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

0:06 Thanks, Carlotta. Yeah, so I'm very happy to co-organizing 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 a, an, an agency. Uh, we, we have the privilege of being able to connect with, uh, like-minded people, having a space, uh, here in Berlin, always there for us, so we should leverage this opportunity, and, um, yeah, I can just can encourage to also engage. I, I've been engaging. Since, uh, some of these

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

1:12 into the topic of flexibility, which is a topic that I'm passionate about as well since a long time, as you know, and here I don't have to explain why flexibility is a, a keyword in the energy system, but still, as a reminder. We need to, 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 so much, at least as in the past. We need to rethink

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

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

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

3:25 in Germany faster than we're currently doing in, in the, this pace. Um, so that's just in terms of, of micro trends. Recently, I don't know who of you knows the DNV, um. So DNV is this uh Norwegian um big organization, a bit of, a bit like Fraunhofer if you want to, to give it an analogy. They recently released a report that is quite interesting about the energy outlook, and they try to be conservative in the sense that they didn't want to do the forecast on how

3:54 we get to 2045, um, and, and, and get zero emissions in 2045, but being a bit more conservative, more realistic, because let's face it, it's, it's not looking as bright as it could. And um yeah, a few highlights I wanted to, to share with you from, from, uh from this report was that that that um I found interesting. On the one hand is they said realistically speaking, we can get to 90% uh emissions reduction by 2045, which I mean if it's not 100%, 90% doesn't seem

4:25 uh so bad either. So even the realistic scenario. Seems quite good, of course it's not gonna be without effort, but that's another story. Also, another good news that I found interesting is according to them last year global emissions peaked, so we already, uh, we, we, we could do better, but we, it's also good to see on achievements and um. And that's, um, that's, that's on, on a global scale, uh, for those that know me, I'm very much passionate also about China and, and, and what's happening

4:57 over there and I think as an energy, uh, enthusiast like we are, China and Germany are the maybe among the most interesting countries, uh, Germany for the pace of the third world economy of changing, um, towards renewables and taking this, the, the lead. And, uh, but, but China is equally taking the lead for the implementation at their, in their country, but also, uh, especially in the production of, uh, materials like EVs, batteries, and PV. And, uh, for maybe you don't, you, you didn't know, but 2020

5:28 they set themselves, um, a, a quite ambitious goal of installing 1000 to 100 gigawatts of, of, uh, solar and I think wind as well. Was it, yeah, solar and wind capacity by 2030. And 1200 gigawatts for me, I don't know if you know the numbers a little bit, but in Germany, we want to have 250, I think, uh, overall in, in, as a, as a kind of a key target, um. Uh, to get to, to zero emissions, so 1200, and they set themselves 2020 to 2030

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

6:27 already. And, uh, and then in terms of batteries, um, there's like a, a global demand of 2 terawatt hours, was it? Yeah, 2 terawatt hours. That is currently the world's demand and there's already 8 terawatt hours of global production capacity and of that China covers 6 terawatt hours already. So and so this maybe you have seen a bit of battery price plunges and the 300 gigawatt um applications here in Germany alone. So this gives a bit of an order of magnitude. Not everything will be installed

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

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

8:07 uh in a, in a very much, uh, chaotic uh approval way so that everybody can just uh connect to the grid. So it's very interesting use case to me, um. And uh you can and the taxes for me proves that even the most uh haters of the uh renewables can see in their libertarian paradise that even them, they are actually super much the fans of the energy transition so they should just adopt any libertarian um person and and uh hater of renewables should look at taxes

8:36 as well. Uh, right then just a few more specifics about Germany that um. That I, I found interesting is now we have 90%, 19, 19% of electricity, um, um, of the, of the share of energy is coming from electricity. This is set to increase more than double, so 46% due to EVs, due to other uh heat um demands, things we will dive deeper into how we manage this tremendous increase in actually uh share of electricity in the, in the share of demand. And we will get

9:13 a lot of batteries even though the 300 gigawatts. That we had, uh, that we have this year that applied for, for being connected is probably not going to happen, but still we will have 337 gigawatts of batteries in 2050, which amounts to a capacity of 1560 gigawatt hours. So this just to give an order of magnitude for those that are not so familiar with the, with the German situation, we have like now about 80 gigawatts of demand peak. And, uh, and 2 terawatt hours of daily

9:47 demand. Um, given the increase, it will be a bit more, but still, it's an interesting figure to keep in mind. They were also including um EV batteries, by the way. Uh, to some extent in that, in that figure, but mostly stationary, uh, batteries. And uh the tremendous uh expense of grid fees will, that's also marked, um, my, uh, piqued my interest. We discussed it earlier here in the podcast, uh, that I recorded with, uh, Michael. Um, the grid fees being, being, no, not, not, not, um

