This week Chris and Johan are joined by Juergen Mayerhofer, the CEO of Enspired. Enspired offers fully automated trading optimization of flexible assets across various energy markets. The three discuss the increased importance of including small decentralized assets into automated trading and why PPA’s might not always be the best choice for renewable energy production. Listen in to find out why batteries are the holy grail of the energy transition and why automakers have an advantageous point of entry in the future energy market.
Enspired’s homepage:
https://www.enspired-trading.com
This week Chris and Johan are joined by Juergen Mayerhofer, the CEO of Enspired. Enspired offers fully automated trading optimization of flexible assets across various energy markets. The three discuss the increased importance of including small decentralized assets into automated trading and why PPA’s might not always be the best choice for renewable energy production. Listen in to find out why batteries are the holy grail of the energy transition and why automakers have an advantageous point of entry in the future energy market.
Enspired’s homepage:
https://www.enspired-trading.com
Broadcasting from the commodity capital of the world, Zurich, Switzerland, this is ‘Insiders Guide to Energy’.
This edition to Insiders Guide to Energy is brought to you by Fidectus. Go to www.fidectus.com for more information.
| Timestamp | Speaker | Transcript
| 00:00.00 | chrissass | welcome to insider's guide energy I'm your host Chris Sass and with me is co-host Johan Oberg. Johan what's going on.
| 00:10.21 | Johan | It's all good Chris and for once I think I'm entitled to say it's good to be on because I actually missed the last episode and I but I hear through the great wine that you did a great job. So good on you.
| 00:22.80 | chrissass | Well at least one of us had an extended vacation. Ah did you go anywhere. Interesting.
| 00:28.45 | Johan | I did actually so so a lot of things happening easter break. So we took a little bit of the European tour. The great thing about Switzerland is that we were able to to travel around up to Belgium and and back through through Germany. Really interesting as well because with the more you drive in Europe the more of this energy transition. You see with all the wind wind parks solar parks all over Germany but also with some of the scary things of the racing water levels across the Belgium and the Netherlands so always a little bit of an eye on the energy. And the sustainable future that we're looking for what what about you.
| 01:03.19 | chrissass | Well cool I'm glad that you enjoyed your trip. Ah, just just been busy. Busy here in Zurich and enjoying the the Zurich freezing spring I looking forward to getting another episode going. Um, what do you? think's going to happen tonight which what's your plan for this evening.
| 01:17.25 | Johan | I think this is one of these episodes where it combines what we've been looking for and and when we set up the show a little bit. We talked about the energy transition. We talked about sustainability. We talked also a lot about storage across it but in order to do all this. Needs to be connected and it needs to be driven by digital and you cannot do that in in the way we've probably done it in the last hundred years so new technology will be the forefront of this whole thing. So I'm really looking forward to see how how do we work and how does this actually work with smaller assets flexible assets. And through blockchain through AiEtc so I think we're looking forward to a digital speech. But who knows.
| 02:00.53 | chrissass | All right? Well let let's find out if you're right I I love to hear what markets do what happens to with the digital world and how how we go. I'd like to introduce Yougan Mayor Hofffer to the program you're going welcome to the show.
| 02:28.82 | Jurgen | Thanks guys Happy to be here.
| 02:32.18 | chrissass | So you you heard my colleague speculate of who who and what you might do, but we say this every single show Yohan and I know who you are we we invited you to show for a reason but our audience has no clue. So. I would suggest we start with a little bit about who you are professionally.
| 02:50.60 | Jurgen | Okay, that's that's the easy 1 right since 20 years in the energy industry and a trained software engineer worked as a consultant all over Europe um, all projects related to the energy field always software and technology so etherms who. Um, scheduling and logistics um algorithmic trading and finally ended up as one of the co-founders of inspired um trading flexible assets in a fully digital setup. So I guess that's why I'm here.
| 03:24.38 | chrissass | All right? So Johan was not off. We're going to talk digital that that's kind of what I thought was going to happen. Um, but that's a pretty high Buzzge Word maybe a little bit more about what that means? What do you guys? Actually do.
| 03:39.10 | Jurgen | So what we actually do is we take every type of asset. So when a talk asset. It's it's generation asset. It could be a demand side. It could also be a storage asset so an asset that could generate or or consume electricity. And we traded in a fully digital setup that means we don't have any human traders. We don't have the trading floors that you would have in mind you know with a lot of screens and people with this chairs and all that stuff. So if you if you would join us in our offices in in Vienna um, you would. Think you enter software company. So um, yeah, not the typically trading floor flair that we that we have here we work with github and continuous integration and and all that all that software stuff and be combi. Find those 2 well so we trade flexible assets but not in a way you would expect it from other players in the market but rather in a software and data and technology-d driven way. So no humans doing some stuff. Data is imported algorithms and models take decision. Um. And and everything is executed fully automated. So while we talk we trade for a lot of clients different use cases and no human has to have a look at it.
