Shaping a Resilient Energy Infrastructure Amidst EV Expansion with Kedar Balasubramanian from GridX

Extracted from InsightTech podcast episode, Kedar and Statzon discuss various aspects of EV industry and its impact on energy grid.

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Shaping a Resilient Energy Infrastructure Amidst EV Expansion 

• Introduction to gridX 
• Addressing electrification challenges 
• European grid system challenges 
• gridX's customer base 
• Trends and emerging technologies 
• Accelerating adoption and push towards decentralized green alternatives

Kedar Balasubramanian, Product Manager 

Kedar Balasubramanian is an energy engineer by education and a product strategist at gridX. His expertise encompasses energy and e-mobility product management. He is passionate about optimizing the performance and value of decentralized energy assets. His insight into the trends in the energy industry offers valuable insights, particularly on the interconnected issues between electric vehicles and the energy sector.

Statzon: Could you explain a bit about what gridX does exactly?
  

Kedar: gridX is a Germany-based energy management service provider with a clear vision of making 100% clean energy affordable and reliable for everyone. 
 
Our journey began in Germany about 6 to 7 years ago, initially concentrating on home energy solutions. However, we've also ventured into electric vehicle (EV) charging. 

Our services encompass charging point operations, fleet charging, and our current expansion into other regional markets in Europe. We've been highly active in both the home energy management system (HEMS) and EV space for the past few years. 

  

Statzon: Could you provide an overview of what your products do and the problems they solve? 
  

Kedar: We've observed that European grids and households are increasingly moving towards a concept known as electrification. Essentially, this involves replacing conventional energy sources with electric devices, such as electric vehicles instead of traditional gasoline cars, or heat pumps instead of gas boilers. 

Electrification offers significant sustainability benefits by reducing emissions from devices themselves. However, it also places a substantial strain on the electricity grid, leading to potential instability. 

To address this challenge, smart algorithms are employed to regulate energy usage. At gridX, we develop these algorithms, which are then implemented in households through IoT devices. These algorithms optimize energy flows within the home. For instance, they ensure that electricity generated by solar panels is efficiently utilized by household devices, such as TVs, electric vehicles, or heat pumps. This optimization promotes the energy transition towards cleaner sources. 

  
Statzon: Let's say that I don't need any energy management at the moment. However, if I were to have solar panels, it would significantly alter the situation. This type of energy management is becoming increasingly relevant nowadays due to the rising demand for energy, driven by factors such as electric vehicles. Additionally, more people are installing solar panels and home energy storage systems. Soon, vehicles may also be capable of supplying power to homes, with some already able to do so. Furthermore, on a larger scale, many countries are closely examining their power grid situations, as these changes in behavior and energy consumption significantly impact laws and regulations. 
  

Kedar: You're absolutely right about that. And maybe just a quick background on the power grid, especially the European grid, which is quite unique. It's a synchronous grid covering 20 to 25 European countries. At one point, it was even one of the largest synchronous grids in the world. Its uniqueness lies in maintaining a constant frequency of electricity delivery, which is 50 Hertz, from generators to end-users, ensuring reliable supply. The reliability standard for the European grid is impressive, at around 99.99%, meaning less than 2 to 3 hours of blackouts or brownouts are allowed by law in homes. 

Supplying electricity reliably to European citizens is quite a challenge, especially as more distributed energy devices enter the grid. These include PV panels, rooftop solar, electric vehicles, heat pumps, and batteries. They increase the load on both utility and household levels. Projections indicate a 50 to 60% increase in these devices by 2030, translating to millions coming online. 

Most grids, not just the European one, are quite old, dating back to the 1940s, 1950s, or even older, desperately needing refurbishment, maintenance, and retrofitting. Therefore, a primary focus of the energy transition is to invest in reviving and reinforcing these grids to handle the influx of millions of devices. 
 

  

Statzon: There's a multitude of these smaller energy sources, and renewable energy is presenting its own challenges to the grid simultaneously. It's an intriguing challenge for those responsible for maintaining the grid's reliability. 

    

Kedar: Absolutely. 

And it seems like that's what the regulators are aiming for too. At the EU level, there's this important regulator called The European Union Agency for the Cooperation of Energy Regulators (ACER). They make rules for the next five or ten years. Then, they give these rules to the transmission system operators, who have their own group called the NOE. All these groups work together to manage, run, and grow the grid across the European Union. They speed up projects to use more green energy and plan for the future. They also help with the networks that carry electricity from power plants to people's homes. 

Statzon: Let's talk about how power demand is rising. It's not just about keeping the lights on anymore; we need infrastructure that can handle the increased load, especially with more people using electric vehicles. By 2030, the grid needs to handle 60% more electricity demand. Europe's old infrastructure needs a revamp, with plans to invest around 500 billion to ensure it's up to the task. 

Now, shifting to your area of operation, what are the main challenges you're facing? With more energy storage options entering the market, what's the biggest challenge right now? 

  

Kedar: Our main challenge is offering an energy management system that's affordable yet valuable. The goal is to minimize costs while maximizing value. We achieve this by creating a system that can connect to various assets, such as charging stations, batteries, and heat pumps, each with its own unique features. Our aim is to have a system that communicates with and optimizes energy flows between these devices. Ultimately, homeowners want to pay as little as possible on their electricity bills. Cost savings are the primary focus for any homeowner.  