10:21 necessarily having to be that, that high, but we're talking 3.3 trillion. Uh, so billion in, in, in German, um, for those that are following the news lately. So 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, it's like, um, yeah, a lot of costs coming up to so flexibility is also key to reduce the grid fees and the grid expenditures that are being planned there. One very bright thing I found about vehicles is in 2050 and

10:56 it's also imagine that uh they predicted only 3% of the absolute numbers of vehicles would be internal combustion engines. So just something to, that I never realized as well in my, in my mind in 2050 we only have 3%. So that's a, that's an interesting um flip side as we're now at less than 3% EVs in the absolute numbers. So in such a short time, we will actually flip it around. Um. Yeah, and maybe a few thoughts. Um, I was at DNV event, uh, Siemens CEO

11:31 was there, uh, Siemens Energy CEO, and, um, yeah, they, they were kind of bullish about the gas plants for capacity mechanisms. Uh, yeah, I, I think they, they have a role to play, but do we really need that many new expensive gas plants and being there, 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 now the current Chancellor um seems quite uh bullish about um 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 uh nuclear reactors were. Something, uh, I, I didn't fact check but it seemed, uh, it seemed quite interesting at least. Made me question if, uh, yeah, the, the, the, the knowledge of having the nuclear reactors being very inflexible, if that's actually um so true always and the role and ramp up of hydrogen, what role will it be playing in the, as we're seeing that

12:34 the hydrogen actually not being adopted in. A few thoughts on the new government, the German government. I read the energy, uh, the CDU's key pillars that they want to do. Um, well, uh, I, um, I don't know, I'm a bit skeptical, so it was again the, the gas, gas was number one. is their priority, making gas power plants. Um, second is, uh, pushing nuclear in different ways, fusion, uh, pushing on fusion technology and etc. um, and, uh, reevaluating if we cannot turn them on again, uh

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

13:36 in, in, in France. Showed as well what it, what a high CO2 tax could mean. So final, final few thoughts. Um, so I think we need to digitize faster in, in, uh, in, in Germany with 2% smart meters. Uh, we're talking about it earlier. It just kills all the innovative business models that also incentivize them, and then smart meter light initiative maybe that you have heard of, um, with Octopus and Co. uh, that's something I definitely agree should be done. Uh, just get the measurements and

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

14:45 I, I'm quite optimistic about the new a few days ago, the uh affordable Energy action plan that you might have seen that Uzola von der Leyen uh released has a lot of good elements in it. So also recommend looking into they really want to focus on lowering power costs through removing grid fees. And less electricity taxes, so across all the member states. So that's going to be an interesting development as well as you might have heard of the clean energy package. So before working at Rynergy

15:15 I was working for Inno Energy and the CEO of Inno Energy. was always claiming the clean energy package when it went through parliament in 2019, uh, that was back, almost back in the days with the, most of the regulatory changes were 1000 pages where each one is a business opportunity and then member states had to, uh, have all these changes done by 2021 and, uh, yeah, we're 2025 and talking with some stadwke, etc. uh, 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 on the top priority of the European Commission to really have the member states doing some of these changes. So that's hopefully gonna bring us something. Now, uh, to the segue of the uh sessions that we're gonna have now and so flexibility, there's, as I said, EVs, that's, um, our part of the business model that Strategy focuses on. We're gonna discuss, um, this particular topic together. The format, um, is gonna be

16:20 in different tables. I'm not sure if you wanted to share the details, uh, Carlotta, about the format in in short. So then I'll, I'll give you the, the, the word for that in, in a second, as, as well as heat, and then we're glad to have Kelvin Energy here with us, um, that is gonna dig deeper into the flexibility coming from heat. Um, sources as well as, um, then the, um, control is a, is a big aspect of it and, uh, there again we have counterintuitively

16:48 so heat is Kelvin Energy and the control and the, and the overall control is called heat, the company. So, um, don't be confused, uh, hopefully Carlotta is gonna make it clear. Um, yeah, and, uh, so one personal, uh, encouragement for me for the overall event, uh, so, I, I believe much in the, so one thing that the Americans do good is, uh, is, is always asking, how can I help you? And I think in Germany we are much more too much critical and and reserved, and

17:20 we should rather adopt a bit in such an especially environment in a networking environment. Just ask the other person, think constructively, how can I help you and and be open to sharing. Cause, uh, especially if you have a startup or a bright idea, startups, uh, die more from the lack of, uh, um, yeah, traction and, uh, having enough, uh, customers and making it, uh, happen, uh, than, than from oversharing, and, uh, 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, have a good evening. Thanks.

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