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S2E10

Predicting Power: BESS, Market Models & Grid Flexibility. Thomas Rosenzopf, Nikolaj Candellari S2E10

with Thomas Rosenzopf, Nikolaj Candellari· enervis Austria, CyberGrid· 61m

TL;DR

Energy market economics in Europe are structurally shifting as merchant solar reaches saturation and drives high volumes of negative prices. Battery energy storage systems (BESS) and virtual power plants (VPPs) are mitigating these imbalances across day-ahead, intraday, and cross-border balancing markets (MARI, PICASSO), but asset bankability increasingly depends on revenue stacking and regulatory de-risking.

Synopsis
Thomas Rosenzopf of enervis Austria and Nikolaj Candellari of CyberGrid analyze the interplay between long-term macro-fundamental power modeling and operational real-time flexibility. The discussion explores why legacy feed-in tariffs created severe negative price signals across Central Europe, how cannibalization has virtually halted unsubsidized merchant PV buildout, and why batteries are increasingly transitioning from primary reserves (FCR) into secondary reserves (aFRR) and wholesale arbitrage. They also examine bankability challenges for storage, regional grid dynamics across Austria, Germany, and the Balkans, and why digital interoperability and demand response are critical to avoiding excessive physical grid buildouts.

Key metrics

by the numbers · 6
  • 2 seconds
    telemetry frequency for remote asset operation via MQTT
  • 1% to 5%
    average variance between fundamental model outputs and observed market prices
  • -500 €/MWh
    extreme negative price observed in a single hour two years prior
  • 400
    negative price hours observed in Austria in the prior year
  • 600
    negative price hours observed in Germany in the prior year
  • 10 GWh
    pipeline capacity of battery storage projects in Bulgaria

Topics

7 tags
bessflexibilitypower market modelingnegative pricesancillary servicesvirtual power plantsgrid integration
Stats
Duration
1h 00m
Words
11.1k
Questions
77
Speakers
4

Rahul Mishra · Thomas Rosenzopf · Nikolaj Candellari · Daniel Schaub

Timeline

11 chapters

  1. Guest introductions and company overviews

    Nikolaj Candellari outlines CyberGrid's flexibility aggregation work, and Thomas Rosenzopf introduces enervis's energy economic modeling practice.

  2. Real-time communication and IoT protocols

    Nikolaj Candellari explains how internet-based protocols like MQTT enable two-second telemetry and remote asset control.

  3. Long-term power market modeling

    Thomas Rosenzopf describes the mechanics of fundamental 15-minute dispatch modeling through 2060 for utilities and debt financiers.

  4. Bankability, risk, and downside quantiles

    The discussion covers what debt providers demand to see in revenue sensitivities and Gaussian risk distributions for renewable financing.

  5. Root causes and trajectory of negative pricing

    Thomas Rosenzopf explains how legacy subsidy regimes incentivized negative bidding and predicts when market saturation will peak.

  6. Solar cannibalization and co-located storage

    The guests discuss why standalone merchant PV is stalling in saturated grids and how co-locating batteries protects asset capture rates.

  7. European balancing platforms and grid constraints

    Nikolaj Candellari details cross-border balancing integration via MARI and PICASSO alongside the physical timing bottlenecks facing grid operators.

  8. Long-duration scarcity and Dunkelflaute solutions

    Thomas Rosenzopf evaluates hydrogen, biomethane, and demand response for addressing the final 5% of decarbonization in Austria.

  9. Storage revenue stacking and market evolution

    The speakers assess the migration of BESS revenues from saturated FCR markets into secondary reserves, intraday volatility, and emerging grid services.

  10. Regional deployment dynamics in Southeastern Europe

    The discussion examines Bulgaria's massive storage pipeline and the urgency of flexible capacity as coal fleets face phase-out in the Balkans.

  11. Capital allocation and ecosystem standardization

    Both guests share how they would allocate a €1 billion investment across physical assets, data infrastructure, and harmonized digital standards.

Key insights

4 takeaways
  • 01

    Negative power prices stem primarily from regulatory design rather than physical grid flaws

    Negative clearing prices are driven largely by subsidized, fixed feed-in rooftop and utility-scale PV assets that have zero financial incentive to curtail during oversupply. As regulatory frameworks shift away from fixed tariffs toward market-oriented tenders in markets like Germany and Austria, negative bidding frequency is expected to peak around the late 2020s and early 2030s before tapering off.

  • 02

    Merchant-only utility-scale solar is effectively dead in highly penetrated markets

    Rapid solar buildout without matching flexible load has cut PV capture values to roughly half of baseload wholesale power prices in Germany and Spain. As a consequence, unsubsidized merchant PV and corporate PPA developments have largely halted, forcing developers to rely on state auctions or co-located BESS to maintain asset viability.

  • 03

    Battery saturation is driving revenue stacking across secondary reserves and wholesale markets

    Primary reserve (FCR) markets are shallow and have experienced steep price drops as battery fleets have scaled up. To stay profitable, new storage assets must optimize across deeper markets by establishing baseline revenue on day-ahead auctions, capturing intraday volatility spreads, and participating in secondary reserves (aFRR).

  • 04

    Digital standardization can substitute for expensive physical transmission reinforcement

    Excessive capital expenditure on physical transmission and distribution assets risks driving grid fees to politically unacceptable levels. Leveraging open data frameworks, common communication standards (like MQTT), and market signals for automated demand response can significantly lower total system costs while integrating high renewable shares.

