Ep. 5: dena FEL Community Night - Navigating Market Trends in Energy Flexibility

0:06 Thanks, Carlotta. Yeah, so I'm very happy to co-organize this event with the DNA. I think we are privileged in Germany to have the DNA compared to many other countries that don't have such an agency. We have the privilege of being able to connect with like-minded people, having a space here in Berlin, always there for us, so we should leverage this opportunity. Yeah, I can just encourage everyone to also engage. I've been engaging since some of these

0:42 workshops that were highlighted, their mentoring program, and received tons of support so far, so thanks for that as a first note. And then, to the topic of the night: yeah, I'm not going to give an intro about myself. Carlotta already said it. Yeah, happy to connect on LinkedIn. I'm a very open-minded person, so if you want to talk to me later, we can get to know each other. And I want to really dig deeper

1:12 into the topic of flexibility, which is a topic that I've been passionate about for a long time, as you know. And here I don't have to explain why flexibility is a keyword in the energy system, but still, as a reminder: we are in this deep transition phase where we traditionally didn't have to handle production flexibility as much as we do now, as we have volatile renewables that we cannot control as much as in the past. We need to rethink

1:44 demand and batteries in particular as flexibility sources. The demand needs to be adjusted to the production time as well as to congested grids. That's always one thing to remember, and I think we can also educate the rest of society if we always give this analogy, which I think is very helpful. The water being in the pipes - that's the grid - they can transport a limited amount of electricity at any given time, and this highly depends on the production and the demand, which is the renewables capacity,

2:16 highly weather dependent as well as demand dependent. Now these are the levers, these are the conditions and the constraints. And today is all about flexibility. But before we dive deeper into flexibility, there are a few interesting macro trends that I wanted to deep-dive into. On the one hand, flexibility - in my view not highlighted enough - is now coming across two crucial trends in the world: one is software, and one is AI. Traditionally,

2:51 energy engineers didn't have to be experts in software. Now more than ever, I think everybody here, especially in Germany, needs to up their game in terms of software know-how and AI know-how, because all of this flexibility requires data handling, software interoperability, demand forecasting, and flexibility forecasting, which are inherent in analytics algorithms. AI - not LLMs, but deep learning - is very much a great tool for that, if we have the data required, hopefully

3:25 in Germany faster than we're currently progressing at this pace. So that's just in terms of macro trends. Recently - I don't know how many of you know DNV - DNV is a Norwegian organization, a bit like Fraunhofer if you want to give it an analogy. They recently released a report that is quite interesting about the energy outlook. They try to be conservative in the sense that they didn't want to forecast how

3:54 we get to 2045 and reach zero emissions by 2045, but rather be a bit more conservative, more realistic - because let's face it, it's not looking as bright as it could. A few highlights I wanted to share from this report that I found interesting: on the one hand, they said that realistically speaking, we can get to a 90% emissions reduction by 2045. If it's not 100%, 90% doesn't seem

4:25 so bad either. So even the realistic scenario seems quite good. Of course it's not going to be without effort, but that's another story. Another piece of good news I found interesting: according to them, last year global emissions peaked. So we could do better, but it's also good to acknowledge achievements. And that's on a global scale. For those that know me, I'm very much passionate about China and what's happening

4:57 over there. I think that as energy enthusiasts like we are, China and Germany are perhaps among the most interesting countries - Germany for the pace at which the third-largest world economy is transitioning towards renewables and taking the lead, and China equally taking the lead in implementation within their country, but also especially in the production of materials like EVs, batteries, and PV. And maybe you didn't know, but in 2020

5:28 they set themselves quite an ambitious goal of installing 1,200 gigawatts of solar and wind capacity by 2030. 1,200 gigawatts - I don't know if you know the numbers a little bit, but in Germany we want to have around 250 gigawatts overall as a key target to get to zero emissions. So 1,200 gigawatts, and they set that goal in 2020 to be achieved by 2030.

5:58 They achieved the goal six years early - actually last year. It's just mind-boggling to think about that, and the growth is just exponential. If you look at also the production capacity of PV, it's insane. But it's not only PV, it's also EVs. They already account for about half - I think more than half - of the world's new vehicle sales that they can produce in Chinese factories alone.

6:27 And in terms of batteries, there's a global demand of 2 terawatt hours. That is currently the world's demand, and there's already 8 terawatt hours of global production capacity, of which China covers 6 terawatt hours already. This may explain the battery price plunges we've seen, and the 300 gigawatt applications here in Germany alone give a bit of an order of magnitude. Not everything will be installed,

7:02 but prices have been decreasing around 50% year over year, and we are seeing a price curve that will be decreasing much more. OK, there are also bad things - US, Trump - that I think we are all probably not so happy about. The good thing, if you want to look at the bright side, I think the states in the US have quite a lot of power. States like California are still maintaining their

7:33 trajectory in a good way. And even the most libertarian state like Texas is incredibly installing wind power and other renewables at record pace. It's an interesting use case to really look at, given their speed of adoption and especially grid approvals, which, as you probably know, is one of the key hurdles for us to succeed in the energy transition - how we manage the grids and this antiquated way of approving grid access. So they are kind of doing it in

8:07 a very chaotic approval way so that everybody can just connect to the grid. It's a very interesting use case to me. And Texas, for me, proves that even the most ardent haters of renewables can see, in their libertarian paradise, that they are actually very much fans of the energy transition. Any libertarian person and hater of renewables should look at Texas

8:36 as well. Right, then just a few more specifics about Germany that I found interesting. Now we have 19% of the share of energy coming from electricity. This is set to more than double, to 46%, due to EVs and other heat demands - things we will dive deeper into: how we manage this tremendous increase in the share of electricity in the share of demand. And we will get

