Speaker 1: You are listening to Redefining Energy.
Speaker 2: Your co hosts from Berlin Gerard Rey and from London
Speaker 2: Laurent Sag.
Speaker 1: Today I'm redefining Energy. We are going to talk about
Speaker 1: vpp's virtual power plants, especially focus on North.
Speaker 3: America, and we're also going to talk about Lasagnia and
Speaker 3: lots of lots of Yes Jah, we hear a lot
Speaker 3: about VPP and more and more so virtual power plants.
Speaker 3: We hear about deer distributed energy resources, and of course
Speaker 3: as the grid becomes more intermittent while the lord is
Speaker 3: going those vppd A platforms. I think they provide a
Speaker 3: critical role by shedding demands sometimes for a few minutes,
Speaker 3: to alleviate the straits on the grater exactly.
Speaker 1: I think they're a really important part of not just
Speaker 1: the grid going forward, but also of buildings and of
Speaker 1: really just if you want to save money, you have
Speaker 1: to have some form of MPPs. And now they also
Speaker 1: enable a whole new different business models. Very very exciting area.
Speaker 3: Yeah, I mean talking about buildings. I saw that Shander
Speaker 3: Electric signed a kind of dr contract with Shell were
Speaker 3: talking about hours. So it's not part of a platform,
Speaker 3: it's a direct contract, but it really shows that we're
Speaker 3: starting to move the needles when it comes to building,
Speaker 3: which is great.
Speaker 1: Absolutely.
Speaker 3: So we brought in one of your friends and her
Speaker 3: name is Dana Geranzi. She's based in Bulder of Colorado,
Speaker 3: and she's the CEO of a platform called Bultas.
Speaker 1: Which is one of the needing dr platforms in the US.
Speaker 3: Let's listen to what Dana has to say. Dana, welcome
Speaker 3: to the show.
Speaker 2: Thanks for having me.
Speaker 1: Guys. Maybe I just kick off by the team. Today
Speaker 1: is going to be virtual power plants VPPs. They're all
Speaker 1: the rage, but sometimes I don't even know what they are,
Speaker 1: even though I've been meant to be looking at them
Speaker 1: for years. So what are they doing?
Speaker 2: I don't think you're the only one. They're everything. They're everywhere,
Speaker 2: all at once. But seriously, they do have a very
Speaker 2: very broad definition. It might be helpful first to unpack
Speaker 2: what distributed energy resources are because the simplest way I
Speaker 2: would describe a virtual power plant is it's an aggregation
Speaker 2: of distributed energy resources that can serve in lieu of
Speaker 2: an actual power plant. So it's not virtual. I've heard
Speaker 2: really smart people refer to it as a distributed power
Speaker 2: plant to dispel the notion that there's anything virtual about it.
Speaker 2: These are real assets, and we bring them together and
Speaker 2: we aggregate and orchestrate them like a power plant. Meaning
Speaker 2: when the grid needs more power because people are using
Speaker 2: more energy, it can do one of two things. It
Speaker 2: can either turk and on a power plant, or we
Speaker 2: can help on the demand side reduce load and use
Speaker 2: people's distributed resources like energy storage, building management systems and
Speaker 2: the like, and in aggregate, all these things together form
Speaker 2: a very very reliable, powerful resource that we call a
Speaker 2: virtual power plant because it's not a physical central fossil
Speaker 2: fuel burning power plant. That's what we call a VPP.
Speaker 3: Well, we should call it probably a DPP digital power.
Speaker 2: Plant, digital, decarbonized, distributed. There's a lot of D words,
Speaker 2: but I think we've landed with Z. We do a
Speaker 2: lot of things with v around here. My company is Voltus,
Speaker 2: so we're pretty okay with it too.
Speaker 3: If I go into details, because I love the details here.
Speaker 3: How do you get a signal from the market, Like
Speaker 3: a few minutes before, a month before, the day before
Speaker 3: via computer, somebody's coorting new said we need to giga
Speaker 3: what or something? How does it work?
