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

0:11 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.

0:40 Welcome to Smart Charge. Today's guest is Farhan Faro. This conversation begins with Charge BNB, a charger-sharing startup that won 100,000 from the Postcode Lottery in Norwegian grants for a pilot in Halden. The pilot exposed market and tech frictions: Schneider 22 kW units without built-in connectivity that needed costly on-site activation, older OCPP version quirks where chargers showed as 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

1:18 user experience make sharing hard to scale - something even players with the most advanced charger backends touch only at the edges. From there, we move to Nodes, a Nordic global flexibility market that tackles congestion through trading, not just grid upgrades. Nodes models the grid at node level, from street-level low voltage to city-scale medium voltage, and 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 MWh of

1:57 availability at about €20 per MWh 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 approved assets with a pipeline above 50,000 - from EV chargers and batteries to heat pumps and commercial sites. That's the

2:34 journey today: from 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, DSOs, need to face. This episode is fundamental to understanding how we can solve this. Let's dive in. Farhan, nice to have you today. How are you? I'm doing very well, thank you for inviting me. Happy to have you coming from Oslo, and it worked well that you could make it to the

3:09 podcast studio here in Berlin. That's awesome. And before we jump into detailed topics related to your work, please introduce yourself. Yeah, first of all, thank you again for inviting me. So my name is Farhan Faro. I've been a global citizen, I call it, because I was born in the Middle East, in Saudi Arabia, but I'm actually a national of Pakistan. My parents lived in Saudi for several years. So I grew up in a

3:39 different desert environment with different cultures and experiences. Then I moved back to Pakistan, did my education there, and yeah, then moved to Europe. That's where I met you as well, while I was studying in Belgium doing a master's in energy engineering. And then after that I moved to France, where I did a second master's in smart grids and buildings, and then after that I ended up

4:07 in Norway. Right now I'm working on flexibility - really about local flexibility markets - and working with a lot of the whole value chain of the energy industry, and it's really exciting. I think we'll talk more about that. Yeah, for sure. Thanks. We knew each other from the InnoEnergy community days. I think we were both quite passionate about that project as well - the vision of uniting sustainable energy change makers - and you were super active as a community leader and

4:37 you studied one of the masters there, as did I. So for the listeners, that's the background, and I'm happy to have you. I think you're one of the first guests from the InnoEnergy community, and I'm happy to have more in the future. As you will see, there's plenty of interesting work that people coming from that community are doing. So you said you came to Europe - first you said global citizen. What motivated you, from your Saudi experience and Pakistan, to come to Europe?

5:05 Yeah, so as I told you, my bachelor's was from Pakistan - I studied electrical engineering and majored in power systems. Right after graduating I went to Saudi in 2016, trying to see if I would be back in my childhood living environment and could get work experience there, but at that time Saudi was not doing great economically,

5:34 so there were not many projects on the electrical power side. Then I moved back to Pakistan and found a job at a very small company, almost a startup, that was doing very technical work. They were essentially partners with General Electric, the large US company, and were installing protection and control system equipment inside medium and high voltage electrical grid stations. The government of Pakistan in 2017 started to upgrade a lot of these electrical

6:07 substations, so they had a contract to upgrade them. While I was working there it was super interesting, but it involved a lot of technical details - designing circuits, really getting into the engineering side, which has its own fun. But one thing I was missing was the new things you hear in the news and online: what is this energy transition happening? And really looking

6:34 From the outside, and never been in Europe, never, never visited even before that. It was like Europe was the leader - back in 2017, if you ask any young person outside Europe, if you tell them 'energy transition' or 'sustainable energy' and all these keywords, every young person would say, 'Oh yeah, this is something happening in Europe.' So that was the main motivation to become part of that community or that society where something is happening, which

7:05 is actually quite important. And then I found this master's with InnoEnergy, which was combining not just the energy engineering and sustainability topics, but also combining innovation and entrepreneurship. So that was like the best of two worlds for me - getting into the sustainability topic, but while also having this very much a hobby to become an entrepreneur. A naive hobby at that time; didn't even know what an entrepreneur

7:36 really means. It was a cool thing to do, but that's how I ended up in Europe and with those two passions: energy and sustainability, and then innovation and entrepreneurship. OK, and one step back again, because it's also something that is a lot in the news right now - we're seeing geopolitical tensions here and there, and borders being set by the US, for example, especially for people coming from abroad with their H-1B visa. And I'd be curious to know

8:06 - I think there's not so much light shed into how many people from Pakistan or India and other regions are actually living in Saudi or in the Arab countries there on the Arabian Peninsula. Like, what's the share of population? What led your parents to move there? Yeah, that's a very interesting question, because my generation has actually seen the global community more connected - it's much easier to move between countries. But back in the day when my parents were, you know,

8:39 in the 60s and 70s, when Saudi - or not even just Saudi, but the whole Middle East - had this oil exploration boom, that was the big function in that society that really enabled them to hire a lot of skilled workers. So my dad actually used to work in the public sector of Pakistan. We have a public company that operates all our electricity grid, but also all our hydro dams. So he used

9:10 to work at a hydro dam up in the north of the country, and then the Saudis were hiring a lot of skilled people because they had a real shortage - they really needed a lot of the new infrastructure to be maintained, developed, and operated. And that's how a lot of skilled people migrated from Pakistan to Saudi. But the same thing happened, I believe, in Dubai or UAE, also in Qatar and Kuwait

9:40 and all those countries, which are quite closely linked. Most of them had one thing in common: they had a shortage of skilled labor, and the countries which had a lot of population but also a lot of skilled labor saw people migrate to those countries. So living there and growing up, I would say my school also had three sections. One was a Saudi section, where only the Arab students were studying.

10:08 Then we had another floor in that school which we used to call the Pakistani section. All the Pakistani students were studying there, and the curriculum we were following also came from the embassy of Pakistan or the government, teaching the curriculum that we were following. And then we had another floor on top which was for the Indian students. They had their own curriculum from the Indian government, which they were following as

10:34 overseas citizens as well. So it was an interesting experience - you had three different layers within the same premises of the school. We would play with the Indian kids from time to time. Also, we'd play cricket with the Indians and football with the Saudis. So that was an interesting experience. Funny anecdote. And coming back to Europe after your

11:02 studies - what did you do? So I finished my second master's in Grenoble, at the polytechnic in France. From there I started reaching out to my network and seeing what the different possibilities were to start working in Europe. I wanted to stay in Europe, build my career here and gain some experience. I had a friend who also graduated from InnoEnergy, but one year ahead of me -

11:29 he was working on European Horizon projects. The European Commission sets out an agenda every few years and they have a certain amount of funding allocated to innovation, research, and also some academic-related activities. So I joined a company called Smart Innovation Norway, which was a research institute - a private one, but doing a lot of research with innovation, so really at the high end of the technology readiness scale, which is

12:01 a term used by the European Commission - originally from NASA - to define whether your product is in the lab or is closer to entering the market. So my goal was to work on creating new projects, putting a lot of consortiums together of 16 or 17 organizations. This would include companies, universities, academic institutions, research institutions, and sometimes startups. Together we would put forward a new proposal or a new innovation concept for a challenge that has been

12:36 set in these Horizon calls, which is designed by the European Commission experts. So I would create those proposals, submit them to the commission, and then you would get feedback whether you got funded or not. And if you are funded, then the second role of my job was to do project management. Also, one of the projects I did manage was as a pilot coordinator. So we

13:05 were actually deploying microgrid optimization solutions across three countries: Romania, Spain, and Norway. I was the main pilot coordinator for all three sites, so I had to coordinate with the vendors supplying equipment, a university that had developed a new algorithm to optimize 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

13:42 really working with European funding schemes and really understanding - this is quite complex coming from outside of Europe, to be honest - but when you start seeing the different trends and different themes, you can start to learn how does this work and what's the benefit of it. And one of the things that I felt was missing there was the impact of these projects, because the European research can go up to a certain level and then it has to end, and

14:08 then it has to enter the market, because that's where the commercial interest will take it further and develop some value for society. And that's where I thought maybe that is just a bit slow compared to the commercial world. And that's where I stopped working there and moved to the next role. And the next role was with Nodes, as a business development manager.

