S2E02

Preventing Europe's Next Blackout: Flexibility, AI & the Business of the Grid with Philip Hahn |S2E2

with Philip Hahn· Cyber Grid· 54m

TL;DR

Philip Hahn discusses grid flexibility, virtual power plants, and AI's role in stabilizing Europe's evolving energy system.

Synopsis

The episode features Philip Hahn of Cyber Grid, an expert in flexibility and virtual power plants (VPPs). He details his journey from EVN, where he fostered flexibility, to leading Cyber Grid, emphasizing the critical role of VPPs and automated trading in maintaining grid stability amidst the energy transition. The discussion covers the evolution of energy markets, the definition and application of flexibility as a service, and the challenges and opportunities in integrating diverse assets like hydro and batteries. Hahn also addresses the importance of cross-border balancing markets (Picasso, Mari) and cybersecurity in a digitalized grid. He highlights the rapid energy transition in Central and Eastern Europe and the need for clear regulatory frameworks, particularly Austria's new electricity law, to support investment in new, system-friendly assets. The conversation concludes with insights on AI's future role in grid operation and advice for new energy professionals.

Key metrics

by the numbers · 7

2000-2001
EU unbundling start
11 years
Market change duration
96
Daily energy auctions
15,000 euros/MWh
Max balancing energy price
30 seconds
FCR activation time
70%
Austrian hydro share
10-15 years
Electricity law update frequency

Topics

8 tags

Grid FlexibilityVirtual Power PlantsAncillary ServicesMarket AutomationCybersecurityEnergy PolicyBattery StorageCross-border Markets

Stats

Duration: 53m
Words: 8.1k
Questions: 56

Timeline

10 chapters

Guest Introduction and Background
Philip Hahn from Cyber Grid is introduced as an expert in flexibility and virtual power plants, discussing his electrical engineering background and early career at EVN.
Early Flexibility Projects at EVN
Hahn describes his initial role at EVN, working on a flexibility management system project and gaining knowledge through both successes and failures.
EVN's Strategic VPP Adoption
Hahn explains EVN's decision to actively engage in flexibility markets, leading to the adoption of Cyber Grid's VPP solution for automated and scalable asset management.
Market Automation and AI's Role
The discussion covers the significant shift towards algorithmic trading and autonomous operation in energy markets, emphasizing the importance of human oversight for critical issues.
Defining Flexibility as a Service
Flexibility is defined as controllable generation or consumption assets, and Cyber Grid's 'flexibility as a service' helps asset owners monetize this capability on ancillary service markets.
Optimizing Assets for Ancillary Services
Hahn details how different asset types, like biogas plants, are optimized for various ancillary service markets (FCR, AFRR, MFRR) based on their activation speed and capabilities.
VPPs, Grid Stability, and Cybersecurity
Virtual Power Plants are presented as a 'last wall of defense' against blackouts, with increasing focus on cybersecurity in the context of a digitalized and interconnected grid.
Cross-Border Balancing Markets
Explanation of Picasso (aFRR) and Mari (mFRR) as cross-border balancing markets, using a firefighting analogy to illustrate the interplay of regional and international flexibility.
Cyber-Knock Platform and Market Rules
Details on Cyber-Knock, Cyber Grid's platform for automated bidding in capacity and energy markets, designed for scalability and efficient asset integration under harmonized European rules.
Regulatory Challenges and New Electricity Law
Discussion on Austria's new electricity law, highlighting the need for clear definitions of 'system-friendly' assets to provide legal certainty and encourage investment in new grid technologies.

Key insights

5 takeaways

01
Grid complexity exceeds human systems
The energy grid is described as the most complex system humans have ever created, surpassing even space travel or the internet, making its operation inherently challenging.
02
Flexibility market needs liquidity
Extreme price spikes in ancillary services (up to €15, 000/MWh) indicate a lack of market liquidity, highlighting the urgent need for more controllable flexibility to stabilize the grid.
03
Regulation lags technology adoption
The energy sector's rapid technological advancements, especially in flexibility and digitalization, are outpacing regulatory frameworks, causing investment uncertainty and hindering faster grid evolution.
04
Human oversight critical for AI
Despite increasing automation, human responsibility and oversight remain crucial in grid operations, especially for critical decisions during extreme scenarios like natural disasters, where AI may lack the full contextual picture.
05
CEE accelerates energy transition
Central and Eastern European countries are making rapid progress in their energy transition, compressing decades of market liberalization and digitalization into significantly shorter timeframes, often leveraging existing assets and new battery technologies.