| 04:57.24 | Johan | So how how do you make this work It's an interesting analogy and and I think it's something that we'll see in in the financial industry as well. You know, not ah quite a few years ago they start talking about robo trading and all the rest but we still have a lot of trading floors around the world of energy trading. So what would you say today and I'm pretty sure we'll go in the future as well. But what would you say today then is the big difference between what you're doing and more of a traditional energy trading floor because it's still fairly digized even if there are shares and and screens. So what? what is the difference.
| 05:34.10 | Jurgen | So there is I would say basically two ways it's it's done at the moment. 1 thing is really trading as a human so sitting in front of 12 screens 14 screens looking at market data where to model satellite images price forecasts and taking a decision. Um. So so the information is processed in the in the traders's brain and and ah combined with experience. Good traders take good decision and other traders take also decisions they might maybe not as good right? Um, and what happens since 2015 in the short-term power space is that you're allowed. Trade electronically on on european exchanges and so with software we tried or the the market tries to to automate some of the trading decisions right? But there is a huge difference between just automating stuff that has been decided are having models that. Take active decisions and I would say the state of the market is that trading is supported by software right? So so signals are still human stuff or the specific models. So I would say most of it is is automating trading. It's not taking the decision like you have a win forecast. You have to sell twelve point Eight Megawatts and you say to the software please execute right? So there. There is not too many logic. Of course you can optimize quite a lot if in in execution. Um. But of course if your forecast or your signal is wrong and the best execution cannot fix it and comparing the approaches. Um that we see in the market with what we do is is different because we use way more data. A lot of signals are autobook database or ah triggered by humans. So we use a lot of data put it into models and take real-time decisions. So for example, when we train our models we know on the second of March Twenty Twenty One three p m. Was the wind forecast available for decision making in the system. So not when it was released but when was it there. Um for the algorithm or the model to decide. What was the residual load. What was the wind level. How steep was the solar curve. So we know that and our models react for every product differently. Based on time to deliver and all that stuff so we just we just stepped up the game um with getting everything digital and and the heavy bet on on data and machine learning.
| 08:05.21 | chrissass | So are both sides of the equation all digital at this point So you're you're got the one side right of the transaction you're you're going with good Data. You're you're hoping to make better decisions. You know I think with data for me. It's it's It's never. Ah, question of if there's enough Data. It's actually refining the data down to useful data right? So there's There's lots of Data. Um.
| 08:26.91 | Jurgen | And ah, unfortunately there is lots of data. Um, quality is an issue timing is an issue right? when do you get the data that you would be interested in. Do you get it in the quality that you would need um because you have to have in mind. Um, the setup for twenty four seven human trading is is it's not dependent on something right? It's not dependent on data quality on a system. Whatever um, but when you have a twenty four seven setup everything has to run without any issue right? If you have wrong data in.
| 08:48.80 | Johan | This.
| 09:03.37 | Jurgen | Your trade positions that you don't want to trade if you have ah wrong forecasts. You maybe take wrong positions. So the whole process has to be super automated and has to have high quality and consistent quality of data. Um, so that's a big difference in that game.
| 09:19.70 | chrissass | And the other side that the original part of the first part of the question are are they able to handle this kind of speed is is is it full end to end automated process or is it just 1 trader that's automated.
| 09:30.68 | Jurgen | It it it depends now What? what? the other side is we have two sides one is the customer's assets right? So we have assets to the fully automated that we trade until some minutes before physically delivery. Um, but we also have customers that have to press the proof button right? As ah as a.
| 09:44.45 | Johan | A.
| 09:50.26 | Jurgen | As a security step because it's critical infrastructure. They don't want somebody else to to maybe ramp up or down the the big power plant and on the other side we have the exchange where everything is automated. Um, the thing is I mean you see if you look in the data when humans are trading and when not. Ah, based on the behavior based on the how it's traded so you clearly see when when traders jump into the market and when they go home and and so still see see quite some patterns out of humans.
| 10:18.20 | Johan | Um, so do you see any out of curiosity before we um I've got a lot of questions about technology and and risk and and who's actually accountable for what but just out of curiosity I think if you look at any trading for. Commodity trading in this case energy it is automating it is digitalizing and eventually according to a lot of people. It will be kind of ah, an automated process. But what would you say today is if you're the fully automated side of the of the equation. How much how far has the more traditional energy companies or energy trading is coming how much of their process are auto automated today and and how far have they to go.
| 11:07.12 | Jurgen | Poor. It's it's really super subjective in the gut feeling but I would say 20 to 30% so it's like you you have to think we we have a very specialized setup for spot. Markets. Um, it's it's actually unfair to compare us to one of the biggest players in Europe. Um, because they carry decades of history of legacy systems of processes when it you know it's it's it's not only the trading component. It's it's the risk management. It's the invoicing. It's accounting so you guys know what ethereum systems do um.
| 11:35.17 | Johan | Um.