14:35 So here, interestingly, within my last job I was doing an R&D project with Nodes, where I already saw their platform and looked at it - it was very interesting. It was a new concept to create new local flexibility markets, which I had a little bit of knowledge about but not really, and I just reached out to my contact there and asked them like:

15:01 "Hey, this looks really cool, and I'm more interested in really commercializing these new innovations, and your platform is already at a stage where it can be commercialized." So I joined this company in 2023 and we've been working there. OK, and before we deep dive into that one, I think there is one episode that could be interesting - Charge B&B as well - that you could be elaborating a bit on as well, what

15:27 what that was about. The name is catchy. Yeah, absolutely. So while I was working in this research organization, the research institute in Norway, one of the things that was really interesting in Norway - and I think most of the listeners will also catch on to that - is that Norway has a lot of electric cars, right? And that was one of the things that I also felt when I arrived there and started living there, that

15:52 when I needed to get a car, let's get an electric one because you're in Norway. But one of the biggest problems I faced was that the place where I was living, I was renting a home, and the landlord had one electric car charger, and that was for his own car. I could not charge on it with any commercial model. I had to charge, and I would have to manually calculate how much

16:16 I charged, which was not really fair for him and also maybe not fair for me. But really where I was living, there was a school that was like 5 minutes away by walking, and they had like 8 22 kW chargers installed at that school. And the school only - the people coming there were charging from the morning till the afternoon. The school closes, the chargers sit there, and I was looking at them all

16:45 day whenever I crossed the school, thinking: why can't I charge there? From 2020 through to 2021 I looked at it - there were many such chargers in that small town in Norway. And then I got contacted by one of my old mates who was living in the Netherlands, and he had this idea from a hackathon: why don't you do the Airbnb of charging? And I

17:11 told him: I'm actually facing this problem in Norway, so this is actually a real problem that you're describing to me. So let's join hands together. Let's create a startup - become that entrepreneur that I talked to you about earlier. So we created the company, and then we faced the first challenge. It was an immigrant challenge: as an immigrant in Norway, or I think most countries, until

17:36 you have lived there for a certain number of years, you cannot create a company just on your own. This was the immigration requirement - you need to have a Norwegian citizen involved, yeah, or a permanent resident. So I was not a citizen or a permanent resident, so we involved another colleague of mine who was, and he was also bringing some experience of Norwegian society and a bit more knowledge of Norwegian society.

18:03 So we were 3 that started it. And then we realized quickly that, as soon as we learned the first keyword - OCPP - what is that, and suddenly we hit the wall that none of us had the software development skills really needed to develop a platform that could allow the Airbnb of charging. That's when I reached out to another student who was studying in the same town where I was working.

18:31 He joined us as a full-stack developer. He was also from Pakistan and he came there for studying, and he had a lot of experience developing full-stack applications. So we became 4. You can already start to see that, as a startup, we were quite a big team, not yet really having validated the problem in a real-life market. And that soon became the biggest challenge - we were really pushing to get the

18:56 market moving, instead of the market calling us and us starting to onboard. So we did end up actually winning a lot of competitions in Europe. We won a big prize from the Postcode Lottery - they have this Green Challenge, they operate it in 5 countries - and we were chosen the winner in Norway as the best green startup. So we got €100,000 of funding with that, and then we also had some

19:28 grants from the Norwegian government to help really build this concept. In the end we did some pilots. We did a pilot with the local municipality of a small town called Halden, on the east side of Norway. We were sharing the chargers from two schools with the community there. But soon we saw a lot of challenges with having a multi-vendor system. We had the chargers - the two-pole chargers from

19:56 Schneider, 22 kW. First we had to find out whether they had an internet connection at that site, which was not enabled, so we had to hire a local electrician or a networking guy who would go in and open the charger. He was the only authorized person to do that from the company. And that had a cost for every charger we had to onboard, because these chargers were installed by the municipality and when they installed them they never

20:25 had a requirement to make them already enabled with the internet. So that was a challenge. Then when we started sharing the chargers, we also saw that a lot of the time - at that time I think it was OCPP 1.6, if I'm not mistaken - it was not communicating quite well. The chargers would report a status of charging, but the customer was telling us

20:54 that their car was not charging; it was actually just sitting there. So we had a lot of bad communication between the two systems, and also on our side I think we were still learning how these protocols work and how to integrate them with the chargers. So there were also a lot of real delivery challenges. Finally we finished that pilot. It had some results, but not really great enough for the municipality to say

21:20 "OK, we're going to do this all across," because it also required the municipality to involve a lot of actors, get approvals, and do a lot of paperwork, which was complex for them. On the other side, we were also already talking to a large fleet operator in Norway called Posten, which is the National Postal Service. They had some depots where they were charging their vans - they had electric

21:49 vans that would charge at night at the depot. They would pick up the mail or all the deliveries in the morning, go out in the field, and deliver. But when they were in the field those chargers were sitting idle, and the concept again was to share those as the Airbnb of charging. We had approval from their management to do this pilot, but essentially all the approvals came so late that we

22:16 were out of funding as well, and also out of motivation, because we were quite a big team by that time - around 6 people - but had not really validated the product. Everybody felt that there was something here, but was it really moving? We all agreed to move forward from it, take all the learnings. I think that's one of the things I really appreciated - that when you

22:39 have a failure, which is quite appreciated in the US, maybe less so in Europe these days, it really teaches you a lot. You learn so many things along the way that you can use later in life, both from a technology perspective, from the culture of the team, and also the dynamics of how to deal with customers and do product-market fit - a term which we

23:07 learned quite late, I would say, as first-time founders. But overall it was a great experience, and it has also helped me in the new role I'm currently working on. Yeah, very interesting story. Thanks for sharing. Just one more thing on that - how do you look back at this problem, the fundamental problem you wanted to solve? If you look around, there are still so many chargers that are not being shared. It's a big topic in

23:34 the industry. What's your view? Why isn't it commonplace? Why aren't there other people that have solved this problem with the same second charge B&B? Yeah, I think that's a very good question. 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 that I last checked are able to scale to a certain level, but that's really a

24:03 community approach to that, right? It's not really a plug-and-play solution like you have on the other sides of EMSP solutions or CPO solutions. This sharing of chargers has not scaled. Even though one of the largest players, Monta from Denmark, they started at the same time in 2022 when we did, and the founders had really great experience from ex-Tesla, and they scaled the platform. Actually, their initial product

24:31 - 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 systems and different locations. So their major revenue portion, I guess, is from there. They still, 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