Pull quotes

3 quotes

Today I'm sitting here talking more or less about the same but before I was on the receiver side so Yeah. that was the time when when I was allowed to gain a lot of knowledge.
Philip Hahn
I think our grandparents provided all of this and they thought long-term in decades and this is still our benefit today. But, now we see a huge fast energy transition.
Philip Hahn
AI strength is to do this this autonomous processes and to autonomously fast secure work.
Philip Hahn

Transcript1296 cuesClick a timestamp to jump

Welcome to a new episode here in the
energy bridge. Today we have the
pleasure to have Philip Han from Cyber
Grid. Expert in flexibility and virtual
power plants. We're going to explore
your interesting profile because you
were part of the utility when they
acquire
virtual power plant and now you are kind
of head of it. So
interesting
chief to be part of the both part of the
table kind of in the same solution. So
it's amazing. Thank you for being
here today. Yes, thank you for having
me. It's a pleasure for me. Yeah, thank
you very much Philip. you
were part of our last forum as well. You
you gave a very interesting presentation
and since then
we have been chasing you but finally we
made it. So very welcome. Okay, thank
you.
I hope I made it not too hard but I'm
not so active on LinkedIn.
So thank you that you had the patience.
I'm sure we go for it. Yeah, Philip
please
walk us through your strong technical
background and also your education
journey and your work journey getting to
the head of flexibility at Cyber Grid.
Like how was the journey and what you
did? Yeah, I never planned it. Business
development but
I was studying electrical engineering on
the technical university. Then in my
bachelor's I need to decide should I
make my master's more into direction
automation or energy.
Back then I chose first automation but
with an internship at EVN everything
with EVN started back then and
that
woke up my interest in the energy
sector because I was working in it.
Very quickly I had some responsibilities
in projects and it really was for me
fascinating. Before I was super
interested in it and then
I was paid for my interest and I really
enjoyed it and That's it.
more and more on university side also
picked some classes in that direction.
very technical side first and then
all the economy side of energy economy
came then I would say naturally and that
was also for me super interested because
before it was just how the physics
behind the working and all the
electric magnetic field and so on and
the generation is working and
then immediately
euros per megawatt hour and the market
and also the all the
the regulations behind it to create all
of this that someone is willing to do
and has the incentives. All of that came
then
naturally on the side and that was
actually my my path from studies to
work. And what was your exact role
at EVN at first? At first I
started with it was planned a one month
internship.
>>. One day before I started they asked
me if I can stay two months because they
need a little bit support in a project.
>>. And actually it turned out that
this project took then a little bit
longer
and still I'm more or less do the same
so I started for actually a flexibility
management system project. That was my
my first day was I was sitting on a
table with a huge project team and
we were talking about how we can use
which flexibility on different markets
and so on. Today I'm sitting here
talking more or less about the same but
before I was on the receiver side so
Yeah. that was the time when when I
was allowed to gain a lot of knowledge.
Actually most of the project also
failed so by this by these mistakes and
by these failing I think I learned even
most and that was then later we will
talk I think all of the further step
and where then cyber grid Yeah. came
into place and I was allowed them to
lead the project on the EVN side. Yeah.
So,
before going to cyber grid, you were in
EVN, which is a utility, and utilities
are known for being
a bit of conservative and focus on
safety and reliance.
And you were fostering flexibility from
inside. So,
what could you say there is the biggest
misunderstanding about flexibility? The
working environment of the old-fashioned
utility since the separation this
unbundling,
I think the a huge transition already
happened. And this transition we saw
and when I came to have EVN, it was
it was done. So, a liberal liberal
market. So, to split distribution from
generation
and transmission.
>> Exactly. Yeah, I think when it happened
2000 in the 2000s around 2000 2001
something like this. It started. And
then 2015 I came to EVN as a young
intern. So, all of this happened
already. And so, I in that
department in that team, it was super
innovative, super fast, a lot of
interesting new topics. And before
you were probably and the colleagues
before were thinking maybe in decades
and I think that was that was good and
reasonable and that's the reason why
we have a very
good grid. We have a lot of hydropower
plants in Austria and so, that's
the work of the grand and grand
grandfathers. So, my grandfather was
this the shaking the concrete that it's
strong. Really? Yeah, yeah, and he was
for days not seeing sunlight and
making all of these Danube hydropower
plants.
>> so you do grow up like with
That was a long time before.
But, your family is related with energy
sector. actually, he
>> He was good in shaking the
concrete. He had no idea what he what it
was good for. In the end,
>> Who knew? but, I remember once
together my my brother and I, we took
our grandparents and then we checked
these power plants and then he told the
old stories when they drive from from
the from the region they originally
came. That's called Waldviertel wood
quarter and they drove down
then for spending a week. So, my
uncle was working working there in this
this company back then and
they built I think one after the other
like 10 of these hydro-power plants.
Yeah, in the whole Danube, I think you
have
plenty of them. At least 10, I
remember. Maybe more. Yeah, and you