Pull quotes

5 quotes
  • So the this kind of negative prices is basically a incentive from regulatory framework, which is uneffective, I would say, to be honest.
    Thomas Rosenzopf
  • What we see basically is like that the value of a PV production is half the price of the average power price in the market, which is quite It's just half of it.
    Thomas Rosenzopf
  • So, the more we we're the smarter we are in in using data and and and and and and also demand-side management, batteries and whatever and curtailment of PV, the less infrastructure we need.
    Thomas Rosenzopf
  • Let's say, primary reserve is dominated by batteries, and the prices have dropped. And now the new batteries being built are are then, you know, because there's so little margin there, they're going into secondary, right?
    Nikolaj Candellari
  • Keep it practical. I think, you know, we like to here having a debates about, you know, transition, but at the end, transition happens on the ground with real real-life use cases with real assets, with real people, and the transition, you know, always needs to be practical.
    Nikolaj Candellari
Transcript188 cuesClick a timestamp to jump
  1. Rahul Mishra: Welcome to a new episode here in the Energy Bridge. Today, we're going to go into energy market. We have here two experts, Thomas in the modeling and long term, and Nikolaj, expert in real-time modeling in energy. So, thank you very much for coming. We are very interested in this topic, especially nowadays with flexibility, all the grid. Today, we're going to be in the electron side, right? So we have Managing a lot of challenges. So, yeah, happy to have you here.
  2. Thomas Rosenzopf: Great. It's a pleasure.
  3. Rahul Mishra: Thank you very much, guys, for joining. Especially, you're a two dual, different combo. Thomas, I know personally, as well, but thank you very much, Nikolaj, for joining and Thomas.
  4. Nikolaj Candellari: Sure.
  5. Rahul Mishra: Please go ahead, introduce yourself. Tell us about what you do.
  6. Nikolaj Candellari: Hey, Nikolaj. Um, well, uh, from CyberGrid. Um, Slovenian, working still for an Austrian company. CyberGrid is focusing on flexibility. Uh, so managing it and then also trading with it on different markets. Austria is usually is our, let's say, core and then Germany, Bulgaria, uh, Croatia, and so on are the other markets we add. Yes, personally, I'm I'm from a mathematical/statistical background. Yes, so it's interesting from from my perspective to look into energy world and also the end and the economics as we'll touch today.
  7. Daniel Schaub: Amazing. And you, Thomas?
  8. Thomas Rosenzopf: Yeah, um my name is Thomas, Thomas Rosenzopf. I'm working at enervis, enervis Austria now. Uh we are an energy economic consultancy based in Berlin, but now I and and a colleague we opened also an Austrian branch uh with uh at the Climate Lab. And, yeah, my background is um en- uh energy technology and business economics. I studied at TU TU Graz and was uh tutor at the Institute of Business Economics uh and engineering. Uh and there, I was dealing a lot with modeling and uh words working also with the institute, but also my master thesis in that. Uh and so, I wanted after my studies, I wanted to bring together those energy-related topics, which I was really interested, climate, energy transition, and, as well, the modeling perspective. So, I ended up looking at jobs, and this was not that easy. And so, I 5 years ago, I I moved to Berlin, uh starting and looking for jobs at at consultancies, which do modeling in the energy transition. And I ended up being at enervis, which I really I loved. And, uh yeah, had a really great opportunity to start growing company, really nice topics, the the Greens in the in the in the Parliament, a lot of a lot of work to do basically.
  9. Rahul Mishra: Were you in like lobbying with the with politicians?
  10. Thomas Rosenzopf: We Yeah, we we made some projects for them, as well. But mainly, we are a consultancy for for utilities, project developers,
  11. Daniel Schaub: Yeah.
  12. Thomas Rosenzopf: uh marketeers, yeah.
  13. Daniel Schaub: Interesting. So, you went for it. I mean, you looked for joining this both worlds.
  14. Thomas Rosenzopf: Yeah. Yeah, I applied for three different uh consultancies in Berlin. And, yeah, uh took this offer, and I'm really glad.
  15. Daniel Schaub: Okay.
  16. Thomas Rosenzopf: Uh started off at enervis, yeah.
  17. Rahul Mishra: And what did you study again?
  18. Thomas Rosenzopf: Uh, yeah, mechanical engineering and business economics with a focus on energy technology, yeah.
  19. Rahul Mishra: Wow. And where did you study?
  20. Thomas Rosenzopf: TU Graz.
  21. Rahul Mishra: Okay. Yeah, interesting. And and and and for you, Nikolaj, so all your studies were in Slovenia?
  22. Nikolaj Candellari: Yes, Ljubljana. Yeah, yeah, first at Mathematics University, and then uh well, Electro University hosting statistics.
  23. Rahul Mishra: We You're our uh second Slovenian guest. We We had Marko actually. I mean, that's the CyberGrid connection, as well. He was the ex-founder
  24. Nikolaj Candellari: Yes.
  25. Rahul Mishra: of uh CyberGrid.
  26. Nikolaj Candellari: Mhm.
  27. Rahul Mishra: And and and with him, we said that Slovenia is the uh is the country of researchers.
  28. Nikolaj Candellari: Researchers?
  29. Rahul Mishra: Yeah.
  30. Nikolaj Candellari: Okay.
  31. Thomas Rosenzopf: I mean, ACER is there, right?
  32. Nikolaj Candellari: As well. Yeah, yeah. I mean, I I mean, in my experience of researchers, I also would need to, you know, put there Slovenia next to Portugal. They are very heavy in in research, but I like that Marko said this, and, yeah, sure, it it must must be true then, yeah.
  33. Rahul Mishra: But but um But how's it uh for you um and you? This is your first international company that you're working on, or you had some other experience working?
  34. Nikolaj Candellari: With my background, my preferred job was in banking. Um, I I mean, I really use the uh system in Slovenia well, which is really promoting students to work a lot. Next to your studies, of course, and then uh looked into uh So, let's say, utility company at first, and then uh went to banking, the modeling, the risk there. Uh, at the at the end, um I didn't want to do this full time, let's say like this. And then I was searching for uh other jobs. The story of how I got this job was quite uh quite strange because I've never even looked at uh electro, let's say, sector, energy sector, uh before. And, um yeah, I I just met the So, the the uh co-founder uh the other the other co-founder, Peter, at the diner. We were both having lunches.
  35. Thomas Rosenzopf: Mhm.
  36. Nikolaj Candellari: Not not knowing each other, not aware of each other, and we were sitting like this, and, you know, started making some jokes over the table like, you know, it in in in a diners. And then, you know, he started, you know, we started debating also about job like what do you do. It's typical men's conversation. We always go into what's your job.
  37. Daniel Schaub: That's what we talk about.
  38. Nikolaj Candellari: Exactly, right? And, you know, at the end, I kind of said, "Yeah, I'm looking for some jobs." And he said, "Oh, you know, yeah, you know, just send me an email." He gave email and like, "Okay, thanks a lot. I guess this will never happen." I mean, for sure not. But I wrote an email, a proper one with CV and everything, sending to him. 2 days later, he responds, "Yeah, sure. When can you start?"
  39. Rahul Mishra: Wow.
  40. Daniel Schaub: And you still having lunch in the same in the same place, huh?
  41. Nikolaj Candellari: No, never had lunch after that there, so it was And also, yeah. So, it was pure coincidence, but it was a good one for me, and I hope for the company as well then, yeah.
  42. Rahul Mishra: Tell us about your role. What do you do?
  43. Nikolaj Candellari: Yes, so I started at CyberGrid as a project manager, and I still do this role to some extent. Um, so I'd say Bulgaria uh expansion there, I I coordinate. Uh, but then, so knowing my background and seeing the the potential for for working with the data, um I then And with the colleagues, we we tried this um building up the the uh so-called market intelligence. Uh, this is a team working with different mostly open-source data. Um, and then with that data, let's say from different prices around different um countries, um different markets, trying to understand where we're going, and uh trying to also build some business cases um with a potential, let's say, assets, let's say in Austria, for example, where we already are, or just understand different markets, and the behavior there, and is it feasible for us as a company to maybe invest, to go to to check it out, and so on, or not? So, this is then the basically what I I do, I lead now, yeah.