24:59 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 maintaining this kind of platform. And then the second problem with that 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 already kind of have a

25:30 bad press. People don't rely on that in the EV charging world because everybody who's charging their car really wants 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 - if there was someone who had one time the charger didn't start and it was not our fault, it was the charger itself not responding, the customers stopped using our app and got out of the

25:55 pilot scheme. And I think it's really important for this idea to stick. So someone has to find a very good business model that makes it 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 the problem that the company is trying to solve first? Yeah, absolutely. So the problem really started on the concept where Nodes was

26:25 born. Let me take you back a bit. So Nodes was actually created in 2016 from a concept where the local grid company in the south of Norway was facing a congestion issue on a large transformer station. Congestion, meaning - just for the audience who doesn't know that - is that you are not able to supply enough power or energy through your electrical grid because it's almost full. So then they

26:56 brought together some experts and thought, OK, what is the new way we can solve it instead of putting in a big transformer. They gathered a lot of experts from Microsoft and also a lot of other companies. Even Nord Pool was involved at that time, the wholesale market operator. So they together designed Nodes' first market design, which was essentially based on the Clean Energy Package in Europe, which already talked about this role of aggregator and prosumers. And also

27:26 local flexibility markets. So the Clean Energy Package - for the listeners, that's the package that the European Commission and Parliament 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 - and one of them here this year. Yeah, absolutely, thank you for clarifying that. So that's something that is in the Clean Energy Package. In the earlier draft, I think the 2015–2016 draft,

27:54 it said that the DSO, the distribution system operator, may use market-based systems or solutions to solve their problems. So this small group together designed this market design and created a platform. The platform was really designed to be a nodal concept - that's why the name Nodes comes from. Grid node is a really important concept in the platform, because what you are doing essentially is creating a replica of your physical network on a

28:27 digital platform. Your grid is connected from point to point. You 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. A digital twin - yeah, exactly, you can call it a digital twin or you can call it a simplified grid model; there are different terminologies used for it. But in this case it's really about taking one feeder or

28:55 one line of your electrical grid, or even one transformer station, and then you can say, OK, this is my child node. I will have some visibility on this node. In this case, a node would be like a line - but what is a node? Let's clarify that. That's a good question. So in our platform right now it can be anything. It's really up to the grid

29:20 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, from 400 volts up - or they prefer to maybe start at a medium voltage level, covering the whole city. So that's really configurable. And we have seen - we can call it 'level'; a node would be like another synonym for level, yeah, exactly. So it can be a really low level of

29:48 the grid, and then you start connecting that low level up the chain, really taking each level up. The concept this enables is that you can really solve very local problems, and that was really the issue that was in 2016 where this platform was a proof of concept. So it did actually result in getting some flexibility from the grid and solving that congestion problem for the electric grid.

30:16 Then, essentially, just to set the basics and the scene. So the fundamental problem is what you said - congestion - which was already defined, so that not enough capacity can flow through the grid. And you're already going through the solution now, that is flexibility. That is: delay and defer certain consumption - basically, or production - or reduce the production of renewables. That's the two levers, right? Exactly. So, if I just summarize

30:51 what Nord's platform does: it facilitates the trading between the grid company and the flexibility service provider, where the concept is that you buy flexibility top-down - so really from the grid - and then you sell flexibility from 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. The real objective here is that you are a generation or a consumption asset. You either

31:19 increase your generation or reduce your generation - so we call it up and down regulation - and then the opposite for 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. So what we have done in this platform is that as a distribution grid company, to start with, they can really create a locational market. So that's why we call it a local flexibility market, where this grid company can say:

31:50 "OK, I'm facing a problem at this transformer. I have essentially two options: one, put more copper, put a big transformer; or the other option is that I can use what is already inside my grid, which is these new distributed energy resources." That's another term, DER, being used a lot these days, which means solar photovoltaics on people's homes or on buildings, or batteries, heat pumps, electric car charging - all that is in the term DER. So

32:24 the grid company essentially can do both functions, and that's what we have seen. They might plan to upgrade that transformer over the next five 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 - all that. In the meantime, we see that there are a lot of companies making a business model where they can actually enable this flexibility. So again, demand turning up or

32:56 down, or generation turning up or down. And they see this as a revenue stream. So that's where we call them flexibility service providers. Their function essentially is that they are aggregators - aggregator is another term, exactly. And virtual power plant, because that's also a common term - do you call them that? So that's why we have termed them all as flexibility service providers. So it can be a virtual power plant, it

33:24 can be an aggregator, it can be a battery operator, it can even be a CPO, charge point operator. So it can be different roles. So we have categorized them as sellers in the market - or call them flexibility service providers, or FSPs for short - and then on the other side we have the buyers, and those are typically the grid companies. So we start really at the local level, and we started with the DSOs to validate the concept

33:53 in Norway with the south of Norway DSOs. Then it 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 also buying flexibility from the same asset. That's also very important to know, because in the end the physics doesn't change. You have electric power flowing from one to the other, and in the other direction you have the battery which

34:30 might be injecting back into the grid. Then you have one battery which might be needed by both the transmission level and the distribution level. So that's something we have also now seen in our recent market launch in Finland, where both Fingrid and the DSO Helen - Helen Sähköverkko - are both trading on the same platform and competing for the same asset. So whoever has the need will pay the highest amount, and that's how we have also seen that. So

35:00 you need to convince the stakeholders - mostly the flexibility service providers, let's call them FSPs - to make it more efficient than the compensation. And for the utilities, or the DSOs in particular, it's mostly a business case: you have to calculate OK, how much money can you save compared to copper and a transformer, as the DSO, and how much money can you make with this extra flexibility source? There might be some cannibalization or other values that the FSP might actually lose by participating.

35:37 in that market, or maybe it's just a value stack. Can you elaborate on these two points? Absolutely. So essentially the platform allows 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 four parameters, they are actually trading flexibility among themselves using the platform. So as a first point, what we need to enable the market is a

36:08 great company to join the platform. So they are currently the prime customers for Nodes, because they are the ones that have the job to supply the electricity to all of their customers, and they are starting to see that as being a big challenge in coming years. Some of the countries already face that challenge. For example, in the Netherlands, the grid is so full that you might need to wait several years to install a heavy-duty charging station

36:35 at the highway. So they have the need. That's why our prime goal is to first get the grid company on board so they create the grid nodes on the platform - 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 going to 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

37:03 where to buy the flexibility, we can start making that available on our website, Nodesmarket.com. And if you go to the Nodes platform, you will see the map where the areas are visible. And what we are doing is essentially inviting all these FSPs to start joining the market, where they see a location on the map where they have an asset. An asset, as I described, can be any type of distributed energy source or generation resource. Then

37:32 once they start to sign up on the platform, the grid company and Nodes essentially start to design the market rules, because these markets, like the other markets we know - the wholesale market or the transmission system operator market - all 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 more than eight or nine years with a lot of different grid companies. So

38:00 we bring them a very simplified set of rules, where the grid company would tell us, OK, the minimum bid size on this market - what do you suggest? We would suggest to them: 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 fine, or they might say, no, I prefer 50 because I have certain needs for my operations desk. That means 50

38:25 should be the minimum size. OK, we can figure that. Then the second point is: as a grid company, what do you want to solve? Whether you want to solve the deferring of your investment - so delaying the investments in the grid - then you might want to launch a reservation contract. So you want to launch a long flex, we call it, a long-term contract where the DSO or the grid company is saying I will buy flexibility

