“Anything special planned for your name day this year, boss?”
“Let’s go to Davos Energy Week,” Henri said.
“Okay, ehm… why?”
“Because that’s where people go who want to save the planet.”
And so here we are, my CEO Henri Kivioja and I, looking to connect with people in the Virtual Power Plants (VPPs) ecosystem, people working on renewable energy at scale, and to learn to understand their challenges.
For years Henri has been deeply entrenched in the technology as well as the business side of 5G edge-to-cloud AI infrastructure and SaaS productization. So has his whole team. But I must say that for me as CMO since only two and a half months, the energy sector and particularly VPPs and fast frequency reserves are still very much unchartered waters. I have way more questions than I have answers.
Our mission at Davos Energy Week is to identify the most pertinent challenges and questions that the VPP ecosystem will be facing during the next three years. Hopefully the event will prove an opportunity to identify people who can shed some light on these issues.
I’m going to provide a little more context to what I know and what I don’t know about the industry, in a minute.
Of course, even if you’re not attending the event but you do indeed have an interest in saving the planet by making a positive contribution to the transformation of the energy sector, it would be great to link up.
“Whence the obsession with saving the planet?” you may ask.
As we all know, we’re kinda living on borrowed time. During the foreseeable future, world-wide demand for energy is only going to soar and there is no way this demand can be met sustainably without a radical shift in the makeup of our energy production. It is imperative that we drastically reduce CO2 emissions and that green energy becomes the dominant form of supply.
Smart grids, or electricity infrastructure with software built in, let energy network operators know how much power is flowing through any part of the network, with a delay that has so far been acceptable for all practical intents and purposes.
But with smart buildings, smart cities and smart transportation, demand for energy is becoming more dynamic. Customers are ever more eager to decide what type of electricity they wish to purchase, when, and from which provider.
On the supply side, nuclear and fossil fuel plants are being supplemented with solar and wind power, and fast reserve electricity that can be sourced from increasingly efficient batteries. Many of these new energy providers may be small in size, but they come in large numbers.
Today, when demand for electricity peaks, most grid operators have no choice but to pull more fossil or nuclear energy into the network. Mother nature doesn’t provide wind or sunshine on demand. The infrastructure is not yet equipped with sufficient intelligence to source ‘fast’ battery reserves quite fast enough.
New, diverse and dynamic energy sources and their dependency on weather conditions are already creating new challenges for grid operators to ensure stable frequencies of around 50 Hz. In addition to influencing supply and demand through dynamic pricing, so-called frequency containment reserves and fast frequency reserves systems are deployed to balance the power grid.
When the sun moves behind a pack of clouds and the outdoor temperature drops, shopping malls, sports arenas, factories and residential buildings suddenly need more energy. Currently, that energy will most likely increase all that real estate’s carbon footprint.
With the right technology at the edges, from big and small suppliers to big and small customers, operators of smart buildings will be able to order green energy even during peak demand. Currently they don’t have a choice. But they should. And they will.
Part of the solution consists of a Virtual Power Plant (VPP) in the cloud to simulate and manage all the actors in the network. This makes it possible for supply and demand of different types of energy to be matched in real time, and for price to be negotiated within fractions of a second. It makes it possible for green energy sourcing to truly become part of the equation.
To meet these challenges while going green, VPPs need data paths with fast actuation of energy production, which means that the network needs to monitor data in real time.
What are the right questions?
We need distributed computing with AI software that can learn to predict and anticipate fluctuations in supply and demand in real time. We need edge computing in order to process and reduce data before it is sent on through the network. Otherwise, the required bandwidth will be physically and financially prohibitive. And even then we will need 5G connectivity for high availability and speed.
Otherwise we’re doomed.
(Or that’s what Henri tells me)
So, the questions we have, really, are: How can we best enable VPP system providers, VPP operators, and VPP-connected aggregators to put the necessary distributed 5G edge-to-cloud AI in place? What do they need to figure out in order to make the right investments? What information do they need? What questions do they have?