  44. Daniel Schaub: Out of curiosity, how's the current state of technology to measure real time? Because you have to bridge digital world with real assets like heat pumps. How How does it work? The sensor of heat, or um current.
  45. Nikolaj Candellari: I think I think, in this sense, this was never a problem in the um electro engineering.
  46. Daniel Schaub: Now is solved.
  47. Nikolaj Candellari: No, it it was always It was very like um fast, I would say, in a few seconds, you know, very detailed um set of data. However, what is has changed a lot in in in the let's say 20 years, uh last 20 years, is that now the IT guys came in this sector, right? And now we have a lot of protocols that are internet based. Uh, example, I think a good one is MQTT. So, now everything is fast and internet based, which is very good because then companies like ours takes this uh and and, you know, goes over internet to, you know, an asset in in let's say Mayotte. You know, it's a island country in in the wait, Indian Ocean. And we had a project there, and we connected to the assets there and tried to manage there. Uh, Maya is the project you can check it out, but basically Wow. IT Time to operate real time remotely.
  48. Nikolaj Candellari: Yes. In let's say 2-second, you know, frequency, no problem, yeah, yeah. I mean, no problem. Many problems, but it it can be done.
  49. Rahul Mishra: It's very interesting. Could you walk us through the technology, how exactly it works?
  50. Nikolaj Candellari: Uh, well, we would need an inverter guy, so who actually builds the, you know, let's say the the smart uh part of the asset, right? Let's say PV, and then you have the inverter, and uh there it starts, right, everything. So, because this brain of the asset is um is where the data is generated, you know. We cannot collect data if there's nothing there, right? So,
  51. Daniel Schaub: That's for another episode. The guy in that invented the inverter.
  52. Nikolaj Candellari: Absolute. So, you have that, yeah. Um, but from there, so we just basically connect to the asset. Some are smarter than the others, let's say. So, but let we take the data, and then we just um communicate with them. So, let's say MQTT, um as an example once again of the IT part, is just that each part, so the asset, the inverter, and on our side, our system, uh does the talking for some part and listening on the other side, right? So, it's um like a conversation we're having now, but via internet into devices in 2 seconds. So, it's And of course, what at the end makes this possible is that there's the standard, right? There's the MQTT standard, which um let's say both sides needs to agree on, and then this works.
  53. Daniel Schaub: And now going with with Thomas, with enervis, uh what is the role of enervis in the market?
  54. Thomas Rosenzopf: Yeah, the the not the operational questions.
  55. Daniel Schaub: Yeah.
  56. Thomas Rosenzopf: Yeah, yeah.
  57. Daniel Schaub: That's why it's complement. That's good.
  58. Thomas Rosenzopf: Yeah, it's complementary. It's like It's really interesting to to to also get some insights in this, as well. Uh, but we are looking mainly into this kind of high-level macroeconomics and and how it impacts macroeconomics, so how it impacts the asset. So, we do long-term power price scenario modeling. So, we have a large fundamental model, which is basically putting together supply and demand in each hour until 2060 or each quarter-hour right now, because we change to to the uh quarter-hourly day-ahead market. Um, and we we we look at different scenarios how the energy transition and assets, demand, let's put it like electrolyzers, uh electric vehicles, heat, uh electricity demand is evolving over time on a daily structure into the future, and how is that met with with supply side with renewables coming into coming into the grid, more batteries, um less coal-fired power plants. I mean, you know the topics. So, we put all these this together and put it into our fundamental model and look into the future how is that change ending in a different kind of power prices structurally. So, we look at daily structures. We look at monthly structures, and sure we look at the the average annual prices. And with that kind of basically quantitative data, a lot for each country, each power price zone in Europe, we do um support investment decisions, strategies for utilities, asset deals, due diligences, whatever you want, and we provide this outlook on a quarterly-hourly basis with updates for each country in Europe where you can, yeah, make some calculations in your own, or we do the business case calculations, all this stuff.
  59. Rahul Mishra: And who who are your typical clients?
  60. Thomas Rosenzopf: Um, the most of the clients, I think, are still utilities. Mhm. It was long the basic Uh, base, our service was made for utilities, but later since I started, uh, we we have much more banks providing debt financing for renewables. We have much more investors having like pension funds want to also invest in renewables because it was like green. Um, but still, we also have project developers, uh setting up their assets as best as they can, also looking in the power prices, looking in the markets. This is, especially, relevant for battery, as they are really market dependent, and sure we also work for associations, in in in in, yeah, for for political players more. Um, this is our own team we have, yeah. And also what we also do is gas, whatever comes with gas and heat, uh, but it's not my core business personally.
  61. Daniel Schaub: Okay, and just with this long term in energy after COVID and everything that have had happened in in Europe, unpredictable, right? And super.
  62. Thomas Rosenzopf: Well, you can I always like to say, we we can model everything. So, if you put the the the gas prices and what we've seen in the past into our model, we quite accurately uh see the prices there, what we see in the market really. There is some off-site because there is opportunistic um bidding behavior from some gas-fired power plants, from some other assets. This is not really rational, we like to say, but still if we have this kind of scenario set up into our model, we quite um we're quite good in in really putting out what what's really what was really there. Yeah. And for sure, we do some backtesting here and look how good is our model, how accurately are we hitting these real prices.
  63. Daniel Schaub: So So, with this energy Oracle of prices, uh if you see the previous reports, like the ones you did 5 years again ago, or even before, how do you see how accurate they are after passing 5 years or 10 years?
  64. Thomas Rosenzopf: Okay, so, yeah, I mean, what we're quite good at what we with I think it's a must a lot of about the scenario and political issues, as well, so political things change really fast nowadays. Uh, but if we look at kind of these baseline scenarios we had when I started, the the rise in negative prices, we predicted really well. Also, the fall in capture prices for PV, especially. We did not see so many batteries coming and and stepping in into the market. That was some that was really fast so far, and we we also debating how will we in 5 years, because there's so much in the pipeline. What do we see in the 5 years? Um, what's also bit of an uh surprise is how fast, especially in Germany, wind is developing, how how big is the pipeline, how many of those assets can come online into next years. This was not We were already quite progressive in the build out, but they're still over it, so above. On the other hand side, demand, we didn't uh predict that kind of crisis we are in right now with the industrialization not having this kind of large demand, especially the automotive industry. So, this is more a macroeconomic like assumption of for our scenarios. But if if we would be right in all those assumptions, you know, which you couldn't couldn't be, sure, but if it would be right, we're quite accurate with predicting the real power prices we see in the market. So, it's 1 1% to 5% off in average.
  65. Daniel Schaub: You are working with banks, as well, and that enables more investment for energy transition. So, what do the banks want to hear from you?
  66. Thomas Rosenzopf: Yeah, I mean, that we are reliable, that we know the markets, that how big is the risk. They always want to have this Gaussian curve.
  67. Daniel Schaub: Risk first?
  68. Thomas Rosenzopf: Risk first. I would say that that most of the time, yeah, how how they want to ask if you understand the markets, the kind of fundamentals, the the the regulatory framework. I mean, this this can basic quite basic, and then they look really And I had a lot of discussions with guys like you, more senior, I would say, uh at large banks. They asked about, "Yeah, what what kind of modeling do you know? What kind of accuracy, backtesting, but also accuracy in this bidding behavior of different asset classes? How How do you set up that?" Um, and in the end, they always want to have a Gaussian curve and what's the 25% quantile that they won't get their loan back. I think that's always the questions which they want to hear, but still it's also not about uh there there can be a war again or whatever. So, this is This is a scenario game, so we can set up a lot of scenarios, what are the sensitivities. And in the end, uh this kind of what do you believe how the future is evolving and what's the quantile. This is a large large discussion. Still, they're financing a lot of assets nowadays, especially if there's some kind of revenue security. Now, we can talk about that later, I think.