you have interesting
Now, I came a little bit off topic. No,
no. It's It's always nice to have those
those kind of anecdotes. We had a
cat. sorry. Now, I
I remembered what I wanted to say
before. So, I think
our grandparents provided all of this
and they thought long-term in decades
and this is still our benefit today.
But, now we see a huge fast energy
transition. I think it's also good
important and now
on the other way, I try to be part of it
and I think we all are and there
flexibility,
faster newer processes, new market, new
incentives and so on. All all is
happening at the same time.. So, so
I didn't came to EVN to bring my
knowledge and change everything and now
we are fast because I'm here.
They were already fast. They were
already smart and I'm I was lucky to be
part of that and also bring my
strengths in it, but I was mainly on the
receiving side, get all my knowledge
about how this is working. They're very
very good, fast, smart smart people
there. And when you just arrived in 2015
working for EVN evaluating VPP solution,
then
what was the motivation and what were
the other options?
And what did you see in the VPP market
back then and now 10 years 11 years fast
forward? Especially with the whole
integration of all the new renewables as
well. What changes do you see? Back then
we had this decision to make, okay,
this this previous project and the
solution was not really turning out that
way we wanted it to have. So two
options, we stop all of this and say,
okay, we market
our our assets and our generation
portfolio as we did always. So we don't
change practices as as long or this the
same way we always did. Or we kind of
try to actively, that would be the
passive way or to actively try to go
into the flexibility market on several
levels. So from the speaker utilities
but down to the household customer. And
then our decision was
I think brave and I'm happy that we
took the decision and then also it was a
very good match with Cybergrid back
then. And we made a market analysis, we
tried to find out already had good
experience what is what is not working,
what is fully automated software was
super important for us because we knew
that's that's relevant when you have
instead of
one day ahead trade a day
and then you have 96 energy auctions.
And we knew 96 time a day nobody's
willing to press every quarter hour
button. So that was clear, fully
automation was important, scalability
was important, so we don't want to just
have our own assets
serviced, but also external assets. So,
I think that was the active decision and
I'm I'm happy we
That's That's the only right decision
decision to be active on the market. You
see a chance and you take it and
>> Yeah, and how do you see the market
today?
Comparing with the previous when you
started. Yeah, when I started,
I also had the luck and the chance to
being a intraday optimizer, not
full-time, but we have a trade
trading desk and I was from time to
time jumping into that
into that role
to be the trader in the night on the
weekend or so on. So, all of these
trainings, all of the system, all of the
markets I
actively participated in these last 11
years, a lot changed. So, in the
beginning it was not just the room and
and the infrastructure changed, but
also
especially the degree of automatization
completely changed. So, algorithmic
trading
more and more is automatized. Overnight,
back then we need to observe it or and
and be on the desk. Now,
mostly can be fully automatized and
this running autonomously.
And just if there is then a issue
and this is the most important
thing to have limits, guidelines, and
and good failure and notification system
that
the human strength is to have the
responsibility. And
AI strength is to do this this
autonomous processes and to autonomously
fast secure work. And also, Philip,
before we dive in
deeper,
I want you to also tell us define
flexibility and what exactly flexibility
as a service means. Yeah, for us we are
always talking about flexibility and
I think most people are wondering what
is this flexibility, yeah. And we
see especially when we talk to customers
or industrial customers, they talk
with their language to us and they say
we need this process heat there and
that's why on the side there is this
electricity generation and so on and we
talk about the flexibility and then we
need or we try also to be the translator
to exchange in this between these two
worlds and flexibility I see
generation or consumption asset.
have is controllable and have the
possibility to increase
the generation or the consumption.
and have this flexibility within limits
and it's planable controllable
then then it's flexibility which can be
used then for
different services. We use it mainly for
stabilizing the or to help
the Austrian TSO to stabilize the
frequency. but it's also for
curtailments for instance or if there is
a if the grid is overloaded then you
this curtailment reserve stabilizing
reserve it's called. If too much
electricity is flowing then you need to
reduce the electricity so there's two
different things. One is to save the
frequency that the generation
consumption is in balance and the other
one is that the grid is not
overheated. And you managing
flexibility as a service so who is the
consumer and who is the provider? In our
flexibility as a service team we
have a big stream is our main customers
are someone who has flexibility and want
to have a revenue out of this
flexibility.
>>. So, whenever
someone with a small power plant or a
big power plant wanted to go on the on
this ancillary service markets, then we
are the perfect service provider for
that.
we call it customer onboarding. So,
the customer comes to us and we guide
him through all the process from
the first sales contact to then
contracting, pre-qualification, then the
tele meter control connection to the
asset, and then we also make a
signal test, activation test, and then
it's possible to earn money with it and
have it have it on the market. That's
that's just one stream and we have also
some some very good running side streams