38:55 for a capacity and reserve it for myself - meaning for the grid company. And I will pay the flexibility provider an availability fee because they are providing a service for me where they are making this asset available. This is the amount which is paid to the FSP as a base price, which is normally lower because it's a capacity price. And the DSO then decides for the second problem, where they might have an

39:25 N-1 issue, or a real-time congestion issue as they go towards the delivery hour. So the long flex reservation is happening maybe months ahead. For example, in Norway or in Sweden, the grid company reserves flexibility for the winter because that's where the grid is really strained. So they reserve this for three months or maybe four months - the long flex contract. Then as you move towards more of the real time or close to the delivery hour, the

39:56 grid company 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 you actually have competition happening, so you can have many flexibility service providers coming in and offering their flexibility, and the grid company looking from their operations desk - they have their own tools, which is normally load flow analysis they do -

40:24 and they will find out, OK, at this location I am going to face an N-1 issue. Then they can buy in the market - so D-1 is the day before. And N-1 means that you are losing one critical component of your grid, meaning you are getting supplied from two transformers, let's say, and one of the transformers got a fault, a problem, and then you are only relying on

40:48 one. And if that goes, then there is a blackout in that area. So that is a really critical situation. And just for the context for the listener here as well: European law actually dictates that the grid company cannot just disconnect people for the sake of it, which in some other countries can happen without penalties, but in Europe the penalties are really, really harsh. So for them, the alternative is either, as I said, to build the grid

41:14 which they probably are doing on the way, but still get some service from the FSBs and then pay them a good amount. And what is the good amount? So this is where your original question was as well. We have seen the prices range differently from different countries and also from one DSO to the other DSO as well. And the reason is that it really depends on what is the situation of the grid,

41:42 today, right? So we have seen that in Norway 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 almost 100 megawatt hour of that 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

42:16 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 less than 10% of those contracts. So this coming winter season we are enabling a new product called Long Flex with arming. What this means 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,

42:49 but 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, and they are paying you €20 per megawatt hour. Then when November comes, they do their load flow again and they see that actually it's not a harsh winter, or maybe they can manage it because they already have capacity in the grid. They would actually release your asset, so it

43:15 will not be armed, and then you can value-stack your asset to the transmission system operator market. 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, the market for the transmission system operator in Norway - the MFRR market, and also the others, the FCR and others - open up. So then, if the flexibility service provider does not

43:43 get this arming signal, the flexibility service provider is open to participating in the transmission-level market. This is very popular, I think, now with a lot of players in Norway right now, and we are also starting to see the discussions happening in other markets where we are operating as well. So the goal here is essentially to really enable the value stacking and enable a new market, because DSOs were not really buying from FSPs, right? So there was

44:12 no price attached to it. But now with this you can actually do the value stacking from DSO then to the TSO, and within the DSO you already have multiple markets, right? And this is where you will get the full scale of all the revenue streams that you get here. And is there some numbers you can give related to DSOs benefiting from the product in terms of savings? I imagine it's not so easy to quantify the value proposition you offer compared

44:44 to what they know with building more cables and transformers. Yeah, this is a very important question, to be honest, and there are actually two things attached to this. There is one about doing this cost-benefit analysis for the grid company - what is the value of flex. Now there is also another aspect that is very important: how the companies are getting paid today, because just for the recap, they are regulated entities, right? And the majority of revenue for

45:14 them is essentially passing the electricity through their cables to the end customer, and the end customer uses the electricity. The end customer pays a grid rent or a grid fee, and that's how they get revenue back. They cannot make huge profits on it because they are a regulated entity. They have a societal function and they need to fulfil that. The current regulation in most of the countries where we are operating has a capex model. So the more investments

45:43 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 a big topic. Exactly, and that is a big issue in most of the discussions that I have with the grid companies - that they see there is no incentive for them. However, we have now been seeing the discussion happening on the EU level.

46:09 There is a policy change being discussed - we will come back to that as well - but also at the national regulators, the NRAs are really pushing the grid companies to think about opex as well 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 totex approach, so a total where capex plus opex is calculated and then the grid

46:38 company gets essentially the money. With this change in regulation, there will be a big incentive for the grid companies to not just think about more copper in the ground, but also other services like flexibility. Now the other side of it - the value of investing in the grid. There was a study from the Smart Energy Group, which is a Brussels-based lobby group on demand response, and they have estimated that almost around €600 billion

47:08 of investments have to be made in the European grid in the next coming 5 to 6 years, and the majority of that investment, more than 300 billion, will go to the distribution level of the grid. And their estimate is that if from that $300 billion you could invest at least $10 billion in 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

47:40 and the generation that is locally present. So that is a big number. I mean, in the next 5 to 6 years, you will see this as one of the key enablers. And that is why actually a few days back I was in Finland, and the European Commission - one of the representatives - presented that they are also working on a common methodology on assessing how the needs assessment for the DSOs works, and there will be

48:09 something coming out from the Commission as well with common methodologies on how to value flexibility and investments in the grid. And that methodology probably will also serve a lot of the grid companies in Europe where flexibility has not yet been on the agenda. And this is something really important - we believe that going forward more regulation will come in, but also at the same time the markets we are running, the data is being

48:38 generated. So there are two things that will come together to really convince the grid companies that have not yet started on this journey. And are there - I think you're already active in different geographies - what's your thought on the regulatory landscape? You already mentioned the UK being very good and favorable to this type of flexibility markets. Are there countries where you could not operate even if you wanted to, or how do you look at geographical conditions? Yeah,

49:09 so NREs currently is operating in Europe and in Canada as well in North America. We are dividing the markets and the initiatives that we have into essentially two different categories. One is commercial, where we are getting clients to procure our platform - so it's normally a public procurement, or a public plus private procurement, of our platform. So our core markets are currently Norway, Sweden, Finland, Belgium,

49:40 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. This was a summer flexibility initiative we did in the Ontario region in Canada. Apart from that, we are working in the second category, which is the research and market design studies that we do and the market design methodologies that will work in that country.

50:09 There we are working in Greece with the transmission and the distribution operator there, and also in Switzerland with the DSO on the Italian side of the country, and then also in Spain as well. So these are the three on the European side where we are working on the research side. And then we also have in the UK a project - a community DSO project - where actually two energy communities

50:35 are actually supplying flexibility to the grid company through the Nords platform, and that has also been in the research space. So these are the two models we have been working with, and we have been really now starting to see a lot more public procurement happening of our platform. We already see in other countries - I cannot name them right now because we are in the process - but already in Europe we see other countries where

51:01 our platform is being procured by the DSO or the TSO, or both. It's also interesting that the TSOs and DSOs are joining hands to launch a market together. And then in Germany we have been really trying to bring this message forward. We had some European research projects here in Germany with some DSOs, but it didn't cross that threshold. One of the biggest challenges, I think, has been on the regulation side here as well,

51:30 where the DSOs have been using cost-based redispatch instead of market-based. We however see that in the end the value of having it redispatched through market-based could actually unlock real value for the transmission system operators as well, because then the transmission system operators - which are, you know, multiple in Germany - could also access flexibility down in the low voltage grid. One of the biggest challenges, I think, has been that the grid companies

