TALKING NEW ENERGY

[00:00:24.630] - Jon Slowe

Welcome to Talking to Energy, a podcast from Delta-EE, the new energy experts. We will be talking about how the energy transition is developing across Europe, with guests who are working at the leading edge of this transition. Hello and welcome to the episode. Transactive energy is a term that's emerged in the last years in the energy sector, and it's being used more and more. I think it's quite a cool sounding word and involves some cool concepts such as peer to peer trading, but what does transactive energy actually mean?

[00:00:41.160] - Jon Slowe

How is it emerging? And in particular, what does it mean for distribution networks over which such transactions will take place? Is transactive energy a solution looking for a problem or what problem is it actually solving? Is it a buzzword that will fade away over time or will it end up becoming a key part of the energy transition? That's what we're exploring in today's episode. And I've got two excellent guests to help me do so. Let's say hello to them. First Gerben van den Berg, Strategic Business Developer at Alliander, hello, Gerben, thanks for joining us today.

[00:01:21.750] - Jon Slowe

Now, Alliander, for those of you that listeners that don't know, Alliander is a distributor of electricity, gas and heat in the Netherlands and in Germany, I think, as well. Can you tell us a bit about your role as a Strategic Business Developer for a very regulated business, like a network business? What does a Strategic Business Developer do?

[00:01:45.440] - Gerben van den Berg

A good question, I'll try to answer it briefly. Thanks for the invitation Alliander indeed is a grid operator in a large part of the Netherlands and in Germany, we are only active in grid management.

[00:02:03.510] - Gerben van den Berg

So, we have no retail or generation or other activities, not in electricity and gas, which is our main regulatory framework, but also not in other energies like heat or hydrogen or any other. In my role as a Strategic Business Developer, I work within a team of five and we lookout for the next activities or next businesses that Alliander wants to be active in and sees as complementary or essential for future grid management and that a broad range.

[00:02:42.320] - Jon Slowe

One of which is transactive energy or elements of transactive energy.

[00:02:48.800] - Gerben van den Berg

Indeed, and local energy systems, that is part of the transactive energy, and I guess we'll talk about it.

[00:02:57.110] - Jon Slowe

Yep, well, let's come back to that after we say hello to our second guest, my Delta-EE colleague and expert, Jeremy Harrison. Hello, Jeremy.

[00:03:04.290] - Jeremy Harrison

Hi Jon,

[00:03:08.060] - Jon Slowe

So, I want to start with what is a very simple question or sounds like a very simple question for both of you. How would you define transactive energy or how would you sum it up in a sentence? Who would like to go first?

[00:03:24.720] - Jeremy Harrison

Can I cheat, by reading the definition that the American Grid Wise council have come up with because that gives us a kind of a baseline that we can workaround. So, they say that it's a system of economic and control mechanisms that allows the dynamic optimisation of supply and demand across the entire electrical infrastructure using value as a key operational parameter.

[00:03:46.590] - Jeremy Harrison

And I think for me, the key part of that is it's about optimisation. You said earlier that this is an emerging concept. It's actually been around for quite a while.

[00:03:58.750] - Jon Slowe

I was going to say, Jeremy, you might say that the electricity system has always been optimised because it has to be balanced. Well, you can store to a point, but it's got to be balanced and in real-time. So, what's the difference between the optimisation that's gone on for decades and transactive energy optimisation?

[00:04:17.070] - Jeremy Harrison

Well, it's been balanced. That's right. In the old days when you had a central generation plant feeding through the voltage levels down to the consumers, the system had to respond to whatever the consumers asked for. And at times that's quite challenging to achieve. The classic thing about the World Cup final, everybody goes off to make a cup of tea at half time and that causes a huge surge in demand. And what transactive energy is about is not just meeting that demand.

[00:04:44.430] - Jeremy Harrison

It's about prevents partly preventing it happening as a peak, but also managing it in an optimised way to make better use of the assets so you don't have to over provide assets.

[00:04:55.480] - Jon Slowe

OK, and in a more distributed world that we're moving into, then you can do that using distributed resources, customers assets as well as big generation plant.

[00:05:06.460] - Jeremy Harrison

Yeah, and that's what makes it so complex, because as I say, in the old days, you had Central Park, which you just turned up and down with National Grid, and that's fairly straightforward. But when you've got multiple generation assets, different voltage levels, then it's a much more complex issue. And that's why transactive energy is emerging as this means of optimising the assets.

[00:05:28.860] - Jon Slowe

OK, just down that definition one more time and then Gerben we will go and get your either definition or perspective.

[00:05:35.820] - Jeremy Harrison

The definition was a system of economic and control mechanisms that allows a dynamic optimisation of supply and demand across the entire electrical infrastructure using value as a key operational parameter.

[00:05:49.760] - Jon Slowe

OK, so that's slowly sinking into our listener's minds. While that does Gerben, how would you define it or what perspective would you bring out or how do you see it in your role at Alliander?

[00:06:02.830] - Gerben van den Berg

Well, where this definition very much appeals to putting the infrastructure as a central element in the energy system of the future, another perspective that is also put forward explicitly in Europe by the European Commission, is the same mechanism that allows for control and steering, also allows for other participants to join in the energy system, even up to the level of the individual homeowner and its solar panels. Which, of course, can be used for self-consumption, but can also be sold to the neighbours or have feed-in tariff.

[00:06:48.870] - Gerben van den Berg

So, there are already small examples of economic levers that influence how the energy system is going to behave.

[00:07:03.260]

[crosstalk 00:07:03]

[00:07:03.420] - Jon Slowe

That's a peer-to-peer trading example, where you might sell electricity to your neighbour, for example.

[00:07:11.090] - Gerben van den Berg

We believe that there will be a time in the future, maybe near future, where anyone can trade with anyone or maybe anything can trade anything, with the rise of intelligent devices in IoT systems, etc. they can trade for any purpose, at any location at any time. So, there will be another top-down energy system.

[00:07:36.340] - Gerben van den Berg

In the future would centralise production and decentralised consumption, but there will be an end to everybody connected. At least administratively, economically, but then there comes the physical element aspect as well. So, there's the interesting intersection.

[00:07:58.130] - Jon Slowe

OK, and that intersection is then not only the trade, but the physical balancing and one thing that stood out to me as I've thought about transactive energy more and more is that that mix of the economic trade and the physical balancing and that physical balancing, both being a time and in space.

[00:08:21.440] - Jon Slowe

So, trying to balance locally as well as trade in a way that reflects those physical requirements.

[00:08:30.210] - Jeremy Harrison

I think, Jon, also there's different levels of sophistication and you mentioned peer to peer trading well at its lowest level, peer-to-peer trading can simply be about me trading my excess TV with my next-door neighbours, electric demand for its heat pump or whatever. Now, it's quite possible that there is no change whatsoever in the physical transaction. My electricity for my TV goes onto the grid and gets absorbed into the system and my neighbour takes his electricity off the grid and it's not as though he has changed his behaviour anyway, or I've changed my behaviour.

[00:09:04.500] - Jeremy Harrison

Now, the next step up from that is where you say, well, I wouldn't normally be running my heat pump at this time of day, but because you've got so much excess, rather than causing the problem on the network with excess generation raising the voltage, I can consume that because it's very cheap. So, I get cheap energy. You sell your energy, and we solve the problem of congestion on the network. So, there are different levels of peer-to-peer trading in transactive energy in terms of how much they influence and how much the transactions physically optimise the system.

[00:09:38.060] - Jon Slowe

OK, that's a nice, simple example, Jeremy, but I guess we're a long way away from having a market design or structure for that to work or are we? Maybe it'll be interesting Gerben and Jeremy to hear examples of where you see transactive energy popping up or, you know, are there examples of what you've described Jeremy. Is that happening today in the market?

[00:10:03.260] - Jeremy Harrison

Well, yeah. I mean, I'll give you two examples. One of the first level where nothing really changes. So, the much-cited example, the Brooklyn microgrid in New York, where people have PV on their roofs, some people would rather, and others don't. They, in theory, trade between each other, the electricity. So, one person's excess PV goes to another person and they have a blockchain transaction. But nothing actually changes the energy flows, just as it would normally done over the same network cables.

[00:10:35.870] - Jeremy Harrison

And in fact, economically, the billing works because the metres that the utility metres are done for these metres, that means they can go backwards and forwards. So those net metres don't actually reflect the use of the system at all. So, the poor old network operator gets left carrying the baby, having to transport electricity and not getting paid for it.

[00:10:58.190] - Jon Slowe

So, coming back to your definition, that doesn't help to balance the system in any way.

[00:11:02.240] - Jeremy Harrison

Exactly. Nothing changes at all the financial transaction has no bearing at all on the outcome of where a network operator has initiated a set of mechanism to reward the kind of behaviour they want to see. So Western Power Distribution in the UK in Cornwall has a local energy market platform, and that is also peer to peer transactions between people with PV or micro computing power systems selling their electricity to well through the platform to people who want electricity. But PV themselves also want to be able to control the energy flows to optimise their system to avoid congestion and capacity issues.

[00:11:50.480] - Jeremy Harrison

So, that's a genuine added benefit. So, people's behaviour is influenced not just by somebody wanting to buy it next door or further down the road, but by the needs of the system operator as well.

[00:12:02.360] - Jon Slowe

OK, so the network company there is incentivising people to transact in a way that helps to sell the network companies problems.

[00:12:13.810] - Jeremy Harrison

Yeah, yeah.

[00:12:15.790] - Jon Slowe

OK, Gerben, any examples from your side, things you've been involved in or seen in the market?

[00:12:23.780] - Gerben van den Berg

Maybe one that's interesting to mention that we've been teaming up with the authority of the Port of Amsterdam. They saw an increase in electricity use with the companies that are located in the port area.

[00:12:40.010] - Gerben van den Berg

The electricity grid in the port area is part of the public grid and operated by Alliander. And they had a similar vision as Alliander by saying, well, maybe we could optimise local production generation of electricity because some companies have PV installations some even have wind farms. There's a need nearby windmills. There's a nearby wind farm and there's a nearby waste incinerator that can also deliver electricity optimised to local generation and the local use, where both the time there, the optimisation can take place, but also by the means of the business activities.

[00:13:24.500] - Gerben van den Berg

And we developed together two platforms. One was to develop on lead by the Board of Amsterdam that optimises the use between partners in the board area, for instance, the cooling warehouse is optimised to the peaks in production from wind or solar. And they also made arrangements between each other that, for instance, the charging or delivery of electric delivery [inaudible 00:13:54], they were not all charged at six o'clock when they were ready, but they made a schedule.

[00:14:02.270] - Gerben van den Berg

And from our side, we introduced our platform from one of our subsidiaries, ENTRNCE, which allows partners to match their generation and their consumption, enabling local peer to peer direct trade, where the platform also then handles all the administration, also the electricity nominations that are needed for the grid operator and also the imbalances, etc. And so now they have a fully automated solution in place where they are optimising the use of the grid. And from our perspective, this is a nice example where the business interests and the grid interest go hand in hand.

[00:14:46.840] - Jon Slowe

Hmm. OK. Is that a pilot project? Is that an experiment? Is that something that you're starting to see being replicated in other areas? How would you describe the status of it Gerben?

[00:15:00.850] - Gerben van den Berg

It started off as a pilot for a few years ago, but we are now at the stage that we are actively talking also to other board areas and also other industry areas and say, well, this is a concept that can be replicated, and it's not restricted to a broad area. It can also be applied to any area where there is a cluster of energy use and energy generation.

[00:15:26.920] - Jon Slowe

OK, and I think those examples you gave, they're a nice mix of what I'd describe as the needs of the electricity system, on one hand, so the stuff the engineers and technical-minded people love, you know, Real-Time balancing generation demand, but also a consumer proposition where a customer is really motivated to do something.

[00:15:51.030] - Jon Slowe

So, I guess the two of those need to come together, you need both of those, you need the right price signals, the right incentives for the network company, for the electricity system. And you need something that's simple and appealing to customers. Do you see that balance right, both of you, in terms that the initiatives are developing, the way the industry is thinking? Are we too focused on one rather than the other?

[00:16:16.260] - Jeremy Harrison

I think you picked on a key point there about the correct incentives. Well, one of the things which I think we are all aware of the recent issues in Texas where they almost fell over completely. Certainly, there were some severe, long outages for many people. And the problem with that was exacerbated by a poorly designed market so that there simply was not enough generation capacity. So, it didn't really matter what price you attributed to generation. It just wasn't available. So, the price was actually capped at nine thousand dollars a megawatt-hour.

[00:16:58.470] - Jeremy Harrison

But if the system is allowed to go higher, it's gone to infinity simply because the demand so massively outstripped the supply. So, I think that's a very good example of how the market mechanisms failed to deliver the correct investment. And the reason for that was the incentive was based on price per kilowatt-hour, whereas you need to have physical assets even if it's only for a very short time. So, for example, you needed the capacity value distributed and they didn't have that.

[00:17:28.530]

[crosstalk 00:17:28]

[00:17:29.280] - Jon Slowe

 On kilowatt-hours, on energy, not on kilowatts. Not on power.

[00:17:34.440] - Jeremy Harrison

Exactly. So, I think I mean, that's a specific example, but I think it illustrates the point. You need to have a market that is designed to reflect the needs, the physical needs. So, it is no good having financial incentives if those do not correlate with the delivery of service.

[00:17:52.800] - Jon Slowe

Yeah, OK. Does that market structure work in the examples you gave Gerben, is the market ready for that example, in the board of Amsterdam? Is it ready for that to be replicated elsewhere or are there particular challenges in that?

[00:18:13.580] - Gerben van den Berg

I think the technology is not the bottleneck, I think, and the technology from such a platform is not the bottleneck. The technology from devices that can remotely be controlled is not a bottleneck and can lead us to every state of the markets. And the market structure is for now still the bottleneck. And there are many initiatives starting at different points in the energy system. And slowly, gradually, they are finding their way towards each other. And as in the end, it's one energy system they are all active in.

[00:18:51.440] - Gerben van den Berg

And so, it's also natural that they will have to meet all perspectives. But that will be a process of years, I think, to come. And of course, in the total energy system, there are also different incentives than trying to optimise either incumbent situations or temporary situations. For instance, feed-in tariffs are per different country, sometimes even per region.  They have a massive impact on energy flows and energy trade, but at the same time, we need them to make the business case for decentralised and CO2 friendly energy production.

[00:19:32.030] - Jeremy Harrison

Feed-in tariffs is a very interesting example because they are a very blunt instrument and as you say they are there to incentivise investment in renewables. But the problem is as Germany has seen to their expense that you can invest so much in the renewables, but you have overcapacity, and you have overvoltage problems in summer on a lot of networks but that is because the feed-in tariff is [inaudible 00:19:32] it is simply a value per kilowatt-hour regardless.

[00:20:03.620] - Jeremy Harrison

So, that, in a way, is almost the exact opposite of transactive energy. It is incentivising perverse behaviour. If you've got excess electricity in summer, you just chuck it onto the network because you get paid for it, even though that's causing the problem. So, a transactive system would actually reflect the fact that there's excess capacity and they would adjust the value of that feed-in tariff accordingly.

[00:20:26.150] - Jon Slowe

So, what you starting to see in Germany then Jeremy is people who are exporting electricity from their PV system. Coming out of the feed-in tariff and getting a very low price for when they export that electricity, so those people are now looking to self-consume that electricity. So, can they shift their consumption around? And maybe heat the hot water or charge their car at times that mean they don't export that electricity and get paid very little for it. What you are saying is that could extend to their neighbours or their communities or people in their locality as well as just themselves.

[00:21:02.010] - Jon Slowe

And that would be a much smarter a more transactive energy system.

[00:21:06.150] - Jeremy Harrison

Yes, because the German response network operator’s response to that was that certainly 10 kilowatt systems, they have the right to disconnect them. So, if there's too much energy flowing onto the network, they just switch them off, which is terribly wasteful. And that comes back to this point about optimisation. You can solve the problem very crude just by switching things on and off. But if you want to optimise it, you want to make use of that energy and as you say, put it in a battery, find some other way of optimising the system rather than just wasting resources.

[00:21:39.260] - Jon Slowe

OK, another example so a project that Delta-EE has been involved in recently has been looking at large scale wind farms being curtailed are switched off at times in the same way those PV systems sometimes disconnected and in Germany.

[00:21:55.550] - Jon Slowe

So, if the wind farm needs to be switched off because the system is at capacity or there's a bottleneck somewhere, could you actually turn up electric demand, maybe electric heating or shift that electric heating to times when the wind farm would otherwise be curtailed and that.

[00:22:14.370] - Jon Slowe

I think that's a really interesting use case, because in theory, yes, why not? But. I can see transactive energy, you could get into a bit of a complex situation where, at the national level, you might want to switch up electric heating or battery or charge an EV, at the local level, you might want to do something different and the wholesale market might mean you want to just do something different again. So, do we risk getting a very complex situation with these transactive energy schemes?

[00:22:47.000] - Jon Slowe

And how might you manage that? Or how are people starting to think about managing that?

[00:22:55.610]

[crosstalk 00:22:55]

[00:22:55.610] - Gerben van den Berg

I implicitly hear an either-or statement in this

[00:23:04.560]

[crosstalk 00:23:04]

[00:23:04.580] - Gerben van den Berg

It's going to be both. And we already see it that the transmission system operator in the Netherlands launched last year equity trading platform where individual households can offer services to the transmission service operator from their home battery or their electric car. That is from a national level directly on the lowest local level. And intermediate markets are also still there and also functioning still well. But yeah, the energy transition, I think, from a micro level will evolve into a new setting of the energy system.

[00:23:45.920] - Gerben van den Berg

So, there will be similar aspects. But new relations or a new partnership. And with the that is one thing that you mentioned in the heating solution is, of course, a local solution because you cannot transport heat on the same distances as a national electricity grid. So, it will be different levels of energy systems. Or a layered energy system is one of the terms that we use, which adds to the complexity on the one hand, but on the other hand, offers more levels for optimisation.

[00:24:24.820] - Jeremy Harrison

I totally agree, and I think the other point I'd pull out from that is that you say it's electricity, converting to heat, excessive heat, and therefore you touch on a really important point, which is not just about electricity. The minute you start changing energy systems, you have to start thinking a lot more holistically. And there's an example, again, in the UK, in the north of Scotland, in Orkney, the reflex project. And in that case, they have a multifactor system.