Speaker 2: Yes, yes, and yes to all of that. Markets have
Speaker 2: so many different layers. There's future planning that can happen
Speaker 2: years and years in advance, and we can sell into
Speaker 2: those markets and commit to grid operators that we will
Speaker 2: reliably bring resources of whatever volume we procure, whatever volume
Speaker 2: they need, we'll bring those resources to them and we'll say, hey,
Speaker 2: in three years, this is going to be there. It's
Speaker 2: the equivalent of committing to building a power plant. Those
Speaker 2: are often forward capacity markets. Then there are everything from
Speaker 2: monthly procurements we participate in to day ahead and real
Speaker 2: time markets, which are probably terms from layer to most
Speaker 2: people in the industry. And so we go all the
Speaker 2: way up through like instant frequency response. And so if
Speaker 2: you think about the grid, it needs to be planned
Speaker 2: at the macro phase. We got to know the lights
Speaker 2: are going to stay on a few years from now,
Speaker 2: and that there's enough stuff being built, and then it
Speaker 2: needs to be operated. We need to know what we're
Speaker 2: going to do tomorrow, what are were going to eat tomorrow,
Speaker 2: We need to do that. We need to do that
Speaker 2: food sh and then in the moment, if it needs
Speaker 2: a little bit more juice, we also need to give
Speaker 2: it bad And so there are all these different markets.
Speaker 2: They're called different things depending on whether you're in North
Speaker 2: America or Europe or what country. Sometimes they're called balancing markets.
Speaker 2: There's reserve markets to just make sure that we always
Speaker 2: keep the lights on, and so in a very very
Speaker 2: practical sense on the time side, it's e all of
Speaker 2: the above, we do all of that. You also asked
Speaker 2: about how we receive the signals. That's a very very
Speaker 2: technology forward, complicated question. The simplest way to answer it
Speaker 2: is that they're truly digitized signals. So we receive signals
Speaker 2: as if we were a power plant, how much does
Speaker 2: the grid need? And when we're then serving in the
Speaker 2: middle as a platform, we pass those signals through to
Speaker 2: our assets and were able to control everything from a
Speaker 2: smart thermostat up through a building management system to large
Speaker 2: industrial processes and data centers. We send those signals through
Speaker 2: simplify it dramatically. Grid has very complicated parameters, but what
Speaker 2: we're doing with our customers is making it extremely simple
Speaker 2: according to their operational flexibility. And then we marry it
Speaker 2: all together. We bring a bunch of Tetris pieces in
Speaker 2: and deliver what the grid asked for, and we're in
Speaker 2: the very very fortunate business of paying our own customers
Speaker 2: to do this, so it's actually really fun. People say, well,
Speaker 2: how do you get paid, But we actually talk about
Speaker 2: our customers as the end users, and so the grid
Speaker 2: pays us, yes, as if we're a power plant. But
Speaker 2: I get to pay my customers every day, which is
Speaker 2: really cool.
Speaker 3: Among your clients, I've seen Walmart, So the grid is
Speaker 3: going to send you a signal. I guess you have
Speaker 3: different type of client. Some it's probably easier to take
Speaker 3: than others. It's a bit like lasagna. You get the
Speaker 3: lower part we can call every day, and others it's
Speaker 3: going to be more complex. And then yeah, tell the guys. Okay,
Speaker 3: so sorry guys your fridger, I need to the temperature
Speaker 3: of your fridger, your frozen food a bit higher, or
Speaker 3: I need to the light so sorry. I mean that's
Speaker 3: why we have you here, is to get those type
Speaker 3: of answers.
Speaker 2: I've never heard lasagna before. I might take that one.
Speaker 2: I like it. I mentioned tetris, like the notion that
Speaker 2: you're putting together, you're weaving, or you're stacking different types
Speaker 2: of assets that can do different types of things, and
Speaker 2: that the net result is actually more positive when you
Speaker 2: take all these different things at different strengths and weaknesses.