| 11:45.97 | Jurgen | And we actually don't need that because we we have real time position trackking real time limit trackking. But we can only do that because we're exclusively focused on the spot. Market. Um, so as soon as you broaden your product range going to forward. Futures. You need different processes. Um. And and that's what they have so I think for them. It will be really tricky to to get the end to end automation done because there is different departments. So so our organizational setup is different right? We have squads that work work on topics and and their. Cross-functional. There is data scientists and trading operations and augmented traders and software developers working together and and if you're a large utility you have sliced and diced it into a front office his back office logistics. You know all that stuff and. And we as a small company can handle that in one goal it that brings a lot of efficiency. Um, and and we had this this big advantage of building it greenfield like that right? We we found that the company and said okay, no, nobody's trading in comp trader right? that's It's not the way how we do business. Um, if you want to trade write a model or an algorithm and if you have to transfer from building a trading flow over 2 decades into say hey guys you don't trade anymore. You're software developers now. Um, that's quite a bit.
| 13:10.73 | Johan | Um, but does that also mean that because one of the challenges I think correct me if I'm wrong. But if if you look at some of the larger energy trading floors is it's the volume aspect. You know it's it's.
| 13:13.49 | Jurgen | And ah I will assume.
| 13:28.82 | Johan | Probably not as interesting of of trading and and utilizing small flexible assets car batteries So whatever needs to be done. Do you do you think you have an advantage here where it's automated can can you cope also with the smaller volumes or the smaller. What.
| 13:45.95 | Jurgen | There is two things. Um I think you mentioned that a very important one is of course if you have a large asset pace of gigawats of generation capacity collecting some 10 megawats of a flexibility may seem irrelevant in the in the absolute figures context right.
| 13:46.19 | Johan | And the others are.
| 14:04.93 | Jurgen | Um, for big companies. So I think it's also tough for them to have a focus on this ten Megawatt battery right? because you have other assets that make you way more money. You maybe have some some hehching strategy in futures where you may be also in gas business at the moment so you know that the numbers are. Super small compared compared to that business on the other hand I think everybody even if they don't tell it they know that the future will be decentralized and that flexibility lies rather than aggregated small assets compared to I mean you cannot build a pump storage right. I mean you can build it but then the energy transition should be done already quite some time ago until until it's there. So I think everybody knows that they should focus on small stuff but there their strategy and and organizational goals. Um, does. Doesn't make their life easy right on focusing on on small assets. Um, we of course have the different approach. Um, so we don't any assets. So we only trade third-party assets. Um, we believe that the energy transition will work with um. A lot of small assets that sit idle because until now um, most companies said kiss or it. It's not a business case. That's too small for me. That's not enough urals. Um, that's that's a lot of work and you have to keep in mind all the other markets that we're talking you can trade them manually right. You you can trade futures manually. You can trade your hedge in forwards manually um, until spot auction. Um that the process has been developed over the last ten years but for trading on the continuous intray market. You need a lot of technology you need 24 7 you need all that fancy stuff that that you didn't need so far to maybe reap 80% of the revenue or of the p and l right? So I think you need as you said some economies of scale and that just doesn't pay off for doing it for three C H piece so so you have to have a business model like we have and really do it for a lot of different parties.
| 16:11.87 | chrissass | So is that the problem statement that you started out to solve then so you you realize that there is this kind of stranded small assets that weren't getting taken advantage of and that's what you started your company for.
| 16:23.66 | Jurgen | Um, actually it was 2 things 1 we have seen I mean we've worked with more than 40 players all over Europe big ones and we've seen that everybody focused on renewables so trading the position try to avoid imbalance.
| 16:36.84 | Johan | This in.
| 16:41.56 | Jurgen | And lot of them being subsidized so they weren't not primarily interested in the prices they achieved with trading but just to get rid of the position and the avoid imbalance risk. Um and that was one topic where we've seen there is a lot of big assets that could be provided on on short-term markets additionally to ancillary services. So really in and and spot and intraday and the other thing is we've seen that it's quite a big step for smaller medium-sized players energy intensive industry to get into that market. So it's already tough for big utilities as with. Talk before it's quite an investment in technology I mean they can do it. They have the knowledge of have the money. Um, but for medium-sized players or ah energy intensive industry. It's kind of impossible right? There is no business case of building a twenty four seven trading desk to trade your 3 ch piece that you actually build to produce heat. For your production. Um, so our idea was to help or we we crafted the or shape the business model in a way that we can serve everybody from the big utility that has this special asset in this one country that no trader wants to trades manually but also help the paper mill or. Whatever it is energy intensive industry to say okay guys you built it for heat the asset for example, but you could ramp up some additional megawats and help somebody in the market. Um, because there were were not. Ah, enough renewables and somebody has to jump in and you can actually jump in make money and help the energy transition. So that was the idea but having a slight tendency that we know the future will be decentralized and there will be bigger target group with smaller assets.
