordination examples like Finrid and Helen in Finland avoid conflicting activations using constrained logic

and market rules. The platform operates in the Nordics, Belgium, and Canada with research in several European countries, including the UK. It minimizes DSO hardware, sends dispatch notification to aggregators and scales via APIs. Assets already number in the tens of thousands in EV charging, leads. Due to controllability, batteries bring reliability and value stacking. Households see small but real rewards. 3 to 10 knocks, that's a few euros per day or week via apps like Tiber, and fleet electrification adds predictable capacity. Regulation sets the tempo. The UK's Tex

model enables mature local markets. The EU is preparing a demand response network code. Ontario is pushing non-wireless alternatives, and Germany can unlock more with TSO DSO coordination and better low voltage sensing. The practical lesson is to start early, open zones and let trades reveal flexible assets. With clear products and simple settlement, local flexibility becomes both a reliability tool and a cost lever. Thanks for listening to Smart Charge. See you next time and stay charged.

Ep. 31: Farhan Farrukh, Business Development Manager at NODES - Local Flexibility Markets, DSOs and the Future of the Grid

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