9:13 a lot of batteries. Even though the 300 gigawatts that applied for being connected this year will probably not all happen, we will still have 337 gigawatts of batteries in 2050, which amounts to a capacity of 1,560 gigawatt hours. To give an order of magnitude for those not so familiar with the German situation: we have now about 80 gigawatts of peak demand and about 2 terawatt hours of daily

9:47 demand. Given the increase it will be a bit more, but still it's an interesting figure to keep in mind. They were also including EV batteries, by the way, to some extent in that figure, but mostly stationary batteries. The tremendous expense of grid fees also piqued my interest. We discussed it earlier here in the podcast that I recorded with Michael. The grid fees not

10:21 necessarily having to be that high - but we're talking 3.3 trillion, in the German sense of the word "billion," for those following the news lately. We're talking 1.5 trillion in new debt coming, that's doubling the German governmental debt, and it's 3.3 trillion. It's a lot of costs coming up, so flexibility is also key to reduce the grid fees and the grid expenditures that are being planned. One very bright thing I found about vehicles is that in 2050,

10:56 they predicted only 3% of the absolute number of vehicles would be internal combustion engines. Something I never quite realized: in 2050 we only have 3%. That's an interesting flip side, as we're now at less than 3% EVs in absolute numbers. So in such a short time we will actually flip it around. Yeah, and maybe a few more thoughts. I was at a DNV event, the Siemens Energy CEO

11:31 was there, and they were quite bullish about gas plants for capacity mechanisms. I think they have a role to play, but do we really need that many new, expensive gas plants, or can we use EVs and other flexibility sources? Just opening up a few questions for debate later on, as well as obviously the nuclear debate that the current Chancellor seems quite bullish about. And are they actually

12:03 flexible in the ramp-up and ramp-down? One thing I learned interestingly: apparently French nuclear reactors are much more flexible than German nuclear reactors were. I didn't fact-check it, but it seemed quite interesting at least. It made me question whether the assumption of nuclear reactors being very inflexible is actually always true, and what role the ramp-up of hydrogen will play, as we're seeing that

12:34 hydrogen is not actually being adopted in many areas. A few thoughts on the new German government: I read the CDU's key pillars that they want to pursue. I'm a bit skeptical. Gas was number one - making gas power plants is their priority. Second is pushing nuclear in different ways: fusion, pushing on fusion technology, and reevaluating whether we cannot turn the existing ones on again,

13:08 Somehow that still seems - and then, yeah, stopping EVs - the EV, the Verbrenner-Verbot, the internal combustion ban in 2035. This was the third key priority. And the fourth priority, we could say, OK, that's not too bad: it's a CO2 tax. I'm not sure how much it will have an influence, and how they plan to make it social. It was a bit of a big debate, and the yellow vests

13:36 in France showed as well what a high CO2 tax could mean. So, final few thoughts. I think we need to digitize faster in Germany - with 2% smart meters, as we were talking about earlier, it just kills all the innovative business models. The smart meter light initiative - maybe you have heard of it, with Octopus and others - that's something I definitely agree should be done. Just get the measurements and

14:10 make it as cheap as possible, with agnostic control, and for the algorithms and for the learning - maybe, at the cost of data privacy, let's get more data flowing. We are already giving away so much data with our smartphones. I'm not sure if we're being pragmatic enough with the smart meters, and if that's really such critical personal information that it needs to be so secure. And yeah, in terms of the Green Deal, I'm also

14:45 quite optimistic. A few days ago, the Affordable Energy Action Plan that you might have seen - that Ursula von der Leyen released - has a lot of good elements in it. I also recommend looking into it; they really want to focus on lowering power costs through removing grid fees and reducing electricity taxes across all member states. That's going to be an interesting development. And, as you might have heard of the Clean Energy Package - before working at RiDERgy,

15:15 I was working for InnoEnergy, and the CEO of InnoEnergy was always referencing the Clean Energy Package. When it went through parliament in 2019 - that was almost back in the day - most of the regulatory changes were 1,000 pages, where each one is a business opportunity. Member states had to have all these changes done by 2021, and yeah, we're in 2025 and talking with some Stadtwerke, etc., nowadays about dynamic tariffs is still like, "yeah, I think we have

15:46 it in the roadmap." Yeah, I think we need to be faster, and at least that's a top priority of the European Commission - to really have the member states implementing some of these changes. So that's hopefully going to bring us something. Now, to the segue into the sessions we're going to have: flexibility - as I said, EVs are the part of the business model that RiDERgy focuses on. We're going to discuss this particular topic together. The format is going to be

16:20 at different tables. I'm not sure if you wanted to share the details, Carlotta, about the format briefly - so I'll give you the word for that in a second. As well as heat - we're glad to have Kelvin Energy here with us, and they're going to dig deeper into the flexibility coming from heat sources. And then the control is a big aspect of it, and there, counterintuitively,

16:48 heat is Kelvin Energy, and the control and the overall control is a company called HEAT. So don't be confused - hopefully Carlotta is going to make it clear. And, one personal encouragement from me for the overall event: I believe much in - one thing that the Americans do well is always asking, "How can I help you?" I think in Germany we are a bit too critical and reserved, and

17:20 we should rather adopt that approach, especially in a networking environment. Just ask the other person - think constructively - how can I help you, and be open to sharing. Especially if you have a startup or a bright idea: startups die more from the lack of traction and not having enough customers and making it happen, than from oversharing. And I think 1 + 1 equals much more than 2. So yeah, just try to

17:50 help each other out, be open and sharing, and hopefully you enjoy it and have a good evening. Thanks.

18:03 Thank you so much. I think you all have a lot to talk about, and that's what we want to do now.