| 18:25.39 | chrissass | And and you mentioned in the pre you mentioned in the preca ah batteries you've spent a good bit of time over the last few weeks talking about batteries to maybe share a little bit about what that's all about.
| 18:25.70 | Johan | Which leads me to 30
| 18:39.61 | Jurgen | Better is is I would say there is that's the holy grail of the energy transition meanwhile right? So um, over the last years. Everybody talked about. Have to increase the speed of building wind parks pp parks onshore offshore. Whatever and also over the last year I think a lot of people realized that that it's not so easy for the grid right? You cannot put endless stress on the grid and and we have einzman in Germany and congestion management meanwhile. Um, everywhere and batteries have this have this beauty of of that they can cover multipleable use cases right? you can put them standalone to help the grid you can put them next to your generation unit. You can put them in to your production facility. Be a backup to maximize pv own consumption. You can put them next to vin park to move it from low price timeframes to high price timeframes. Um, so so there is a lot of use cases and it it seems like over the last months that's basically every. Different market role from asset developer 2 utility to consumer understood that battery has a value and I think what helped it is that with the energy crisis at this increasing price levers volatility just gave a kickstar to the intraday market right? So suddenly. For batteries. It's not only ancillary services so in continental europe it's mainly frequency containment reserve but youve got an additional route to market where you could say okay I have I have a choice right? Do I take market a or b and maybe have a third case saying I and my primary target is to maximize own consumption. And then with the idle flexibility left I can choose between 2 markets which helps makes the business case more stable than three years ago because he had 1 market and either you made a lot of money there or you made yeah not too much money. There.
| 20:46.43 | chrissass | That's what.
| 20:47.00 | Johan | So going back a little bit I think we all agree the batteries is kind of the holy gra I like the expression but it's going to be a massive part of of this and I think that's kind of a common theme across all the episodes we've done storage in one way or the other what one of the. Things I just want to go back to a little bit in terms of of yours specifically and that is where who is your customers if you look at it today but maybe even more than into the future. Ah what we see is more okay, you you move from this consumer consumer to this or from consumer. This consumerr set up where we actually will produce the energy but you will probably then also store the energy. What way. Do you see your your core customer group in the future and but but also maybe mention of some of them today.
| 21:38.17 | Jurgen | So ah I can tell you what how it's today. So it's utilities from top utilities in countries smaller utilities. It's asset operators or renewer operators. It's direct marketers. So it's rata I would say at the moment it's storage operators. It's rather on the it says there is a tendency for the generation side at the moment. Um I think because it's easier for them. You know that they know their asset they didn know about trading. So it's easier than the the hardcore demand response use case I think it's just tougher to to. To explain it to the client. There is more technically restrictions. So I think that will play a bigger role in the future. Um, also in aggregated way. Um, our clients are also aggregators. So. Companies who aggregate a lot of small assets that would be too small to trade themselves against their wholesales market. So for example, um, that the smallest prospect size is one hundred Kilowatt on the exchange. So even if we want we cannot trade a fifty Kilowatt battery right. It it just doesn't work you so you have to pre-aggregate them trade them or commercially optimize them and then distribute the dispatch signals. So um I would expect that in the future. There will be more aggregate the roles I would so really. People building virtual more and more virtual power plants I would assume that a lot of utilities just see that as natural part of the business at the moment you noticed it's fancy thing and we have it. They don't have it and why why you? Why don't you have a virtual power plant right? So I think that we'll be. Ah, go from fancy to to normal stuff I think that also when we go out maybe 5 years it will also be coming closer to the b two c customers. So at the moment. Households are just you know that the metrics don't work out. You need a certain volume you would to agree have to aggregate a lot of customers regulations. Don't don't even help you that much I mean you case slightly different but try to access a heat pump from your client without being the supplier which is horrible. Close to impossible. Um, so I think there is some regulation work involved over the next five years um and once a lot of virtual power plants have been built granularity will get small and smaller. So that people say okay I want to.
| 24:16.85 | Jurgen | Aggregate Two Thousand P Two c electric vehicles I think now that's a fancy proof of concept and it may technically work. But I think it's quite some time until it's commercially, really viable. So I think that's why it's going from big asset generation side to demand response mid-size. And I think just finally um, with with consumers at at home will be a target that's that would me with me my expectation.
| 24:43.93 | chrissass | So on that journey you you say I think you said your customers tend to be mid-size or maybe someone a little smaller tends to be your sweet spot are are they doing customization on your platform or is it is just a service that they sign up for so what exactly happens. So.. What do you do for me if I if I have I have a bunch of assets and I come to you? How do you help me get them on the spot. Market.
| 25:08.37 | Jurgen | Um, so it usually runs if you would stick to our process. Um, you would get we would decide for a use case right? You may have a small pump storage. You have a thermo generation. You may have.
| 25:10.78 | Johan | In.