52:01 do fear that their grid will be violated if someone coming from the high level of the grid activates 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 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. So there we are actually enabling

52:30 a new module in the platform, already being used in Finland and also in Greece, called the TSO-DSO coordination module. What happens is that the local distribution company, when they are creating this local flexibility market, can already create constraints per grid node - creating limits - so then if the higher level of the grid comes and buys from the same asset, if you remember our initial point, you have the same

52:58 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 there anymore because 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

53:28 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 you start to see this happening, there could be a lot of challenges that could be solved with the 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

53:54 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, and not only at regional but overall systemic level, so that all these value stacking of the different markets can play along correctly, because without these constraints indeed there will be stakeholders that rightfully are concerned about overcapacity. And what is it that you need to set such a market up? So if

54:29 I'm a DSO, are there also elements that would impede you to get activated because, for example, lack of meters? I imagine. Yeah, that's a very interesting question actually. So wherever we work and we enable this market - I explained to you earlier that it's a long flex, so you reserve something, and then short flex, you activate something - we also have a third product called Max Usage, which is a kind of a virtual fuse contract, which is

54:57 a simpler way to unlock a bit more capacity from the grid. But essentially to unlock this flexibility, or to deliver it between the grid company, the buyer, and the seller, there must be a way to validate it, right? So whether you really delivered the kilowatts or the megawatts that you said you were going to deliver - and that is where we have a nodes metering hub, so this is a platform to essentially upload your meter data, which is normally

55:28 coming from the smart meters. This is a really crucial hardware component that needs to be there, because you really need that resolution of the data to be uploaded on the platform. 15 minutes. Yeah, so normally we have seen 15 minutes. It's also, I think, the standard resolution of the meters being rolled out in Europe. So we see that when you have the smart meter penetration going up, you can already start to get

55:56 more different levels of flexibility at more granular levels, really from the residential sector as well. But to get started, I think the grid company just needs a willingness - someone at the grid company saying, OK, let's try it out. Let's open maybe one area, just one area at the medium voltage level. That's fine. Anyone below that can come and provide flexibility, because in our experience we have actually seen that when the grid company opens those areas

56:26 and we start reaching out to the flexibility service providers to come and register their assets, it sometimes 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 found out, oh, we only have maybe 550 megawatts of flexibility. But real data, or real assets, coming to your visibility is only when you create a real area and you create an incentive. You are really giving an incentive

56:58 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 signal that you are opening something and let's connect. Then when the asset is registered and the meter points are uploaded, that's where we have seen that if you don't have a higher penetration of smart meters at all levels of the grid, you might start with bigger assets. You might start with a newly connected battery, which

57:27 might be at a smart meter point, or you might connect a big industry first, or a big sports arena for example, because we have seen all types of flexibility coming in, and that might just start your journey. As you penetrate with more smart meters, you will start to see more residential flex and also commercial flex coming into your market. And maybe it's a stupid question, but my understanding is also that the DSOs, especially

57:54 in Germany, haven't had many smart meters in most grids, at the medium and low voltage. How do they actually quantify their flexibility needs to then be able to open this market in the first place? Yeah, so there are two ways essentially they can do the assessment. Either they can go through the smart meter data and do studies through that, which is not available in Germany at most of the grid

58:27 companies. Then the other side is that they might go through their SCADA systems or the distribution management system, the DMS. This is where they would essentially have these systems installed by big players in this space, like Siemens, Schneider, GE, and also new companies coming in, so they would actually connect to the grid company's local operation and control system, which is traditionally, you know, has been a very simple SCADA system that is

59:01 just getting the data from their substations. But now, as we see that there is a lot more innovation happening in that area, we have more modern systems where, with the data that is coming in, they can actually do accurate forecasts. They can predict at different levels of the grid when an overload will be coming, so they can already do that needs assessment with those kinds of tools on the grid side. And many of the

59:27 grid companies already have such systems, either not fully deployed - so there are modules of these, maybe not at 100% fully deployed, but they might be at 50% - and that still gives them a lot of visibility of the issues that are coming. Because remember, if they have a blackout, they have a huge fine coming, which is not what they need. So they are already investing in these tools to actually get that visibility of where we are

59:54 in the red, in terms of the capacity of the grid. And so that could already help them start this journey. And I understand it's at the substation level, for example, in Germany, but as there are not so many smart meters compared to other countries, you cannot go much below that in terms of visibility. Exactly. So there is a challenge in going below that, but we have a partner in Germany, Smite, who has actually been able to unlock

1:00:21 a technology by installing sensing equipment on the low-voltage feeders. They are actually able to bring that observability also from the low-voltage grid, and surprisingly their biggest market is Germany - they actually have several customers who have already deployed that low-voltage observability equipment and the software with it. So there is, I think, a lot of control and visibility on that side. I think the challenge has been that there is not much motivation

1:00:50 to go towards market-based flexibility. And it's probably also because there had been a few trials in the past which had not been successful - there might not have been enough liquidity at that time, and there might not have been many new aggregator companies that were really bold enough to build those technologies and those business models. So that has had - I'm speculating here, but what I've heard so far from the market in Germany is that those trials didn't really make a

1:01:23 big success, and that resulted in not going towards a market-based approach to flexibility. And talking about concrete projects - which ones are you particularly proud of? I would say that I'm proud of all of them. But our biggest market is Norway, which started with one DSO, as I told you, in 2016, 2018, and 2022, scaled to the 22 largest DSOs in Norway, and now it covers actually eight of the largest DSOs, so it's

1:01:53 scaled up to almost two-thirds of the meter points of Norway. So that is a very large area being covered on the nodes flexibility market. And then also in Gothenburg, it's very interesting, because that's a very small area for flexibility to be open, but the grid company there, together with the local grid company in Mölndal - so these are two small towns, Gothenburg and Mölndal - the two grid companies have been

1:02:20 able to run the market for four seasons now, four 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. They have really interesting flexibility coming from EV chargers, batteries connected to heavy-duty charging, and there was also a trial of V2G with Volvo there. Being present in Gothenburg, they are enabling price signals from the DSO but also allowing commercial companies to

1:02:51 test new technologies and really validate whether they have a business case. If tomorrow, let's say, Volvo launches V2G for all their customers, and the grid company is willing to pay this much for that, then there is a business case they can enable. So there are really interesting local players that have contributed to that market. And recently, in Finland, we launched the first TSO-DSO coordinated market where both Fingrid and Helen, as I mentioned, are buying in the

1:03:21 same market area, which is very unique because it was never done before. The TSOs always had their balancing markets and never wanted to involve the DSOs in their markets, because the scale is bigger at TSO level. But this trial is really about solving congestion locally but also at the connection point to the transmission grid. And it was very interesting at the Finland Flexibility Day we hosted two days ago, where TSO Fingrid mentioned that the queue

1:03:51 of connections is almost 70 gigawatts being requested on the Fingrid network in the next five years or so - they have to deliver that. And this is a big rise. This 70 gigawatts is the capacity being asked, and there are terawatt-hours of energy that they have to deliver in the next 5 to 10 years. So you can imagine the scale of the electrification and the things happening there. So if

1:04:21 they don't really have data from these kinds of local flex markets and coordinating with the local distribution, they might be too late if they start it five years from now. So that's really interesting. And I will quickly also mention another one - Fluvius in Belgium - because they have taken the approach of really answering what you were asking, like what's the value of flex. They have taken the approach of really defining six core parameters and really going from a societal