One of the biggest challenges we see is integrating our system as more assets with diverse technologies and communication protocols emerge. Currently, the main focus is on funding, bringing in incentives to enable the purchase of these energy assets. Regulation also plays a crucial role, and Europe is already doing a good job in this regard. Additionally, reducing dependency on China for knowledge and technology skills is a major challenge for us and other energy firms in Europe and America. 

  

Statzon: I can definitely see that being a challenge. For instance, when I wanted to manage the energy usage in my house, specifically with my heat pump, I realized it didn't have an interface for external systems to control it. So, are you collaborating with different manufacturers to establish interfaces for devices like heat pumps? 

    

Kedar: Absolutely. Heat pumps are indeed an exciting asset class, especially considering their potential to significantly reduce building emissions. They're poised to be a major asset in the coming decade. However, communicating with various assets means dealing with different OEMs, each with their own interfaces, requirements, and constraints.  

Creating a solution that provides an abstraction layer between these assets and the energy management logic is quite a complex task. But that's precisely what we're focused on. 

 

Statzon: Electric vehicles are already designed to communicate with external platforms in most cases. However, heat pumps, being an older generation of technology, weren't initially required to have such communication capabilities. 

 
Kedar: Absolutely. Electric vehicles have made significant progress in this area, thanks to underlying protocols like the Open Charge Point Protocol (OCPP) and EEBUS, which standardize communication between energy assets and transmission system operators. 

 
  

Statzon: Shifting gears to home battery energy storage solutions, I've noticed they're gaining popularity. How do you perceive their future? Personally, I found the initial cost to be a barrier, but I believe prices are decreasing, making them more accessible. 

  
Kedar: That's a great question. Regardless of pricing fluctuations, the demand for batteries is bound to increase, especially with the growing installations of PV systems. The mismatch between energy production and consumption, typical with solar energy, underscores the need for energy storage solutions like batteries. As more PV systems are installed, the demand for batteries will naturally rise. This is also why electric vehicles are gaining popularity, as they serve a dual purpose of charging and discharging batteries. 

 
Statzon: What concerns me about using electric vehicles for balancing is twofold. First, with solar panels, energy production peaks during the day when it's not needed most, while the demand for charging an EV peaks in the morning when people leave for work. Secondly, there's the issue of battery degradation from frequent charging cycles. 
  

Kedar: That's a valid concern. This is where energy management systems, like what gridX is developing, become crucial. Smart charging is the buzzword here. It's about optimizing charging not just for user benefit but also for grid stability. The system dynamically adjusts charging based on various factors. For instance, it might adjust charging overnight based on the expected driving range or consider external factors like grid operator tariffs. Smart charging ensures cost-effective charging while avoiding grid congestion and overloading, all while prioritizing EV battery longevity. 

As for the fluctuating energy prices, such as spot pricing in Finland, energy management systems become even more essential. With prices varying so much, these systems justify their cost by optimizing energy usage and minimizing expenses for homeowners. 

 
Statzon: Now, let's redirect our conversation to explore the customers of gridX. Who are your customers? 

Kedar: Broadly speaking, we're a B2B company. We sell our products to a range of energy suppliers, including utilities, decentralized energy system suppliers, and charge point operators across Europe. These providers directly serve homeowners, who ultimately seek maximum cost and emission benefits from their energy usage. We actively engage with our customers to understand market needs and develop long-term solutions, such as our energy management platform called XENON. This platform is then integrated into smart IoT devices sold to end users, coordinating their energy assets using advanced management logic. 

Statzon: What major trends are you excited about or what emerging technologies are you looking forward to? 


Kedar: As I mentioned earlier, one of the standout assets of the decade is the heat pump. It's a complex asset with the potential to significantly reduce emissions in buildings. Exploring how to communicate with and optimize heat pumps is a fascinating topic that gridX is actively working on. With increasing regulations and incentives driving the adoption of heat pumps, we anticipate this trend to continue gaining momentum. 

Another significant trend is the dynamic tariff effect. With the rise of renewable generation on the utility scale, countries are adjusting electricity prices based on solar generation levels to incentivize greener consumption. Developing smart systems that can consume more electricity when it's greener is a trend we're closely monitoring. 

Additionally, fleet charging is an emerging concept that's gaining traction. Instead of focusing on individual homeowners, the focus shifts to companies with fleets of electric vehicles, such as Uber or Amazon. Coordinating the charging of thousands of electric vehicles parked overnight presents both challenges and opportunities in optimizing charging infrastructure. 

Looking ahead, one change I'm particularly interested in is how companies adapt to reduce dependency on China for technology and manufacturing. Localizing production of electric vehicles, batteries, and heat pumps, utilizing locally available materials, and developing a skilled workforce proficient in these technologies are all crucial steps. This shift towards localization has the potential to reduce technology costs and drive innovation. 

 

Statzon: The spike in energy prices last winter in Europe sparked a lot of interest among homeowners to upgrade their heating systems to more modern and efficient ones, particularly heat pumps. 

  
Kedar: This was especially noticeable in heating systems because Europe heavily relies on gas heating. Approximately 25 to 30% of European gas comes from Russia, but over a period of 6 to 12 months, this supply was completely cut off. This forced Europe to seek alternative sources, such as LNG from the US. This situation accelerated several trends, including the push towards heat pumps and EVs. Germany, for instance, has introduced massive incentives focusing on heat pumps and EVs to reduce dependency on natural gas and fossil fuels. While last winter was relatively stable weather-wise, we can't rely on luck every year. This is why the shift towards decentralized green alternatives, like electric assets, will continue to intensify.