| 25:25.23 | Jurgen | Some demand sides capabilities or um hydrogen generation. Whatever right? We we said lo a first use case. Um then typically your first question would be okay now you can tell me what's the value of my sit on on this intraday fancy optimization thing that you do. So we would ask you for historical data or or we draw up an artificial case and we give you a value indication of how much ten thousands of euros per month. Ah you can earn and then the technical integration is actually really easy. You just tell us for tomorrow during the day. If we're a allowed to ramp up or down your plant. What are the marginal prices for every quarter hour. We have to talk upfront about technically restrictions are there rams or minimum minimum runtimes are the type of stuff. Um, and then we go live your testers you watch on your iphone on on the realtime. Dashboard super fancy in black and you know like you would expect from a quick company and you wake up in the morning at the first thing you do is you look and how much money you earned overnight with your assets and if you're convinced we in the longer term agreement so be ah, very open that. Clients just try us right? So we don't want to sell this 5 year fixed fee contract and and and talk you into something so we want to prove in in the real trading environment that that we deliver what we promise.
| 26:52.98 | chrissass | So but that sounds pretty labor intensive to scale. It sounds like that. There's a lot of handholding to get started so you're relatively young company and and I know recently I think I saw you over in North America as well. So you're you're trying to grow. So so how does this scale.
| 27:09.27 | Jurgen | Um, scaling is is is a sense of technology in in in our world. So um, a colleague just call it last week ah it's we call it mask customization right? So so we have we have with trip. Core trading strategys in models right? Um, we have a core optimization that can deal with storage no matter if it's a pump storage a heat storage or a battery storage because the concept basically is the same and the market data you you need is the same. So what we do, we trained at models. Your technically restrictions. Let's say you show up with a battery and you say okay, my guaranteed terms say 1.6 cycles per day. Not more cycles than x per month. That's my efficiency loss. That's the maximum charge discharge um, we considered that. Retrain our models optimize our parameters with back testing and take it live so that's actually that maybe sounds labor intensive if you would do it manually but we have all components in place and we just retrain the models to a needs and and if Johan would show up then and say. Here I have this other battery. We just repeat the process with different numbers and then take it live so we tried to get rid of all hurdles and and complicated stuff right? and you would get an upfront information of what we think we can earn.
| 28:34.38 | Johan | So I can understand in the future of of the image world I think this is I totally agree with this the future. But if we look at the where we are today. We we've all discussed the the kind of clash between the new and the old a little bit in the end and the industry. So so here you are.
| 28:35.88 | chrissass | It's cool.
| 28:53.20 | Johan | Looking like a software company behaving like a software company calling yourself almost the software company. Even if you have a a long background in an energy. But what is the what is kind of the feedback or what is the impression when when you then go to customers are they ready. To take on this. You know they invested in an asset. They are used to maybe an old let's call it a legacy way of of working and you come here and says you know what we're going to do this. We're going to revolutionize this for you digitally? Um, how does it work are they ready.
| 29:22.89 | Jurgen | Yeah, so um, that really depends right? We have people and that's that's kind of close to quotation to say they have just been waiting for a service like ours right fully transparent realtime monitoring on your iphone and they just. We not happy with the offerings existing at the markets so transparency is a problem at the moment. Um I think it's also still a lot of misunderstandings what flexibility marketing or trading is right? some say. I already do that I sell this remaining 10 megawats in the spot auction right? and think go for lunch and I market my 10 megawats flexiibility others say okay I do that since 10 years because I I go into a frr fcr as what they mean anciary services. And I think not not many people think of the whole range right? to optimize across markets and say is it smart to put the battery. It's at 0 ah, with 0 price into fcr just to get some revenue wouldn't it be better. Um to have a limit price because we have an expected volatility and intraday and try to get the best of. Both markets. So I think um in or in my experience in a lot of course we we have to clarify what's the difference to what they do if they say okay, we're not interested with trade already our flexibility we say hey guys and even if you if you talk intraly there is different approaches right. You can ah propose a dispach to your to your client or your assets and they can decide if they do it or not we have the approach of that they tell us their idle capacity and our models ra the milliseconds to the market so we are in the lead. They tell us the restrictions. And and we take the commercial optimization decisions. So even on intra there. There's totally different approaches of the hey yuhan I have a suggestion for you. Do you want to ramp up right? That's also intraday flex optimization. But it's far away from twenty four seven algo trading with ten thousands of trades so um that that's a topic still that's.
| 31:33.17 | Johan | Um, but I think this is a topic for everyone because we're in a transition. So I think it's still but what coming back to that list. 1 of the things it will be interesting because we're talking now about the customers that you have are they energy savvy enough to understand all this because if we look in the near future. I think it's in the near future. We look at and a lot of new organization if we look at the b two b sides that are coming into this energy production. You know they're putting solar panels on their roof. We're talking about electric cars in the basement which which then connects to batteries suddenly you have customers that might not be Let's call them energy savvy you know that they are doing this for sustainability reasons or they're doing it for financial reasons maybe not purely on saving energy. So how how does that work are they a big. Kind of an opportunity for you or are they more difficult to work with because the energy saness is not there.