Speaker 2: The sum is better than the parts. That's what we do.
Speaker 2: That would argue the sum of the lasagna is better
Speaker 2: than any individual part personally. But to your actual question,
Speaker 2: it depends. You could get anybody from the energy industry
Speaker 2: on any podcast, ask them a question and the answer
Speaker 2: is probably it depends. But what that means here is
Speaker 2: even in the case of a big box retail store
Speaker 2: like Walmart, depending on what the grid means and depending
Speaker 2: on the store we can and the circumstances, we can
Speaker 2: do different things. So that might look like we've control
Speaker 2: integration with an HVAC system, and that's simply changing the temperature.
Speaker 2: Even within that world, there are different use cases. Increasingly
Speaker 2: our assets are used to drive renewable penetration on the grid.
Speaker 2: So what happens when the wind for just a second
Speaker 2: stops blowing unexpectedly or the sun goes behind some clouds.
Speaker 2: You need a really quick backstop balancing resource and might
Speaker 2: only need it for ten minutes. For ten minutes, you
Speaker 2: can do things with HVAC that do not impact occupancy,
Speaker 2: meaning people don't notice if it's sixty eight or seventy
Speaker 2: two degrees I'm seeking in fahrenheit. You'll have to excuse me.
Speaker 2: But people don't notice for ten minutes because the thermal
Speaker 2: load of the space is such that it doesn't truly
Speaker 2: impact their comfort. And so we actually can take a
Speaker 2: lot more load off the grid for quick response balancing
Speaker 2: type events per store than we can for very long
Speaker 2: emergency summer heat wave, winter cold snap, multi hour duration dispatch,
Speaker 2: and we know how to accommodate and how to flex
Speaker 2: accordingly with our assets. Similarly, increasingly lots of stores have
Speaker 2: behind the meter assets. So behind the meter asset means
Speaker 2: something like a distributed generator, more and more energy storage,
Speaker 2: and so if you have an asset like that, you
Speaker 2: also can do a lot of things very very flexibly.
Speaker 2: But you need to understand the parameters of the battery,
Speaker 2: and first and foremost, you need to understand what is
Speaker 2: the customer. Their primary reason for being the primary reason
Speaker 2: for a big box retail store is to make sure
Speaker 2: that people who go in that store are comfortable and
Speaker 2: want to buy things. So we have to respect that
Speaker 2: first and foremost, and that's what we do when we
Speaker 2: put together the understanding of different industries and customer sets
Speaker 2: that we work with and how we can leverage controls
Speaker 2: and technology to marry like this is what they can do,
Speaker 2: and this is what the grid needs, and then you
Speaker 2: take all the pieces and you make lasagna.
Speaker 1: Danik, can I ask you to talk about the supply side,
Speaker 1: because a lot of what you've talked about up to
Speaker 1: now as demand, and in particular, just maybe how you
Speaker 1: see solar and storage going forward, noting just I mean
Speaker 1: just incredible cost reductions we've seen over the last eighteen months,
Speaker 1: and obviously performance improvements as well.
Speaker 2: I agree. So I started in this industry almost twenty
Speaker 2: years ago, and every year we underestimate the growth of renewables.
Speaker 2: The cost decrease of renewables storage is following the same curve,
Speaker 2: and so the debates become how low will go, how
Speaker 2: much renewable penetration can we get to. But there's a
Speaker 2: well accepted trend that's happening now, which is great from
Speaker 2: a climate point of view. Keep in mind there's also
Speaker 2: tremendous load growth happening. For the first time in twenty
Speaker 2: thirty years. We are using more and more and more electricity.
Speaker 2: That has to do with our electrification of everything, electric vehicles.