  69. Nikolaj Candellari: Maybe Maybe just, I I point one something out that I think it's very good that we went in this direction because uh the risk is something everybody, you know, also us, when trying to discuss with, let's say, a potential customer or a new client, a new country. This is the the the question, right? How can you guarantee the prices will stay the same? And we try to do that, but, you know, like Thomas said, you know, batteries are coming fast, right? So, uh you know, we we try to to do something, but then the risk question is always there, and securities, let's say, is is, I think, then the number one alternative with we try to And not just us, but, you know, in the in the field, uh we try to work with that because it it's very hard to uh to say it's opportunity, and you're not really sure where the risk will go, cuz the market is is fast changing. So, um it's debate we all have, I think, that the risk.
  70. Thomas Rosenzopf: I mean, that's also the nice thing about the energy transition.
  71. Nikolaj Candellari: Yeah.
  72. Thomas Rosenzopf: It's so like changing fast. It's thrilling, in my in my opinion.
  73. Nikolaj Candellari: Mhm.
  74. Rahul Mishra: Yeah. And and for you, Nikolaj, uh at at CyberGrid, because, essentially, it's a virtual power plant uh company uh managing flexibility a lot uh these days, so how do you bridge the gap between the physical asset and and the complex energy market? The same following questions, like Mhm. because it's also it's not in terms of de-risking the the investment now, but de-risking the the whole system. So, uh how did how the process goes in CyberGrid?
  75. Nikolaj Candellari: Maybe coming to the point of Thomas, you start with the baseline, right? You try to get it that's right. And then, you know, anything anything can happen after that, let's say like this. Um, and I mean, it it's in a good and bad way, right? Because, you know, um price fluctuation is also opportunity for us to to earn money, right, because our services basically provide energy in times whereas the, let's say, missing or too much, and we try to help the grid, but also you you're paid for that. Um, uh but yeah, I mean, risk is something like interesting, and also, uh as a coming once again to my market intelligence uh sphere, um talking to a lot of data providers, um they they don't try to to measure every height of the let's say price fluctuation. They they usually focus on when this will happen because then this is already enough information that you understand something will happen. And you don't know how much, but, you know, the then you understand how hard is to to work with risk, that, you know, the timing is already like a very good initiative. And um yes, so, once again, baseline is something we start with with the assets, and then from there on, um well, we try to to have I mean, the algorithms are done in the way that, if possible, you earn more. Uh, if not, of course, then you stay with the baseline. Uh, this means, usually, that our system start with day-ahead price, which is static, right? This is guaranteed, more or less. And then we go to intraday market uh or the so-called flexibility markets, which, you know, are daily, and you don't know exactly when you will be accepted or if you'll be activated. How How will be the price? This is, you know, post um allocated, and so on. So, this is all um well, a long, let's say, procedure to to understand how much you will earn, but still um we start from the baseline.
  76. Daniel Schaub: In long term, so you could predict negative prices, but how do you see in the long term the energy market itself working with negative price? I mean, it makes no sense for the people that it's, "Oh, the market is negative, but I'm paying the same bill," or or which incentives you see in prices in the market in the future?
  77. Thomas Rosenzopf: Yeah, it's a common question for me and and I think it's a really interesting one, because what what are negative price prices basically, how they come where they come from.
  78. Daniel Schaub: What does it mean?
  79. Thomas Rosenzopf: Yeah, what where they come from. I mean, basically they come from must feed in of some power plants to go they have to feed to the grid. And this is mainly kind of heat heat-related or heat-stirred power plants, which have to provide also heat. But this is not a big part. The bigger part is fixed PV, which are subsidized and does not any have any incentives in curtailing their energy production if if there's low prices, or if there's already too much into the grid. And this is basically an incentive from a regulatory framework, which which a lot of which was set up 10 years ago or something, and which which took us too long to change it. So so many the build-out was so fast in the last year that no one expected really to be that quick and that that many PV plants in that kind of region uh regulatory framework coming online need to feed in in that kind of every hour they're producing electricity into the grid. And what do they do if they have to feed in? They bid as negative as they can that they go into the grid uh and have feed in. So the this kind of negative prices is basically a incentive from regulatory framework, which is uh uneffective, I would say, to be honest. And it's based on that. And the regulatory authorities, they're getting smarter, thanks, and it's good. And so this kind of they face out the regulatory incentives for bidding negatively into their into their support, into their tenders and and also the the fixed feed-in for for rooftop PV, for example. And so we saw that already in Germany happening. In Austria, it's also coming right now with the EAG basically for rooftop, but also for for large scale um PV. I see it in the market uh coming in the next years. And so what what would we we we model that? This kind of bidding behavior of the already installed plants, of the future plants, and based on the demand. So if there's enough demand, which was so far always the case, so there's not a lot of negative prices. But if there's low demand and a lot of PV feed-in, and we like to call it a sunny Monday in or Sunday in in May, this is basically what what's what there's the demand is low, the the PV feed-in is high. Uh there's still negative prices, in our opinion, in the future if this is coming together. But still, when demand is growing, on the one hand side, PV is still growing, but the incentive is not there to bid that negatively. On the other hand side, if there's more flexibility, which can uh charge in those times or or make demand higher in those time with in case there is a lot of PV, this kind of negative prices is declining, and we always also already see this in magnitude of negative prices. So we saw 2 years ago, -500 in 1 hour, which is crazy.
  80. Nikolaj Candellari: Mhm.
  81. Daniel Schaub: Yeah.
  82. Thomas Rosenzopf: Uh this is not happening, I think, in the in the short-term future, um because the the the market has got got like the the risk framework are better. Um, but fundamentally explained what we do, uh these negative prices can still be high in the next years and will be a bit in in numbers at at least. They're we see it growing a bit, not too heavily. Uh we had like in in in Austria, I think, 400 negative prices last year, 600 in Germany. We see that growing a bit, um, but uh there is an a peak point in in our scenarios in the in the late '20s, beginning of the '30s, uh where demand is growing, flexibility is is coming online a lot, Demand response? Demand response, as well, yeah. Um, so those kind of negative prices are getting less in number, uh and also impacting having the less impact in business case evaluations. Because this is always a thing, what if you don't get anything for feed-in, you would curtail, and this makes your revenue smaller, and banks, "Oh, revenue smaller. We don't like that."
  83. Rahul Mishra: Yeah.
  84. Thomas Rosenzopf: You know that. And in the end, this is a huge huge pain point and also discussion how these negative prices are evolving over time. And, yeah, this is this is our opinion on that, and it's different in different countries in Europe, for example. So the peak is is really Germany. Italy don't have any negative prices, which is quite interesting.
  85. Daniel Schaub: Because it has seven systems.