[00:24:54.580] - Jeremy Harrison

So, they're using excess wind capacity, which, as you say, would normally be just curtailed and therefore wasted and using that produce green hydrogen, which can then be used to provide heat and power in the fuel cell cogeneration system. It can also be used to fuel the power systems for some of the ferries and for local mobility. So, you've got the demands for heat, power, mobility, using hydrogen, electricity and heaters as the vectors. And it's all being integrated together, and it becomes extremely complex.

[00:25:28.180] - Jeremy Harrison

But that's where transsexuality comes in, because if you have simple price signals, then that's the driver that's controlling instrument that allows you to optimise the full holistic system.

[00:25:45.280]

[crosstalk 00:25:45]

[00:25:45.570] - Gerben van den Berg

The system of systems and we believe they're in such a complex field, they cannot be one central authority. So, you need other incentives and levers, and economical areas could be a transactive energy as economic levers could be a solution. Or an opportunity.

[00:26:03.920] - Jon Slowe

So, I can imagine some listeners thinking, well. This all sounds really interesting but really complex, and it's quite a different electricity system that you're talking about compared to the old electricity system.

[00:26:19.100] - Jon Slowe

So, one of the questions are both in the introduction was what problem is it trying to solve? So, last question before we move on to the crystal ball. How would you simply articulate the problem that transactive energy is trying to solve? Why bother with all of this?

[00:26:39.110] - Jon Slowe

I've stumped you there, you're thinking hard

[00:26:43.280] - Gerben van den Berg

From a grid operators’ perspective, I think transactive energy is a great opportunity to include incentives to optimise the system in total. Just a small size of one of the researchers that we are taking right now or is going on is could we also go to a mix where we say, well, grid investments may be up to 90 percent of the needed capacity in the last 10 percent of the capacity we will organise with Flex and there's, of course, an economic Trade-Off or also an economic trade-off.

[00:27:19.010] - Gerben van den Berg

So, that is how we look at transactive energy as a solution to include also the physical part.

[00:27:28.320] - Jon Slowe

So, it's helping you solve some of that congestion that you're getting on networks and you'll increasingly get on networks as we have a more electrified future, for example?

[00:27:37.320] - Gerben van den Berg

Yeah, very much.

[00:27:38.220] - Jon Slowe

Jeremy how about you?

[00:27:39.450] - Jeremy Harrison

Yeah, I would echo that I think that it's important to recognise that transactive energy is about optimisation. It's not the system. It is it is optimising it. You still need the hardware assets. You still need the physical infrastructure generation and the loans to be able to optimise. So, it's really just a more cost-effective way of delivering the very dynamic and very distributed energy system that we are moving towards. So, when you say it's a solution looking for problem, it would have been if you tried to implement it 20 years ago.

[00:28:15.090] - Jeremy Harrison

But because the energy system is changing, is evolving into a much more dynamic, distributed system, you need to have different instruments to optimise that that you're used to when it was a top-down control.

[00:28:28.110] - Jon Slowe

Yeah, OK. So, it's a more complex energy system we're moving into, which will need more, a solution that's more complex than the ones we've had in the past.

[00:28:38.490] - Jeremy Harrison

Exactly.

[00:28:40.500] - Jon Slowe

OK, keeping our time.

[00:28:42.570] - Jon Slowe

Let's now bring out the Talking New Energy crystal ball and set the dial this week to 2030.

[00:28:51.150] - Jon Slowe

It's hard to have a quantitative question, I normally like quantitative questions for the crystal ball, but what I'd like to ask each of you to describe is a picture of how widespread transactive energy will be in 2030 or what transactive energy might look like in 2030. So, you can interpret that question as you wish. Who would like to go first?

[00:29:18.870] - Jeremy Harrison

OK, I'll take the short straw, I think it will still be in its infancy. As I say, it's a very complex concept altogether. And there are so many different use cases that are being looked at. We haven't really talked very much about energy communities, for example, and that is one of the means that the European Union has seen for engaging consumers with the energy transition. And those are starting to be explored in many of the European member states, but still as pilots.

[00:29:52.980] - Jeremy Harrison

And those will take two or three years even to get the useful results to learn from them. So, in terms of scaling, I think by 2030 we will still be there will be quite a few systems, but they will be very small compared with the overall energy system as a whole. So, in terms of numbers you're talking about, the single-digit percent's is not going to be significant, but ultimately it could become a major force. And people are talking about maybe 40 percent of the European energy system comprising these energy communities and transactive energy systems within it.

[00:30:31.610] - Jon Slowe

OK, that really would be a paradigm shift, but maybe not by 2030. Gerben, how about you?

[00:30:39.140] - Gerben van den Berg

I agree, I think that that in 2030, it will be more around. It will be better understood. I think on what dynamics it will involve and next to energy communities and political and regulatory support that is evolving for this. I also see I'll be very interesting to learn what large corporate and industrial corporates will do when they are now also confronted with the need to change their processes or step up and electrification of processes or using other fuels.

[00:31:22.340] - Gerben van den Berg

What they will do. There's just a couple of weeks ago was a nice press clipping that multinationals, Heineken, Philips and some others jointly built a wind farm in Finland. But they are using it for their factories and sites all over Europe, and so administratively, that is great news. But physically it will be interesting if there is a congestion in Finland. How do they then solve it at the local site in I don't know which country?

[00:31:59.800]

[crosstalk 00:31:59]

[00:32:01.550] - Jon Slowe

Yeah, OK, so 2030, not a big paradigm shift for me, it's fascinating to see both the I guess the pilots, the sort of things you just got, Jeremy, but Gerben from your point of view, a company like Alliander investing in a platform and actually starting to see this as an opportunity to help enable a more transactive energy future, as well as I, guess having a financial stake in that, you know, extending your position of the value chain to having a stake in that and helping enable that.

[00:32:37.100] - Gerben van den Berg

And I must add to that that we do that not from a perspective of running a business but having facilitating a marketplace where local energy traders can take place. We also see as an opportunity to what we call implicit flexibility to incorporate the needs of the grid into that transaction. We're still finding out what way do we need incentives like in Cornwall or do we need a price, premiums or others? Or maybe bluntly say this is a region now out of scope for your trade?

[00:33:11.120] - Gerben van den Berg

We're just discovering how that works. But we firmly believe that if we work with the mechanisms and with the marketplace, then we can also use it for the good of the total system.

[00:33:25.480] - Jon Slowe

OK, we better draw to a close there I hope listeners that's been an interesting window on transactive energy. You may have heard the term and now hopefully understand more about it. Jeremy and Gerben, thank you very much for sharing your time and expertise.

[00:33:46.210] - Jon Slowe

I think it's a topic for the future, but not for the future, in that we don't need to think about it for a long time. I think there's a lot to do and engage with a lot of rules and regulations to shape and develop and a lot of opportunity. So, thanks for sharing your time. Listen. Thanks for joining as always. We hope you enjoyed the episode and look forward to welcoming you back next week.

[00:34:09.040] - Jon Slowe

Thanks, and goodbye.

[00:34:40.060] - Jon Slowe

If you're as passionate about the energy transition as we are, then please keep in touch. You can follow us and me on Twitter, LinkedIn or subscribe to the podcasts on your chosen podcast platform. 

[00:34:40.060] - Jon Slowe

If you'd like the podcast and like sharing, then please rate us and to listen to archived episodes, to read transcripts and to see the latest Delta-EE insights, then please visit www.delta-ee.com

[00:00:23.700] - Jon Slowe

Welcome to Talking to Energy, a podcast from Delta-EE, the new energy experts. We will be talking about how the energy transition is developing across Europe, with guests who are working at the leading edge of this transition. Hello and welcome to the episode.

[00:00:24.320]

It's fantastic to see climate change rising up organisations' agendas. A really good example of this is cities declaring climate emergencies and their own net zero or carbon neutrality goals.

[00:00:38.120]

These targets, visions and aspirations are great. There's always got to be a clear goal, but they need to be backed up with a clear strategy, plan and action. And in this episode, we'll be delving into cities, the growing number of net zero declarations cities are making and looking at what cities are actually doing, what's going on that and what we can expect to see in the next year. To do so, I'm joined by three great guests who help us explore this topic, let's say hello.

[00:01:08.000]

So first up, Sandra Fives, the CEO and co-founder of Urbanomy, a subsidiary of EDF, the energy company.

[00:01:19.250]

Hello, Sandra. Sandra, I think we can assume our listeners will know who EDF is, but they probably don't know about Urbanomy. So can you tell us a little bit about Urbanomy and what you do there?

[00:01:30.320] - Sandra Fives

Yes, with pleasure. So Urbanomy is basically trying to solve the dilemma between the reduction of energy consumption. Meanwhile, we are all increasing and we're to support the development of new electric uses such as electric vehicles, the emergence of data centres, IoT applications, and at the same time we try to reduce carbon emissions. So Urbanomy being a spinoff of EDF coming from an expertise on the energy sector, we try to help our customers who are real estate developers, investors, promoters and also local authorities to solve this issue.

[00:02:08.420] - Jon Slowe

Okay, so you are helping them solve the issue. Are you helping them? Are you helping them do the plan and the strategy or are you helping them implement and deliver? Are you getting involved in delivering projects as well.

[00:02:23.210] - Sandra Fives

Yeah, that's the key question. You're right, because we we come into place in the consultancy phase. So we provide consultancy. We come into place in the planning of their project, which means that we help them build the vision, the strategy, the action plan. We build scenarios with technical and economic recommendations, and then we also help them in the visualisation of their projects so they can involve and engage with stakeholders around their project. However, as Urbanomy, we do not get involved in the implementation for this weekend either, um, you know, work with other people in the in the market or we can work with some of EDF subsidiaries.

[00:03:00.380]

We can also support in the implementation of the projects.

[00:03:03.440] - Jon Slowe

Okay, that's clear.

[00:03:04.760] - Jon Slowe

And how how wide geographically are you doing? This is it is it just proxies it from other countries is what's your reach.

[00:03:13.970]

Our reach is actually the UK and Germany as a priority. And so our team is based in the UK, in Germany. And we also have including myself, some people in in Paris, in France, we benefit from a wide customer base from from EDF that we can do some cross-selling with. However, we really proactive in the UK and Germany.

[00:03:35.330] - Jon Slowe

OK, and why those three countries and do you have plans to expand your activity to other countries as well and why those two countries?

[00:03:44.510] - Sandra Fives

Our analysis shows that in terms of maturity on the topic of sustainability, reaching net zero and also because the core of what we do is providing an integrated vision that I will maybe I will share a few words on this a bit later. And the UK and Germany are the two countries where the markets is the most mature, the most ready for our services. So this is where for us there is most potential. In terms of other geographiese, w are also looking currently at the Middle East.

[00:04:14.930]

So we're looking at the United Arab Emirates and maybe Saudi Arabia as two other potential markets.

[00:04:21.850] - Jon Slowe

OK, so you're looking at places where the cities are they're ambitious, they have those goals, they have the vision, but they need support in then that strategy, that action plan.

[00:04:32.830] - Sandra Fives

Yes, I would say for the Middle East, it's a totally different, totally different environment, of course. And the challenge is a lot bigger in helping helping developers, helping the real estate world, really integrating sustainability and net zero targets very early on in their projects. This is the challenge there, as well as transforming the energy generation into a more renewable energy generation, which is very different to what we can see in the UK and Germany. Of course.

[00:05:03.260] - Jon Slowe

I can imagine. Yeah, OK, thanks. We'll come back to you shortly.

[00:05:08.830]

My second guest is James Sterling, Communications Engagement & Partnerships manager at Bristol City Council in the UK. Hello, James.

[00:05:17.170] - James Sterling

Hello. Thanks for having me.

[00:05:19.120] - Jon Slowe

Thanks for joining James. For listeners who don't know, Bristol is not one of the biggest cities in the UK, but it is a reasonably sized cities. Can you give us a few quick facts about the city?

[00:05:31.110] - James Sterling

Yes, sure. So for those that aren't aware or haven't visited Bristol is it is a core city. So it's one of the largest, top seven largest cities in the UK with a population of about half a million and growing. And I'm very pleased to say that we were the first UK city to declare a climate emergency back in 2018.

[00:05:52.140] - Jon Slowe

OK. And from that, what targets has Bristol set itself targets beyond declaring that climate emergency?

[00:06:00.330] - James Sterling

Yes. So prior  to 2018. Our target for carbon neutrality was to be carbon neutral by 2050. When we set the target obviously  it was in line with kind of COP and government policy back in the day. However, on declaring the climate emergency, we we decided to set a more ambitious target to go faster and to up the scale and pace of delivery. So we set a new target to be carbon neutral by 2030, but also for the council to become a carbon neutral organisation by 2025.

[00:06:37.100] - Jon Slowe

OK, so that 2025 target's within the direct control of the council's activities, but the 2030 target, that includes everything in the city, presumably.

[00:06:49.100] - James Sterling

That's right, yes, 2025 is the council and its operations so our offices, schools, housing, libraries, museums and the like, and yes, the 2030 is city wide.

[00:07:02.520]

OK, well, we'll come back to shortly about how are you going about that. My third guest is Delta-EE expert, my colleague, Alex Weil. Hello, Alex. Alex, you're looking across the net zero space.

[00:07:18.170]

Can you give us a feel for how widespread this trend of climate emergencies and net zero cities is across Europe.

[00:07:27.370] - Alix Weil

Well, across Europe, it's difficult to count the number of cities which have declared the climate emergency, but worldwide I would say that around 2000 cities have declared a climate emergency. So you would have approximately the same number that have set measurable goals. But it's still a pretty recent trend because the first declaration actually dates back from 2016 only.

[00:07:54.240] - Jon Slowe

OK, and a cynic might say that declaring something or setting a goal is easy to do.

[00:08:03.420]

It's an easy slogan, it's a nice goal to set. But how clear do you see cities are about how they're going to achieve that and the action that they need to take and the action that they are taking?

[00:08:15.230] - Alix Weil

That's a very good question. Well, first, I think I need to explain a little bit what net zero actually means. So it basically aims at carbon emission not exceeding carbon that is used or mitigated in a certain area. So here we're talking about cities.

[00:08:34.760]

But what is actually accounted for in carbon emissions, what we consider as the boundaries of a city is quite unclear. So we have this broad ambitions ranging from 2025 to 2050, but each account very different carbon emitters. They cover different boundaries, which makes it very difficult to understand the level of ambitions of cities. But so far, yeah, and what we've seen so far is that most cities don't really know what they're covering and hence it's difficult for them to have an actionable map.

[00:09:12.400] - Jon Slowe

Sandra, how does that match with your experience, you see the same or do you see, we'll come on to Bristol shortly, but do you see cities in general really backing up that vision with strategic plans and actions or a stage where they've got the vision but they're trying to work out what to do next.

[00:09:29.930] - Sandra Fives

Hmm. Yes. I think maybe we should take a step back and see also what what he's done at a national level, because I think the, um, the involvement and the the empowering of cities is also matching with what is happening nationally. So I think in the U.K. right now, what we see is is a good promising trend in the sense that we know that now the UK is halfway to meeting its net zero emissions targets, which is which is good.

[00:09:57.940]

And the reductions in carbon emissions that have been made are mostly in, you know, more renewable energy generation, cleaner industrial processes. And also, we've noticed that in 2019, transportation, the fact of decarbonising transportation, has accounted for a fourth one fourth of the reduction of carbon emissions. And I think there we see what cities can do at a more local level, especially on transport and mobility and also on renewable energy, local renewable energy schemes put into place at a local level.

[00:10:33.520]

And the other reassuring point is that we know that roughly there is about 73 percent of the urban population in the UK that live in cities with natural targets. So it shows that at the target strategy plan and even if there is a target, there should be a sort of an action plan to reach that target. And it's showing that we are on track. There is there's a trend, a positive trend to to move and to go forward.

[00:11:00.520]

In terms of implementation, what we see is that cities like quite often are are missing some financing of their project. This is often the pain point for cities, which is why the involvement of the private sector is absolutely crucial in in that in those projects and the implementation of those projects. And this is why we see cities were looking for investment partners as well as, you know, industrial partners that can help them to implement that project. This is why also we believe that at Urbanomy, that we should also target people who take part in the change and the transformation of cities such as developers and the real estate world, which accounts for a good chunk of carbon emissions.

[00:11:42.340]

So this is all this industry that needs to move forward as well.

[00:11:46.090] - Jon Slowe

OK, and it all needs to move forward, well not perfectly together, but in a way together at the same pace and in the same direction. So, yes, a complex, complex ecosystem then and complex between what's really in national government's control and what the cities can do themselves. Well, James, Bristol has been one of the leaders in the U.K., so you told us about your ambitions, your goals and targets.

[00:12:17.690]

Can you tell us a bit about how you're going about that, um, and what you're actually doing to bring those that make this target to reality?

[00:12:28.730] - James Sterling

Sure, so, I mean, declaring the climate emergency, you know, hugely important, you know, the message that sends to neighbouring cities in the rest of the UK cannot be understated. But the work to get there was kind of quite a long time in the making. So we've been at a very, very interesting and very fruitful kind of relationship with energy as a city over the last couple of decades.

[00:12:54.050]

We've been investing our own capital over the years. So the council now has invested over 60 million of its own budgets, a great deal of grant funding as well from Europe and from central government to invest in kind of clean tech or, you know, large kind of energy infrastructure. So lots and lots of work there. But I think on setting the new target, we were really clear with ourselves that actually setting a target is one thing. But coming up with a road map and a methodology to actually getting to that target requires a lot of work.

[00:13:29.420]

So, you know, almost immediately upon setting that target, we started to consult with city partners. We started to work with some consultancies to actually develop a roadmap and help us to build that kind of future strategy, you know, understanding that we were bringing target time for 20 years, essentially. So we published last year the one city climate strategy for Bristol, which sets out all of the things that we need to do.

[00:14:00.070] - Jon Slowe

OK, can you give us... the 60 million you mentioned of the council's money that you've invested? Can you give us a feel for one or two of the things that's been invested in? Is it things like district heating or community heating or... What's that gone into?

[00:14:16.340] - James Sterling

It's a little bit of everything, actually. So, I mean, one of our largest projects at the moment is City Centre Heat Network. So we've invested, you know, tens of millions in decarbonisation of heat and providing essentially kind of low carbon district heating, sometimes called heat to thousands of properties across the city. So our heat network supplies a thousand homes and a number of businesses now and more connections to come. We're also the first UK city to build and manage and operate our own large scale wind turbines as well.

[00:14:52.460]

So we've got those happily spinning away in the northwest of the city as we speak.