like consulting for instance. So, we are
also experts on simulating, calculating
revenues for battery energy storage
system. So, for best systems. Very
demanded now. In very demanded, yeah.
Interestingly,
they are very specific usually. So,
most of the people come and say, "Hey,
just tell us what we can earn." We say,
"Okay, you want to know it exactly or
you want to know an average?" And this
average is standalone somewhere
then you can say, "Oh, it's earning that
much." But usually you have grid
constraints. You have a co-location
maybe with a renewable energy generation
so on
and so on and so on. And in the end
with all of that constraints,
they still want to know, "Okay, if I now
invest in that, how much money I can
make that then?" And I think we are
expert also in that. So, since 2 years
we are providing that service and it's
it's running excellent. And
being part of within a utility, how much
of that is an enabler and how much of
that restrict you? on the utility
side
it's it's just
enabling. The restrictions come more
from regulation side or when the
grid has not more capacity. But actually
it's also an interesting conversation.
Maybe we'll talk later then about the
new
electricity law the electricity law
is that what is now supporting the
grid? What is system supporting these
terms and what is then kind of
need to pay this this grid fees or where
reduced grid fees and so on. If you
could walk us through
how do you
manage to have a dump asset like a
biogas power plant for example to a high
value market asset?
How do you do it?
>> So
we never call a asset dump.
I know that that was called cool in the
first place. But I understand what you
mean. I think every every technology,
every asset type has strengths and
weaknesses. We can just use what what
the asset is capable of. So there are
restrictions in I don't know ramping
time. Is it fast enough maybe for AFRR
then
we try to bring with good concepts
and algorithm the asset to the higher
market. I already mentioned some some
terms. So AFRR is this secondary control
or MF RR is the tertiary control. A
little bit slower, a little bit less
activations. And those are ancillary
services at the end. Exactly. And you
can provide it because you integrate
more technology on it. Okay. Now I try
to explain it briefly what is ancillary
services. There are these three markets
primary, secondary, tertiary.. In
English, it's called FCR for frequency
curtailment reserve. Yeah. AFR and
MFR. AFR is standing for automated
frequency restoration reserve, and
MFR manual.
And they have different ramping times or
different time spans when they need
to be activated. So, first is primary,
that's immediately frequency
measurement. So, it's measuring the
frequency, and when I have There is a
deviation, then it's it's activated
directly on the asset. So, that's a
little bit different to AFR. AFR is also
kind of measuring the or APG is
measuring the frequency within the
control area of Austria and wherever
because the frequency is a global.
APG is checking the frequency
deviation within the control area of
Austria. Whenever activation in
Austria is then necessary, they activate
an AFR. And a little bit time delayed,
so it's 30 seconds, 5 minutes, 12.5
minutes for the activations.
And that means how how smart is
your asset to name it the other way,
or how fast is the asset you can play
on different markets. But So, is that
time thing?
It's mainly mainly a time thing. And
what are the ranges?
Milliseconds, seconds?
>> That is These are the 30 seconds for FCR
from
till full activation time, this 5
minutes. We can also say 300 seconds or
this 12.5
minutes.
Yeah, and just
getting you back from a bit of
just we to also understand virtual power
plants, and if you think that VPP
it's also
kind of truly a firewall against the
blackouts that we see and in terms of
grid stability because flexibility as a
service is something that
it also challenges stability and grid
stability is
the talk of the town what happened in
Poland and also in Germany and last
year in Spain. So, how do you see and
also do you see VPP being part of the a
firewall for all the stabilization that
we
I would maybe not call it firewall but
maybe
last wall of defense
to hold the frequency and the frequency
is a term to see that the if the
frequency drops too strong or increases
too fast but mainly drops too fast then
then all of this blackout dangers
happening and usually all this
if you read then in the news the almost
a blackout and so on if you go then
through the
days weeks later then a chronology is
published and what exactly happened
and most of the time it's a chain on in
in failures mainly then
a human failure somewhere happened some
some operator maybe operated one
important transformator wrong in the
wrong direction and so on and these are
then the most relevant of failures
of this long failure chain but usually
it's so complex the grid and the
operation of the grid that once I heard
it's the most complex system humans
created right and humans were on the
moon and we have the internet and
and still the energy system is the most
complex system of all of them and I
think there's so many
or already good implemented
and secure borders that nothing is
happening and actually in Europe
we have very very less of this energy
outages, right? so it's it's very
well
and strong and resiliently built
their whole energy system.
but still with a mix and chain of
failures
whenever there is a chance of failure
and
in thousand code lines there are four
four
code lines for sure wrong.
so more and more of this complexity can
also lead then to
failures and if there is the right chain
of failures then of course this can
always happen. And with all of these
virtual power plants connected and
helping the grid to be the last line of
defense, how are you addressing the
potential cyber risks? Yes, I think that
becomes also more relevant. Back then it
was hosted in some server center at the
utility and now more and more is
outsourced somewhere in the cloud in a
data center. It's leading in two
different directions. On the one hand