Speaker 2: We're moving things to the electricity sector. We're also adding
Speaker 2: load more and more data center load AI. So when
Speaker 2: we started this business, we definitely did not forecast just
Speaker 2: the tremendous amount of growth that a data center loads
Speaker 2: would bring. So you have that, and then you have
Speaker 2: solar and storage and wind and all these other assets,
Speaker 2: and I just think we need everything, and I'm glad
Speaker 2: we're doing everything. I don't think yet it would be
Speaker 2: a wonderful problem to have that there was just so
Speaker 2: much solar and storage that we didn't still need demand
Speaker 2: side flexibility. But like anything, you're going to get to
Speaker 2: a diminishing returns on your cost. The last one percent
Speaker 2: of hours are going to be extremely expensive, extremely expensive
Speaker 2: to continue to just put batteries on the grid. And
Speaker 2: so in any world that I see, I think it's
Speaker 2: still really economic and for the greater good to have
Speaker 2: some flex on the demand side as well. It's just
Speaker 2: the optimized equation. On top of all of that, we've
Speaker 2: also got a grid that's getting old, it's aging, we're
Speaker 2: seeing signs of stress. The worse the climate stress gets,
Speaker 2: the more signs of stress we see, and so we
Speaker 2: need to be able to do all of these things.
Speaker 1: You mentioned data centers, and obviously these are a game changer,
Speaker 1: and you could actually look at these data centers and say,
Speaker 1: isn't there a problem for the system, or they could
Speaker 1: be incredibly helpful to the system, because you could say
Speaker 1: that they could become the biggest virtual power plants in
Speaker 1: the world.
Speaker 2: Yeah, I think it's even more than that. So yes,
Speaker 2: they could, if they were truly going to be completely flexible,
Speaker 2: be the biggest virtual power plants in the world. I
Speaker 2: don't think the economics are there for them to want
Speaker 2: to do that right now, they would make a lot
Speaker 2: more money running the data center. However, they're facing the
Speaker 2: problem of not being able to bring the data centers
Speaker 2: online because depending on what utility territory they're in or
Speaker 2: what region they're in, there simply is not enough supply.
Speaker 2: And so I look at it as a huge opportunity
Speaker 2: because now you have big tech, big money focused on
Speaker 2: this problem that we need to figure out how to
Speaker 2: do the energy transition. And so it used to be
Speaker 2: this very walky thing that some of us worked on
Speaker 2: and talked about, and nobody knew what I was saying
Speaker 2: when I went to dinner with friends. And now not
Speaker 2: only does everybody understand the problem, at least to some exit.
Speaker 2: But you have big tech with both big wallets and
Speaker 2: a huge desire to help us solve this problem, and
Speaker 2: many of them want to do that in a clean way,
Speaker 2: and so it's an opportunity. And I think we'll look
Speaker 2: back on this and see a huge inflection point where
Speaker 2: there was so much attention and so much desire to
Speaker 2: do this the right way that the funding just started
Speaker 2: really transforming the way that we all do this.
Speaker 3: If we switched to market structure regulation. There was a
Speaker 3: few years ago Firk called the twenty to twenty two
Speaker 3: Can you explain a bit to what that is and
Speaker 3: did it change anything for you?
Speaker 2: In the US, Furk issued order twenty two twenty two.
Speaker 2: It was back in twenty twenty. It's been a number
Speaker 2: of years now. Twenty two twenty two was huge for
Speaker 2: setting the right direction of how these wholesale markets should
Speaker 2: be treating resources on the demand side. So we'd had
Speaker 2: prior Firk orders. I'll spare the audience, but we've had
Speaker 2: prior Firk orders that say the demand side should be
Speaker 2: treated equally to this apply side. A megawat not used
Speaker 2: or a nega loot if you will, is just as
Speaker 2: valuable as a megawat that comes online should be paid accordingly.
Speaker 2: But we never got as deep into the smaller assets
Speaker 2: such as electric vehicles, battery storage, and the rules and
Speaker 2: regulations around them can get very, very complicated, and so
Speaker 2: twenty two twenty two was an effort by Ferk to say,
Speaker 2: these assets are extremely valuable, and we want the different
Speaker 2: transmission operators and independent system operators that we have in
Speaker 2: North America under fur jurisdiction anyway to do certain things.