[00:14:58.280] - Jon Slowe

OK, so coming back to the point Sandra made about finance. So on one hand, 60 million is a lot. On the other hand, it probably isn't very much if you consider all the investments that are necessary to to reach 2025, 2030 targets. So what's Bristol's approach to that? Do you need the private sector? How much of this can you do? How do you work with the private sector? How do you bring that capital into the city?

[00:15:26.490] - James Sterling

Absolutely. I mean, yes, 60 million is a lot to a council. But in terms of the scale of the challenge, it's it really is a drop in the ocean. And so, you know, looking at the target, looking at our current trajectory through kind of annual investment, we know that we're never going to hit 20, 30 in isolation, that the scale and the pace of the challenge needed to deliver that is far greater than the council could ever bring to bear.

[00:15:54.080]

So so our view was around partnership, really, and a new approach towards delivering energy infrastructure in the city. So we launched in just before the climate emergency was declared, actually in twenty eighteen, an initiative of City Leap. And City Leap is essentially a large long term partnership with the private sector to deliver up to a billion pounds worth of investment in the energy system over the next 10 years. We're in the process of looking for that partner at the moment. So in a procurement to kind of establish who will join us on that venture going forward.

[00:16:34.300] - Jon Slowe

OK, and the advantage there are you've got one partner, a long term partner. It's not a piecemeal approach where you have to tender for every single project you want to do, but you've got a partner. They share your vision, willing to make the investment a presumably able to get a return on investment as well.

[00:16:50.410] - James Sterling

Well, absolutely, yeah, and it has to be a commercially viable proposition, so, you know, looking across all of the technologies, there are some fantastic investment opportunities in the city. So we did a lot of feasibility to look at the opportunities. And that's essentially where the billion pounds investment figure came from. But obviously, lots of modelling as well in terms of what will an investor get out of this apart from you know, a good feeling for, you know, having contributed to our journey to carbon neutrality.

[00:17:20.030] - Jon Slowe

And politically, has that been hard? Because I've seen some cities want to do this themselves, but to work with the private sector for it to be that joint venture type model -  is that politically harder or was that actually quite straightforward to take forward politically?

[00:17:37.840] - James Sterling

It's been a long conversation. I mean, I think I'd start by saying that the declaration of the climate emergency and the setting of the new targets had unanimous support across all parties in the city. So every single councillor, every single local politician voted in favour of that motion. And that in itself is very telling. It speaks to that the challenges that we face and the kind of political will within the city, which is great. I think, as you say, in terms of partnership between public and private sector, there have been, you know, sort of dalliances, I suppose, in the past and on a much smaller scale.

[00:18:18.790]

And I think politically we're getting a lot of support and that's simply because there is really no alternative for us to deliver what we need to deliver so that there is always a risk, any partnership is a risk. But I would say the risk of doing nothing is is far greater, really.

[00:18:37.860] - Jon Slowe

Yeah. Yeah. Sandra and Alix, how if you look at other cities, do you see many other cities taking this approach Bristol is taking or some very different approaches? Sandra would you like to go first and then Alix.

[00:18:53.150] - Sandra Fives

Yes, sure yes, it's a very interesting approach that that Bristol has taken, and we do see other cities that also get highly involved in well, first, the climate emergency declaration, of course, but then setting up a strategy and the action plan and then running projects.

[00:19:14.180]

And I think there are a few a few exemplary cities in the U.K. We we're actually working with one. Well, it's not quite a city it's more a County Council, but we're involved in the Local Energy Oxford project. So in the in the County Council of Oxfordshire. And we're helping them on a specific project, which is called Salt Cross Garden Village. So this is a brand new village that they're building near to an existing village. And how these can contribute to facilitating transportation at a local level, giving access to the population to Oxford, especially with decarbonise transport, but also giving you access to affordable housing.

[00:19:59.570]

And it has high ambitions in terms of net zero targets as well for that specific scheme. So that's an example for me of another project undertaken at a local level, also involving local communities, which is another aspect I think, that cities are great at doing. They have to engage with the local stakeholders. There are plenty of residents and citizens who are highly interested in what will become the cities, what are the actions undertaken. And I think putting them around the table, taking into consideration the plans and their input into the plans is absolutely key to the success.

[00:20:39.310]

So I see you know, there is the financing aspect, which is vital, obviously, to to implement projects. And then there is also the buy in of the local population and making sure that you do something that will benefit to the people who currently already live there.

[00:20:53.060] - Jon Slowe

Yeah, OK, Alix, how about you in terms of approaches?

[00:20:59.510] - Alix Weil

Well, I agree with Sandra. They're a few exemplary cities. But overall, I would say that the Bristol approach of the joint venture is quite unique. So far, what we see in the market is more fragmented projects. So you would have a project focussing on a single technology or a single site. We don't have such a broad approach and I think we still miss them a little bit because I think it's going to be hard to connect the points after some progress are made.

[00:21:29.450] - Jon Slowe

Yeah, OK, so that holistic view that you described in Bristol where you're looking at one partner, a whole multitude of product projects across the city, that billion pounds of investment. Sandra, do you see anything else like that or would you agree with Alix it's more piecemeal or less big city wide partnerships with that level of ambition in Bristol?

[00:21:54.890] - Sandra Fives

Yes, I have to say, if if I try to think of the other projects, they're probably not as wide and city scale as what is undertaken in Bristol, also sometimes because of the ownership of the land.

[00:22:09.320]

So a lot of the time it's linked to land ownership and who is involved and who has this ownership. So if it's quite scattered and, you know, split across different players, then it's harder to have this more integrated approach with a city ambition.

[00:22:31.700] - Jon Slowe

Yeah. What about Germany? Because the German cities and towns have tend to have more powers and historically been involved more in implementation and ownership of utilities, for example, than in the UK. So do you see different approaches in Germany or is it similar aspects to what we talked about?

[00:22:54.800] - Sandra Fives

Yes, it's quite different. You're right. It's it's very decentralised in terms of the management of the energy systems. So they are the model of Stadtwerke, so they are like local utilities working directly hand in hand with the cities.

[00:23:10.580]

And also, I would say the land and the cities themselves, the lenders, which are the equivalent of the county councils, shall we say, have bigger a bigger empowerment in terms of decision making and budgets associated with that decision making. So there is, again, a more decentralised way of approaching this topic at a local scale. Then in terms of actions surprisingly, I don't see that the UK is lagging behind. You know, even though the model is is is different.

[00:23:45.680]

Quite the opposite, actually. The they are it's actually roughly at the same level in terms of the number. When I look at the tenders coming out and the number of cities in Germany and in the UK that are now asking for support on building those strategies and those action plans and running the projects, the demand is quite similar on both sides, which shows to me that Germany is not more advanced. And and also, I would like to say, in terms of the awareness of the population, surveys that we are doing with citizens is showing that there is a bigger awareness in the UK on climate change, climate emergency than there is in Germany.

[00:24:23.330] - Jon Slowe

Surprisingly, even though Germany has this image of a very sustainable country and the Green Party having a lot.

[00:24:30.440] - Sandra Fives

Exactly, yes. So I think it could be due to the the topic. I think the UK has really embraced this topic of net zero. It's now everywhere across all industries, which is great as long as it's behind it.

[00:24:45.140]

There are obviously action plans and reactions implemented, but that also allows for popularisation and democratisation of the topic itself, vulgarisation of the topic. And that's really important if you want that buy from the local stakeholders as well.

[00:24:58.190] - Jon Slowe

Yeah. Alex, any other European countries that stand out or citizens stand out as examples of what you've looked at?

[00:25:08.660] - Alix Weil

That's a very good question. I think for me, the UK and Germany are probably the leading ones as well. I would say that there are also a few cities that stands out like Copenhagen, Amsterdam, with very bold and innovative plans, but that's probably more scattered. I would say it's more about cities than a big country trend like we can see in the UK and in some other in Germany.

[00:25:34.070] - Jon Slowe

Yeah, OK, it sounds to me like there's a growing amount of ambition. It sounds like we're still there's a lot of learning to do around the the action is quite straightforward to take a step towards maybe the wrong word, but taking action on specific projects or specific areas of land, I can see how cities can take that forward. The approach you're taking, James, sounds more I don't know whether it's unique, but it's certainly quite a bold and all encompassing approach. What if other people are listening joins from other cities? What what key learnings would you would you share with them from your journey? Particularly about that public and private partnership, I know you're not there yet - you're still in the tender process.

[00:26:29.090] - James Sterling

Yes, and I think I mean, City Leap's been kind of branded not by us, but by Department of International Trade and lots of others as a world first is something very unique. And it is definitely a game changer, I think, in terms of the way that local authorities can work in that holistic way that Sandra was describing. I mean, I guess the key learning for us is that public sector, you know, local authorities should not understate the power that they have within their cities and within their regions.

[00:27:00.410]

You know, there are a great deal of really attractive factors that would make any local authority a fantastic partner to work with, you know, not least kind of engagement in sort of in a planning process, ownership of assets and land, but also that kind of convening influence, that trusted brand that the local councils have. And particularly, I think in the wake of the pandemic, local councils and local authorities has become a real kind of hub, I suppose, for public information and a real trusted voice in communities.

[00:27:34.120]

So I would say definitely always open to have a conversation from a personal perspective with the local authorities, but definitely kind of with I suppose this is the message there.

[00:27:45.980] - Jon Slowe

Yeah, OK. And in terms of the tender process, I know you definitely won't be able to say who is involved in that. But have you had a lot of interest? Do you feel it's going to be a challenge to get the last part of that done, to get an agreement in place that gives the private sector partner the returns they want, and gives Bristol City Council what you want.

[00:28:08.100]

Yeah. So it started out with a great deal of interest, actually surprised even me as a communications person. You know, we managed to kind of market the city in such a way that attracted a phenomenal amount of interest. So we had two hundred early expressions of interest from a range of organisations across the UK, across Europe and across, you know, the Far East and further afield. So huge amount of interest in terms of Bristol's proposition and what we what we bring and what we offer.

[00:28:41.740]

We've whittled that down now so as part of the tender process, we're down to our final three bids. We've done a shortlisting or down selecting, if you will. So we're down to three shortlisted bidders, which are E.ON. and Marubeni as a consortium, Amaresco and Vattenfall, and Engie and Sumitomo is another consortium. So so three, you know, absolutely huge potential partners for the future. And all of whom could play a fantastic part in our journey.

[00:29:18.070]

Well it sounds fascinating - it sounds like that could be a model from the interest you've got, from those companies that are involved that you describe, that could be a model that could be replicated across cities across UK and Europe and beyond.

[00:29:33.780] - James Sterling

It's definitely definitely one of our key objectives, actually, is to create something that's replicable. So we've been working very closely with central government, with the local DNOs, with, again, Department for International Trade, to fully understand, I guess, the potential of a City Leap model and how you could create a City Leap for, you know, other core cities and other regions.

[00:29:59.230] - Jon Slowe

Sandra and Alex, briefly from each of you - see potential for that model in other cities?

[00:30:06.180] - Sandra Fives

Yes, absolutely, I think it fits for - it's suitable, obviously, for Bristol. And as we said, Bristol is one of the top ten UK cities, so maybe it's not applicable to to all cities. And that's why we need to have different models, depending on the scale, depending on the ambitions. Yes. Replicability is it that's always the tough bit is being the first one to do it. You always have a first of a kind is good because you attract attention and you it's and therefore there is also a lot of interest and people who who want to support and get involved. But at the same time, of course, it's a journey where we have to learn and and I think replicability and embark in those lessons, plans for the cities that I'm sure Bristol is involved in, in cities, communities and different associations where they can share those learnings. So that's that's key.

[00:30:58.900] - Jon Slowe

Yes. Yeah. The leading edge, but also sometimes a bleeding edge, but hopefully not too much of that. Alix, do you see a similar potential?

[00:31:08.760] - Alix Weil

Absolutely. I think while replicability is always difficult, but best practises, best working technologies. Ideas is definitely things to do to keep an eye on the Bristol Project.

[00:31:23.620] - Jon Slowe

OK, well, let's bring out the Talking New Energy Crystal Ball and set the dial this week to 2030. And the question for each of you is this...

[00:31:35.930]

If we look beyond the what national policies of regulation will achieve. So what the German government, the U.K. government will achieve through their national policies. How much difference will cities be making to our progress to net zero, so you might want to answer this from your own perspectives from Bristol or some of the cities you're working with, Alix, from across the industry. But how much difference will it be making by 2030? Uh, let's start with James and then Sandra and then Alix.

[00:32:09.640] - James Sterling

Well, firstly, informationally, hopefully, Bristol will be the first city to reach carbon neutrality. And lead by example there, but I think importantly, we're not only in terms of decarbonisation, but we are also taking, you know, my fellow Bristolians on a journey with us, you know, a life changing journey which will improve, you know, a lot of aspects of everyday life, you know, clean up air quality, improve the energy efficiency of homes, you know, a just transition for new green jobs.

[00:32:46.210]

And I guess importantly, you know, I was nodding along when Sandra was talking earlier about ownership and taking communities on that journey with you and ensuring that people have a meaningful stake and that's really something that we want to build. And we want to show the rest of the UK how we can work with community organisations, with community energy groups to to to to play an integral part in that transition.

[00:33:12.790] - Jon Slowe

OK, well, best of luck in the next year. Sandra, how about you?

[00:33:18.790] - Sandra Fives

Yes, I totally support  what James was saying. So I think the biggest impact that cities can have is the involvement of local communities, the vulgarisation, the democratisation of the topic, and ensuring that there is also a change in behaviours at an individual level. So that's that's the power of cities. They can they can show they can lead by example and then embark a whole population that will also change their habits the way they consume, the way they move.

[00:33:48.930]

So that's absolutely key. And I'm not sure this is something that can be done at a national level. So that's first point. Then the second point. I think also in it's in the conception of cities, in the planning and the urban planning of cities. You can also have a big impact at a local level. And these are decisions that are really relevant for the local level and don't depend on the on the national requirements.

[00:34:12.860]

So I'm thinking specifically, there is a new trend in urban planning at the moment, which is the so-called 15 minute city. And it's this idea of being able to access any essential part of our lives: work, housing, transport, culture, education, health services, within the 15 minutes walk reach or a 15 minute cycle reach. So decarbonised way of transport we reach, let's say. So this accessibility at a local level as well is again going back to changing the behaviours of how people move within the city and plan their days and plan their lives is also having a greater impact on reaching net zero.

[00:34:57.100]

So for me, it's another way through the local planning input of cities and directions they can give how and hopefully in 2030 they can really have an impact. And on this we see great leads from cities across the world, you know, be it in Australia, in France, in Copenhagen. That was mentioned by Alix earlier, in Spain, in Barcelona. It's, there are many cities, in Dublin as well in Ireland. So many cities are integrating this at a local scale in the way they want to engage with urban planning going forward.

[00:35:29.800] - Jon Slowe

OK, so, yes, some clear ways there that by 2030, cities will be making a differences that add to or go beyond the national policies.

[00:35:39.760]

Alix, last but not least, from you?

[00:35:40.870] - Alix Weil

I'm not sure I have much to say. Everything was said already. And I think honestly that ultimately national government will have a key role to play in the net zero transition, probably bigger than through all they have right now. And I'm pretty sure we're going to have new regulations, incentives put forward by national governments. But I completely agree with Sandra and James that the cities have a real connector or a neighbour role in this regards with the local community, with the local businesses.

[00:36:18.760]

And they are going to be the connection between this bigger scale incentives sentence and the local community buying. And so that's the first thing. And if I just have the time to do the second thing, I think that it is also great testbeds to see what works and what doesn't work. And it's going to show the best practises and what should be done at the national level to ensure that everything is following.

[00:36:43.660] - Jon Slowe

This is a good point. They could they could move faster than national policy can move so they can innovate quicker. Yeah, well, that's a positive and exciting note to finish on. So it's been excellent to delve into what's actually going on.

[00:37:02.470]

Sandra, thanks for your perspective working across cities. James, it's been great to hear about Bristol and Alex. Great to hear your your wider view of the market. Um, so, yeah, Sandra thanks very much for joining.

[00:37:15.790] - Sandra Fives

Thank you, Jon.

[00:37:18.460] - Jon Slowe

Thanks James.

[00:37:18.460] - James Sterling

Thank you.

[00:37:19.570] - Jon Slowe

Thanks, Alix.

[00:37:21.370] - Alix Weil

Thanks, Jon.

[00:37:22.360] - Jon Slowe

And thanks, as always to everyone listening. We hope you enjoy the podcast and look forward to welcome you back next week. Thanks and goodbye.

[00:37:31.720]

If you're as passionate about the energy transition as we are, then please keep in touch. You can follow us on me on Twitter, Linkedin, or subscribe to the podcast on your chosen podcast platform. If you like the podcast and like sharing then please do rate us, and to listen to archived episodes, to read transcripts and to see the latest Delta-EE insights. Then please visit w w w Delta hyphen e e dot com.

[00:00:23.840] - Jon Slowe

Welcome to Talking to Energy, a podcast from Delta-EE, the new energy experts. We will be talking about how the energy transition is developing across Europe, with guests who are working at the leading edge of this transition. Hello and welcome to the episode.

[00:00:24.830] - Jon Slowe

Think about heat pumps, and I'm sure the vast majority of you will be thinking about electrically driven heat pumps, but that's not the only variety of heat pumps. Heat pumps can also be driven by heat itself rather than an electrical compressor. Some listeners might have heard about a gas-driven fridge, an example of a thermally driven heat pump.

[00:00:46.460] - Jon Slowe

Well. Today, many thousands of such heat pumps driven by combustion of natural gas have been installed across Europe. And while boilers are efficient, thermally driven heat pumps are a step higher as they capture the low-grade heat from the air around, and they can operate at efficiencies of up to one hundred and sixty percent or even more. So today, we're going to look at the state of thermally driven heat pumps and explore where this technology might be going and what role it has in the energy transition.

[00:01:19.430] - Jon Slowe

So, to delve into the topic, I've got three fantastic guests. Let's say hello to them. First up, David Dupuis, Project Manager for Innovative Gas Products at Engie. Hello, David.

[00:01:30.560] - David Dupuis

Hello. Hello, Jon.

[00:01:32.780] - Jon Slowe

Um, David Engie is a very large energy company. Tell me very briefly what you do at Engie. Which part of the business do you work in and how are you working with thermally driven heat pumps?

[00:01:44.980] - David Dupuis

Yes, so I work in Engie Lab Crigen, which is one of the research divisions of Engie. OK, I am a project manager and I have in charge of developing maybe several projects dealing with gas heat pumps.