1:04:51 value of flexibility. So they are really engaged in making that market, so it actually enables a real big value for the society overall. I'll just stop here, but there are other initiatives as well which have been really interesting over the years. And let's talk also about DSO-DSO coordination. I think that's also a topic that you address, because it's not - yeah, it doesn't go only from the low to the higher one, but

1:05:18 it also goes horizontally. So this is something, because the concept is the same, right? If the low-voltage grid company, the local DSO, has some constraints at their level, but they have maybe a DSO that's a regional DSO above them 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 Norwegian flexibility market,

1:05:46 actually two DSOs, LV and Nordgisneth, who are actually doing this DSO-DSO coordination, where the Norse platform's architecture of child-parent grid node concept is being used, 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 by the local distribution company, is being aggregated at a higher grid node and

1:06:18 being offered to the regional DSO. So the regional DSO is able to access the flexibility from the local one, but if the local one needs it on their own, they can also just use it themselves and also define the constraints if they have issues with those higher volumes being procured. The other example we had was in Stockholm. We did a project a few years ago where the

1:06:45 two regional DSOs were buying flexibility in each other's areas. And what they were doing is that they were also coordinating with the transmission system operator, where if one 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 feed to the TSO - they will automatically increase their value there and decrease for the

1:07:14 other one in the other area, and then vice versa for the other case. This was also interesting because then, upstream to the TSO, they were already paying the same amount, but if they hadn't coordinated - anyone who is activating more in the up direction or increasing the limit up to the transmission would have to pay an extra fee to the transmission system operator. And this is a very concrete business case again for them, primarily in Sweden, because the regulation

1:07:46 is like that. The local DSO has to pay the regional DSO some fee if they exceed their peak capacity every year, so they have a defined peak limit every year. And then the regional DSO has to pay up to the transmission system operator. So there is already a business case where, if you just keep your peak below that by buying flexibility, you're already saving as a distribution company. And I think this is also something

1:08:14 I have heard from the German DSOs - that they also have to pay upstream as well if they exceed their peak limit. So there is already a business case where you're already seeing your peak increasing because more people are electrifying, more connections are being done. So you could already have some flexibility contracted. And that's where our max usage contract has been really interesting, because then you are saying that, OK, I have

1:08:40 a 10 MW connection, but my peak, as a battery operator or as an EV charging station, is maybe 7 MW. So the other 3, I can rent back to the grid company, and the grid company can use this either to reduce the cost upstream or to issue new grid connections to the new customers that are waiting in the queue. So that has been also something for some of the distribution companies. And let's talk more from a product angle. How

1:09:08 can I imagine the product being used by these FSPs and the utilities? Is it very much API-first, or is there a web app? Yeah, good question. So it is available both as a web app and also on the API, because we are working with two different stakeholders here. We have the grid companies who have been used to working on the web apps or the applications

1:09:37 over the years. So their staff is really trained and they have capabilities to use the web application on the user interface. That's why the user interface has been one of the main focuses for the application. But we are actually very capable - I would say - 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.

1:10:11 And if you are working with an energy retailer who's also maybe an aggregator, they are saying that they know how much flex they can enable, but they cannot do it manually. They have 1,000 households that they would aggregate and provide you flexibility. Then you really need the API for it, right? You cannot go one by one clicking. Yeah, ridiculous. Yeah, exactly. So that's why the API has been developed over the years, and this is a very interesting mix because on

1:10:40 On one side the buyers are maybe using the application, and then on the other side the flexibility service providers are using API to trade, but it's not a must, so you don't need to do the API. You can already start by just using the UI, but we have seen that with the maturity, the flexibility service providers prefer the API. And what are regulatory trends that you're particularly interested in? I think you already hinted upon a few, but yeah, the

1:11:06 one of the main ones that I'm really interested in is the EU demand response network code that is coming in next year, and then being finalized in the year after, which will be something that all the member states in Europe have to look at and have to adopt in different shapes and forms. But that network code for demand response, one of the main motivations that we have been contributing towards

1:11:35 it is to enable the local flexibility markets for the distribution. Because, as we discussed very early in the beginning, 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. So that's something I would be really excited to see if they really put it in the final wording that it is something that should be used first, because if

1:12:01 you use it first and you see it doesn't work, then you can go to your other solutions - disconnecting 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 companies might have a different need based on their grid needs. So this is something I'm really excited about, if that comes out and how the market shapes. But I'm also quite interested to

1:12:27 see how the overall landscape around climate change - and we hinted earlier that at the geopolitical level as well, the US is now a different focus - but Canada is taking a big leap forward. The Ontario Energy Board is already looking into flexibility; they are really looking into benefit-cost analysis, which is a way to analyze what is needed by the grid company

1:12:59 before they invest in the grid. And connected to that, they have a new regulation called non-wires alternatives, NWAs, which is also something that they want to really promote flexibility for. So it's a lot of things happening in different regions, but these are the two I would say are really interesting to see, because as soon as the shift happens from climate change discussions to non-climate change

1:13:29 discussions in one region, then the capital starts moving towards other countries where the climate-focused groups will like to invest. And that is why I'm already seeing and talking to different flexibility providers where they are seeing a lot of capital coming into Europe - also in Germany where batteries are being built, and a lot of big projects are being done, like several tens of megawatts or hundreds of megawatts now. In the UK it's already the case, also in Germany I

1:13:57 think there are a lot of projects underway. So that is also something I'm really excited about - this will help flexibility because you will have more capital deployed, more assets being enabled, and then what you need is the markets. You need multiple markets to make that return on investment, and that's something. And how do you - you hinted upon it right now - how do you position yourself compared to other forms of DSO flexibility, like dynamic

1:14:24 tariffs? We have here in Germany this new law, the EnWG §14a, the energy law paragraph 14a, that tries to solve congestion via more dynamic tariffs. Is that approach worse compared to a market, or in which way? Yeah, so I would say they both coexist, to be honest, so it should not be one or the other. This is something I think is quite clear in Norway - we also have a step-by-step

1:14:59 grid tariff. So it's already existing - with our smart meter rollout you can already have that. In Norway, if I'm paying my electricity bill and I'm above a certain peak with my average - I think 3 averages are taken over a month or a time period - then if my peak exceeds that, I'm on the next step. So my tariff goes up and up. So it's

1:15:29 like a step-by-step tariff, even though the market is already being used as well. So in my view I think both can coexist, and it should be, because if you consider the situation where everybody plugs in their EVs at night and you might have a dynamic grid tariff at a very high value, then everybody stops doing that. Then the grid rent might be lowered, but the aggregator who has already scheduled them

1:16:00 has a big loss, and they might have taken a position with their energy supplier on the balanced responsible party as well, so they might lose their money there. So there is just not one solution for all, because if you have both present you might lose some revenue from one area because everybody has stopped their charging because of higher grid rent, but on the other side you might gain something from the flexibility market. So

1:16:27 So I think there is a possibility for both to exist, and it should be that way. Yeah, very interesting, also a bit complicated. And I think mathematically, from an optimization standpoint, trying to optimize very many different things and markets at the same time - at least from what I did as an analysis - gets quite complicated. Nonlinear, multi-criteria, multivariate problems are not the easiest ones to solve. Absolutely, you can model all

