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S1E14

Scaling Flexibility: VPPs, Storage & Business of the Decentralized Grid | Marko Svetina | TEB S1E14

with Marko Svetina· BM2 Solar· 83m

TL;DR

Marko Svetina discusses VPPs, battery storage, and market reforms needed to empower decentralized renewables and enhance grid resilience.

Synopsis
Marko Svetina, a serial entrepreneur, shares his journey from founding Cyber Grid, a pioneering VPP software company, to his current venture, BM2 Solar. He highlights how early demand response systems offered rapid paybacks by optimizing industrial peak consumption. Cyber Grid's success demonstrated the potential of aggregating distributed assets for grid services, though large utilities often resist scaling such solutions due to conflicts with their traditional business models.BM2 Solar aims to empower independent power producers (IPPs) by integrating PV with battery storage, enabling participation in lucrative ancillary services and balancing markets traditionally dominated by large utilities. Svetina criticizes subsidies for distorting markets and emphasizes the need for regulatory reforms to create a level playing field, particularly regarding grid tariffs and market access rules across Europe. He advocates for digitalization and decentralization to build a more resilient and secure energy system.

Key metrics

by the numbers · 8
  • months
    Peak shaving payback
  • January 1st, 2012
    First commercial VPP project
  • €60
    Single home PV panel cost
  • below 10 cents/kWh
    PV+BESS LCOE
  • 8-10 cents/kWh
    Austrian grid tariffs
  • 5-50 MW
    Target PV plant size
  • 2-4 years
    Battery system payback
  • €60-70/kWh
    Current battery price

Topics

8 tags
Virtual Power PlantsDemand ResponseBattery StorageMarket DesignGrid FlexibilityEnergy PolicyStartup FundingEnergy Security
Stats
Duration
1h 23m
Words
13.0k
Questions
150

Timeline

10 chapters

  1. Early Career & US Experience

    Marko Svetina worked in the US for a Swiss company promoting industrial mixing equipment in the early 2000s.

  2. Transition to Energy Management

    Returned to Slovenia and joined a spin-off from the Joseph Stefan Technical Institute, focusing on energy management for large industrial consumers.

  3. Founding Cyber Grid in Vienna

    Marko and two colleagues founded Cyber Grid in Vienna after their previous company's owners resisted a full pivot to the energy sector.

  4. First Commercial VPP Project

    Cyber Grid's first major customer was Electrolublana, with a commercial project starting January 1st, 2012, marketing tertiary reserve.

  5. Toshiba Acquisition and Re-acquisition

    Toshiba acquired 76% of Cyber Grid in 2013, but then pulled out of Europe in 2014-2015, leading Marko and partners to re-acquire the company.

  6. Second Sale to EVN

    Cyber Grid was resold to EVN in 2022, with Marko continuing to advise until 2023.

  7. Launching BM2 Solar

    Marko started BM2 Solar to empower independent power producers (IPPs) by enabling them to offer comprehensive energy services with PV and battery storage.

  8. Ukraine Energy Security Project

    Through Fifth Vault, Marko is involved in a project in Ukraine to transform energy systems for three cities, focusing on security and resilience via decentralization.

  9. Permitting and Grid Tariff Barriers

    Discusses challenges like varying regional rules in Austria, double taxation for storage in Austria, and minimum capacity requirements (e.g., 100 MW in Spain) for market access.

  10. Challenges in Startup Investment

    Highlights a funding gap for energy startups beyond seed stage, where multi-million euro investments are needed to cover high burn rates for talent and infrastructure.

Key insights

6 takeaways
  • 01

    Utilities' VPP Adoption Lag

    Despite early VPP success, many large utilities struggle to scale demand response due to conflicts with their core generation-centric business model and slow market design adaptation.

  • 02

    Market Access Disparity for IPPs

    Independent power producers (IPPs) with only PV plants are largely restricted to day-ahead/intraday markets, missing out on lucrative balancing, ancillary, and redispatch services dominated by large utilities.

  • 03

    Battery Storage Transforms PV Economics

    The dramatic drop in battery storage prices makes PV-plus-storage highly competitive, enabling IPPs to offer comprehensive energy services beyond simple energy sales, including grid support.

  • 04

    Subsidies Distort Market Signals

    While initially useful, continued subsidies for mature technologies like solar PV lead to overproduction, negative prices, and disincentivize market-based optimization and flexibility.

  • 05

    Decentralization for Energy Security

    Distributed energy resources, especially renewables combined with storage, are crucial for enhancing energy security and resilience against geopolitical vulnerabilities and physical attacks on centralized infrastructure.

  • 06

    Startup Funding Gap in Energy

    While seed funding for energy startups exists, a significant gap appears for more substantial investments (multi-million euros) needed to scale operations, develop infrastructure, and attract top talent.

Pull quotes

4 quotes
  • But in principle I think the the demand responses or let's say virtual power plant kind of competes with the core business of the utilities
    Marko Svetina
  • Subsidies basically I would say distort the market itself right so in the beginning they are good right to to start the business like also the solar right but right now the solar does not need subsidies right?
    Marko Svetina
  • There are probably two parts to it, right? One is digitalization of the energy which and this is happening, right? This is what we also do. This is what a lot of the thing where the things are going. This means that we can really adapt quickly to to any changes on the market, right?
    Marko Svetina
  • Energy markets or energy systems are becoming much more much cooler right to a certain extent. I don't want to say I mean especially because of of
    Marko Svetina