[00:02:05.050] - Jon Slowe

OK, so your day job is looking at gas pumps, at the technology, trials, market development, all of these things, right?

[00:02:12.860] - David Dupuis

Right.

[00:02:13.420] - Jon Slowe

OK, so you live and breathe thermally driven heat pumps. Well, let's come back to you shortly after we've introduced our other guests. My second guest is Stefan van Uffelen, CEO of Cooll Technologies in the Netherlands. Hello, Stefan.

[00:02:29.410] - Stefan van Uffelen

Hi. Good afternoon.

[00:02:32.390] - Jon Slowe

Stefan,

[00:02:32.440] - Jon Slowe

You're developing a thermally driven heat pump. Can you give our listeners an elevator pitch, a very brief summary of what your product is that you're developing?

[00:02:43.120] - Stefan van Uffelen

Yes, we are developing a thermally driven heat pump based on the carbon ammonia cycle, it's an absorption heat pump. And what the thermally driven heat pump does, we take air from the outside together with the heat from burning gas and the sum of those, too, we put in a house and the aim is to do it efficient and our technology, our origin is from cryogenic cooling.

[00:03:11.910] - Stefan van Uffelen

So, for the European Space Agency and the challenge was to cool without moving parts. And when we developed this technology, we thought this will be very suitable for ambient use. And so we started in 2009 with developing a heat pump based on this technology.

[00:03:30.970] - Jon Slowe

OK, so you've been doing this for many years, and I guess your goal is to have a product like a boiler with your technology inside that could go into homes and really increase the efficiency through which that gas is used.

[00:03:45.190] - Stefan van Uffelen

Yes, we really focus on the replacement product for the existing convention boiler. It looks like a convention boiler. So, it has the same connection it can be wall hung, it's inside. We don't need an outside unit. It's very compact.

[00:03:58.330] - Stefan van Uffelen

So, it's really a replacement product of the convention border, but then with a higher efficiency.

[00:04:05.350] - Jon Slowe

OK, thanks, Stefan. So, let's go to my third guest now, my colleague and Delta-EE expert, Steven Ashurst. Hello, Steven. Welcome back to the podcast.

[00:04:16.870] - Steven Ashurst

Hi, Jon. Yeah, it's great to be back for another episode.

[00:04:20.370] - Jon Slowe

So, I mentioned in the introduction there are thousands of thermally driven heat pumps running in Europe today, but can you give us an idea on how big this market is in the context of the wider European heating market, the overall heating market?

[00:04:37.470] - Steven Ashurst

Well, if you look at it this way, products for business customers have been available for well over 10 years. So, distribution, there is quite established across several, several European countries as well as further afield. And there are by this point, there are some small niches emerging. And we're at the point where there is an installed base of several thousand units.

[00:05:02.830] - Jon Slowe

And they might be in hotels or these sorts of buildings, for example.

[00:05:08.250] - Steven Ashurst

Yes, hotels, schools and even a small commercial building where there is either a high heat load, a high-water load, or, of course, a cooling load in the summer as well. That's another aspect that you can provide with TDHPs on the residential side.

[00:05:27.030]

[crosstalk 00:05:27]

[00:05:27.260] - Jon Slowe

So, in that market, in the commercial and industrial market, they're established, but they're a relatively small part of the market. But they're established.

[00:05:34.710] - Steven Ashurst

Yes, established still growing, still developing on the residential side. The products have been available for less than 10 years. So, there's a handful of companies on the market just now. There's one kind of standout market leader. Again, we're seeing several thousands of sales per year, which going into single-family homes or maybe two-family homes. Across Europe.

[00:06:01.370] - Jon Slowe

OK, so again, established for homes. Can you get them in every country in Europe or are they only in certain countries?

[00:06:08.090] - Steven Ashurst

At this point in time, you can get them, and distribution is quite closely matched up with, I guess, as you would expect, the big gas heating markets but there is also a quite advantageous sparks spread so, you're looking at Italy, Germany, Belgium, Switzerland. And then and I would say that's where activity has been concentrated thus far. But we've also seen activity when it comes to residential sales, UK, Netherlands few other markets as well.

[00:06:39.830] - Jon Slowe

OK, so established. But in terms of the overall heating market, a small part or very small part today.

[00:06:48.960] - Jon Slowe

Now, let's look at the how they work because I'm sure some of our listeners will be scratching their heads thinking, how do you put heat in and then get well put one unit of heat in and get maybe one point six units of heat out?

[00:07:05.520] - Jon Slowe

Well, the trick is in using the ambient heat from the air, but which one of you would like to have a go at a really simple explanation of how does a family-driven heat from work?

[00:07:17.700] - David Dupuis

Yes, I can start if you want, Jon and maybe Stefan can continue. I think today for when we talk about heat pump, it's necessary to distinguish different technology. We have several technologies absorption, adsorption and thermal compression. These technologies use a thermodynamic cycle. Energy is transferred from an external fuel to the heating system of the building; therefore, a proportion of the power output is when you [inaudible 00:07:57] very important. These transfers are operated by a refrigerant which carry out the thermodynamics cycle.

[00:08:09.280] - Jon Slowe

OK, so the container refrigerant is like an electrically driven heat pump.

[00:08:15.640]

[crosstalk 00:08:15]

[00:08:15.940] - David Dupuis

The key point is the main difference between these three technology is located as the compression stage for the absorption on adsorption technology. The compression will be characterised by the chemical reaction for the thermal compression. The conclusion will be characterised by the mechanical actions like an engine, for example, but I think it will be better. But my colleague Stefan will continue to explain his product.

[00:08:51.630] - Jon Slowe

OK, so just let me summarise for the listeners. Electrically driven heat pumps have an electric compressor.

[00:08:57.720]

Thermally driven heat pumps have a different thing in place of that compressor. That electric compressor, as you described David, could be mechanical compression, could be a chemical reaction for adsorption or absorption.

[00:09:10.920] - David Dupuis

And thermal compression.

[00:09:13.410] - Jon Slowe

Yeah,

[00:09:14.940] - David Dupuis

Adsorption and thermal compressor for this compression, you consume gas, you need to consume gas for the reaction of this option. OK, it's a chemical reaction breaker.

[00:09:30.320]

So, I'm sure if you're interested in listening, you can Google to get some nice pictures that are available for this cycle. Stefan, tell us a bit about your product. Maybe not necessarily so much from the really detailed technology, but what's in the box?

[00:09:48.680] - Jon Slowe

What sort of things? If someone opened a box, your product, what would they see inside it?

[00:09:56.030] - Stefan van Uffelen

From the outside, it looks like a convention boiler because it has the same connection. But if you open it from the gas burning side, it still looks the same as a condensing boiler. So, it will have a natural gas burner or a green gas burner or a hydrogen burner, whatever gas you put in. And then it really gets different because as David explained, we if you compare it to an electric heat pump, it's much like an electric heat pump from that part on because we need to compress and to pump heat and an electric heat pump, does it with an electric heat pump.

[00:10:33.350] - Stefan van Uffelen

And we do it thermally and with absorption. It's actually a physical process, not even a chemical process. It's just physics. And we have two lungs, you could say, in our system. So, we have two absorption rates, and one is heated up and then the other one is cooling. And then we change the cycle and the other one is heating up. So, we are thermally pumping it from one side to the other side.

[00:10:58.110] - Jon Slowe

OK, and can you do that? You said it looks like a condensing boiler. Can you do that in a box that's the same size as a condensing boiler, or does it have to be a bit bigger because it's more complex?

[00:11:09.720] - Stefan van Uffelen

The challenge is to get it in the same box, and we really see the different models we have get smaller and smaller. And so, it will be about the same as a condensing border, but not as small as the smallest units now available.

[00:11:25.870] - Stefan van Uffelen

But it will be less than 50 kilos and it will be relatively small. So, like 40 by 50 centimetres. And the difference will be on the top because we need air from the outside. So, on the top it's a little bit bigger. If it goes to the wall or to the roof, it has a bigger pipe outside, but that's relatively limited.

[00:11:50.560] - Jon Slowe

OK, so you're capturing heat from the air outside. You're doing that by, in a way, bringing the air into the unit. Other thermally driven heat pumps or gas pumps will have an outdoor unit that looks maybe a bit like an electric heat pumps unit.

[00:12:07.070] - Stefan van Uffelen

Yes.

[00:12:07.410] - Stefan van Uffelen

So, there you see a difference, some units are outside that will be placed on your balcony. Some are inside and outside. So, they have pipes outside. But in our system, the outside is taken inside. So, it's a combination in one product and we take the air from the outside. And that's possible because a thermally driven heat pump generally needs about a third of the air from the outside compared to an electrical power. So, an electric heat pump, because of noise, they need a big outside unit and thermally driven generally.

[00:12:41.510] - Stefan van Uffelen

All of them have smaller outside units. So, that's why it's easier to place it inside.

[00:12:47.060] - Jon Slowe

OK, I understand.

[00:12:49.850] - Jon Slowe

Steven, you mentioned earlier on about a number of products. Well, on the market, thousands of units installed. Stefan's product is under development still. How many products are there? Are there lots of manufacturers are most in the market or most developing product is it a mix of both?

[00:13:11.600] - Steven Ashurst

Maybe a mix of both, I would say there's lots of development activity going on behind the scenes. There are more products which are currently being developed, tested than are available just now.

[00:13:26.560] - Steven Ashurst

But we do see there's a bit of a conveyor or a queue forming of companies that look to launch new products over the coming one, two, three, four, five years, many companies within Europe, both from the established boiler brands, from technology developers like Stefan, also from players further afield, as well as an increasingly interesting topic in North America as well, for example.

[00:13:52.480] - Jon Slowe

So, there's quite a bit of R&D money. Well, there's products on the market and there's a lot of R&D money going into new products.

[00:13:59.580] - Steven Ashurst

Yeah, it's quite an active area, and as we've discussed, there's the three branches of the technology of the three main branches, absorption adsorption and thermal compression companies a range active in each area.

[00:14:11.280] - Jon Slowe

OK, David. Let's go to where you're based in France now. So, is there a what's the market in France look like? Is there a market, small market, growing market, big market?

[00:14:27.660] - David Dupuis

It's not a simple question today, to be honest with you, the French market is poor, maybe only 100 units sold per year.

[00:14:42.890] - David Dupuis

Why? Because we have only one product, which is commercialised in France, but. I am very, very optimistic for the future. Why? Today there are a lot of manufacturers, several manufacturers, who are developing their products, so I think maybe in one or two years, three or five manufacturers will be ready to commercialise in Europe. And I hope in France, I think about BOOSTHEAT, for example, maybe BOOSTHEAT will be ready this year, I hope.

[00:15:26.930] - David Dupuis

Ariston, maybe with their product for the residential market and for the commercial market, maybe Panasonic [inaudible 00:15:38]. And other manufacturers.

[00:15:41.420] - Jon Slowe

Yeah. Yeah.

[00:15:42.620] - David Dupuis

And maybe cool. I hope to of course heat pump maybe and I know maybe on you know a few US Start-Up ThermoLift and [inaudible 00:15:56] these start-ups have a real potential for the European market. So maybe it will be another opportunity. So, I am very optimistic.

[00:16:09.500] - Jon Slowe

More products coming to market.

[00:16:11.620] - Jon Slowe

Yeah, a question for all of you, perhaps in terms of the cost. So, they cost more there's more inside the box and there is in a condensing boiler and presumably, it's a matter of the extra cost above the boiler compared to the amount of money you'll save because of the increased efficiency.

[00:16:33.380] - Jon Slowe

So, maybe Stefan from your product. Do you have a view as to how much that extra cost might be, or is that too early to say or David, maybe from your side? What do you see in France at the moment, or, Steven, how much is that extra cost or we talking double boiler, triple the boiler, payback of 5years, 10 years?

[00:16:57.360] - Stefan van Uffelen

From our perspective, we aim to provide our technology to the different producers, so you won't see our brands in the market.

[00:17:06.690] - Stefan van Uffelen

So, probably you will see the known brands with cool insight on it and the use of technology. So, I'm not allowed to sit on that chair and say something about their market strategy.

[00:17:19.460] - Jon Slowe

Yeah.

[00:17:20.250] - Stefan van Uffelen

So, that will be different per country. But if we just look from a distance to our technology and some of the parts that we have additionally to convention boiler it definitely will be a very competitive product with condensing boiler.

[00:17:35.220] - Stefan van Uffelen

And if I look back in time and see the prices of condensing boilers in the 90s, we will have the same kind of cost price and we will end up a little higher because they have some additional parts. But it's not that we simply if you if you weighed, it is less than 50 kg. So, we don't have that many, many parts.

[00:17:54.050] - Jon Slowe

And there's nothing, no exotic materials or no real precision, very high precision engineering involved Stefan?

[00:18:04.280] - Stefan van Uffelen

Yeah, there is some nanotechnology involved which took a lot of years to develop, so we have been developing for 11 years, but at the end, the product is relatively simple with a small amount of moving parts. So, in that case, is also a reliable as a product. And so, we think, and I think that's the same for some of the competing products.

[00:18:27.560] - Stefan van Uffelen

So, I think the thermally driven heat pump in terms of cost price has a better future than electric heat pump.

[00:18:34.910] - Jon Slowe

Yeah,

[00:18:35.300] - Stefan van Uffelen

And if we really compare it with the convention boiler, that's challenging. That's a very mature product. But if you compare it with electric pumps, we don't need that many parts and they can become smaller.

[00:18:48.770] - Jon Slowe

OK, so it will be a volume manufacturing game today, condensing boilers are very high volume. The industry's been very successful at driving the cost down and thermally driven heat pumps are on that curve of scaling up.

[00:19:05.820] - Jon Slowe

I've got two.

[00:19:06.920] - Stefan van Uffelen

Yes, we expect that the thermally driven heat pump will replace the convention boilers in 10 to 15 years. And of course, electric heat pumps will probably also take a third of the market. I think the thermally driven heat pump in 2030 will also be a third of the market. And that's written in many research projects from Fraunhofer, etc. So, there will be no condensing boilers like the non- condensing boilers are being replaced everywhere at the moment.

[00:19:37.620] - Stefan van Uffelen

This technology will replace condensing boilers in 10 to 15 years.

[00:19:42.480] - Jon Slowe

OK, now we're looking forward, I'd like to look at the gas that is used because some people listening may think, OK, they use natural gas if we're to hit net zero by 2050, there's no room for natural gas.

[00:19:58.500] - Jon Slowe

But we've got a lot of, well, green gases in the system today. Hydrogen is the big hope for the gas sector that we can switch from natural gas to hydrogen at some point, maybe blend to begin with and then hydrogen.

[00:20:12.150] - Jon Slowe

So, can these products, if you're burning gas, presumably you could burn hydrogen. These products all able to work on hydrogen. Are people actually testing them on hydrogen today? Who'd like to respond to that?

[00:20:27.270] - Stefan van Uffelen

Yes, hydrogen is a very logical step in the future. So, we agreed within the re-heat programme already that any thermally driven heat pump by any producer should be or has to be hydrogen ready.

[00:20:43.130] - Jon Slowe

OK,

[00:20:43.520] - Stefan van Uffelen

So, if you buy a thermally driven heat pump you start a journey to a sustainable future.

[00:20:49.450] - Stefan van Uffelen

First step is you say about 30 percent or 40 percent of natural gas. That's the first step. So, you really reduce the amount of gas you use. Second will be the amount, what comes into your house will be more and more green gas. And the third step, it will be more and more hydrogen. So, it will be a blend so up to about 30 percent of the gas can be hydrogen without any problem. And somewhere maybe in 10 years, maybe 50 years, your neighbourhood will probably switch to hydrogen.

[00:21:21.830] - Stefan van Uffelen

And then your thermally driven heat pump will be ready to burn hydrogen as well.

[00:21:28.580] - Jon Slowe

Well,

[00:21:28.880] - Stefan van Uffelen

That's the journey you start with buying a thermally driven heat pump.

[00:21:33.770] - Jon Slowe

We'll avoid getting into, if you don't mind, getting into the hydrogen electric debate today, but it's likely hydrogen will have a role in the future in terms of heating homes. And I think it makes a huge amount of sense to use that hydrogen in the most efficient way. And from what you've all explained, a thermally driven heat pump could be very efficient.

[00:21:55.180] - Jon Slowe

A lot more efficient than a boiler. David, are you testing units on hydrogen today or is that something you will be doing?

[00:22:01.760] - David Dupuis

No.

[00:22:04.690] - David Dupuis

Today, we plan to test a pure hydrogen gas heat pump, maybe in one year, in one year, we plan to test about four, I think four appliances for gas heat pump to hydrogen. OK. Uh, just to complete the explanation of Stefan. Yes. I agree, of course, with Stefan because it's a step by step. OK, so the first the green gases will be it's a key point for the future.

[00:22:37.540] - David Dupuis

OK, one of the objectives of Engie is to develop green gases. So, in this context, the green gas heat pump will play a major role. So, the first step will be to deploy a gas heat pump with biogas, a blend of hydrogen plus natural gas. And of course, and the second step will be the pure hydrogen.

[00:23:01.750] - Jon Slowe

Yeah, yeah, yeah.

[00:23:03.700] - David Dupuis

It's I think today green is gases the key point. It will be why.

[00:23:09.400] - David Dupuis

So, heat pump will be the main work.

[00:23:12.700] - Jon Slowe

Well, let's look forward a bit now and in terms of what it would take to develop the market, Steven, maybe you'd like to just start with the things you think need to be put in place or happen to take this market. Well, we've talked about, the products, more products need go to market. David, you mentioned that as a challenge, Stefan, you've explained how your products come to market, but beyond more products coming to market, Steven, what sort of things can help to get from thousands to tens of thousands, hundreds of thousands, millions a year across Europe?

[00:23:47.640] - Steven Ashurst

I think there's basically there's a lot of things that could happen, and it's quite possible that it will happen over the coming years, I guess, to begin with, just an increased focus on renovating existing buildings across Europe. So, over one hundred million existing buildings connected to the gas network, which will also need to begin to decarbonise our faster rate. The renovation wave is a big target of the European Commission over this decade. And as we've heard, even in existing homes where perhaps you don't have enough resources or the financial resources to change the heat distribution system to really heavily and so you can achieve 30 to 40 percent savings from a thermally driven heat pump there.