it's good that it's when it's in the
cloud you cannot directly attack a cloud
because usually it's part here, part
there and it's back up in each
other. On the other hand it's a lot more
digitalized. So whenever a hacker is
good then he cannot hack just one
utility but if he's really good then he
can
hack the whole system in worst case.
But it's always
like increasing
the hackers become better and the
defense system becoming better all the
time and I think
it also helps that it's super
diverse, that it's not just one system
for a centralized for everything but
there are different VPPs running with
very intelligent IT sec people who who
takes care and try to defend it all of
this encryption, VPNs. There are so many
mechanism to protect it to outside, to
have a gear redundant, and so on and so
on. So,
in the end I think also hackers
have a harder and harder job to Yeah.
Actually, we're exploring the
organization of hackathons, which is a
IT concept, but to bring it into energy.
So, we are introducing more and more the
concept of energy security.
And it could be cybersecurity, like
these risks, or also infrastructure
security. So,
we can explore it later, but now I
wanted to ask you for we have heard
that in Europe is being used Picasso and
Mari. So, if you could explain what they
they mean and how
how far the flexibility can goes in like
one asset here
in Austria can help the in other
countries. You used to know how
what do they mean and what how they
work. Picasso is for aFRR and Mari, the
M I remember it's standing for yeah,
mFRR tertiary.
And it's cross-border balancing markets.
So, that means that you can trade
your flexibility or your flexibility is
used not in your own control area only,
but it's also in can be also used
then for others. Very important,
there are borders and there
grid constraints on the borders. So,
just as much as the grid is able then to
provide, for instance, in if an Austrian
asset one of our asset is jumping in
for a for Portugal
deviation in the in the frequency,
then of course, there need to be
the capacity of the grid over the
borders free that we can deliver it. And
so there is still a core value of
flexibility with within the own country.
Well, for me it helps to explain it
usually to compare the these services,
these ancillary services with
firefighting. I always compare this
firefighting example. So
that means in that term that within your
region, within Austria, we have
firefighters that can drive to Portugal
to
fight the fire. But at least a certain
amount of firefighter need to stay in
Austria
to make sure
they can also come then
firefighters from Czech Republic to help
in Austria.
But still also
the roads need to be free. It doesn't
if the road doesn't provide the fire
or cannot bring the firefighters then to
to Portugal then they are useless,
right? We also need to take take care of
that. But that is the idea behind. And
why I compare it with firefighters I
before wanted to explain a little bit
what is this FCR, EFR, MFR. They are in
different markets. So one one important
difference is the activation speed.
One is also the likelihood of
activation. So the activation
probability is different in this in this
market. And
for instance FCR is in both
directions is symmetric. EFR and MFR
they are divided into positive negative.
And MFR and EFR are divided into
this
capacity
market and energy market. Power and
energy you can also say it like this.
And I like to compare it with
firefighters because here it's clear for
that service even if there is no fire
by waiting you get paid. It's a good
analogy. is capacity. And when there is
fire and you drive with your firefighter
car there and
They drop water. So, that's the
>> And then then there is a price for the
water you
you provide. It's a good analogy. Good
Yeah. And
just going deep into this
firefighting machine that you have and
you call it Cyber-Knock.
Tell us about Cyber-Knock a bit as a as
a
the first as a platform.
And also utility of it going
forward compared to
an operator.
What will be the difference because
how does the platform itself manage the
wallet volatility of the market and the
negative price or sequences like
that? Now, I jump again a little bit
back into time. Back then I was project
manager to implement the Cyber-Knock at
EVN, right? That's the new software.
We're going to use it. And
in that time also the Mari or first
the Picasso go-live happened and then
the Mari go-live.. And for us that
was
one of our main decisions was we now
need a autonomous system
which allows our assets and our
firefighter cars, to come back to that,
to participate active on the two
markets..
>> Capacity market is
this day-ahead auction market.
Austrian TSO make sure every day that on
the next day there are enough
firefighters..
So, for that we need a fully automated
system, but even more for the for the
energy market because the energy market
also gave them the chance, if you're not
accepted with your bids on the capacity
market, you still have the chance to go
on the energy market and without getting
getting paid for capacity you can get
paid for energy and that's happening
every quarter hour so 96 times per day.
We kind of implemented
all of this
because of money rules
back then when it went live and that
was
one of the biggest strengths of back
or is still one of our biggest strengths
but that was kind of very very new back
then because
we were also I think one of the first or
even the first who were able to be
active then on the because and the
money market.
Another very important thing for us was
before we had the pain that it was very
difficult when a new asset needed to
be connected and it was a very pain.
Every asset we always wanted to
standardize it but every asset was
somehow specific.
And within a very stiff and
old-fashioned software it was almost
impossible to customer friendly. We
always need
also the software provider to also
parameterize and it was
very expensive, time-consuming, and a
lot pain to add one external asset. And
for us it was super important doesn't