1:17:02 the grid, but the reality will always be different. I think that's the reality here, at least with the market-based mechanism. For sure, it sounds like a very sophisticated method to try to solve congestions, compared to a tariff maybe - or having both seems like a Swiss Army approach - to solve this important issue, which is probably one where the energy transition might be very jeopardized, and

1:17:32 as you say, there are different sorts of flexibility: batteries coming, and of course EVs and others that have already been deployed, and production that could be curtailed, which obviously is not the best. So which source of flexibility do you think yields the largest potential, especially for DSOs? Yeah, so I think there is definitely, in our data that we see in the platform - we have already quite over 10,000 or 15,000 assets that are

1:18:02 approved, meaning they are not waiting to be registered. They are actually approved by the distribution grid company, so they can start trading and they can supply flexibility. If I add also the not approved, or pending, or those that are still to be connected, then it will go way above 50,000 or maybe over 100,000. So there are a lot more assets that are in the pipeline to join. We have seen that the EV charging

1:18:31 or smart charging is quite easier to supply as a flexibility, so I think that really works nowadays - from the flexibility service provider, they can really plan it quite well, for the end consumer with their apps or whichever solution they have. And then the grid company, in the end, they just need that peak period to be lower, so when the grid is congested, they can reduce

1:19:00 something, and that really works well. Last I checked, if I'm not mistaken, almost 10,000 of the 15,000 assets are EV charging. This also includes a lot of residential charging boxes as well, but there might be some which are also the EVs themselves, because you can also set the state of charge from the car as well. So it's a mix there. And

1:19:27 then we have seen that a lot of the players have started, especially on the battery side - batteries being really reliable in delivering flexibility - and the value stacking there with multiple markets is really the thing to do with batteries nowadays. So we see that the batteries that are being deployed just as a flexibility resource are quite reliable and they can also supply to the DSO, but now also to the TSO as well, with

1:19:58 this concept I explained, the long-flex arming concept. Recently we've also seen batteries being deployed together with heavy-duty EV charging on highways in Norway, where the battery's main function is to provide that extra juice to the EV charging station when people are traveling for vacations. 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 customer who has invested in it. So now

1:20:26 we see that a lot of technical aggregators who have clever algorithms and different mechanisms are able to leverage that battery both in the DSO market by creating this virtual fuse contract, the max usage - so they get some revenue from the distribution company, the DSO - and then 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

1:20:52 for those assets, but still the main function is served - when, for example, in Norway in the summer, people are going to the cabins and stopping at these heavy-duty charging stations, the battery can do its job as well. So that's very interesting as well. And then we have seen a lot of demand response assets coming in as well. Some of them are aggregated as well. So some of them might be a greenhouse

1:21:17 directly providing a demand response. We had some fish farms as well in Norway join the market. And then you might also have some residential flex which is then aggregated as well. So you might have EV charging at your home but might also have a heat pump, and then the end consumer is enabling in the app that they are being flexible. There are different business models there that we have seen, where

1:21:45 some of the flexibility service providers are also offering consumers some rewards - where they're getting some money back on a monthly basis, which is still quite decent compared to having nothing, and still having your resource being used. So there are a lot of different assets that we have seen, but some of the ones that I mentioned are quite interesting and I see them growing day by day.

1:22:10 How much does an EV driver get for this service? For example, if I'm home and I'm giving this service - yeah, so it varies. I know that Tibber has enabled this in the app. So as a Tibber customer, you can be offered great rewards. And then it's Tibber'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

1:22:41 for them, they might value-stack it in different TSO markets because they're already pre-qualified. Or they might also do essentially arbitrage in the wholesale market as well. That's also possible. So they would return maybe - it varies - so it's between 3 kroner in Norway, Norwegian currency, to maybe 10 on a given day or a week. And it's also not a static, so it's not a guaranteed value, but it's

1:23:12 something that you get over time. And maybe some of the people 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. So right now, I think in the app - last I checked - as a customer you can only do this with smart charging, but I think they are also promising now with heating as well. So if you have a heat load as

1:23:32 well, they will combine both and then they might offer you higher grid rewards, because then they essentially have more flexibility per customer. But how does it work in the case of Tibber? Because they have, if I remember correctly, always a dynamic tariff. So as an end user, I would enable Tibber to start charging not only at the lowest spot tariffs but in combination with the other things, so I don't have to worry. And at the end of

1:24:05 the day the bill reflects both the spot and it should be - if I was charging at the spot price that is higher than what I could have charged, if I hadn't activated the grid rewards, normally it would still be lower, right? Yeah, absolutely. So they promise you the spot price charging, so at the lowest price for your car. So the energy cost for charging your car will be the lowest. But then if

1:24:33 you activate the grid rewards - essentially what I understand, and this might be their proprietary knowledge, 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 grid rewards. So the spot price is to have the cheapest charging for the car, and the comfort is there that you will get the car charged at the end of the day, right? If you

1:25:04 keep it plugged in. But then the grid rewards is the cherry on the top, which is small right now. But as we see in the Netherlands, the grid is so congested it might happen all over Europe, and the grid rewards might start to go up as well. The balancing cost is also increasing in every country, and I think in Germany as well there has been a discussion that

1:25:29 the TSOs here might have very high imbalance costs in coming years, if they don't get extra assets from the different levels of the grid. So if you look at that overall picture from the market size point of view, it's starting slow right now, but if you offer the end customer the cheapest charging and at the same time use their flexibility in multiple markets and then start offering them rewards, this might enable the

1:26:01 rewards to start to 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 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 think, to be honest, that's a very interesting asset class. Fleets overall are as well, because they have certain needs. In

1:26:29 the end, most of the fleets in Norway are actually going electric. In Norway, I think most of the companies have a mandate to go electric by 2025. If not, they will be by the end of 2026, so it's very soon actually - it's almost there. So we have seen that the commercial buildings where these fleets are being charged, they essentially have one of their

1:26:59 technical aggregators or commercial aggregators working with them to enable that flexibility from their assets. And then it's normally a revenue-sharing model most of the time, where the money made on the different markets - so as we discussed, DSO and TSO markets all combined - is shared between the fleet owner or the fleet operator and the company that is doing the service. There are different companies doing different models and

1:27:34 different approaches. So some of them have a direct connection to the car, or to the van, or whatever the vehicle type is. If it's larger fleets like trucks, then it's normally the customer who owns or has leased those trucks that has either an energy department in their own company, which is then making a VPP, because they might have a facility - because it's a big truck being charged at their facility - so they might have also solar panels, backup batteries

1:28:07 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-size, I would say fleet operators, you start to see this as a contractual arrangement with someone else, and this is different models from different customers. And talking control - actually then reducing and augmenting charge based on these signals - what is the... Are there any constraints by DSOs? In

1:28:41 my knowledge, there are 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. Are there these type of constraints? Because, as a startup guy, 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,

1:29:08 if you talk on the charging, or if you actually need to install extra devices that were not really needed from a technological standpoint otherwise. And this is a very good question. Personally, I think 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 not their job to know how to control the asset. And that's one of the fundamental principles in the Nodes platform,

1:29:38 which is that when you do the short flex energy trade, you don't give direct control of the asset in the Nodes 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 - aggregator, VPP, whichever company name we use - they are experts in their own assets, or the assets of their customers. So then it's their job to really steer that asset in the best way possible. And in