Speaker 2: We want it to be possible to bundle them all together.
Speaker 2: And sometimes when you get into deep regulation, you can
Speaker 2: get death by a thousand pets. One of the reasons
Speaker 2: I was excited about twenty two twenty two is it's
Speaker 2: an effort to avoid that. So it's not that we
Speaker 2: can't do demand side without twenty two twenty two. We've
Speaker 2: been doing this for a very long time. This is
Speaker 2: what Voltas does all day long. But there are things
Speaker 2: that will briefly gears and ways that we can access
Speaker 2: assets in certain markets that today we can't and smaller
Speaker 2: and smaller assets. Residential becomes more and more of a
Speaker 2: growth market as we see the order make its way
Speaker 2: through regulation. Am I excited about how quickly it's been happening. No,
Speaker 2: we see some of the ISO say we'll be ready
Speaker 2: in twenty thirty. The order came up in twenty twenty. Guys,
Speaker 2: come on, So I think there is this like both
Speaker 2: genuine real excitement and optimism and also a deep desire
Speaker 2: for urgency. And let's get going on some of these
Speaker 2: things that we're seeing play out right now.
Speaker 3: At the beginning of our conversation, you said that you
Speaker 3: would send the money back to your clients, which is
Speaker 3: great and it's a great proposal. What is it like
Speaker 3: you managed to cut their bits? But what five?
Speaker 2: Depending on the sector, their bills can be a huge
Speaker 2: portion of their out there. So there are certain industries,
Speaker 2: heavy industry crypto loads for example, where energy is their
Speaker 2: number one expense and so we can go really deep
Speaker 2: into that and so it really becomes energy sector dependent
Speaker 2: how much we can cut their bills. Twenty percent is
Speaker 2: a good role of sun.
Speaker 3: Nice nice DNA. You're welcome, Yeah, twenty percent. I find
Speaker 3: your product extremely interesting.
Speaker 2: Energy spent Who doesn't want because not all energy is
Speaker 2: created equal. We're going to stick with food for a second, right,
Speaker 2: So you go to a salad bar and you pay
Speaker 2: by the weight, and it's like, how is the cucumber
Speaker 2: worth the same amount as the salmon? It doesn't really
Speaker 2: make sense. It's not really correct. So not all hours
Speaker 2: are created equal on the grid. Overnight, when you have
Speaker 2: baseload running, sometimes pricing goes negative, and so really understanding
Speaker 2: that nuance taking the burden off of the customer to
Speaker 2: understand when and how they're going to use energy. Two
Speaker 2: certain hours are going to really hurt them. Demand charges
Speaker 2: can be off the charts sometimes understanding that that hour
Speaker 2: is just not the one. An equivalent for someone who
Speaker 2: just never doesn't know anything about industry is uber surge pricing.
Speaker 2: Can you wait five minutes and not pay ten times
Speaker 2: the price for that uber you want it to take
Speaker 2: most of the time you can? And so part of
Speaker 2: what we do is just deeply understand the economics of
Speaker 2: our customer, what motivates then, and what are their non starters.
Speaker 2: We work with electric school bus fleets. There's probably no
Speaker 2: price at all that will convince that fleet not to
Speaker 2: take the kids too in front school, But when the
Speaker 2: buses are sitting there overnight, when they're sitting there during
Speaker 2: the day, now the price point is much lower, so
Speaker 2: really understanding that, marrying it with what the grid needs
Speaker 2: and then having the lasagna and biass nets. You know,
Speaker 2: I'll get some lunch after this. That is how it
Speaker 2: can work because you do not need to reduce twenty
Speaker 2: percent of the hours to reduce twenty percent of your cough.