  86. Thomas Rosenzopf: Yeah, yeah, they have seven power markets. They have different incentives. And it's so this I think this is a good thing that you see, okay, the incentives from regulatory, from tenders, from build-out of rooftop PV, how how they are incentivized to feed in the grid is is affecting power prices. So, this is kind the interesting thing is technology. You have to have to your energy management system is technology, how, and it's also economics, it's should be profitable.
  87. Daniel Schaub: I just heard from a friend who is in Spain, Álvaro, I hope to have you here in a podcast. Because he is analyzing Spanish market with BESS and how to make it profitable. And there is a situation in Spain that energy is super cheap, because it can €10, €11 per megawatt-hour. But the the final price is still 60.
  88. Thomas Rosenzopf: Yep.
  89. Daniel Schaub: So, how do you see in the future, in in some scenarios, the idea of getting more renewables, it was supposed to be cheaper, but the all the services to make it uh resilient and secure, it make it more expensive. So, how do you see this counterintuitive situation?
  90. Thomas Rosenzopf: Yeah, this is they call of this cannibalization effect of the renewables, they're eating up themselves or their own revenues. When they're more, they're setting the price really more often, and so they their revenue is declining. What we see basically is like that the value of a PV production is half the price of the average power price in the market, which is quite It's just half of it. And uh what we see in markets like um which are having a lot of PV compared to the demand like Germany or Spain, so there is not any build-out of PV, large PV plants, which aren't subsidized anymore. So the whole PPA framework, which was a big game, merchant PV, is kind of really restricted or close to to not happening anymore. Um, and this is so this maybe put it like that, the the more PV we want without any flexibility on the other hand side, which is increasing those power prices or demand in that in that hours where there's a lot of PV, um the more we want to have it now is a lot paid by state uh subsidies frameworks. So there's auction, there's tenders. Um, and they're the tenders are really large in Germany, for example, I know, and those assets are built, and also rooftop PV is built. They are discussing now I'm having not that that incentives of building uh getting an feed-in tariff for that that asset. But in in the end, the current status is PV is merchant only is close to not happening anymore in in such countries where there's already a lot of PV. And also interconnected countries to Germany, to Spain. Also, if they don't have a lot of PV, this is uh the markets are saturated for PV already. What we see now is like, yeah, we put a PV uh a battery storage right next to it, and uh increasing the value of that kind of asset.
  91. Nikolaj Candellari: With one comment to this, um I think the um the answer partly partly, at least, would be um so-called smart grid or smart grids, um meaning so that it's not going to be enough in the future to just build PVs, right? I see this, so working in Southeast Europe, you see that, you know, now, let's say, Serbia announces, you know, so and so amounts of, you know, uh PVs installed, and you're like, "Sure, but this will be at 12:00 in in Sunday, and then they have a problem, right?" You need You need, basically, then inverters, once again coming back to the point, smart inverters that can talk and then curtail the assets or batteries, or something else. Cuz, um you know, if we just scale up everything, when we'll need new new cables, new infrastructure. And if we build it up, once again, the cycle continues with new PVs and, you know, obsolete system. So, we need to be- become becoming smart in this in this direction.
  92. Rahul Mishra: Now, how do you see it, because CyberGrid is part of EVN, like a bigger utility? So, how how do you uh monetize this structural uh volatility? What's the word?
  93. Nikolaj Candellari: You mean the market one?
  94. Rahul Mishra: Yeah, like I mean, uh how Thomas has explained, so uh in terms of uh It's also an opportunity for EVN to make make monetize this uh this this market, because you you have like a bit more information than from the from the outside perspective.
  95. Nikolaj Candellari: Not sure how Well, let's I'm I don't know how much, let's say, we got directly from EVN. However, looking at the market, um there's a lot of opportunities, for sure. Um, and so, um you know, one of the let's say features we just now published is so-called SpotGuard, and it's it's a stand-alone feature, curtailing large PVs in times of negative prices. Exactly what was discussing, you know, because, for Thomas, it sounds like, "Yeah, just a short term until 2030." But, you know, for everybody owning PVs, this means 6 years of pain. So So, we need to have some um options. And and, let's say, SpotGuard is a functionality of that. But also, coming back to the point that Thomas once again mentioned is, um this so-called flexibility or smart grids, you know. Whatever is there that can change its behavior, we we try to connect it and then put it to the market, to the TSO. So, let's say, TSO's market, APG, in Austria. Uh, and then this is a service to the grid, right? So, basically, what we do is, um we wait for a command of the TSO to say, "Look, now I have some problems because I know PV produced 2% more, but this is megawatts now, right? And can you curtail so yourself, I don't know, production, uh lower production so that we stabilize the grid, right?" That's basically what we try to do, and I think this is, you know, we try to scale this, and not just us, there's also other so-called competitors of ours across Europe. Uh, but at the end, this really helps, you know, that then the PVs, new PVs still have a place in Europe, and I think this is important, yeah.
  96. Daniel Schaub: What do you think that is the biggest Europe bottleneck or constraint? It's lack of infrastructure and that is old, or it could be used in a higher level being more smart? Like, more infrastructure or or more flexibility in software, let's say.
  97. Nikolaj Candellari: I think, sure, infrastructure, you can always have more, and it's not not going to be too much. Um, but at the end, uh so so-called so flexibility, smart initiatives, um whatever is needed. But saying that, um I think Europe, Europeans, we are quite good at understanding this, and, you know, trying to make this work. So, I think the biggest constraint for me at the moment is time. You know, we just try to make everything work while we're having, you know, let's say invasion of batteries, let's call it like that. And we're trying to scale PVs on the other hand, and we try to, you know, interconnect because maybe that's something I can say here. So, I I see a very good initiative across Europe happening, which is this interconnection of markets, you know, happened on day-ahead, intraday. And now, we're we're also doing this in so-called uh balancing markets with this MARI and PICASSO. And this means that, let's say, a French battery can help um well, let's say Germany or Netherlands or Austria to to stabilize. I think this is great. So, what is missing is that each country joins, right? And and they're joining eventually, but it's it's a big, old system that is trying to renew. And I think we're in pretty good in Europe. Still, once again, time is, you know, here. We need it tomorrow, right? PVs are producing energy as we speak. Oh, well, not anymore.
  98. Daniel Schaub: Today is snowing in Vienna.
  99. Nikolaj Candellari: Yeah, so. But, um yes, anyhow, so the time is needed that this system gets running.
  100. Daniel Schaub: And and what is your thoughts, Thomas?
  101. Thomas Rosenzopf: Yeah, I think we need more infrastructure, but I think the smarter we are at using data, using digitalization, using incentives to have demand-side management, to have batteries being smart into uh and and serving not only the market, but the grid, grid as well, we need less infrastructure. So, the more we we're the smarter we are in in using data and and and and and and also demand-side management, batteries and whatever and curtailment of PV, the less infrastructure we need. I think uh bringing that all together is the main challenge of the energy transition, because if we build so much in infrastructure, yeah, it will will will happen, but it will cost a lot. And we're already at that point, the grid fees are exploding, and no one wants to pay it. And everyone, "The energy transition is bad. It's so costly." And if we use the data so wisely and use the whole frameworks we have for also your your um market signals and also grid signals, I think grid is is always forgotten so far. Yeah. Was forgotten. And
  102. Rahul Mishra: That also brings my follow-up question to you. In in the long-term scenario uh in a 2040 scenario, where do you see a scarcity emerging in in the Austrian market?