[00:24:39.120] - Steven Ashurst

The products that are on the market just now, typically are supported with incentives as well. So, as I mentioned earlier, the domestic products that are available in Belgium, Germany, Italy if they don't receive their own subsidy, which occasionally, they do they would also typically receive the same level of support, like an electric heat pump, for example. So, a big push on renovation is certainly an important getting gas grid to carbonisation we've covered that takes you to that extra if you're blending hydrogen.

[00:25:11.710] - Steven Ashurst

In the short term, an extra, let's say, seven percent CO2 savings, if you're putting in 20 percent into the grid. Cooling is another aspect which I think over the next decade could really be in favour of thermally driven heat pumps as well. That's the cooling market and you have especially the cooling and renovation is really just starting to pick up. And in areas where the electricity supply is constrained or it's very expensive to upgrade an electricity connection, for example, to put in air conditioning thermally driven heat pumps would have a strong opportunity there as well.

[00:25:49.630] - Steven Ashurst

So, those are a few of the usual new business models as well. There's no reason these technologies can't fit with the heat as a service model like other heating appliances can to, I see lots of opportunities.

[00:26:04.140] - Jon Slowe

What about building with any new technology? Part of the challenge is building confidence amongst policymakers, amongst the industry, amongst customers. So, I think there's plans for a potential demonstration programme. Steven, can you tell us a bit about that, what that might look like and how important you think that will be to build confidence in the in the centre?

[00:26:26.950] - Steven Ashurst

Yes certainly, so Stefan already touched on it earlier, it's called the ReHeat EU Project or ReHeat EU consortium at this point in time ourselves, along with members of the industry and in collaboration with Element Energy, who's the project coordinator.

[00:26:46.030] - Steven Ashurst

We've amassed a group of over 20 companies in the area and submitted a bid to the European Commission's Green Deal, which ultimately would be for a mass demonstration of TDHP systems across Europe, over 3,000 systems deployed over the next three or four years.

[00:27:05.280] - Jon Slowe

OK, and that presumably gathering data from those systems, the fact that it's an industry effort, that sort of thing, can help to really understand how the technology can be installed, the performance of it, and build confidence for people to take that forward further.

[00:27:22.060] - Steven Ashurst

Exactly.

[00:27:22.690] - Steven Ashurst

You know, over 20 organisations, six suppliers, nine countries for redeployment, focussing on residential systems, but also low carbon gases and hydrogen readiness training over 100 installers.

[00:27:36.100] - Steven Ashurst

Those are all our key goals as part of that bid, of course. Yes. Underlining it all is building awareness and confidence from policy makers to lend more attention to the technology longer term.

[00:27:49.450] - Jon Slowe

Still waiting for the decision on the bid. So, fingers crossed.

[00:27:53.420] - Steven Ashurst

Yeah, I think July or so not too much longer to wait but we've got a really strong consortium there. So, yeah.

[00:28:02.020] - David Dupuis

We cross the finger.

[00:28:03.700] - Jon Slowe

Yeah. Everything crossed. Well best of luck in that it's got to that time in the podcast now when it's time to bring out the Talking New Energy crystal ball and I'm going to use the dual settings of 2025 & 2030 and ask each of you to say where you think gas driven heat pumps will be in those two years.

[00:28:31.030] - Jon Slowe

So, where will the market or the sector be in 2025 and 2030. And you can answer this from different perspectives. David, you might want to answer it from a French market perspective, Stefan, potentially from your own product, Steven, from the wider industry it's up to you how you answer it. But David, do you want to go first so briefly 2025, 2030 where will gas driven or thermally driven heat pumps be?

[00:29:02.410] - David Dupuis

So, for the French market, yes, I think maybe, I hope. My dream will be to have a share maybe 10 percent of the market it will be interesting because I mentioned before, if you want to reduce the price of product, you need the volume. OK, yep. OK, so, yes, I'm very optimistic, for the French market. So, maybe we can imagine maybe in 2030 maybe 10 or 15 percent of the market share.

[00:29:47.270] - David Dupuis

I hope for the French market.

[00:29:50.230] - Jon Slowe

OK, thanks, David. Stefan, how about you?

[00:29:54.590] - Stefan van Uffelen

Yeah, I think in 2025 it is very near and from a technology perspective.

[00:29:59.000] - Stefan van Uffelen

That's tomorrow. And that will mean that that we, together with some large producers, are heavily investing in scaling up. So, it will still be a niche market from a European market perspective, but really emerging, really speeding up. And I think in 2030 and I think we as a consortium agree on this, that electric heat pumps and thermally driven heat pumps are not competitors and we need each other. The energy transition is such a challenge, and the pressure will be so high on the market to do something.

[00:30:32.990] - Stefan van Uffelen

And also, from a technology perspective, we need each other. So, from our technology perspective, it's easy to ask an electric heat pump to our cycle and we make a super hybrid. So, it's either an electric heat pump and a thermally driven heat pump and we could also add a fuel cell. So, it's a load balancing system it can balance the energy system. And we have such a big challenge with winter and summer with storage, with the power grid that we need each other to grow our markets.

[00:31:10.130]

[crosstalk 00:31:10]

[00:31:11.680] - Jon Slowe

Really interesting point, Stefan, about the hybrids, because people think of a hybrid heat pump as an electric pump with a gas boiler, but as you say, electric heat pump with a gas driven heat pump and you have a really efficient hybrid.

[00:31:24.560] - Stefan van Uffelen

You have a super hybrid,

[00:31:26.160] - Jon Slowe

That's a good name, let’s see if that sticks.

[00:31:28.940] - David Dupuis

Yes,

[00:31:31.470] - Jon Slowe

Steven, how about you? What's your view of the future for 2025, 2030?

[00:31:37.270] - Steven Ashurst

Yeah, I guess we've basically covered the 2025, but one additional lever, actually, that I didn't mention to your previous question could be them instances where in the renovation context where you have to meet certain criteria, for example, whether it's a percentage share of renewable energy or your new heating system has to be over 100 percent efficient, which basically means you need renewable heating.

[00:32:05.200] - Steven Ashurst

There's still few and far between instances of those kind of regulations across Europe just now. But I think as we move towards 2025, those could become more common, perhaps more so just at a regional level than nationally. But there's no reason why thermally driven heat pumps couldn't take a share of that market, you know, along with other low carbon heating systems.

[00:32:28.750] - Jon Slowe

So that will grow, that will help the industry grow out of the niches in at the moment and gradually into more parts of the market for 2030.

[00:32:38.480] - Steven Ashurst

So, for 2030, I'll look back to our ReHeats EU consortium again. So, given that our demonstrator would be looking to wrap up around 2005. You know, the ambition from the minimum level of ambition from the consortium would be for TDHPs to gain half a percent of the current gas boiler market in Europe, so half a percent per year, out to 2030 would add up to around about half a million to thermally driven heat pumps install base just from the projects that were involved in ReHeat so as we've mentioned, for other manufacturers that are already on the market, and they'll continue to work their products, and there could well be some other entrants from overseas, too.

[00:33:27.280] - Steven Ashurst

So, I think that's certainly achievable. And that's what I would be looking to see, in 2030.

[00:33:35.800] - Jon Slowe

Well, we'll come back in 2030 and see how we're doing, if not earlier. So, that's been a fascinating discussion on a technology that my guess is many listeners may not have known much about and really appreciate.

[00:33:53.930] - Jon Slowe

David, Stefan and Steven, you sharing your time, your insight on all your activities, what you're doing, and your clear explanations. So, thank you very much. And thank you as always to everyone listening. We hope we've broaden your horizons even further and look forward to welcoming you back to the next episode. Thanks, and goodbye.

[00:34:27.940] - Jon Slowe

If you're as passionate about the energy transition as we are, then please keep in touch. You can follow us and me on Twitter, LinkedIn or subscribe to the podcasts on your chosen podcast platform.

[00:34:44.410] - Jon Slowe

If you'd like the podcast and like sharing, then please to rate us and to listen to archived episodes, to read transcripts and to see the latest Delta-EE insights, then please visit www.delta-ee.com

[00:00:16.670] - Jon Slowe

Welcome to Talking to Energy, a podcast from Delta-EE, the new energy experts. We will be talking about how the energy transition is developing across Europe, with guests who are working at the leading edge of this transition. Hello and welcome to the episode.

[00:00:25.130] - Jon Slowe

I'm delighted to be joined by Marzia Zafar, Head of Customer Strategy & Policy at Kaluza. Kaluza is part of the OVO group which has grown in the UK to having around five million customers and is active across a number of other countries as well. We'll be exploring the pathway to a new energy world where devices like electric vehicles, electric heating and more not only meet customer’s needs but also contribute to the needs of the wider energy system.

[00:00:55.360] - Jon Slowe

And we'll be keeping a laser-like focus on the customer. So, let's get going. Hello, Marzia.

[00:01:02.090] - Marzia Zafar

Hello,

[00:01:03.680] - Jon Slowe

Thanks for joining the podcast. Can you start by briefly describing Kaluza after my pen portrait of OVO and maybe its relationship with OVO or how it sits in the OVO group?

[00:01:16.910] - Marzia Zafar

Perfect. So Kaluza in itself is a technology company we bring to life the policies that government institutes. For instance, the net-zero target for 2050, we create the technologies for suppliers and customers to be able to contribute to the net-zero target and eventually get there in a cost-effective and reasonable manner.

[00:01:44.330] - Marzia Zafar

So Kaluza itself was born out of OVO energy. And as you know, OVO energy has been around since 2009 nine. We took over SSE as well. So now we have over five million customers. Kaluza became an independent arm of OVO energy in 2019. And the reason that Kaluza started is because OVO has the transitional goal, which is what OVO is looking for is not only get its operations to be net-zero by 2030 but also help customers get there.

[00:02:28.590] - Marzia Zafar

And to do that, OVO needed a platform, a billing platform, an energy retail platform I would say an ecosystem that allowed it to be nimble, that allowed it to deliver customers the service offerings that they needed to be able to engage, to give the customers an easy way to understand their bill, to be able to contribute towards net-zero if they wanted to.

[00:02:59.430] - Jon Slowe

So, Marzia when you say technology company, you're not talking about developing a technology like a heat pump or that that hardware, you're talking about the platform, that interface between the energy retailer and the customer.

[00:03:16.420] - Marzia Zafar

Yeah, exactly. I'm talking about the billing platform. I'm talking about how customers see their usage, how customers are communicating with that, with their supplier. I think that thus far it's just been a very unfriendly interface if you will. And we want to change that. We want to make it as easy as you're banking. The way you see your bank balance, we want customers to be able to just have an easy way of interacting with their supplier.

[00:03:49.440] - Marzia Zafar

We have built a whole ecosystem, one platform that can give the supplier everything it needs to be able to interact with the customer and additionally allow their customers to be able to interact with the grid. It's one platform because our platform is modular. You can take the flexibility and just use the flexibility part. Without the billing platform, or you can take the billing platform itself and not use flexibility.

[00:04:19.230] - Marzia Zafar

Our goal is to give optionality, to introduce optionality for the customer, for the end-user customer as well as the supplier.

[00:04:27.900] - Jon Slowe

OK, and like with we're seeing with a number of other companies now, you've developed this platform. You developed, Kaluza, it's not only for OVO's use, you're working with other retailers, providing services through the platform, through Kaluza to other retailers.

[00:04:44.880] - Marzia Zafar

Yeah, I mean, of course. And we think that we want to share what we've built with everyone globally. We think that we are offering something that's special. We think that we're offering a solution that makes sense. So why not share with everybody?

[00:05:05.730] - Jon Slowe

And tell us a bit about your role as Head of Customer Strategy & Policy. What does that involve? Can you bring that to life for our listeners?

[00:05:15.180] - Marzia Zafar

 I think, for our start-up, these titles don't really mean anything. We all do everything, anything on any given day. What I think I bring into to such a young start-up like Kaluza is that I have 20 years of energy policy experience and I have a lot of direct customer experience and trying to engage the customer the end customer to want to move from being a ratepayer to being a customer. I think that's what I like to bring in that mindset that we have to do.

[00:05:54.480] - Marzia Zafar

We shouldn't think that we are the customer. We need to go to the customers themselves, directly to them to understand what their needs are, what their pain points are, what they're looking for, and build a system around their needs. And I think that's what we're trying to do most and having a very keen eye and doing focus groups with customers to see what they want, what they don't want.

[00:06:20.850] - Jon Slowe

I often say there's a lot of technology push in the energy sector. And you mentioned ratepayer's, which is widely used in the US. Another word I hear that I don't like is consumers because that suggests something is done to customers. So, your job at Kaluza, as you said, it will involve many different things in a growing company, but it's really to keep that customer at the centre of what you're doing to have that customer-centric mindset.

[00:06:52.260] - Marzia Zafar

Yeah, and also to just bring that policy expertise into the company, because the energy industry is a heavily regulated industry and policy drives everything, whether we like it or not, policy at the top of the funnel. A government creates policy, then the industry creates solutions to meet that policy.

[00:07:20.770] - Jon Slowe

Yeah, OK, so let's just look at that policy area briefly, your background you worked in you had a regulatory perspective in California. You worked as director of insights for the World Energy Council. You're now in Kaluza, if you step back a bit, how deep, how well or not do you see policy evolving as you think it needs to? Where do you see the industry? What are you optimistic about? What you're pessimistic about?

[00:07:52.610] - Marzia Zafar

I think there is there's policy, then there's regulatory reform and then there's tax solutions and then above it, all is will customers want this? And I think policy is moving pretty fast. I think regulatory reform is lagging a bit, but. I must say that being in Europe, being in the UK, it is such a breath of fresh air because the regulatory system here is extremely progressive and it is a competitive market.

[00:08:32.400] - Marzia Zafar

Innovation is being sought after, but there's still a lot of rules and standards that need to be looked at and reformed. As an example, elective half-hourly settlements. To allow suppliers to continue to use projection versus actuals doesn't give them the incentive to want to use flexibility or demand response, for instance, because you're using your projections, you're not matching your supply and demand on a half-hourly basis, on an actual basis.

[00:09:13.380] - Marzia Zafar

Instead, you're matching your projections. So that's a rule that needs to be fixed. Half hourly settlements should not be elective. We need to settle supply and demand on a half-hour basis. And it should be both on the residential side as well as the commercial side today in the UK, it's just on the commercial side, mandatory and selective on the residential side.

[00:09:38.270] - Jon Slowe

Yeah, that's quite I guess we've veered into energy check energy market details. But there's a really, I think that's a great example because. The need to match supply and demand better. You have to be able to a supplier has to be able to buy what the customers are actually using rather than the standard assumption of what their customers will use to give them incentives better match supply and demand. The UK, I think, is relatively progressive, Europe as a whole is moving in the right direction.

[00:10:13.820] - Jon Slowe

Different countries at different speeds. If you zoom in on that issue of half-hourly settlement. How quickly is the UK moving? You obviously want it to move faster, but are you confident that in a few years every supplier or retailer in the UK will be settling on a half-hourly basis? Or are you frustrated that even in a place like the UK it is taking far too long?

[00:10:39.420] - Marzia Zafar

Well, I'm really glad that you asked me this because to me, I feel like we right now, we in the UK, both the regulatory side and the market side, we have some time we have some time to do this right because right now we have the UK we don't have smart devices at scale to really make flexibility be commercially viable today. But we know that it is crucial for net-zero because as soon as we have millions of cars on the road, it's going to become not only commercially viable, but it's going to become a necessity.

[00:11:17.890] - Marzia Zafar

That's what I think you need half hourly settlements. So National Grid ESO has estimated that in 2025 we're going to have a few million cars on the road in the UK, in 2030 we're going to have almost 10 million cars. It is crucially important that the market is ready for those EV owners in 2025. To have the right incentives for them to want to take advantage of some of their offerings that say Kaluza would have or the industry would have, because {illegible}.

[00:11:59.770] - Marzia Zafar

 So, an average customer in the UK uses about 37-hundred kilowatt-hours annually when you add their EV to that. That's another1800 kilowatt-hours. That's almost a 50 percent increase. And in our view, when the bill comes in, that customer's going to call their supplier or email their suppliers and say 'Hey, why'd my bill go up? What am I supposed to do?'

[00:12:28.360] - Marzia Zafar

It is at that time that the market needs to be ready because the customer is ready to engage. So, we need to give them the information. And if we do have the right market mechanisms in place, like half hourly settlements, like price signals, like transparency at the local voltage network, then we can turn around and say, well. Because of flexibility, if you are Kaluza enabled, if you allow us to optimise your usage for you, we can give you a 20 percent discount on your bill or we can give you a 30 percent discount on your bill.

[00:13:04.550] - Marzia Zafar

All of that is dependent on policies being adopted by regulation.

[00:13:13.130] - Jon Slowe

OK, so the as you say, in most European countries, we've got a bit of time.

[00:13:19.400] - Marzia Zafar

Yes,

[00:13:19.970] - Jon Slowe

But not that much time.

[00:13:21.920] - Marzia Zafar

Yeah, we have a couple of years, I think, to make this work because, in my view, you only get the customer once calling. And if we tell them if we reject them, then we’re going to have to wait another few years for them to come back to us again.

[00:13:37.960]

Yeah, OK. Well, you made a nice Segway into customers there Marzia, I guess from the policy part of your role to the customer strategy part.

[00:13:46.700] - Marzia Zafar

The boring part of the role, policy talk, which I would love to talk more about.

[00:13:50.810] - Marzia Zafar

But go ahead.

[00:13:55.000] - Jon Slowe

You gave an example there of a customer use case that we can all imagine of. There's a lot of talk in the energy sector about customer empowerment, about customer engagement, customers becoming part of the energy system. I'd love to be part of the energy system, but I'm not a typical customer. Most customers, to be honest, couldn't really care. And energy is such a low engagement sector, so. What yeah, how do you see that in terms of?

[00:14:31.640] - Jon Slowe

Needing the energy system, needing customers flexibility, but customers having really low engagement. Maybe that changes a bit as they have electric vehicles or heat pumps. What should we be aspiring to in terms of prosumers, active customers, engaged customers, or is that the wrong mindset?

[00:14:52.130] - Marzia Zafar

Well, I mean, I would look at the customer archetypes, you know, and maybe sometimes we tend to only look at the green customer. So, we only tend to look at price-sensitive customers.

[00:15:04.100] - Marzia Zafar

But there's this massive customer base in the beginning and in the middle that is looking for a little nudge. If we have price-sensitive, we have techie customers, we have all the customers, we have non-techie customers. We have to think about all of them at the same time and plan accordingly for them. So, to me, I feel like customer engagement is very much lagging in the energy industry because energy is a basic necessity. We just want to switch the light on, have the light come on.