Speaker 1: And dand what you've just touched on there as a
Speaker 1: whole area mobility. Very interested to hear your view on
Speaker 1: the use of these electric vehicles, whether they're buses, trucks,
Speaker 1: or vehicles now on how you see that going forward.
Speaker 2: I see the growth of electric vehicles and in particularly
Speaker 2: large fleets as another resource for the grid. And again
Speaker 2: you have to respect to primary use case. School Buses
Speaker 2: exist to take kids to and from school, the same
Speaker 2: way that the walmartn't exists, so that people can go
Speaker 2: and buy what they need to buy. But those are
Speaker 2: sitting grid resources. They're ddrs on wheels, and they have
Speaker 2: things they can do to really benefit the grid. Why
Speaker 2: would we not squeeze out and increase the utilization rate
Speaker 2: of these assets that we have all around us. It's
Speaker 2: just an extremely inefficient system. If you really look at
Speaker 2: our system, We've got buildings and all the load control
Speaker 2: that they can do. You have electric vehicles just battery
Speaker 2: storage on wheels, and you use them for fractions of
Speaker 2: their actual capability. So the most efficient way as a
Speaker 2: society that we can get more out of our existing
Speaker 2: infrastructure is to make better use and have secondary intertiary
Speaker 2: use cases for these very capital intensive assets. Batter Is
Speaker 2: are expensive, and so when we can go and partner.
Speaker 2: We have partners in the battery storage space, and the
Speaker 2: partnership goes like this, Hey, you're selling an expensive stink.
Speaker 2: Let us help you make it cheaper for your clients.
Speaker 2: That's compelling too, So we do a lot of work.
Speaker 2: It's not just that we go directly to the client
Speaker 2: that's buying a battery. We're also going to the developers
Speaker 2: and helping them bring a cheaper solution.
Speaker 3: Data. I'm going to put a bit your system to
Speaker 3: the test. We've seen the recent auction for capacity at
Speaker 3: PGM reach crazy prices four times. I mean, what's your
Speaker 3: interpretation of that and how can you help.
Speaker 2: I noticed that data point too, was it still is
Speaker 2: huge talk of the industry. A couple things. One, it's
Speaker 2: the market working. So credit to PJM for sending a
Speaker 2: price signal to the market that incentivizes people to come build.
Speaker 2: What's happening right now, everybody wants to build in PJM.
Speaker 2: What's pgm's problem. They need more capacity. That's at the
Speaker 2: highest level, that's how a market should work. So we
Speaker 2: now have this price point. We have a couple other
Speaker 2: problems though. Here in the US and probably everywhere, there's
Speaker 2: an interconnection queue, and there is simply a time lag
Speaker 2: to build new assets. It is hard to build a
Speaker 2: new power plant quickly. It's hard to put anything on
Speaker 2: the gride quickly when you also have to go through
Speaker 2: the interconnection queue. VPPs are already in the ground like,
Speaker 2: they're already there. They don't need to go through an
Speaker 2: interconnection queue. The stores already exist, the school buses are
Speaker 2: already out there, the buildings already have their building management systems,
Speaker 2: there's storage going in behind the mean or stuff like that.
Speaker 2: These assets exist and so it's a matter of connecting them.
Speaker 2: So that brings me to the second point, which is
Speaker 2: this is a tremendous opportunity for VPPs to rise to
Speaker 2: the occasion, and that's what we're all talking about. Voltus,
Speaker 2: our peers. How can we grow, how much can we
Speaker 2: grow as quickly as possible because we're one of the
Speaker 2: only asset types that can move that quickly. And the
Speaker 2: next auction already is coming up in December. That's how
Speaker 2: I view it. This is the first time we've seen
Speaker 2: a realcific numerical data point, first major time. There's data
Speaker 2: points all the time, but it's the first really newsworthy
Speaker 2: frost the ocean data point of this phenomena we're seeing
Speaker 2: where we now have huge load growth for the first
Speaker 2: time in decades. The reason Boltus exists, in part is
Speaker 2: to build out these resources in a way that continues
Speaker 2: the energy transition. We exist so that the penetration of
Speaker 2: renewables can become more and more and more. But you
Speaker 2: need that load side flexibility day night.