| 32:29.53 | Jurgen | Yeah I I think it requires some different business models or product approaches right? Um, think at's home. What do you do? if you change your supplier right? You take the best areariff you maybe have a look and say okay maybe I don't want to have 80% coal production in there so rather take a green thing so there is. There is some expectation. Um and I take the example of of b two c flexibility right? Even if you would have a dispatchable heat pump. Ah maybe a charging station for your Ev at home. You. Most probably won't want to think about too much I would have to show up as a supplier and say here you are I can offer you this 10% off on your energy bill if you let me access your heat pump and your ev right? Ah beatv to to grid vehicle to home. Whatever right. So think for b two c not energy savey um target group. The product has to be super easy and you may just want to tick this additional box and it happens magicrally and you have a monetary benefit for example, so there's a lot of studies with real-time pricing but you know we're just humans we fall back into the same behavior. Don't want to start our dish dishwasher at 2 2 in the night because it's ¢2 cheaper, right? It's not convenient for us so you would have to have an offering for the not takes save it that just works magically and I think that nicely fits to my prediction that I had who will come next It's also from energyavv to um, convenient target group. So at the moment. Um, even if you talk energy intensive clients they are are or the even they are or either they are already energyavvy or they are now. To the energy crisis becoming Energyav a year ago. They maybe haven't been interested. It was a commodity that they tendered every two years meanwhile I think everybody no matter if it's household clients or no matter what industry getting plus 50% on their energy bills. Leads to focus on the topic and I think if there is 1 positive thing with the energy crisis is that it created a lot of awareness right for that the energy transition kind doesn't come for free. So I think people get more energy sevy at at the moment.
| 34:53.98 | chrissass | So what? what competing strategies are so you've you've got a strategy right? You're you're looking to to help solve a problem. What are some of the competing strategies. You're you're you're swimming against or what what are you trying to like what are other alternatives that people are looking at.
| 35:03.61 | Johan | Select.
| 35:11.14 | chrissass | To solve the same problem.
| 35:12.90 | Jurgen | I mean some of them. Um, maybe don't see a problem at all right to say okay I didn't do it for the last ten years its efforts my chop is producing a certain good and I'm not interested in that. So I mean we don't have a strategy for that one if.
| 35:25.88 | chrissass | So. Faith.
| 35:31.92 | Jurgen | You know we cannot convince everybody. Um, there is certainly some thoughts about companies that use a lot of energy or um, managed assets if this should get closer in the value chain to energy trading right? So we're talking to. Asset operators of renewables that think okay maybe I don't sell this stuff via ppa and then I think about a battery and maybe it makes sense to get more familiar with trading and this there is small fraction of the of the value chain that I could also take over does it make sense so we see. Ah, the last year is quite some movements where people get more interested so they don't just want to sell it via ppa because they realized it's an insurance right? somebody you pay somebody for taking a volume a price raise? whatever. Um, so I think they get more educated and get more curious. Um.
| 36:28.51 | Johan | In.
| 36:28.84 | Jurgen | And of course there is companies strategic decisions they say I built this on my own and I'm a trading company I'm a utility that's my core competency. Um, so we played very open. Um.
| 36:41.56 | chrissass | Yeah, and is there are there regional plays that are different is it is the North America Market significantly different than the European market.
| 36:48.60 | Jurgen | We just have some or had some initial chats in North America so at the moment our focus is really scaling in Europe from our initial markets Germany okay Austria now to France Netherlands nortics iperia italy so I can say if if there is a.
| 37:06.94 | chrissass | Um, and have.
| 37:08.42 | Jurgen | Huge difference in in Mindset or not.
| 37:11.69 | Johan | Which is ah and and and it's coming back to to to this because you you mentioned a little bit about the competing Chris was also enters in the competing approaches. But once we're talking about competitors and also combining that with with with. Ah, digital approach surely with the energy crisis and even before the energy crisis. There are other larger not energy companies. Perhaps but larger I t bad word to use maybe but software companies and it companies that are. Also looking to dip into this a little bit. Do you see? Ah, do you see some of the major ones also coming and say you know what we can do this Ah you know the big, the big tech dragons or is this still a bit away from them that due to compenancy and then focus.
| 38:03.57 | Jurgen | I Think some of them really looked into the market. So there have been cases already some user ago where big tech companies bought metering data and in eo etc which was a where a lot of companies were afraid if they end or not.
| 38:13.80 | Johan | A.