1:30:08 the end, the grid company - what they really 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 and increase the cost overall for 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 that extra cost over time will also need to be maintained. So that box, or that extra hardware, is an added cost to

1:30:38 that entire regime. And in the end you are getting the same result - you are getting that up or down flexibility, right? So that has been the fundamental principle in the Nodes platform. We have always been getting this question from the DSO: "We have to operate a very reliable grid. We cannot have blackouts and everything. So that's why we need this red and green button on our desk. We can

1:31:04 dispatch this battery or that charger." But we have always been telling them: trust the market. Because if you create enough good price signals, you will see the technology coming - like yourself and a lot of other companies have developed really interesting technology that is actually enabling, in the end, that up and down of the flexibility. So when DSOs first enter the market, they have these questions, but as soon as they enter the market,

1:31:34 their next biggest concern is to get the liquidity - to really attract these flexibility providers into their market and get the assets. So the whole discussion about whether it will be reliable or not really doesn't come to the stage in most of the markets that I have been talking to customers. So the way it's set up now is the way you suggest DSOs to operate, which means no extra hardware. Yeah, exactly. So we allow them to put the buy order

1:32:03 in the market, which is their signal for where, 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 at a given price. So the dispatch notification is essentially the activation signal, 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

1:32:32 flexibility service provider. So we started with Saudi Arabia and Pakistan, and I'd like us to end on those notes. What about e-mobility - are you following e-mobility developments in those countries, and what can you share with us? Yeah, we are very much focused a bit more on Europe here, but we had a nice podcast about Ethiopia that I can also recommend to listeners. So what can you share

1:33:00 about e-mobility in those countries? Yeah, I think e-mobility overall, or sustainable mobility, is going on all over the world. In Saudi Arabia, if I start with that, I've been following a bit of the development. With Vision 2030 from the government there, they have actually attracted a lot of EV manufacturers. Lucid, as you know, one of the big players from the US, they have

1:33:27 a big factory there. They have really been the front runners in the Saudi market to develop it and also train the staff there. So there is a huge shift of taking the German automotive industry model and applying it in Saudi Arabia, but just for electric. Their permitting system and everything has been really easy, and there is also probably a lot of investment from the Saudi investment fund being available.

1:33:56 for such companies who are putting their companies and manufacturing there. 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 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 vehicle getting out of the production line, then the total cost of ownership

1:34:23 will never be lower than the diesel or the fossil fuel. So I think that's also been a big focus. There are a lot of other players that are coming in from Asia, from China, from Japan and other countries, to also establish the after-sale services of the EVs there. So I think that's very interesting. And I think recently I've also seen that they are investing hugely on power-to-X or power-to-

1:34:50 hydrogen essentially. So they are installing a lot of renewables in different regions because, as they have a lot of sun there and also some wind being installed, instead of curtailing those when there is extra production, they are starting to also look at generating hydrogen. And because the distances in Saudi or the Middle East overall are very large - you're talking about thousands of kilometers - using an electric truck there is not maybe the

1:35:17 most optimal. So the use case of hydrogen really works there, because then you can really refuel it at certain locations, and it might be really valuable for the fleet operator to take the hydrogen truck from one destination to the other in the lowest time span. So I think that's very interesting to see both electric and hydrogen being used there. In Pakistan, the market

1:35:45 is slow for electric, but we recently had the large Chinese manufacturer BYD launching in Pakistan with their electric fleet of vehicles. They are offering all kinds of vehicles that are also available in Europe - actually the same level of car and service there in Pakistan, which is very interesting. Recently the government had some study, being some

1:36:15 policy signals as well, and I think UNDP did a study that I looked at a year or a year and a half ago where they looked at the market share in Pakistan, which is quite similar, I would say, to India and Bangladesh as well, where the dominant EV or dominant transport vehicle is the two-wheelers. And if you combine two- and three-wheelers together, then

1:36:44 you are looking at 80% of the market share for a country of 250 million people in Pakistan - that's a lot, right? 80% of the vehicles, not the population, but 80% of the vehicles is two- or three-wheeler. And I also looked at the numbers there, so that's almost 22 million or 23 million two-wheelers that are running on the road as of now. And an interesting contrast to that

1:37:12 is that the country is importing all this fuel, so Pakistan does not have huge oil reserves like the Middle East. So this is a big import bill to the country. If the import bill could be reduced - 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 can generate the electricity locally with solar. So the

1:37:42 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 rooftop of your home, you already have a return on investment in less than 2 years. Worst case it could be 3 years, and with that the whole market of solar installation has really peaked. I was just looking at an article that was stating that in Pakistan

1:38:14 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 MW coming from hydro, from coal, from gas for the whole country; that's the peak installed capacity. And then the actual demand peak is only 30,000 or 35,000 in the summer when you have a

1:38:50 lot of air conditioning. So there is already a gap between your peak installed capacity and the demand. If you can reduce that gap by essentially increasing the demand, the best way possible for the country could be to put electric two-wheelers on the road, because then people will start charging them, the demand will go up, but also the fossil fuel import bill for the country will go down. And in the end, if you also have a home-installed residential

1:39:18 solar on the rooftop, then you can charge at home, so the convenience will also be there for the consumer. So I think the policy has been there. I think they looked at 4 main parameters for what needs to be done in the next decade to really enable that: essentially the clear policy signal from the government, and also the global battery cost to go down, because it's not a country with

1:39:45 high income per capita, so you need the battery cost to go down so the vehicle itself is affordable. And then the charging infrastructure as well needs to develop, because that is something also quite lacking right now, and that maybe is also where the distributed charging could work. And then the last thing I think they mentioned was the localization of the supply chain, so again taking an example of what I was mentioning in Saudi, which is for the

1:40:13 bigger vehicles they were doing, but a similar approach of having locally assembled and created two-wheelers or three-wheelers, and then also having the after-sales market, because a lot of these two-wheelers, you know, a brake light is broken or something, so you can get that spare part inside the country instead of importing it, because again, 82% of the market that is driving two-wheelers is not really at the upper stream of the income either.

1:40:39 So they really also need not just the lower cost of owning the vehicle, but also the lower cost of operating the vehicle. Again, coming back to the point with EVs, it's always been a discussion that the total cost of ownership should reduce, and that's something I think the UNDP report also highlighted: if this needs to happen, there must be the localization of the whole value chain there. OK, thanks for sharing. Is there a last message you

1:41:06 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.

1:41:17 And if anyone from the grid companies is listening, from Germany or other areas, reach out. Start somewhere with your journey of flexibility before it's too late and you are given the stick to do it through regulation. It's better to trial it, learn from it, create the data, and make sure you are ready for the next generation of the grid that is coming. So that would be my last message. Thank you, Farran, and keep up the

1:41:42 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 earning mechanisms let DSOs and TSOs value assets so they can earn more than one revenue stream. Coordination examples like Fingrid and Helen in Finland avoid conflicting activations using constrained logic

1:42:22 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 notifications to aggregators, and scales via APIs. Assets already number in the tens of thousands. In EV charging, controllability leads. Batteries bring reliability and value stacking. Households see small but real rewards - €3 to €10, that's a few euros per day or week - via apps like Tibber, and fleet electrification adds predictable capacity. Regulation sets the tempo. The UK's flex

1:43:06 model enables mature local markets. The EU is preparing a demand response network code. Ontario is pushing non-wires 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 by RiDERgy. See you next time and stay charged.