Speaker 3: You've created vert Us eight years ago, and I guess
Speaker 3: you started with a simple software. How has your software
Speaker 3: evolved in the past eight years? And now, of course
Speaker 3: we hear a lot about AI. Are you using AI?
Speaker 3: How does it work?
Speaker 2: So our technology platform is central to the primary reason
Speaker 2: that we exist, which is we want to maximize value
Speaker 2: for our customers and our partners, and so we do
Speaker 2: that through technology and some of it is out of necessity.
Speaker 2: We talked about how we have to interconnect with the grid,
Speaker 2: We have to interconnect with the assets with the advent
Speaker 2: of the AI, and as we continue to build out
Speaker 2: the tech, what we're doing is using AI for example,
Speaker 2: to maximize that revenue. So this stuff gets complicated quickly
Speaker 2: and there's a learning component to it. How can we,
Speaker 2: for example, forecast customer loads better, How can we forecast
Speaker 2: what the grid will need better? How can we marry
Speaker 2: that all so that in real time. We just actually
Speaker 2: had a press release about our AI Adjusters what we
Speaker 2: call it, and that product's feature, for example, is adjusting
Speaker 2: in real time to the forecast of what our loads
Speaker 2: are doing to make sure that we're squeezing everything out.
Speaker 2: It's really that optimization where AI can come in handy
Speaker 2: for us the most, and we look at it through
Speaker 2: the lens of value to the customer. And so that's
Speaker 2: how we think about our roadmap. That can be anything
Speaker 2: from expanding geographies to going deeper, to figuring out how
Speaker 2: to make that lasagniol a little better, a little faster
Speaker 2: and sell it for a little more money. But at
Speaker 2: the end of the day, that's how we think about things.
Speaker 1: So Dana, can you take out your crystal ball and
Speaker 1: give us a view of how you see the future
Speaker 1: of this VPP market in the US and also the
Speaker 1: role of oldest and that.
Speaker 2: My crystal ball involves VPPs playing an extremely central and
Speaker 2: pivotal role to bring us through do an energy transition
Speaker 2: where renewables play a much larger role in running the grid.
Speaker 2: If you think about renewables for a second, we've invented
Speaker 2: an amazing technology. Take a three inexhaustible clean resources on
Speaker 2: the wind, and through technology, humans have figured out a
Speaker 2: way to generate energy with it. It has one problem,
Speaker 2: which is that we don't necessarily control, at least not yet,
Speaker 2: when the sun shines and when the wind blows. And
Speaker 2: so that's where VPP has also come in, is to
Speaker 2: enable that renewable growth DPPs. Five years from now, we'll
Speaker 2: look back and we'll say we enabled the load growth
Speaker 2: we needed, the electricication we needed. We did it with
Speaker 2: renewables because we brought online more flexible demand side resources,
Speaker 2: and we shore it up bridge reliability so that we
Speaker 2: don't have issues like blackouts and concerns about our grid infrastructure.
Speaker 2: And VPPs are central to that.
Speaker 3: Dana, thank you. So much for coming on the show
Speaker 3: and shedding a light on what VPP is because now
Speaker 3: I understand better and really I wish the best for
Speaker 3: voters because you're one of the very important block that
Speaker 3: will help the success of the energy transition.
Speaker 2: Thank you very much, Thank you guys so much. This
Speaker 2: was super fun. Glad to have helped.
Speaker 3: So thoughts Number one, Dana is brilliant, a company is
Speaker 3: very successful. She has raised thirty million USD in ceric
Speaker 3: and I can't wrap my head around the profitability of
Speaker 3: such platform. And I'll tell you why. We had an
Speaker 3: air knock bought by NL two and fifteen million dollar
Speaker 3: into was seventeen. Has an air not really been growing
Speaker 3: or not? I don't know. We had a startup or
Speaker 3: Swell Energy went down after raising one hundred million dollar.