matter external or internal whenever
there's a new asset we want to be fast,
we want to be we want to do it by our
own, we want to be scalable that we have
the potential to bring a lot of
flexibility into our VPP.
And I think that was one of the biggest
strengths but of course that that
happened a lot a lot development that
was our luck or our profit that EVN back
then when we when we kind of
once we called it we married a
marriage EVN and CyberGrid that was one
of our big strengths to develop then
something together.
To develop something for a European
market and the Picasso rules are
very similar. Doesn't matter if it's
Germany, Austria, or Portugal,
Croatia, Norway, it's very similar then.
And that was if you have one system for
for Picasso, then you can use it most
everywhere. Okay, so Picasso Mari gives
like the
framework where your algorithm can play
kind of to make bids into the market.
Right? Yes, so Picasso and Mari are
these cross-border markets and they have
certain rules. For instance, one of the
harmonized rule is capacity bid is 4
hours long. And then our algorithm, of
course, need to
forecast,
calculate, and all of this
and send automated bids then to the
trading platform and so on for this
market rules. Okay, so the question is
if is an algorithm and now we are using
more AI, is everything automatized? What
happen with a bid it's 3, 000 euros per
megawatt hour? Do you still have this
panic bottom? Where is the human
control in the loop?
Yeah,
ancillary services and balancing
energy is even more extreme.
So,
we have prices up to 15, 000 euros
So, positive, negative also also that
happened, but
for me it shows that more flexibility is
needed. That the market is not
completely liquid yet.. it's it's
really needed and sometimes we need to
activate even very very expensive
flexibility
to be stabilized and it's a lot still a
lot cheaper than a blackout..
Yeah. In the end. And so,
for sure, like on this side,
we and our algorithm need to take care
that we are not
how is this called? I think in algo
trading is this
thick finger or so, that you
place a bid, you mean maybe minus 15,
and then it's minus 15, 000, or you
compare you
you want you want to type in megawatt,
and then it's kilowatt or whatever. So,
this this thick but this you need to
take care, or
the system need to provide you then a
alarm if you really want to
place this bid if you want to place it
manually.
And this parameterization, this
strategy, this also this backup
mechanisms and so on, they need to be
trained, strengthened, tested all the
time that this is not happen happening.
In the end, there need always be a human
in responsibility.
So, it's maybe interesting similar
thought is in autonomously driving, it's
also the question who is responsible
when a person gets killed, and
who decides should be a kid killed or
eight old people walking about
on the
on the street and so on. And
and I think in our algorithms, we are
not there yet to have this
fully AI artificial intelligence
yet, but very strong trained within
borders
system to be also built not for the
perfect day, but for a day where there
are some data missing, and
where the previous system has a
failure, and the
interfaces is changing, and still
you want to
participate on the market, and
it's it's quite an important
service. Like that's why I like also to
compare it with firefighting. And in the
dystopian future,
could you imagine, electrical system
operated fully automated with AI,
for example? It I'm not sure if if I'm
more afraid or excited about that.
>> Yeah.
But I think,
I'm more on the con- conservative side
on that. I think the final decision
should should be made by by human and I
think we still have some advantages
against
above AI. And I think we have a
still overall picture and we can
take take more parameters into
account. For instance, there was the
flooding lower in lower Austria. Yeah, I
was stuck, so I know it very vividly.
Okay. And, in these times, a
lot a lot of good human, decisions
were made that to prevent even a lot
more damage and even,
risk for someone losing their
life and so on. I'm not sure if in that
extreme scenarios, AI is able to take
the right decision and to always provide
the full picture and all of the
information. I think I don't know., I
think in some ways, it could also be
the other way around. In lower Austria
with EVN, we were a little bit closer
and saw all all what happened and
all was all what was not happening
because
some very good decision were made up
front.
but in that scenario, I'm not
sure. I would be still a little bit
scared, when AI is taking all of this
decision. I don't know. Yeah. Would you
like someone at AI AI doctors operating
you already?
Yeah, that's maybe maybe with support,
right? But there should be still a
person
standing next to it and observe it and
and have the responsibility in the
end. Yeah. Also talking about the
traditional assets now. Yeah,
since
biogas and hydro they also flexibility
options, right? So, do you think
hydro in Austria there's a lot of
hydro storage and you think they're as
effective as going forward as Tesla mega
back
or how do you rate them as a flexibility
asset?,
what I like so much about hydro is I
think as Austrians you need to like
hydro. It's renewable, right? It's
already here.
>> And unlike nuclear. And it's maybe
seasonal storage and we don't
have nuclear and I think that's that's
good as as it is. 70% hydro in Austria?
I think the electrical energy is 70,
yeah, two two thirds. Yeah. Around. And
that's a lot. It's because we have the
the Alps and we don't have that huge
consumption in electricity.,
still, but for
8 9 million and not for 80. What I like
is about you have you can also have
seasonal storage.. And compared to a
battery
a battery with the losses is losing
energy anyway because it need to be
cooled when it's operated and round trip
efficiency is always less than 100% of
course. There are some losses.
Compared to a hydropower plants,
whenever it's raining, it's it's loading
your your storage, right? And it's built
for decades. That that's why I really