  103. Thomas Rosenzopf: Yeah, um, yeah, Austria is in a really good state. Um, we have the hydro fleets, which is I think great. We're already at 90, above 90% of uh green electricity. Scarcity, especially in the in the in the in the, let's put it, electricity power market, uh in my opinion is is there when it when we look at the last 5% of of hours, um where we don't have wind, where there's Dunkelflaute, so-called, um how what kind of uh production do what kind of backup do we have there? And there's mainly two options, I would say. It's like hydrogen uh or biomethane. And and in if you want to be 100% green, this is this is the options we have, in my opinion. Long-term storage, yeah, you can argue that, but in my opinion, it's it's more like a chemical carrier. And uh those kind of chemical um gases
  104. Daniel Schaub: Power-to-X.
  105. Thomas Rosenzopf: Power-to-X, yeah, exactly, and uh this will be scarce in in the '40s, or in big late late '30s. And so, still we have to decide you do we want to go for hydrogen, import it somehow? It will be scarce.
  106. Daniel Schaub: From Chile, we're going to
  107. Thomas Rosenzopf: Well, maybe. Chile is a good country, I think. The lowest lowest LCOH all over the world. In the in the other hand side, biomethane is quite bit easier, because you can use it as as normal uh natural gas. So, we don't have to adopt the the power plants, and if they will also some kind of maybe we get something from other countries. So, this is easier to maybe substitute. Mhm. Still, I think that both are scarce if you want to have a green electricity system, um we need some kind of those, and both are scarce. Biomethane, there's different kind of scenarios how big the demand would be, how much land use it would cost, but this is crazy if we want to do it like that. So, maybe Power-to-X will be a better option. At least, in my opinion, one one unsolved long-term future problem we have.
  108. Daniel Schaub: Yeah, also we have heard in some other interviews that is not the most efficient solution to get 100%. Because the rest the last 5, the last 7% can be used much wiser in other solutions somewhere else to tackle the the global challenge that we have. Right.
  109. Thomas Rosenzopf: Right. And also interconnection is is like a helps us a lot. So, somewhere in Europe, there's the wind, and in something. And also the other hand side, which I always want like to stress is, okay, what's the cost in the last 5%? What if we want to pay less and don't have electricity? So, demand-side, demand response. Yeah. So, how what our what's our price as consumers, as industry, in that five 5% or let's let's put it 2% of hours of of a year, if we want to reduce our our electricity consumption, we would need less grid. We would need less kind of uh backup capacities, and those last percents are really costly. And so, I think this is we have to we have to decide that as a as a community, as a as a society if we if we want 100% always-available electricity, energy, or if we can step down a bit on some occasions, and then it's less costly.
  110. Daniel Schaub: Yeah, and yeah, just to in the same framework of of thinking in 2040, do you see some tension in the future for intraday market with market balancing?
  111. Nikolaj Candellari: Let's say, wholesale markets, intraday, day-ahead, and balancing are are, well, you know, most assets, especially now uh batteries, participate in both, right? So, this is also, you know, what, you know, if you're not offering that as as a service provider like we are, you're not getting any anybody on board. You need to have this interconnection uh at least in the country and possibly across Europe uh to all markets. And I think this is, you know, if somebody's building a battery, he starts with the day-ahead price. This is his starting point, which is fair enough, and how much can I make there? And then he's adding intraday market on top, you know, the volatility the spreads, I would like to capture, and then balancing markets, you know, if you know the the the price is big. So, the spread is even bigger there, then I go there. So, our software already uh is is um going across markets, and interesting now because if you check the prices of these markets, they they are coming, you know, they are at let's say, being more correlated than they they were before, because the assets are going across. I see this. I mean, is it good, bad? I I think it's a good one, but but still, um at the end, um it's it's a dynamic we are seeing with the with this smart assets, yeah, cuz they do can do this, especially batteries, once again. Uh, but uh yeah, so I don't see any any, let's say, infighting, or uh it it can be so-called cannibalization, for sure. Let's say, um primary reserve is dominated by batteries, and the prices have dropped. And now the new batteries being built are are then, you know, because there's so little margin there, they're going into secondary, right? So, um this is now the the the dynamic we will see in also next, I think, years, that batteries will change the the structure of these markets, but I wouldn't say for the for the worse. I think this this helps the grid to be more stabilized. Um, saying that, maybe just one last point. So, we are having more batteries that are more capable. We are connecting the grid, so, you know, everything should be more stable, yet, you know, we see uh big and and frequent peaks in prices in in demands across these markets. And so, an example of that is Italy. They joined uh, so, secondary uh reserve, and they uh abandoned it after a few months. I'm not sure how many, but anyhow, when they connected, the price peaked so many times so often, for so long periods, that they said, "This is not worth it," and they abandoned the European initiative. So, it's interesting dynamics. But, you know, I I guess smarter guys than me said, at the end, the the grid will stabilize and become uh, you know, more yunimized. Um, yeah. So, let's let's see for that.
  112. Rahul Mishra: And also in terms of revenues, where where do you see flexibility coming and and it's also changing the new revenue models? Where exactly is generating revenue for CyberGrid as a whole, and also for the market?
  113. Nikolaj Candellari: Yeah, so I mean, I I think, at the end, um, um flexibility will be a business case, uh, we will need. That's That's number one. But it will be a growing, you know, demand, uh, if the the the asset owners, so the guys providing their assets, um, can have some some revenues, right? If If there is no revenue, they will not do it. So, um, you know, like I've explained, we go over the markets and try to capture something, um, but, but at the end, we try to find the best solution for each asset owner. And, uh, yeah, and and and when we capture some prices, then they also say, "Okay, yes, this can be added value," because usually people don't know about flexibility markets, and most of the guys coming from a trading perspective, they start with wholesale markets, right? Day-ahead, intraday. So, to to change their mind to go also to the balancing, they need to see some benefit in that. But they, and and they do, yeah. At the end, I think there are many good use cases across Europe happening, as we speak, uh, people joining the flexibility markets, as well, with their assets.
  114. Daniel Schaub: Or what do you think that the system need the more the most? Uh, more batteries, or more price signals to be more efficient, resilient, cheaper? I think For both.
  115. Thomas Rosenzopf: Yeah, more price signals first, and that will bring more batteries online. Uh, the thing is that the the battery can earn on different markets revenues, and we're not finished with that. So you can also you have the grid services. There will be new grid services, I'm pretty sure, flexibility services, which a battery will provide for grid stability, which we don't have yet in our market. Inertia, for example, is established in Germany. Uh, black start capability, so if there's a blackout, kind of what do the battery can maybe also help here. Uh, and these are price signals from a like supply security of supply perspective, grid perspective, from a pure market perspective. Um, I think batteries are always following price signals, and so the price signals are first, which we've seen in the last years. And, and, "Oh, yeah." from time to time, more players, "Oh, yeah, there was definitely volatility. Prices on on intraday spreads are high, and spreads on intraday and day-ahead can be can be compared really directly, I think, to revenues of a battery, not if it's a larger battery with with a C-rate a lower C-rate or a high longer um capacity. It's not the case anymore. But if it's a 1-, 2-hour battery, it's it's pretty accurate. So you you have these kind of price signals, and then uh and then the the system and then some market is adopting. And if it's like a a wholesale market like we have, I think it takes some time, and needs need some stability, needs some revenue perspective, and then it comes to also financeability, bankability, because there's always a bit of a missing part, because there will be there will be revenue. There will be a a case, but if the revenue can change really quickly because it's a fully merchant market asset and revenue, um then no one wants to finance it, and get the money into it, because it's too risky. I mean, that's always like the first movers in a battery case in Germany. I don't know how much how high their IRRs are. So this is first mover, and they come home after 2 years with financed asset. Um, and this is sure this is the first period. And now it's getting even more and more players coming into this markets, Austria, Germany, um and other countries. Um, and now it gets the the the whole system gets more pressure, and also price signals are not that high anymore. So now, okay, market is going after price signals, and now we see maybe again the other way around, and there's too many coming online.