| 38:22.98 | Jurgen | I think it's it's really tough for them to enter this physically market right? What? what? distinguishes? um the spot markets from from other or and also financial markets. It's the physical restrictions. The weather dependency the grid constraints and all that stuff. So. I would rather say that maybe other players join I would not expect tech companies. But maybe um, ev ores. Um, now I imagine you you buy a new ev and and a brand says hey um, here is Dv. Do you want to have the insurance. And do you want to have the energy and do you want to give me access to your battery to to provide flexibility to the market. So I think they could have the advantage of being very close to the to the customer right in every other setup especially when it comes to evs you have to you have the utility that talks to the customer.
| 39:04.14 | Johan | Um, it.
| 39:21.90 | Jurgen | Or maybe um, you know there are so many players in in that space. So I don't see tech companies but I would assume that um people really close to the customer maybe selling Pv Panels or whatever start to to contract that stuff. So I think utilities.
| 39:22.24 | Johan | Yeah.
| 39:40.34 | Jurgen | Try to do that. Of course I mean you can lease and and buy Pv stuff everywhere. But there said lot of small players that try to craft different value propositions than the typical utilities as as we do basically come.
| 39:50.56 | Johan | Yeah, but I think it's a challenge of course because there's a different, not just a technology difference. It's it's also an offering and a support function which might be slightly difficult we seen Tesla as as one of them. Course so with with a trading license in the Uk and also an energy provider in in in the in the Us. But but the other oems have all with challenge with with bringing on the new parts and and and as an oam you're also then suddenly responsible for the customer relationship which. Ah, traditionally they haven't been so so I think there's a business model here that could change.
| 40:31.42 | Jurgen | And I think the best are the offerings have to also get more complex right? So I mean I I brought up the Ev example but actually um, you could even go into home automation right? because.
| 40:43.78 | Johan | It.
| 40:47.90 | Jurgen | Um, you mentioned it before the presumer task you will have this excesspv. Do you do you feed it into the grids and and get a certain tariff. Do you give it to an aggregate Um, who gets maybe depending on the the subsidies you get in the bucket or trade it on the Wholesale market where you feed it into your. Ev and save it for later as as a battery. Um Do you use it to produce heat for your whatever boiler. Um, so I think that this is just one missing piece and in the future people will go more and more into this holistic optimization because they will see. Okay, there is. There is some some opportunity in just optimizing an eb and but the next step would be Okay, there is a Pv on on the roof right? Why don't they consider that and there is maybe a stationary battery and there is whatever is it type and maybe. A heat boiler that they could reduce consumption and and all that Stuff. So I think in that space a lot will happen and the question is who will be the entry point for that. Will it be the Ev guys will it be the utility will it. So I think it's pretty open. There is a lot of.
| 41:52.20 | Johan | And.
| 42:00.29 | Jurgen | Different players. Will it be the heat pump provider. Will it be the Electrician right? That says you get the heat pump you get the Pv you get the Ev charger and maybe you sign up the the supplier supply contract with them right? because these guys are involved before you even build a house or renovate the house right? So why? not them.
| 42:13.87 | Johan | Yep. Yeah, now. But I think this is I think you're totally right on this one because I think we where we look at it. This has been the biggest challenge in in any transition who actually owns the customer and combine it from from your point of view I Guess this is positive because it's very difficult to recapulate.
| 42:20.50 | Jurgen | So.
| 42:36.60 | Johan | The algorithms and the trading formulas for for for the energy trading. So if you can provide that as a service combbined with your solders with your pvs etc. It's only good, but but the question I agree with you still remains who owns this customer who can manage this.
| 42:53.21 | Jurgen | At the moment. It's very separated right. There is people owning the battery of the of the client there is people having supply contract. So but I think.
| 42:54.90 | Johan | I Guess that's a big question. Yeah yeah, and who are you going to call when something goes wrong. That's always my biggest problem.
| 43:09.58 | Jurgen | And and as every consumer you want to call one number right for all the problems.
| 43:11.62 | Johan | Yeah, of course of course and the oems is not ready for that. That's for sure.
| 43:18.23 | Jurgen | Um I have some experience. They are definitely not ready.
| 43:22.67 | Johan | That no.
| 43:25.15 | chrissass | So I Guess yeah, interesting I mean I think you guys are pontificating about like in consumers I think we're a bit away from that kind of panac of of kind of managing or arbitraging in your own home and getting the best deal with your energy. So I think we're probably still at that mid-tier step. As you said you're you're focused midtierer. But what comes to mind mind. Is. You guys been doing this for a while you've proven the market out, you've you've got you know? basically your sales model you described was hey give us a try We. We don't want to tie you up by contract you want to tie you up because it bring you value. That's what I heard you say?? um. But you must have learned some lessons along the way nothing comes easy you you don't get to where you are without having some lessons Learned. So What are some of the things that that were different than you expected when you went into this.