like hydropower plants. But
nevertheless, it's impressive how
how cheap batteries already are. It's
definitely part of the solution. They're
super fast. They're precise.
And it they're definitely a very
important enabler for our energy
transition. Both technologies have have
their strengths or to name also biogas.
whenever we can use
biogas generation to reduce the
generation and store the biogas then for
for later it's it's it's even the best.
Then you can
save energy. You can have it then later
and
then then a very simple flexibility
asset
has has a has a good impact to
the overall system. Yeah. And now moving
to Central and Eastern Europe
region
because Cybergrid was founded in
Slovenia. You still have
teams and projects there but you
also were telling us that you have
projects in other countries in
Central and Eastern Europe.
How do you think the challenge to
implement more
virtual power plants there it's a
more related to the grid outdated
infrastructure or more software
skills
like digital skills?
Yeah.
we as we as Cybergrid we have the
Cyber NOC. We operated at EVN. we
provided service.
But also we have a software as a service
stream. So we provide the software to
other utilities. We have it up and
running in Croatia, Bulgaria, North
Macedonia and now we go also on
the German market
very soon. Maybe when the podcast is
online, we already on the German market.
so, we go to more and more and
then a lot of other countries. And
my my impression I'm not directly
into that project, but my impression is
that we are a little bit ahead because
our our Mari go live and our Picasso go
live, it was
I think 2022, 2023, something like this.
For we already had collaborations
with
with German TSOs,
with Czech TSOs, and they were there
was already a I would call it a pilot of
of Mari up and running.. And our
liberal- liberalization of the market
happened longer time ago.. So, what
I think what Eastern Europe is now doing
is to make the same transition in a lot
less time.. I think the
what I see, they do a very good job.
I'm always impressed how smart the
people are who are leading the other
project and the implementing all of this
software solution. They are super
curious, they are super interested in
that, but all already bring so much
knowledge. They also have very very good
technical education and so on. So, I
think they are able to do it. And
I'm talking here
they have everything in the future. I
think they already implemented a lot,
but all of this cross-border is working
specially good if you have a lot of
borders where other market participants
are.. And I think that's a little
bit a bottleneck right now that for
instance when one country is the first
active member, then
they can cross-border trade, but
there is no country ready on the
other side of the border yet. But now
more and more countries are active
and we deliver also as things
software our cyber knock..
And that brings them now
more and more into into new markets in
cross border and I think they are a
little bit behind but they are
really running fast to come on the on
the same level. And I think in that
case digitalization is super important.
I think that's the first step to make
the
digitalization and then bring new assets
battery energy storage systems and so on
in a in a second step on the market or
even better would be in parallel if
you don't have to choose. If you had the
budget.
we heard in Bulgaria they're
just going
full throttle about batteries.
They're putting a lot of batteries. So
you think the
the digitalization is the low hanging
fruit and then going for the batteries.
Yeah or
to
to use use what you have already..
So when you have they also have a
hydropower plants we know because heart
of EVN group a utility in Bulgaria
and North Macedonia.
And all the all the assets they
already have or they also build new
assets and also they have a lot of PV
generation for instance and even a
lot more PV hours than was sun hours
than we have in Austria. So they have
other chances they should use it and
whatever they have they should already
bring them in into into a market and
make the market more liquid and when the
market is functioning and the
neighboring market is functioning and
the It's like a snowball. Then it I
think this is a snowball effect. And so
use what you have
and you need some digitalization to make
use of this flexibility and
best case at the same time build
new new
technologies and into the grid. Yeah,
and now going into
one of our thesis in the energy bridge
is the technology is going faster than
regulation and energy super regulated
sector.
And now we Austria has a new electricity
law.
So, if you could tell us briefly
what is it about and what would you add
to this law to enable more flexibility?
Yeah, I think every I don't know 10 15
years there's a new electricity law
coming as I think it's more supposed to
every 10 years or so when it feels
necessary. Maybe this also will be
shorter terms in future.
but I think all the all the energy
market was desperately waiting to
that it to be published. They needed to
plan. They need security.
they need legal certainty. Yeah, I'm
not expert on that, but we have still
some issue as long as that's not decided
and I still when now we recorded it's
not 100% decided.
and for us one of these terms is this
if an asset is system friendly, it has
some advantages. And what does system
friendly mean? Especially if you want to
build new assets. So,
when a hydropower plant is 80 years
old, then it's not waiting for the new
law. But especially if you want to build
tomorrow something new, you want to have
some investments into generation, into
also in our system to for decision make
decision making, we need clarity. And I
think
now part of this clarity we have,
but still not some certainty how it's
interpreted in some terms. For instance,
this
is this as is a battery system
friendly? Is it system friendly if
it's a co-location with a renewable
energy generation? And this need to
be decided better soon that all these
investments
keep on going and happening that we have