  116. Rahul Mishra: Considering that, would you rather own a 50-megawatt battery storage or a 50-megawatt VPP portfolio?
  117. Thomas Rosenzopf: The reason behind it, I'm from from us as a modeling perspective,
  118. Rahul Mishra: Yeah?
  119. Thomas Rosenzopf: it's the same.
  120. Rahul Mishra: Is it?
  121. Thomas Rosenzopf: For for for to to to to optimize that asset, there's a different picture. I mean, that's Uh, Nikolaj have to explain that. For me personally, um, I would rather own a big battery, to be honest.
  122. Nikolaj Candellari: I think, so, bigger bigger battery. So, one, let's say, one asset. Big asset usually is is a better way, because you then, you know, have less work with it. But, you know, I think our specialty in CyberGrid is to having different, diverse um assets connected. So, I think I would go for that, cuz I think there's the intermittent uh, let's say, a collaboration across assets, we we do quite well, and I think this can get better better results at the end. Uh, however, if, let's say, portfolio would mean more asset owners, then I would still go with one asset, because usually at the end, you know, if you have, huh?
  123. Daniel Schaub: Yeah.
  124. Thomas Rosenzopf: Yeah, problems with
  125. Nikolaj Candellari: Yeah, I mean, at the end, you know, it's it's, so, um it it's always brings
  126. Thomas Rosenzopf: But still we try to analyze that from a systemic perspective, as well. And on a grid level, a lot of smaller batteries uh are kind of a bit better for the grid stability than a large asset, because of the ramp-up curves and also there's the the thought notes into the grid. So, uh a VPP in a from a systemic perspective would be uh slightly slightly easier to handle from a grid operator's perspective.
  127. Daniel Schaub: Yeah, and just coming back that you mentioned the risk of cannibalism in in BESS in installation. How do you convince a bank to finance highly risk and expensive asset as a storage?
  128. Thomas Rosenzopf: Yeah, there are several ways. I mean, the the the the pressure from the market have to be really high. We see that in Germany, they do so so far now. In Austria, they're doing not still not doing it if there's no no security. Because if there is a large market, also the bank wants to participate. And so they're taking more risk, but they're still assessing those risk really carefully. And what we do, we provide two, three scenarios to them, okay, what could be a potential outlook for those kind of battery asset. And so if there's the low volatility scenario, as we like to call it, if there's low revenues for a battery, is still serving those kind of uh debt financing uh redemption. Uh, they financing it, and they want to have a cash sweep. So if there's more revenue, they all want to have it on the first place that they having those risk really fast away from their uh uh portfolios.
  129. Rahul Mishra: But what happens to the business case, because uh everyone would like to build the same asset, same portfolio, similar portfolio?
  130. Nikolaj Candellari: Yeah. So, Bulgaria is interesting use case, you know? Yeah. So, they they subsidize a lot the batteries, and I I mean, I have no numbers, but working there, I mean, I have not seen somebody building batteries as fast as fast in Europe, at least.
  131. Daniel Schaub: How much? How many
  132. Nikolaj Candellari: I I don't know, but, you know, I let's say, it's, you know, I'm I'm getting emails about a potential customer of 100-megawatt battery. Like, wow, this is one, like, and then they're coming. It it's like, please check it. I haven't done the research well enough, but and and and they're building and they are building batteries like fast and and quick, and and good, I say, and with PV, so collocated use case, and they're, you know, I don't know. I I don't know exactly everything. Maybe you can help me. But then But um, I I still see the the market is there, let's say. Bulgaria is the is also a market in that needs this very and a lot, right? So, it might not when we think about building batteries quick and fast, we're thinking about maybe Austria, and it's, well, you have a lot of HPPs. You don't need batteries so much. However, you know, looking in these countries, um well, you know, at this rate, they still need years that they come to the point uh, at least as a region, to be, you know, on the on the flexibility level they need, cuz, you know, they are still They are they are pushed to phase out the coal plants,
  133. Rahul Mishra: Mhm.
  134. Nikolaj Candellari: but they don't have any backup, you know, not I mean, not yeah, let's say, I know for Serbia, I remember. So, everybody was talking about PVs. So, I was uh where we met, a conference, right, in in Belgrade. Everybody was talking about megawatts and gigawatts of PVs, and the same time, talking about they will phase out the coal power plants, which is very green. But the coal plants are usually the cornerstone, the stable one on which
  135. Daniel Schaub: The inertia of the
  136. Nikolaj Candellari: Yes, on which you build your energy system. So, you know, they need batteries uh a lot. So, I think, in these countries, banks can can can build batteries a lot.
  137. Thomas Rosenzopf: But do banks look differently in different markets? So, if this FCR market, the balancing service markets, they're smaller in every country than a wholesale market than the day-ahead market. So the saturation is way far further away in a deeper market if in even if there's a lot of batteries coming. Uh and so if the revenue is already high enough to only be profitable on the day-ahead market, for example, which is the case in those countries. Yeah, on the day-ahead market, the volatility will stay, and the market is pretty deep, because all the electricity is traded there. Um a bank sees those kind of revenues more secure, and it is easier to be convinced to finance such assets. Still, it's a a lot of work to do, I would say.
  138. Daniel Schaub: In Bulgaria, there are 10 gigawatt-hours in pipeline.
  139. Nikolaj Candellari: Wow.
  140. Daniel Schaub: So, that's that's a lot. And now that we went into CEE region,
  141. Rahul Mishra: Just before that, I I wanted to ask uh one more question to Thomas about the the financing part of it. But what do exactly the the the EPC and the developers require to finance the storage? What What do What are the usual requirement that they they to make to show that this will be profitable?
  142. Thomas Rosenzopf: They need to calculate a a business case, which is profitable for the bank and the debt tiny debt financing part of the bank, not worst, but worst case, I would say. So, they have to calculate and see the outlook, "Okay, there's low demand. There's a lot of batteries coming online, maybe, in the future and not so many PV then we think." And, in the end, this business case for the battery have to be the price in on the bidding behavior slightly positive. So, what we see is a large amount of really low prices below, let's say, €10, €15 per megawatt-hour, but not uh negative prices anymore. So, negative prices are somehow declining again, but the general shares of of low prices, uh we see them, because of the renew renewables having um low or less little or zero marginal costs, we see those kind of shares in the electricity price formation uh increasing.
  143. Rahul Mishra: Now, the big question. If you have €1 billion to put into energy transition, what what you will do with it, starting from Nikolaj?
  144. Nikolaj Candellari: I would split it, and half goes to assets. Um, I would build different kinds of assets, not just batteries, let's say, also CHP. I think that's my favorite, let's say, personal. Um, however, uh half of this money, I would put to to to building data centers. I think uh we we touched about this before the podcast about the data, collection of data, sharing of the data. Uh, I think there's the the transition we're talking about is is founded on data. And, um you know, I'm looking across the ocean, and the Americans are, you know, very good at this. We are lacking behind. So, my bet would be, hey, heck, I would even put all billion entire billion to to putting data centers across Europe, yeah.