[00:15:41.170] - Marzia Zafar

You don't really care about the billing, but when you actually now as a customer, when you start to put smart devices in your home and your bill goes up, that's the point where the customer wants to engage, that's when the customer says, OK, well, how am I supposed to do this? How can I take advantage of this? And I think I see a lot of hope and seeing a lot of customer engagement once they get smart devices in their homes.

[00:16:13.170] - Jon Slowe

Yeah.

[00:16:14.000] - Jon Slowe

OK. I think it's really interesting what you said about different customer types because another thing I see the energy sector being very guilty of is talking about the customer. There's not one type, there's loads of types, and so segmenting that is really important. How do you build that into your work over? I mean, I see a big difference between incumbent energy companies and the new breed of energy companies. It's easier to have a different culture in a new energy company, then an incumbent, but tell us a bit about how in Kaluza.

[00:16:51.930] - Jon Slowe

Or OVO you, you really embed that customer-centric thinking?

[00:16:57.810] - Marzia Zafar

So, we don't want to build for the techie customer, we want to build technology for the non-techie customer. That's our goal. If we build technology that a non-techie customer would want to use, you know we've succeeded in the way we do that is we talk to these customers and we are customers, what do you need for you to want to engage in one thing, for instance, that we have put for as part of the platform.

[00:17:35.060] - Marzia Zafar

Is a customer spotlight, so when you go to your OVO energy bill and you see your OVO energy bill online, you get a spot that is only tailored to that customer and nobody else?

[00:17:49.860] - Jon Slowe

So very personalised.

[00:17:51.440] - Marzia Zafar

It's very personalised. And the more personalised you make the interface, the easier it is for the customer to want to participate because they get interested. So, our number one goal is to make it more personalised, to make it tailored for each customer, and to make sure that if we build for the non-techie, then we've covered almost everybody.

[00:18:16.650] - Marzia Zafar

Have you got an example of that type of personalisation, that's maybe one that's worked and maybe one that you've tried and learnt, that's not the route to go? I'm more aware of I think I have to think about what hasn't worked, but for us what has worked is that that first flush of that energy spotlight, here is what you have and then we go and, we show them, and they can amplify this by giving us better information of how much energy each of their appliances are using.

[00:18:55.560] - Marzia Zafar

That's really, really popular. Another thing that's popular is that carbon-cutting, how much carbon they're using and that's maybe more for the green customer. But the information displayed in both bar charts as well as just sheer numbers. That's good for customers. Some customers just want a flat number, some customer, they want bar charts. Those seem to be more popular, the ability to change your direct debit easily and talk to the customer agent and have the customer agent have all the information in front of them.

[00:19:37.800] - Marzia Zafar

That's also really it. It makes not only our agents happy, but it makes our customers happy because the agent doesn't have to transfer them to a second or third agent. When the customer calls, they only have to speak with one person that's also super popular.

[00:19:58.470] - Jon Slowe

OK, so that better customer experience driving the easier customer experience. What about how to even get them to look at the energy spotlight in the first place? Do you think that's a challenge?

[00:20:12.070] - Marzia Zafar

I think the reason it's not that that much of a challenge is because it's on the front page of their customer interface. And we've put it right upfront. And we've highlighted its eye appeasing as well and it makes them want to read it.

[00:20:33.030] - Jon Slowe

Yeah. And that mindset is very, very different from my experience of a normal billing department of an old energy company in terms of people or skills that Kaluza employs. Are you employing behavioural scientists? What sort of skills are you trying to bring into the business to drive this mentality this way of thinking?

[00:21:01.140] - Marzia Zafar

So, we have a lot of data scientists on our as employees. We have a lot of product managers. We have obviously a lot of software developers who understand the energy business and who are wanting to make a difference. I think that that that goes a long way, the fact that that OVO has the plan zero and that commitment that we are getting a very good talent pool, we get to select from a very good talent pool of data scientists of product managers and software engineers who are wanting to make a difference in this world.

[00:21:45.690] - Jon Slowe

Yeah, I can see that, if you're motivated by what you do and your customer-centric as well, then yeah, you'll get the right type of.

[00:21:55.320] - Marzia Zafar

I think the key is when because everybody is going to say they're customer-centric. I think the key is, are you thinking that customer-centricity means, one, that customer archetype or customer archetypes and are you thinking the customer is yourself or is it the actual customers in their houses? And I think sometimes people make me assume that you are the customer that you're building for, and we try to avoid that as much as we can.

[00:22:30.230] - Jon Slowe

Yeah, and that's by a lot of focus group research, a lot of primary customer research, bringing that voice to the customer right into your business.

[00:22:38.420] - Marzia Zafar

Yeah, yeah. And for us, even management, we get a weekly update titled Voice of the Customer. And that goes not just to middle management or to analysts that goes all the way to the CEO of the company. Everybody gets to hear the voice of the customer on a weekly basis. Friday afternoon.

[00:23:01.340]

We get that email.

[00:23:03.550] - Jon Slowe

I Like that.

[00:23:07.950] - Jon Slowe

Last question before we move on to the crystal ball, so you talk to the beginning about policy moving fast, regulatory reform lagging a bit, tech solutions being developed quite quickly, I think probably ahead of the other two. How hard is it for a tech company like Kaluza to be ahead of the curve? So, if I think about flexibility and your flexibility platform, you're involved in some really cool pilot projects.

[00:23:34.790] - Jon Slowe

But as you said, some of this isn't yet mainstream because we need those regulatory reforms, the markets not there maybe it doesn't quite need to be there yet so. For some start-ups, that's the valley of death, because they do pilots, but they can never get to the mainstream view, that is maybe more of a, it takes time to develop the solutions, but it will take time to get them out of the market. So, maybe that's a financial investment challenge.

[00:24:05.410] - Jon Slowe

How do you see that journey from the really cool flexibility pilots to having millions of those electric vehicles that need smart charging, for example?

[00:24:15.390] - Marzia Zafar

I think you're right in that statement, you said that maybe tech solutions are moving a little faster. I think the investment community is also a very open to seeing these tech solutions for Kaluza specifically, I think we're fortunate enough to have OVO behind this OVO and their five million customers behind us. We get to have the luxury of seeing what these customers want and offering it to that customer base.

[00:24:48.310] - Marzia Zafar

For instance, our type of use tariff we looked at in December, we looked at the time of use the agile tariff that maybe took a hit and we looked at the social media and we saw that customers were concerned about prices going higher. And for us, that raised an alarm, because we said, you know, our whole business is about customer engagement, net-zero is about customer engagement. We don't want it.

[00:25:17.460] - Marzia Zafar

Now, the UK customers are on the cusp of wanting to be engaged because they're starting to get their smart devices and we don't want them to feel like engagement means risking their pocketbook or engagement means, oh, my God, I have to spend more time looking every half hour what the wholesale prices. So, we quickly we were able to quickly create a new offering called type of use tariff because of the Kaluza technology we are able to offer.

[00:25:51.880] - Marzia Zafar

OVO customers, 6p per kilowatt-hour, 24 hours per day, fixed price for their EV charging and we're able to do this because we get to optimise their load and use price arbitrage and be able to share that revenue with them. So those are the types of things that I think gives me comfort that Kaluza is on the right track. We may be a little early when it comes to see our flexibility platform being fully commercially viable.

[00:26:24.770] - Marzia Zafar

But we are ready because we're backed by OVO.

[00:26:31.370] - Jon Slowe

OK.

[00:26:31.670] - Jon Slowe

So, for me, the points key points are you've got that backing of being part of a larger group. You're not a tech only company that is going for venture capital to venture capital and having to get traction quickly with its customers. And you've also I think that's a really nice example of the benefits of being part of a bigger group with its own retail business. So rather than a tech only firm, I'm sure there were pros that many listeners will think yeah but they're pros of being a tech only firm but there are pros and cons of both.

[00:27:03.530] - Jon Slowe

OK, let's bring out the Talking New Energy crystal ball, and I'm going to do something a bit different, which is ask you to choose the time setting Marzia. What I'd like you to do is pick either 2025 or 2030, and to explain why you pick that time scale for this question. So, how different will the customer's experience be in the future in either 2025 or 2030 compared to customer's experience today?

[00:27:37.950] - Jon Slowe

For example, you'll frame this in Kaluza and OVO, but it could be framed by any supplier or retailer. So, how different will the customer experience be? And your answer that for 2025 or 2030. And I will set the dial on the crystal ball accordingly.

[00:27:54.460] - Marzia Zafar

So, I will take 2030 simply because of the number of smart devices that I think will be in the market by 2030. So, the estimates are that there will be about 10 million EVs in the UK market in 2030 and hopefully over a million or a couple of millions of heat pumps in people's homes.

[00:28:21.570] - Marzia Zafar

And the experience to me in 2030 would be that the customer has an energy app, whether that's an OVO app or a Kaluza app, that customer wakes up Monday morning and says this week I'm going to set my parameters for my EV charging that I want, I want my EV to be completely charged by 7:00 a.m. in the morning. And its wintertime, I want my heat to be at 69 degrees Fahrenheit. I apologise, I don't know Celsius.

[00:29:09.310] - Jon Slowe

20 degrees.

[00:29:10.930] - Marzia Zafar

And that information gets delivered to the energy supplier and that energy supplier then uses that flexible load into the market, whether that's hopefully the market at this time will have a level playing field for flexibility, which will be residential flexibility, which will be a smaller load. So, we can take that load in the balancing mechanism and the frequency and all the other services and there's price signals. But basically, the customer is driving the engagement, is completely engaged with their supplier because their app is so easy and, in the mornings, or they get a text message saying today is a flex day.

[00:30:05.230] - Marzia Zafar

And if you want extra money today, you may want to plug in your car at 3pm rather than 6pm. Those text messages and all the customer does is says, OK, I'm going to change my parameter. Also, when it comes to their billing, it's a rolling balance. So, on any given day, the customer looks at their balance and can pay it off right then. Or they can send the message.

[00:30:35.560] - Marzia Zafar

The idea for me in 2030 is that it's similar to my HSBC app or my any other app that I have on my phone that can easily engage. And it has a live chat that if I want to speak with my supplier, I can just do everything on my app and that would be the end of it.

[00:31:03.120] - Jon Slowe

So, it's bringing energy up to the best in class with other industries, with the added feature of this flexibility and having your home at the right temperature, or the temperature you want, and I know some people listening may think.

[00:31:17.430] - Jon Slowe

Yeah, but are people really going to look at the energy up every week? But what I find really interesting is with smart thermostats, what we've seen is people with a smart thermostat use their app sometimes several times a week because it's a comfort in their home. And they wouldn't use an app several times a week to look at their energy bill, but they would use their app several times a week just to feel comfortable in their homes. So, when energy itself might be very dull and boring in terms of kilowatt-hours and kilowatts, comfort and ability are the centre of many peoples, a key part of people's lives.

[00:31:52.290] - Marzia Zafar

Exactly.

[00:31:52.950] - Marzia Zafar

I mean, to me, a few years back, I got a nest thermostat in the US only because it was pretty. That was it. I liked the orange colour. I liked that it would just light up and then once I got it because it was pretty, I also realised that I can actually control it when I'm at work. And I want to make sure that I come home to a warm house. I just change the temperature.

[00:32:17.400] - Marzia Zafar

I think so long as tech solutions have the customer at the centre of what they're building on a daily basis, I think we're in good shape. But the second you take your eye off that customer at the centre, then we're going to build for what I want to build or what you want to build rather than what that wider customer wants.

[00:32:42.240] - Jon Slowe

Well, I think that's a great way to wrap it up Marzia about that focus on the customer. So, we started and finished at the customer, we had a little Segway, quite rightly into energy policy but a nice customer focus throughout. So, thanks very much that was a great conversation, thanks for the time, thanks for joining us today.

[00:33:04.230] - Marzia Zafar

Of course, I am all about flexibility/demand response. I hope one of these days we get to see it live and it being kind of sort of normal business day.

[00:33:16.230] - Jon Slowe

I'm sure we will and thanks as always to everyone for joining the episode and listening to it. We hope you found it useful and interesting and look forward to welcoming you back next week. Thanks, and goodbye.

[00:33:40.680] - Jon Slowe

If you're as passionate about the energy transition as we are, then please keep in touch. You can follow us and me on Twitter, LinkedIn or subscribe to the podcasts on your chosen podcast platform.

[00:33:57.120] - Jon Slowe

If you'd like the podcast and like sharing, then please to rate us and to listen to archived episodes, to read transcripts and to see the latest Delta-EE insights, then please visit www.delta-ee.com

[00:00:04.560] - Jon Slowe

Welcome to Talking New Energy, the podcast from Delta-EE, the new energy experts. We will be talking about how the energy transition is developing across Europe, with guests who are working at the leading edge of this transition.

[00:00:22.110]

Hello and welcome to today's episode. In this episode, we're heading to Norway, famous for many things, but one of them has been the leader in the European electric vehicle market, at least in terms of electric vehicles per person and percentage of car sales that are electric.

[00:00:38.080]

Some might say Norway is not typical. It's got generous tax incentives for electric vehicles. It's quite a wealthy country compared to some other European countries. But even though it's not typical, there's still plenty to learn from Norway's experience at the leading edge. Today, we're going to explore what we can learn from charging of electric vehicles in Norway. And to do so, I'm joined by two guests, my colleague Abhishek Sampat and Frederik Lima of Zaptec. Hello, Frederik.

[00:01:06.220] - Fredrik Lima

Hi there.

[00:01:07.870] - Jon Slowe

Frederik, thanks for joining. You're Vice President at Zapotec. Can you tell us in a nutshell what Zaptec does?

[00:01:15.010] - Fredrik Lima

Yeah, sure. First of all, thanks, thanks very much for inviting me to this podcast. I'm very much looking forward to sharing my experiences from the Norwegian EV market and coming from Zaptec we are developing EV charging stations for private homes and apartment buildings and workplaces. So in just a few years, we've been able to build up a nice company in Norway and become the market leader for these private installations of charging stations.

[00:01:44.740] - Jon Slowe

And to give us an idea of scale. Can you give us a feel for either how big Zaptec is or how many charging stations you're selling a year or some metric like that?

[00:01:54.490] - Fredrik Lima

Yeah, so we have about forty five thousand charging stations installed across 15 markets. We are by far the strongest in the Nordic countries, so Norway, Sweden, Denmark and Iceland. But we are also seeing some very nice installations and and systems being set up in in countries like Switzerland.

[00:02:17.870] - Jon Slowe

OK, thanks. We'll come back to you shortly. Frederik, let's say hello to my second guest, my colleague, Abhishek Sampat.

[00:02:27.440] - Jon Slowe

Hello Abhishek.

[00:02:27.980] - Abhishek Sampat

Hi Jon, Hi Fred. Great to be on the podcast again.

[00:02:30.770] - Jon Slowe

Welcome back, Abhishek. Now... Our electric vehicle team's carried out research about how people charge in different European countries, one of them being Norway. What's that research told you about the Norwegian market? Is it very similar to other European countries? Is it different? How are people charging their cars in Norway?

[00:02:52.930] - Abhishek Sampat

We've been doing customer research across some of the key European markets for a few years and what we have noticed is there is a shift in Norway. Norway is the poster child of EV adoption at the moment. But we are seeing a shift where it's becoming almost a regular car. It's not an EV. It's not different anymore. It's a regular car.

[00:03:12.560]

And a lot of a lot of our Norwegian respondents on our survey, more than the average, about 82 percent said they charge their cars at home, primarily using a dedicated charger or a regular socket, which is about 10 percent more than the rest of Europe.

[00:03:30.020] - Jon Slowe

So that's the highest amongst the European countries that you've looked at?

[00:03:32.810] - Abhishek Sampat

Absolutely, absolutely. Definitely. And there is I think that there's a few reasons for that. I think one of them is the fact that there is space available at most of the adopters and most of the drivers' houses and homes today to do that. And it's convenient. And Norway is probably a step ahead in terms of adoption rate.

[00:03:53.750]

So we're seeing we're seeing the transition from early adopter to mass market there.

[00:03:58.640] - Jon Slowe

Ok and the other 18 percent... Usual mix of public, workplace, destination?

[00:04:03.500] - Abhishek Sampat

Exactly. I mean, a lot of I mean, from the other 18 percent, we're seeing about 12 percent of that is using a public access charger near their home so on-street. So so that's quite important. And obviously, the more adoption we see, the more types of customers, the more demographics of where they live will come in and probably see that number increase as a percentage. But overall, I think the number, the volume of charging stations will increase as well.

[00:04:32.380] - Jon Slowe

Frederik, how does that match with your experience, 62 percent at home, charging and then public charging next is that what you're seeing in the market?

[00:04:42.010] - Fredrik Lima

Yeah, it's it's definitely what I'm seeing. And it reflects the Norwegian EV charging market. Most people in Norway have access to their own driveway or have a private garage. And I think the thing that is really important also is the average Norwegian consumption of electricity, whereas Norway is in the absolute top of the range when it comes to consumption. And the I think the average consumption per household in Norway is about twenty thousand kilowatt hours. And compared to, for example, the U.K., it's probably three to four thousand kilowatt hours.

[00:05:20.890]

So we're pretty much used to consume electricity. And for us, it's the natural thing to plug into our car to to a wallbox or a charging station.

[00:05:32.510] - Jon Slowe

And I've heard Frederik in Norway that some some people plug their cars in to keep them warm effectively. So because you get very cold temperatures in parts of the country, you get this sort of, there's a socket there and a very slow trickle heating of the car. Has that been important to have that electric infrastructure there or have people generally installed new infrastructure to charge their car?

[00:05:57.280] - Fredrik Lima

Well, it's been quite important, but we've been trying to avoid the promotion of the  regular socket, and it's not been recommended by the local or national authorities, represents a fire threat because these sockets are not the need for withstanding such a large amount of power over time. But it's definitely been important and people are using whatever accessible power they have. So if that's the charging station, they use that. If it's a socket, they use that.

[00:06:40.420] - Jon Slowe

So recommend, probably some people are still doing that, most people installing their own wall box...

[00:06:46.540] - Fredrik Lima

Definitely - we're seeing this service from the Norwegian EV Associations over time that the people have been installing more and more charging stations and they were going away from their regular socket. So there's definitely an improvement in the population.

[00:07:05.130] - Jon Slowe

OK, and your company, Zaptec, you've been one of the suppliers of these  charging stations. Well, tell us a bit about that charging station market and the products and the technology, have they evolved and developed over time, have different models evolved for providing wall boxes?