in this asset and this flexibility. So,
you would add more clarity in
definition. Yeah, I would
Two things, I think it helps if it's
clear up front.. If not, then it
need to be clear how it's interpreted or
how it's operated in reality. How a
control defines this is system-friendly,
that it can have a great fear reduction
and that's not system-friendly. It need
to be clear for all market participants.
Yeah, we had a
interview with
Wind Association.
And Florian told us that they prefer to
have clear rules even if they are not
completely aligned with them, but it's
preferable
to have rules. Clear.
That's I would agree on that and I think
You have maybe less or different
investments or whatever, but as long
it's not decided, nobody's investing.
Everybody's waiting what's going to
happen. When it is sure, let's wait. And
and I think that's
helping nobody. Yeah, Philip, looking at
the time
we
we it's very insightful, but using the
flexibility to get into our
last round.
The time flexibility. It's we call it
the quick fire round. So, basically
we ask you a question and you can just
tell us
quickly like what you prefer.,
because you have been an engineer
and you now also an executive
bit of management part.
So, rapid response.
What do you think the best asset for
frequency control? a 10 MW battery or 10
MW hydro turbine?
I know I don't know the capacity,
the storage, so if it's 10 MW hours or
thousands.
So,
I would take the hydro.
Very Austrian.
if you would have 1 billion euros, how
would you invest it to accelerate energy
transition or promote more flexibility?
I think I would separate it.
I think a grid still plays a huge role
to enable or make all of this happen.
And digitalization, that I think where
all of this flexibility management
system also comes to into place.
And
yeah, also some some
new missing technologies like batteries
I think
could be a game-changer, but with
digitalization also to go more
down into smaller flexibilities, maybe
even the household, e-mobility,
storage system, PV and so on households.
So, flexibility in all levels. In all
levels I think then it the billion is
gone.
In which month of the year the grid
is getting tested the most?
The summer months of August when
all the wind and the solar aid pumping
it up or in January when
it's a dark month, nothing is happening?
Yeah, I think
January is more difficult.
Yeah, because I think you always can
curtail easy, but when you have no
renewable generation then it can be
tough.
Picasso or Marie, which acronym gives
you more headaches? Headaches.
I had some headaches and I was not the
only one I think back then when we
implemented in our project.
I would say Picasso because the
Picasso go live was first. That was a
little bit harder in the beginning.
Yeah, and you already shared your
apprehension about
AI. Not just apprehension, but also like
good concern. But what do you think
about AI and energy? It's It's still
under utilized or
it's over hyped?
Yeah, I think right now it's under
utilized. We in CyberGrid and EVN I see
very active move movements into finding
new use cases and already
paint a very futuristic picture and
and like every idea is allowed and
and this is
impressive and none of us is knows in
which direction it goes. But I think
really in the daily processes we use
it a lot
too less in general and also in the
energy sector. In your role now if
you see the frequency dropping to 49.5,
what is the first thing you do? Maybe I
would call the old colleagues in the
trade room
to ask
What are the what's going on, but they
don't need my disturbance.
no, maybe I will try to see which
flexibility we have in the market and
and try to push more.
Which fire fighter, right? Yeah, that's
the
maybe the fire that activates the fire
fighter instinct, right? To press
and run direction to help the
frequency. Yeah, and also Philip
from your role in being part of
major utility here, you have like
the more clear picture of how the grid
is going to look like in let's say 7 8
years from now. How do you see in 2035
the great looking in Austria and also
all over Europe? I think a little bit
more hybrid than it is today, but I
think if you really want to make
investments into transformers and so on,
that's you need to do it today that you
have them in 10 years all what you need.
So I think we will still notice it
that that's our grid what we know now in
35 years it would it will look similar,
but it definitely needs an investments
it need to be smarter, more hybrid, more
interconnected. Well, we're going to see
this video 10 years after and see
how it goes. Yeah,
just to finalize which advice would you
give to new electrical engineers for
example who who are entering this sector
or new professionals in energy in
general? Yeah, that's more
on the social skill level I would say,
but stay hungry, stay foolish that was
Steve Jobs back then said, but I think
to bring in the your own energy, your
own motivation, your your interest and
and your strength and I think if if if
if you're young and you're active,
motivated
you will find your way even if you can
cannot imagine where all of this then
leads to and I think that's very
important to
concentrate mainly on yourself and your
active
motivation what you can bring in and
and not
come into
the environment you are and adapt
to the environment. So bring in yourself
and your strengths and then you
will find your own way.
Amazing. on that note, thank you
very much Philip.
Finally, it was
you came, but it was
it was worth all the wait that we had
to do. Yeah, we knew it.
Yes, thank you very much. I really had
fun. Yeah, amazing. So, thank you for
coming again, Philip, and thanks to the
community for watching the episode, and
stay tuned for more episodes, and keep
tuned for the forum second and third of
June. So, see you. Ciao, ciao.

Preventing Europe's Next Blackout: Flexibility, AI & the Business of the Grid with Philip Hahn |S2E2

Grid complexity exceeds human systems

Flexibility market needs liquidity

Regulation lags technology adoption

Human oversight critical for AI

CEE accelerates energy transition