  145. Rahul Mishra: Interesting. And I and I see that uh this kind of attitude is more coming from the southeastern and central eastern European countries, uh and the and the data centers are kind of a pariah in in in the West. Why Why do you think that's going on in, Thomas?
  146. Thomas Rosenzopf: Yeah, uh why, it's a good question. Why they are more progressive in the investments? I don't know.
  147. Daniel Schaub: I don't know, but what would you do with the mil with the billion?
  148. Thomas Rosenzopf: Yeah, I think it uh I think the ecosystem uh of datas, we need to have standards all over Europe in Interoperability? Yeah, inter- inter- and and reliability, interplace uh interconnections, and the same standards. And I think, if we have the ecosystem with the same standards, a lot of problems are already solved. So, it's it's not a It's a more uh wide social investment, which I think is crucial for the future as well of demand-side management, demand responses, grid services. So, if there is a ecosystem, which shares different kind of standards, mhm, a lot of things are getting easier, and the the billion is is wisely invested, sure. Asset class now, I would go for a a battery, as well. I think this is short term quite quite good. Um, if it's going online next year or something, I would go for a battery. Still, uh the larger share of the billion, I would it'd be um to have this kind of overall European framework for for an ecosystem about the the data in the energy transition.
  149. Rahul Mishra: Amazing.
  150. Daniel Schaub: What do you think that the promise of cheap energy with renewables are is going to be accomplished, or is just a promise?
  151. Thomas Rosenzopf: It's going to be accomplished, and this is uh based on on fundamental power market modeling and also grid modeling. I think it's accomplished if we have a slightly uh higher willingness of of demand uh response from consumers. Mhm. Then we can really save a lot of money based on really low cost of renewables, if we're just um consuming energy whenever we want to, the the kind of backup costs for that are really um averaging um increasing the average value of of of the power system of the system costs. Mhm. And so the system costs are uh lower when we're a bit more uh flexible in our consult consumed uh consummation of electricity. And this is, I think, the key. If we are that, we can really lower energy costs in the long term, and having a better and also greener, renewable energy system and good energy transition.
  152. Daniel Schaub: I love the answer. It's a joint challenge. Yeah. It's a joint challenge, generation and demand.
  153. Thomas Rosenzopf: Yeah.
  154. Rahul Mishra: In the end, uh you guys are already way accomplished in your career in the energy sector. What do you have as an advice for young young young people coming into the into the sector?
  155. Thomas Rosenzopf: I would say, love figures. Love numbers. Analyzing numbers, because energy transition and also these kind of things we're dealing about is a lot about um putting the right figures together, having smart analysis. So, I would do, yeah, if you love figures and and are quantitative um person, this is the most important one.
  156. Rahul Mishra: For you, Nikolaj?
  157. Nikolaj Candellari: Stay hungry for more uh let's say, for more knowledge, I would say, number one. And number two is uh keep it practical. I think, you know, we like to here having a debates about, you know, transition, but at the end, transition happens on the ground with real real-life use cases uh with real assets, with real people, and the transition, you know, always needs to be practical. So, keep that in mind, I would say.
  158. Daniel Schaub: I wanted to ask another short question, but it's uh about ancillary services that now that we went uh upon it's uh it's a structural value for the future, or is uh like a gold rush?
  159. Thomas Rosenzopf: I think it's security. Uh, we have demand uh so ancillary services for security of supply. We need some amount. There is a value on that. The value is maybe now a bit higher than in the future. It can be satisfied a bit cheaper. There is a value, for sure. Um, and if we can satisfy that value cheaper, for example, with batteries, we should do it then.
  160. Daniel Schaub: But it's something that it it can be still profitable in the future, or is only now profitable?
  161. Nikolaj Candellari: No, I I think we will need it, Mhm. just by the physical logic that you cannot store uh energy. Mhm. You you just electrical energy, so you just need to have something on the reserve like this. And also, I think something we didn't discuss, but um I think what would be a use case for the future is the balancing services for the for the DSOs, for the local grids. Um, this is still, you know, um this is just maybe starting in some countries across Europe, but it's not there, and I think this is going to be even more important uh with, let's say, um yeah, future use cases of the batteries and PVs connected. Uh, you will need the battery there, not not, you know, across countries.
  162. Daniel Schaub: Yeah, I Just curious, but who would you like to see as a guest in a podcast?
  163. Rahul Mishra: And ask what question in our
  164. Nikolaj Candellari: Ah, the next one.
  165. Daniel Schaub: Yeah, or
  166. Nikolaj Candellari: Okay.
  167. Daniel Schaub: or or or who you would like to interview, for example? Just curious, in in energy sector, with energy transition related. Any person, just dream.
  168. Nikolaj Candellari: I would I would go for battery manufacturers.
  169. Daniel Schaub: Okay.
  170. Nikolaj Candellari: Uh, especially, I I think I mean, um the Europe is a it's it's own hub, but then battery batteries coming from China. I know, you know, hear a lot. So, I would like to talk with them to see how they think, how they see the transition we having, so like an outsiders basically supporting our transition, seeing what they think. Um, yeah, I would I would love to see that.
  171. Rahul Mishra: We did that for you.
  172. Nikolaj Candellari: Ah, okay.
  173. Rahul Mishra: You can tune in to the Energy Bridge channel, and you will find some perspective from the manufacturers.
  174. Nikolaj Candellari: Very good. Then we did. We'll check that.
  175. Daniel Schaub: And and you, Thomas?
  176. Thomas Rosenzopf: I would go for someone who really understands this kind of data structures. Because like as a
  177. Daniel Schaub: But do you have a guru or some reference?
  178. Thomas Rosenzopf: No, I don't I don't have someone especially in mind, but I think at at CyberGrid, some someone who is putting all those datas together from the assets, from the grid, from the markets, because that's what I mentioned before, this kind of eco- ecosystem, which is, I think, crucial. And I want really want to know, and I don't know really, because it's like something operational, um where we are there, if we are really far off having a common ecosystem, or are we already quite close to to having that in the energy, because is everyone having the same data format, standards, whatever? Uh, this would be really interesting in my opinion, because, I think, this is some missing step in the future.
  179. Daniel Schaub: Great. I like it. So, yeah, we have come to an end. Thank you very much for for being here. Um, I learned a lot. Thank you. And, yeah, we hope you see you in our forum in June, uh, 2nd and 3rd of June. Uh, we're going to address this and many topics. Uh, there is one thing that you mentioned in the middle that we should measure more to make the grid more intelligence. Just an spoiler, we are addressing this challenge as energy security, as well, because it's critical infrastructure. So, we are going to see the relation between energy security, but also smart grids and more intelligence. So, stay tuned.
  180. Rahul Mishra: And also, uh, if you guys want to share some last thoughts?
  181. Thomas Rosenzopf: Yeah, thank you, Rahul and Daniel, for the the invitation. We loved talking. Also, to you, Nikolaj. Hope to, yeah, see you soon. And thanks for the invite.
  182. Daniel Schaub: Gerne.
  183. Nikolaj Candellari: Mic drop. I think this was a good one, so.
  184. Rahul Mishra: Hey, thank you very much, guys. Uh, and I think it was a very insightful interview. I mean, I uh we we we we met Nikolaj just like that uh in Serbia, and we kept in touch, and uh we chased him for 6 months, and it finally happened.
  185. Nikolaj Candellari: Finally.
  186. Rahul Mishra: And with you, Thomas, so thank you very much.
  187. Daniel Schaub: Yeah, and thanks to the community for watching the episode till the end, and stay tuned for more interviews. See you. Ciao, ciao, ciao.
  188. Nikolaj Candellari: Bye.