[00:07:26.790] - Fredrik Lima

Yeah, there's been a lot of development since we came to the market. And even prior to that, from from day one, I would say that the charging station were just replacing the socket, but it was a safe replacement and it could do up to 20 kilowatts. But obviously, pulling 22 kilowatts from your household is not something everyone can do, and especially not during peak hours. So during dinner time or early mornings. And so I would say that the biggest development in the charging stations is the connection to the fuse cabinet.

[00:08:05.970]

So in Norway, we have smart energy meters in all households, and with our newest charging stations and systems, we're able to connect to this fuse cabinet and to the smart energy meter. And do load balancing based on the information we get from this.

[00:08:25.360] - Jon Slowe

OK, so that avoids going over the power connection for the building and the car then ramps up and down according to the other demands in the home.

[00:08:36.230] - Fredrik Lima

Yeah, it varies throughout the day based on the average [...] And consumption in the house, so it will lower the power when you cook and they will increase the power in the night time.

[00:08:49.040]

And also, since we have and this and tariff system in Norway, where you get the charge by the hour, we usually delay charging until the cheapest hours during night-time.

[00:09:03.220] - Jon Slowe

OK. And is that built into the products that you and others are offering.

[00:09:07.370] - Fredrik Lima

Yeah.

[00:09:08.520] - Jon Slowe

OK, so what's the user experience? They come in, park their car... do they say when they'd like their car charged and then the charger decides exactly when it is charged according to the prices.

[00:09:19.430] - Fredrik Lima

They don't have to do anything. They activate the [...] And then it's ready the day after and then we use data in terms of consumption in the house and also a price on electricity. And we calculate what or how much power is needed the day after and then charging is automatically started based on those parameters.

[00:09:42.830] - Jon Slowe

OK, let's have a quick look at public charging.

[00:09:48.500]

Abhishek, you mentioned public charging was the biggest part of that 18 percent that isn't home charging, but Abhishek is that still small compared to other countries or does Norway have roughly the same amount of public charging as other countries?

[00:10:05.440] - Abhishek Sampat

Other countries that we've surveyed, their answer came in at about 22 percent as an average of customers who charge in public primarily. But when we do look at just where do you charge in general, workplace, which I guess in some ways is public, but also just pure public charging, so at a hub or at a destination, etc., they come in at roughly the same percentage number.

[00:10:35.130]

So I guess that's a factor of convenience as well. And there's definitely some some locations which are more convenient than others and are preferred.

[00:10:44.290] - Jon Slowe

Yeah, OK, Frederik, what's your view of public charging? It is a critical factor in Norway because you've got I guess some dense towns but big distances between those towns, is that where public charging is really coming into play?

[00:10:57.670] - Fredrik Lima

Yeah, I think along the highways, the public charging is really important and to have fast enough charging along those corridors. So with the new cars coming into the market with 120 or 150 kilowatts the charging rate, it's really important to have those fast chargers available. But for the average day to day use, I don't see that the fast chargers necessary. It's for the holiday driving and during summer and Christmas, they are definitely really important.

[00:11:34.030] - Jon Slowe

So around the town where you live, around Stavanger, if people are staying in that region, they'd charge at home, what's the need to charge publicly?

[00:11:43.360] - Fredrik Lima

Yeah, as long as you have access to your own driveway or a garage, you wouldn't stop to charge. Then you would rather charge when you stop.

[00:11:52.000] - Abhishek Sampat

Yeah. Exactly. Yeah. Fredrik, I have a question on that topic. Having lived in an apartment block and didn't have a dedicated space to park my EV, I did tend to use rapid chargers maybe once a week just to top it up and sometimes meditate for half an hour, because that's actually quite pleasant.

[00:12:14.140]

Do you see that as a use case in Norway that's increasing with the adoption by people who maybe don't have their own space to park?

[00:12:22.360] - Fredrik Lima

I think in the bigger cities. So Bergen and Oslo, that's definitely a use case, but for other cities, we would think that people would like to charge at the grocery store or the shopping mall if they park for more than one hour, then it makes sense to charge perhaps on 50 kilowatts or below.

[00:12:46.540] - Abhishek Sampat

Agreed, and that's that's something we've seen from our use case work as well, where the grocery store or a mall or somewhere where you are for an extended period of time, not not a ten, fifteen minute stop and go. That's when a 50 kilowatt charger suits quite well for a lot of people.

[00:13:05.950]

We looked at some we looked at some use cases where fast food locations had 50 or 150 kilowatt charges, but it almost didn't make any sense to do that because you're there for such a short period of time. The expense involved in putting those chargers in the ground, it doesn't pay back.

[00:13:23.410] - Fredrik Lima

I think it's really important to have the right type of charger at the right place. So for a shopping mall, you would see twenty five to thirty kilowatts is the most used charger, while of course the highway, then you need even more at the highway. It's not enough with fifty kilowatts in the future, you need at least one hundred kilowatts.

[00:13:48.460] - Jon Slowe

So Fredrik, the charging around towns and shopping malls, supermarkets, etc., what chargers are you typically selling into those applications? What powers?

[00:14:00.530] - Fredrik Lima

So for now, there's no real alternative to have anything above twenty two on AC, so I would say that in the future we are looking towards twenty five to thirty kilowatts DC charging stations for shopping malls and so where people stay around one and a half hour to two and a half hours. So then for public charging in streets, I would say seven kilowatts is more than enough because you stay there overnight, you know.

[00:14:30.830] - Jon Slowe

OK, Fredrik. Now one ofthe great things about being on the leading edge like Norway has been, is that you're paving the way. The other way of looking at it is that you're on the bleeding edge and it can sometimes be a bit painful because you're learning the lessons first.

[00:14:47.570]

Well, what would you pick out as key lessons that Norway has learnt or key things that haven't maybe gone as well as they could have?

[00:14:58.450] - Fredrik Lima

I think for fast charging, there's been a few of the major issues, one is the payment and the ability to use the same RFID tag or charge tag wherever you go. That's not been the case in Norway. And we've seen different chargepoint operators having their own masses of users and they're not allowing roaming in between.

[00:15:24.860]

That's been a hassle for mass adoption. And also, I would say that there's been some technical difficulties on fast charging stations. That's been one of the major complaints from from EV drivers that the fast charger isn't working. There's some technical issues with it.

[00:15:44.850] - Jon Slowe

OK, are there any particular technical issues that have been occurring or is it more a case of a lack of monitoring and ability to know that something needs to be fixed?

[00:15:56.810] - Fredrik Lima

I think it's a combination of of many things, of course, it's really early in the development of fast chargers, so one must expect that there's some issues in the first years in its infancy. And I think that will really be important for other European markets. Look at Norway and see what has been done and what kind of charging stations has been used. How are they used? Of course. In Norway, there's a rough climate. It's, there's a lot of rain. There's a lot of snow. It's cold. And the temperature is changing quite a lot.

[00:16:33.440] - Jon Slowe

Yeah. OK, so part of that is just product development, in testing conditions and learning how to make that a robust product, the maintenance or the monitoring and ability for a chargepoint operator to know that there's a problem and fix it. Is that working well in Norway or is that something that's still being developed?

[00:16:52.490] - Fredrik Lima

Well, I think the the CPOs have a high focus on on good customer service. But of course, it's difficult to have or to know how many people you need to have available at the customer support at all times. So there's been some complaints that they're not able to get hold of the customer support while trying to charge.

[00:17:13.940]

But of course, it's difficult in the first couple of years and you don't have the experience with that. We don't know the kind of the usage of the charging stations.

[00:17:23.840] - Jon Slowe

Yeah. Yeah. So are those two the, I guess the reliability and then the ability to provide that customer service, would you say that fixed now in Norway and sorted, or almost sort of everything is going the right direction and they're near to being sorted?

[00:17:40.160] - Fredrik Lima

Yeah, definitely going the right direction. And  there's a lot of development and focus on this these days. And there's investments from a lot of different companies into the Norwegian market. And we've seen more and more players enter the last with with [...] which is a Norwegian owned company investing in the old CPO called [...], which is now being called [...] in Norway. And they're investing quite a lot. And also with the likes of [...] and other local utilities entering the fast charging scene.

[00:18:19.520]

There's some more competition, which is good for the EV drivers.

[00:18:24.410] - Jon Slowe

OK, and I guess with the ever increasing adoption of EVs, the business case becomes easier. The utilisation of the charging stations goes up.

[00:18:33.200] - Fredrik Lima

Definitely, yeah.

[00:18:36.200] - Jon Slowe

You mentioned a lack of interoperability and the roaming challenges.

[00:18:41.420]

So putting myself in a Norwegian driver's shoes. There must be quite a lot of frustration that you can't you know, you can't just use any public charging station. You have to be a member of a certain network. And then when you get your chargepoint, it might not be working or the customer service hasn't always been what it could be. So how is that played out? Is that because we see Norway as a sort of country where everyone's enthusiastic about electric vehicles. Has the user experience being good enough, or have there been horror stories or has there been a bit of a backlash against when things don't go right?

[00:19:23.990] - Fredrik Lima

I think there's been quite a lot of horror stories. One example is my father in law. Yeah. He usually calls me when he's entering the fast charging station, because there are so many apps and there are so many different RFID tags you can have. And if they don't talk together and there is no roaming, it's really difficult for most people to know what kind of app to use. And and they they don't want to spend time on the payment of the charging.

[00:20:03.200] - Jon Slowe

Are there solutions coming up there, is there initiatives to get more interoperability and better roaming? Or is it difficult because people that have invested in the networks, want their return? That collaboration is proving hard to get going.

[00:20:19.450] - Fredrik Lima

I think most of the CPOs are now being forced to have contactless payment installed on the charging station, replace old equipment and also, I think, to accept roaming and not protect your own user base too much. I think it's really important for the mass adoption to have roaming across different CPOs and also that the contactless payment. Yeah.

[00:20:47.610] - Jon Slowe

Abhishek, how does that compare to other countries? Because I guess the UK is not great for roaming. Germany's probably got more interoperability.

[00:20:55.780] - Abhishek Sampat

Yeah, well, I think, you know, Germany, France, Netherlands, Belgium, that sort of region, there's much better roaming access there. The UK has not been the best at accepting roaming, although now there are murmurs from government and legislators that they will force that to an extent to where possible. And I'm glad you mentioned the contactless aspect, because I think that's quite important for giving customers choice. So you don't even necessarily need to be part of a roaming agreement.

[00:21:24.410]

If you turn up somewhere, you can still pay. You might paymore than you would if you remember, but then it's still an option that that means it's frictionless to an extent. And that's actually something that came out from our work as well, that Norway had the highest amount of customers paying with contactless compared to a monthly fee or, you know, monthly bill based on usage. It was a pay as you go, which I think is quite important for adoption. As Fred said, it's just the convenience factor that's important.

[00:21:54.620] - Jon Slowe

Yeah. Do you see more pay as you go, Fredrik? In Norway.

[00:22:01.590] - Fredrik Lima

Yeah, but not in ths speed, I would think. Most of the CPOs are asking their customers to download an app and sign up to an agreement.

[00:22:16.160] - Jon Slowe

Yeah. I guess that will play out over time.

[00:22:20.890] - Fredrik Lima

Yeah, hopefully.

[00:22:24.860] - Jon Slowe

Fredrik, looking forward in Norway, we've touched on this a bit, but where would you say Norway would be in in a few years' time? Three to five years' time, what would have changed, what will be different, what things is your company and others working on that will be coming to market?

[00:22:44.270] - Fredrik Lima

I don't think a lot will change. I think we'll just improve and continue on the strong development we have set out. I think more Norwegian homes are being now equipped with with the charging facilities or charging infrastructure. So it's it's going to allow people to drive electric since there's an EV charger at home, all ready for you to plug in. So I think Norway is now in a really good on a really good path. I think we are really prepared for the mass adoption of electric cars.

[00:23:22.130]

But of course, we have some challenges when it comes to the fast charging network, which is not as good as other European countries.

[00:23:32.600] - Jon Slowe

Yeah, OK, so you've you've you've had some of the pain. You've had a lot of success. You've had some of the pain as you've highlighted. You've learnt a lot of lessons and now you're in a good place to push forward. Well, just a quick question on multifamily housing and apartment blocks. It's quite an interesting segment across a number of European countries. Is that an important sector in Norway and has that developed alongside other segments of the market, or is that one that's going to come more in the next years?

[00:24:04.180] - Fredrik Lima

I think it's a really interesting topic and it's what we at Zaptec have beenbeen working the most with the last couple of years. And I remember back in 2016  the multifamily homes, usually had just a few charging stations. It was not scalable. They only had the ability to have, let's say, 10 out of one hundred parking places equipped. But then but then in the later years, we've seen the multifamily homes are actually preparing all the parking space for electric cars. They're seeing into the future, they know that they're just in a few years' time, everyone will have an electric car. And then it's important to have this parking place enabled.

[00:24:46.090] - Jon Slowe

And are they typically paying up front - is that a Capex model where that they're realising it's an investment we need to make or are there other models emerging?

[00:24:55.330] - Fredrik Lima

There's been different models in Norway and both the Capex [...] has been available in the market. And I think today it's it's a freedom of choice. The facility manager or owners of the multifamily homes are able to do both then and get prices on both. And then they can make a choice, which is what is working for everyone in their association.

[00:25:20.800] - Jon Slowe

OK, interesting. OK, well, let's let's get the talking your energy crystal ball out now, and I'm going to set the dial to 2025, I think, looking at the next few years. And let's look outside Norway, Fredrik, your company I know is selling, you've mentioned at the beginning, selling products into multiple European countries.

[00:25:48.070]

Now, when we look at the market, we see Germany in a way is the new Norway, in terms of standing out as EV adoption and chargepoint adoption, not replacing Norway, but another standout country, and then a group of countries following that, UK, Netherlands, France, probably the three that are closest behind. Fredrik and Abhishek, what other countries do you think will be driving growth beyond these countries? If we look beyond Norway, Germany, U.K., Netherlands, France, which ones stand out to you as particularly interesting or active markets for adoption and growth in EV charging? Fredrik, let's start with you and then go to you Abhishek.

[00:26:35.800] - Fredrik Lima

I think that the countries you're mentioning will absolutely be the largest in terms of absolute numbers, but I think in Europe there's a number of interesting countries and we've seen Switzerland as really interesting: there's a lot going on. And also more or bigger markets like Poland will rise in the coming years. Today, there is very few electric cars in Poland, but we're definitely seeing strong interest. And with good tax incentives, we we really believe that there's going to be a big market.

[00:27:12.750]

And I would say outside Europe, of course, the US is really interesting. There's a lot going on in the political scene as well, which can kind of shift the focus over to electric cars.

[00:27:26.120] - Jon Slowe

Yeah, you just can't ignore it for the sheer size of the market, I guess, as well.

[00:27:31.150]

Abhishek, how about you?

[00:27:35.210] - Abhishek Sampat

I'm with Fredrik on Poland. I think it's a very interesting, interesting market, especially as they have their own development currently for vehicles as well for making their own EVs.

[00:27:45.920]

They understand their customers. It's a very price sensitive marketplace and EVs are known factually to reduce your driving costs. So that's quite a key seller for a lot of these markets. Other than that, I'd say Spain and Italy, I think, are maturing very quickly and blossoming. And I include Portugal on that list as well in terms of adoption, as they're also quite good.

[00:28:11.930]

They're also fairly well sized markets. And there are there are manufacturers of vehicles in those markets as well.

[00:28:19.700]

So there's, there'll be an obvious push to follow the same as the rest of the E.U. So I think they're quite key as well.

[00:28:27.030]

So Western Europe, I think, will follow very quickly. But countries like Poland, very interesting.

[00:28:33.440] - Jon Slowe

OK, well, plenty to keep companies like your... like Zaptec busy, I guess, Fredrik. Absolutely. I think it's going to be a few interesting years ahead and we're really looking forward to enter more European markets. And within just a few months, we will also launch our UK office and really establish a business over there.

[00:28:53.640] - Jon Slowe

OK, well, you'll bring lots of valuable lessons to other countries from what you've learnt in Norway, I guess, so um, Fredrik, thanks very much for sharing your experiences in the Norwegian market. Not everything's 100 percent applicable to other countries, but many, many things are so really valuable insights. Thank you. Thanks for joining us.

[00:29:19.260]

Abhishek, thanks for joining again. Thanks for sharing highlights of our research and your expertise.

[00:29:25.140] - Abhishek Sampat

You're welcome. Thank you. Thank you for having me on.

[00:29:26.870] - Jon Slowe

No, no problem. Thanks for listening. We hope you enjoyed our little virtual trip to Norway. And if you're involved in the electric vehicle industry or if you're charging sector in anyway, then good luck in the next years - they'll be very busy and very exciting. Thanks very much, everyone. I look forward to welcoming listeners back to the episode next week. Goodbye.

[00:29:49.960]

If you're as passionate about the energy transition as we are, then please keep in touch. You can follow us and me on Twitter, LinkedIn, or subscribe to the podcast on your chosen podcast platform.

[00:30:01.980]

If you like the podcast and like sharing, then please do rate us and to listen to archived episodes, to read transcripts and to see the latest Delta-EE insights thenplease visit w w w  dot Delta hyphen e e dot com.

[00:00:04.560] - Jon Slowe

Welcome to Talking New Energy, a podcast from Delta-EE, the new energy experts. We will be talking about how the energy transition is developing across Europe with guests who are working at the leading edge of this transition.

[00:00:21.830] - Jon Slowe

Hello and welcome to the podcast. The new energy landscape is awash with start ups, but not many of these have yet successfully scaled. As a traditional energy market fragments, opportunities for new initiatives, whether they're start ups or in-house initiatives within bigger companies, there are so many opportunities, but only some of these will successfully grow and scale and possibly only a small proportion of them. Today I'm talking with Joris Jonker CEO and founder of econic, previously known as THE FCTR E.

[00:00:57.530]

Loyal listeners to the podcast may recognise the name. Joris was one of my guests in episode four, series two, way back when we were looking at retrofitting homes. I've invited Joris back today and since then, his company has grown rapidly. And I wanted to discuss econic's progress and explore how Joris growing and scaling his business. So let's get going. Hello,Joris.

[00:01:22.990] - Joris Jonker

Good afternoon.

[00:01:24.970] - Jon Slowe

Thanks for joining us again on the podcast. Joris, reminde us a bit when you founded THE FCTR E, how long ago was that?