Speaker 3: Our batteries, allies or those of those VPV platforms, because
Speaker 3: if everybody installed batteries behind the matter, after a while
Speaker 3: they said, you know what, I'll take care of it.
Speaker 3: So all this saying, I love what she's doing among
Speaker 3: the fence when it comes to the viability of such Madela, Let's.
Speaker 1: Be clear on one thing.
Speaker 4: If you have a demand response behind the system and
Speaker 4: what you're doing is you're just reducing load or using
Speaker 4: demand in a much let's a more intelligent way than
Speaker 4: that in the past.
Speaker 1: That's for me a critical part of the system going forward,
Speaker 1: and a battery doesn't do that. What a battery does
Speaker 1: is it's doing one or two things. It's either enabling
Speaker 1: you to optimize self generation or optimize buying and maybe
Speaker 1: selling power to totle the system. That's what it's doing.
Speaker 1: But if we'd actually think the VPP should be combination
Speaker 1: of all of these, it shouldn't be just reducing demand,
Speaker 1: it should be also the battery as well. And actually
Speaker 1: you're definitely seeing even larger batteries being put into this
Speaker 1: as well, because again it gives you even more opportunity
Speaker 1: as well. But I think the real critical roll of
Speaker 1: VPPs is we have got constraints across the grid across
Speaker 1: the Western world, and it's just that sometimes that peak
Speaker 1: how a demand can be enough to cause real problems.
Speaker 1: So what you're doing is reducing it all the demand side.
Speaker 1: That's what it's doing. And you're right, if you had
Speaker 1: a battery there it might help, but it means that
Speaker 1: you'd have to fill up the battery to wait for
Speaker 1: that moment, and so I would say the shots in
Speaker 1: the metal. That would be the way I look at it.
Speaker 1: You can need both.
Speaker 3: I only see a future if they act daily on
Speaker 3: the market, because if it's just to wait for cold
Speaker 3: snap in January or heat wave in July and the
Speaker 3: rest of the time the grid is sufficiently provided. I
Speaker 3: can't see a business model where basically you work twenty
Speaker 3: days per year. But if they act daily and optimize daily, yes,
Speaker 3: I see a lot of value in those.
Speaker 1: VPPs without a doubt. Actually, by the way, quick clear again,
Speaker 1: it is optimizing demand up and down because up is
Speaker 1: going to become more important. We've got so many days
Speaker 1: that have negative prices, so you're going to have you
Speaker 1: need to be able to pun up to demand, but
Speaker 1: you also need to be put it down as well
Speaker 1: for the grid. But the other thing is we're totally
Speaker 1: witch is when you have batteries and self generation, it
Speaker 1: just changes the whole mix and the complexity of it.
Speaker 1: And from the customer perspective, you can save an awful
Speaker 1: lot of money for yourself by having those optimization possibilities.
Speaker 3: Exactly last, folks, before I let you go.
Speaker 1: Oh no, listen, I I'm really excited by all these
Speaker 1: business models that are possible in the future, in and
Speaker 1: around this, and I think if I look at what's
Speaker 1: going to happen, I would see energy services just almost
Speaker 1: offering us a flat rate for our energy at this
Speaker 1: point in time, and they just manage every in the background,
Speaker 1: and you feel good and you've got low cost bill.
Speaker 1: That's how we're going.
Speaker 3: Yeah, one hundred, one hundred percent. You need to have
Speaker 3: those platforms managing flexibility, the variability of the price and
Speaker 3: as you do for a phone skiption, have a flat rate.
Speaker 3: So that's your house. That's so much who finish, forget
Speaker 3: about it, we'll take care. I like that a lot exactly,
Speaker 3: and a lot of business would be exactly the same.
Speaker 3: Well on those wise world jib we thank Dana for
Speaker 3: coming and I took to you next week, look forward
Speaker 3: to it.
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