| 44:13.27 | Jurgen | So what we did initially. Of course we write after and even shortly before founding the company. Um, we we give some pitches right to ah to friendly customers of the past and people that I got them more. Ah just to hear their ideas and um, um. All this would work out. First of all I think um I thought that ah everything is clear about flexibility right? So I thought there is a certain market standard. So do you go there and say that's my offering and everybody understands it. Ah so so we had to work a lot on. Simplifying the offering I would say making it as easy as possible for you to try it and there is wholes. We removed technology wise wells that we removed contract wise hurs that removed removed in in our commercial or in our pricing right Um. So so that's something that we learned. That's the same business idea in the different wrapping right? makes a big difference right? because um, the business model of of doing trading as a service for a client. It's it's not the business model innovation and say wow I've never heard that before. But having it fully digital making it super easy to use with your iphone dashboard thingy um is a different story so we learned that it it has to be super easy to try out. Um, the other thing we learned is that and that was a. Was not painful but it was surprised for me that I think in the first two hundred calls I asked. Do you know the value of your flexible assets on intro the markets and there were not even ballpark figures in the first 200 calls right? so. People know it somehow for ancillary services dennoy it for spot auctions because the price is transparent. But for intraday you know the price is collected for the same quarter of physical delivery and if you look at an index you get just the average volume weighted average right. So there is no public information where you could get a feeling of is it going wild or not you have to be a trader to know that and most of our prospective kinds are not traders like we are. They're somehow energysavvy as you accord it and but they don't look at the trading screen or the dashboard every day. So um, solving that transparency thing was was a big topic. So that's why I said our sales process meanwhile is we give you an indication because you want to know very early in our discussion. A is this interesting and bay does it b does it pay off for me right? You wouldn't work with.
| 46:55.31 | chrissass | So basically your baselining for for them in in the trial.
| 46:59.83 | Jurgen | Yeah, yeah, we even go um far at the at the moment that we talk about floor pricings or guaranteeing minimum revenues etc So We really try to find out what what does this think that I mean everybody Understands. We have esg guidelines and it's good if I contribute to the energy transition and it's good for employer branding. But there is always of course this aspect of making money and and we try to find out what what do you need to say this? Okay, let's give it a try and.
| 47:30.51 | chrissass | So so I love to have real time stories of things as success story So give me a success story. What give me the best case scenario that you've had tell talk about someone you brought on you don't need to give me the names but tell us how it worked why it was the success.
| 47:46.98 | Jurgen | And with 1 success story that was one car. Um renewers so we meanwhile trade more than five hundred Megawatts One of the case studies is out is priorogen Germany and and where we trade their intraday deltas. Um, and they were super fascinated by offerings that that's exactly what we need and I think it was even in the first call when can we start trading two weeks one month etc so this was really a success story where our service was our offered that flexibility. To fit into a client process of jointly optimizing positions, etc and thiseducate. That's what we're looking for. We needed. Let's start trading right? and we added value right from day one basically um for me personally one of the the biggest success story was of course our first client. Um. You know, um you you get this platform done. You invested a lot of time and and passion and everything and you want to know if it works and with the initial version we have been really good compared to big player in Europe. So so maybe basically all par with them in the first version that was some months old and this was for us very important to get the indication. Okay like okay me invested some months so basically're on the right trek right? We have a ton of ideas and and and we we have a roadmap over years if we want. Um, so. So that was rather for us. Ah as a company. Um, interesting. Um, we had other clients that that was easier where we kind of added 50 60 70% to the existing sport revenue. Um because they were not fully into that algorithmic intraday trading. So. It. It really depends on where the your your partner and customer starts right? if they invested 4 years in Algo trading. It's tougher to get um, a bigger share if it's somebody who says okay until now I stop there ahead. It's easy to gain forty fifty percent that's
| 49:57.87 | chrissass | Well cool. So I have enjoyed this journey. You've taken us all over the place I think it's given me a little bit of a light What you do I've I've seen you around the industry now for a few years and didn't really understand what you did and and now I think I have a pretty good clear What you do.
| 49:58.74 | Jurgen | And opbrano.
| 50:11.28 | Jurgen | Um, ah you know.
| 50:16.50 | chrissass | Um I loved your story about making things simpler and and changing the message because as a founder myself same exact message I think that's just if you're if you're doing technology and energy that that message resignates to any of the founders listening because I know we did the same thing removing every hurdle make the message simple and it it does work. That strategy does get attention. So I'd have to agree with you there. But thank you so much for being on the program. Johan do you have any final thoughts.
| 50:41.78 | Johan | Ah, well thank you Jon for being on I think going back to my introduction I think we take the boxes of what I was expecting but more I agree with Chris on the simplicity and especially as we discussed in in some of the the episodes here today is.
| 50:50.78 | chrissass | That.
| 51:00.54 | Johan | Future So there are new people coming on to this market that are not energy savvy so simplify combine and I think we're we're looking for a good future great having you on.
| 51:11.81 | Jurgen | Thanks guys. It was a pleasure.
| 51:14.32 | chrissass | And thank you and to our audience you've enjoyed another episode of insider's guide to energy if you like the content you want to find out more follow us subscribe and please share us with your friends. We look forward to speaking you again next week bye bye