[00:01:34.900] - Joris Jonker

Depends when you start counting, because I believe that with the limited was founded in 2017 and the initial ideas were also formed in that year.

[00:01:48.460]

But I would say we start counting from May 2018 because that's when we move to a real office and recruited our first employee besides the founders for a two and a half years.

[00:02:02.730] - Jon Slowe

Yes, so pretty young. And where have you come in those years? Can you give our listeners a portrait of econic today?

[00:02:11.380] - Joris Jonker

Well, interestingly enough, by before we scheduled this podcast, I looked at some old reports you your company wrote about THE FCTR E the name of econic now. And I had a good ambition in around 2018. But if I look at it today and we are even beyond the ambition we had in 2018, so we're growing well. But I think the main reason there is that we are not just growing autonomously, but we also have acquired a few companies and will will acquire some more companies in the years to come.

[00:02:57.830] - Jon Slowe

Can you give us a summary, if I'm a customer, what's econic's core proposition to me as a customer? So to remind our listeners or those who didn't listen to the last podcast, what can econic do for me as a customer?

[00:03:10.760] - Joris Jonker

Well, firstly, important to know is that our mission is a world without emission. And then we focus on the residential environment and we try to make it very easy for homeowners to upgrade their home to an ehome, as we call it, and an ehome is a home which has no fossil fuel for heat.

[00:03:37.070]

So no oil or gas and possibly generates as much electricity as possible close to the home. So with a solar panel or or a wind farm or solar farm in the neighbourhood. And what it is we offer is, is this simple steps towards a fossil free home. We provide heat pump, solar panel, batteries, as a service. So you can you pay us a monthly fee. And for that fee we install the equipment and run the maintenance service and maintenance for the lifetime of the equipment.

[00:04:20.120]

But it's flexible, so you don't have to lease the products from us. You can also buy them. But we try to convince, especially consumers who are not really actively looking to transfer their home to an ehome, and by making this affordable with a monthly fee, which in most cases is the same or lower than the saved energy cost. So let's say you have an energy bill of 250 pounds a month or euros for the European listeners or dollars, it's all the same.

[00:04:57.110]

Now, nowadays, so let's say 250 a currency, then? Yeah. If our service costs a hundred euros a month, then you should also save at least hundred. That's that's the idea. So you can at least, let's say money wise, you can switch to a fossil free home and on a neutral basis.

[00:05:24.250] - Jon Slowe

So you started in 2018 with an idea and zero homes. How many homes have you installed equipment in or sold to or how many homes a year are you at at the moment?

[00:05:38.240] - Joris Jonker

Well, in 2019 we did so 2018 we did about 100. Yeah. So that was also the target to learn in 2019. We did a thousand homes. In 2020 we did two and a half thousand. And we also acquired a company who already had some customers, about fifteen hundred. And this year we plan to sell about 5000. And if you add it all up then the total by the end of this year is 10000.

[00:06:12.250] - Jon Slowe

Okay. And that's that's faster than you thought you'd go you were saying.

[00:06:18.200] - Joris Jonker

Yes, yes.

[00:06:19.310] - Jon Slowe

Have you... Would you say you've gone in a straight line from thinking back to May 2018 or just before then I remember having a beer with you in the sunshine in Amsterdam. Have you got on a straight line from that sort of what you describe to me back then or...?

[00:06:38.376] - Joris Jonker

No, absolutely not. Tthe initial idea was to focus on only existing homes, because if you look at the European market there, there are about 200 million homes which have to be transferred to an ehome without oil or gas for for heating. And so we that was our target market and we targeted the larger homes to keep it simple. Let's say out of the 200 million homes, 100 million homes are owned, privately owned. And so we targeted the top 50 for 25 percent.

[00:07:12.860]

That was our target. But we found it was not easy to convince consumers to to to to do this big transition because it's not just renting our equipment in many cases. It also means you have to completely insulate your home and new roof and new wall insulation, floor insulation, double glazing. It's very invasive.

[00:07:39.620] - Jon Slowe

And you have to go and you have to go as well from buying a product, which most people do today, to the service model, which might make a lot of sense, but it's quite a big change for customers as well.

[00:07:51.290] - Joris Jonker

Yeah, so I think the technology is there. The prices are already at the right level - will be cheaper but it's already at a good level, but the consumer is not ready. It's too early, so it's a good idea, but it was a few years too early.

[00:08:05.260]

And so we we pivoted towards a new build, new newly built, you say homes. This is a small market compared to existing homes. But it's when you're in the first year of your company, it's sizeable enough.

[00:08:21.610] - Jon Slowe

That's enough to go for. Yeah, yeah.

[00:08:23.440] - Joris Jonker

The Netherlands alone is about 60, 70 thousand new homes per year. Yeah. I would say on average at one percent per year so the European market, you could say about two million homes per year. So it's a it's a good market. And we were very successful there for the main reason was that the Netherlands decided two years ago that new homes being built are not allowed to have a gas connection anymore. We don't have oil here so it means that you have to heat your home either with electricity or with some other form of local heat network.

[00:08:59.590]

So this is a big market. There's not a lot of players who could do what we did. So we became very successful in that market with our both our lease and sale option.

[00:09:10.770] - Jon Slowe

So  a mix of luck and judgement, Joris.

[00:09:15.240] - Joris Jonker

I think it's... I always say that success for entrepreneurs... they take the right decisions at the right moment. So when something passes by someone, let's say something, an opportunity, then they they look at it as a rrain and they jump on the train instead of just pointing out looking at it, most people do.

[00:09:42.700]

So so initially we started with the retrofit, we looked at new build and we are now very successful in new build. And what we learnt along the way is that and it's too big a leap from from having a gas or oil heat and no solar panels to a completely all electric ehome.

[00:10:04.330]

So we have come up with a new proposition which will be launching this summer in the Netherlands and hopefully later this year in more countries besides Germany, where we launched last summer. And that starts with a hybrid heat pump, OK, for very low fee, we will be around thirty five pounds a month, with expected savings of more than 35. And the good thing about it is this this should be appealing to a much bigger audience in the market.

[00:10:42.940] - Jon Slowe

And it's a smaller step, I guess. So maybe your, if I can describe it, it's like the original vision or the original plan that is still a vision. But rather than get there in one big step, you've realised you need to take some small steps towards that.

[00:11:01.300] - Joris Jonker

It's yeah, it's a little bit, but it's a little bit comparable with the electric vehicle market. The vision is everyone will drive an electric vehicle. But it's a big step for a lot of people. So that's why the hybrid cars are are successful. And I would not prefer to compare a hybrid car with a hybrid home, as we call it, because a hybrid car is actually running on petrol, carrying a battery and an electric motor and not using those and but with a hybrid home, you you actually save at least 50 percent on your fossil fuel usage. So you see the reduction is huge.

[00:11:43.300] - Jon Slowe

And that will get you back into nicely into the existing home market, s well as the new build the market.

[00:11:54.200] - Joris Jonker

Jon, it's a small step, but it's it's attractive for a much bigger audience. So our mission is to this world without emissions. So our focus is a CO2 reduction.

[00:12:07.740]

So we come to the conclusion that having a few homes converted to all electric is not as good as many homes who convert to hybrid home where they reduce their fossil fuel usage with at least 50 percent.

[00:12:27.039] - Jon Slowe

Sure. OK, you mentioned Germany. So it's neighbouring to the Netherlands but, as you said at the beginning, there's enough opportunity in the Netherlands to get going. You've got this international ambition of not just looking at the Dutch market, but the European market. So what pushed you into Germany? Was that opportunistic? Was it, was it planned?

[00:12:55.700] - Joris Jonker

Well, again, I looked at my initial ambition. That's good that you recorded that in 2018. And and and then the idea was to start with the U.K. second. Yeah, but we found when so we had a good, good relationship with Centrica at the time and we did, we have had some discussions to have Centrica launch with our heat as a service offering with a heat pump in the British market. But after several months of discussions, we found that the gas price is still too low.

[00:13:37.760]

Yeah, and so did not make sense. And we only want to provide our service when it means that the consumer, the homeowner saves money on a monthly basis. Otherwise, the market is too small. Of course, there are people interested in buying heat pump or solar panel because there are tech savvy nerds.

[00:13:58.930] - Joris Jonker

Well you're talking, you're talking to one of them Joris but I've got a hybrid heat pump actually.

[00:14:04.490] - Joris Jonker

Very good - good to hear Jon. So if we want our end customers, consumers, homeowners to actually save money. Yeah. And we found that it doesn't make didn't make sense in the UK. And so we look at Germany again and there it does make sense. And so also there's a lot of subsidies at the moment for for heat pumps. And also there it's very interesting when you have solar panels already, which many German homes have, the electricity, you have you don't use it, you don't get a lot of money back from from the grid.

[00:14:42.950]

So it's better to use that with a pump, for example, so that business wise, for the money wise, for the homeowner consumer, it makes sense in Germany. So, yeah, so we looked at Germany. But then to your question, is it opportunistic? Yes, it was also a little bit opportunistic because a partner company of ours with whom I worked already before got a company called Gideon, they did somewhere around 250000 thousand installations for my previous company for the thermostat.

[00:15:20.840]

And this company had a division in Germany who installed wallboxes, as they call it, in Germany, electric car charging system, solar panels, batteries and heat pumps. We discuss a joint venture between the Dutch Gideon and E.ON, the German number one energy company and company [...] And E.ON decided to, even though they were successful already in the markets into around a thousand homes, they decided to  stop with those activities and then we were able to take over the team. So it's not really an acquisition of a company. We acquired the team, which was very knowledgeable in Germany.

[00:16:08.930] - Jon Slowe

Yeah. I mean that reminds me of a... You described it as a train and you don't watch the train go by, you jump on it. It's in a way, making your own luck. If you hadn't been exploring this with [...] Looking at the German market, the train wouldn't have gone by you.

[00:16:27.800] - Joris Jonker

That's part of ambition and is voicing to them, to your network what your plans are in the next years. So if you if you tell people I would like to be active in Germany, then suddenly someone calls you or says, hey, listen, I have this team of great people who have been doing exactly what you do with econic, but in Germany, would you be interested? Because I heard that you have an ambition to to move to Germany.

[00:16:58.670]

So that's part of of of executing and the ambition is talking about it before it happens, because then you are like some of my colleagues say, you're you're you're bending the universe.

[00:17:15.080] - Jon Slowe

That's a nice phrase. And that's not whether you describe that as not quite an acquisition. But taking on that team, that's not the only acquisition you've made. Tell us about where else you've been.

[00:17:30.890] - Joris Jonker

Yeah, it maybe becomes a little bit more complicated story now, but we as I've said before, we moved it to the new build home market here. And there the customers are not end customers you are talking to large building companies, companies who build homes. And that's where we we provide heat pumps, solar panel battery and wallbox. Is wallbox also something you use?

[00:17:55.100] - Jon Slowe

It's a language I know a lot. I think it's still maybe a continental European term, but I think in the industry wallbox, chargebox...

[00:18:01.820] - Joris Jonker

Car charger... So we our customers are in the Netherlands now, in the new build market are large building companies who built homes and what they are looking for is a one stop shop. They want a company to provide them with everything they need when it comes to heat, cooling and energy.

[00:18:25.550]

So they want us to provide this heat pump, solar panel battery and EV charger but they they built detached homes, semi-detached homes and multi-dwelling homes. And in the multi-dwelling units you cal it I believe, an apartment block and you don't have a heat pump per home, but you have one big heat pump for the whole building.

[00:18:54.290]

And that's a very different technology and also a very different offering there, because in the apartment building market, it's not a question of providing the heat as a service. It's mandatory. So you have to provide the service. The heat as a service to the apartment building for 30 years. And I believe in the UK it's 25 but it's for a very long time. Yeah. And so our customers in the building market that we like what you provide to yours, but you're only providing a single heat pumps for a detached or semi-detached homes. And we want to give you all our business. If you could also provide this heat pump technology for apartment blocks.

[00:19:42.620] - Jon Slowe

Yeah, they want a single partner. They want for all of their activities they don't want several partners they're having to manage.

[00:19:49.850] - Joris Jonker

And the same will happen also in the in the rest of Europe, because they also they all move to also in the UK, it's 2023 they start building without gas and then you need a company like us to integrate to provide a completely integrated service, but not make it...

[00:20:11.900] - Jon Slowe

More complicated than putting in a gas boiler, which...

[00:20:15.530] - Joris Jonker

They need to look at the the building as an integral system electric electricity system. So they said to to us, not just to me but to to to our company, we want you to provide this heat as a service also for our apartment buildings and we had no experience. So we partnered with a company, a small company, about 20 staff who had about ten years' experience providing heat as a service to apartment buildings. And yeah, we we got we got along and we had a chat with the owner and then, yeah, he was already working on this company for a very long time.

[00:20:58.310]

And he said, I believe that my business better fits econic, so a little over a year ago we decided to acquire the whole company, have the staff move to Amsterdam because they were outside Amsterdam and and. Yeah, so that's what happened.

[00:21:17.600] - Jon Slowe

So Joris if that growth you described earlier, year on year, hundreds, a thousand, two and a half thousand plus the fifteen hundred from that acquisition, getting to, you know, that doubling you're talking about how much of that growth has come from organic growth and how much of it has come from acquisitions? It's a bit of a simplistic question.

[00:21:44.540] - Joris Jonker

 I would say out of the ten thousand will have at the end of this year fifteen hundred is an acquisition. Yeah. OK, so the rest of it is organic. So the idea is also to also because you said times two, I'm trying to do times three. So I would say if I look at it it's a thousand. Three thousand. Ten thousand. Yeah. So my my plan next year. Thirty thousand. Yeah. So we're trying to grow at the three hundred percent base annually, organically or autonomously.

[00:22:25.670]

But if we, if we don't succeed then then we will acquire company, so I'm at the moment talking to companies in France and Germany and in the U.K. as possible acquisition companies.

[00:22:43.590] - Jon Slowe

Yeah, OK, so yeah, growth is fundamentally organic, but where acquisitions help to drive that and get to your times three. You'll fill in with those acquisitions.

[00:22:53.920] - Joris Jonker

Yes, yes.

[00:22:55.870] - Jon Slowe

And if you think this is your second start up, as you mentioned Joris. So think back to Quby, think back to the last years with econic. Are there common ingredients you think that in both of those journeys? Or or not. Was Quby such a different business, the the real magic ingredients there are completely different to the magic ingredients at econic?

[00:23:30.360] - Joris Jonker

Before I answer your question, one last thing about acquisitions, because we did another acquisition last December, and it's a solar installation company with about 25 staff in the office and fifty installers, soe seventy five in total. And they are one of the bigger solar installation companies in the Netherlands last year, about 10000 homes. And we acquired that company. And this year they will not do 10000 homes because it will be less because they work mainly for third party companies and we're going to move that capacity to our own installations. And that's also gave us a boost in the solar area...

[00:24:21.820] - Jon Slowe

I can imagine, yeah.

[00:24:23.120] - Joris Jonker

...Which is already a pretty mature industry in the Netherlands - about one million homes are fitted with solar panels so that's about 15 percent of the homes. But the growth is still, it doubles every year. So it's yeah, we thought it was smart to add that to the company.

[00:24:49.120]

So that means that initially when I spoke Delta-Ee first, we planned to to have the heat pump as the core offering, bBut now, because we have this large solar company, we are we will also start offering just solar as a service.

[00:25:07.670] - Jon Slowe

Yeah.

[00:25:08.590] - Joris Jonker

Again, small steps, because I found that it's a little bit that's a similarity with Quby. And then back to your last question, we were also too advanced from the start with Quby. This device was able to do everything in your home. Smart home, smart energy, thermostat, energy control, virtual power plant, everything was building. But that's not what consumers like. They like to buy just one functionality. So we were successful when we started selling the Toon - just a thermostat.

[00:25:47.590]

So what was the similarity? This is maybe two things. One is consumers in the end, they need an integrated system, but they like to buy it in small steps.

[00:26:05.080]

So actually I made a very big mistake, which I should not have done when we launched econic is at least try to sell this full ehome with the heat pump and solar panel on the battery and everything combined.

[00:26:21.250]

And now after two 1/2 years, we decided to make this big change. You can buy EV charging, you can buy solar panel, you can buy heat pump, you can buy a battery or you can buy two or three or everything. And yeah, I believe that consumers, they they want to take these small steps.

[00:26:45.130]

And of course, in the new builds, it's it's the full Monty. And there will be customers who will buy everything. But most customers like to first buy one component and hopefully they will buy that component from econic because we are able to provide the whole system.

[00:27:06.230] - Jon Slowe

Both cases Joris, I guess you started with a vision and ultimately, well, with with Quby, you got maybe not every aspect of what you described in that vision, but you are taking steps towards that.

[00:27:20.900]

With econic, againn, you started with that vision. Some parts of the market, you could fulfil it, but other parts you realised that was too, too big a step. And it makes me think a bit about scaling because a lot of... I remember one conversation with a big energy retailer and they said, I want a proposition that's low capex, low risk, highly scalable, can get to volume quickly. Well, don't we all? But that scale, that speed of growth is really, really important to make a difference to the energy transition, to move the needle for a company's financial performance and what you've described is in customer facing businesses to move the needle, to get that growth, you've got to be very pragmatic.

[00:28:08.350]

You might have a vision, but as you say, if you only sell a big step to customers, you'll have a very small part of the market. You've got to provide the stepping stones for customers and take them on a journey.

[00:28:20.770] - Joris Jonker

Yes, I would maybe also go back to the last question about the similarities between Quby is that consumers in general are, they perceive anything which has to do with energy as low interest.

[00:28:35.320]

So we believe that they are, that a smart thermostat or a home energy management system or smart home or heat pump or solar panel batteries all sexy. And that's what what drives us as Delta-EE or econic employees. But the general public people - they don't care. So, so, so don't talk about all the tech stuff to them, just to talk to them to give you more comfort or it takes away hassle or that it saves money, which is of course the most important.

[00:29:10.090]

And also don't talk too much about saving on CO2. I mean, that's that's nice to have. But for most people, that will not be the number one reason to to to buy a solar panel or heat pump. The number one reason is it takes away hassle or to save money.

[00:29:30.010] - Jon Slowe

Yeah, be really clear about what your customer proposition is, because in any consumer facing business, you need a great proposition.

[00:29:39.510] - Joris Jonker

Yeah. And don't try to sell technology because that's what all the manufacturers are trying to do. If you look at the websites of the heat pump companies or all the other equipment we we provide as a service, they try to sell it to you and they still talk about gigawatts, kilowatts, all the specs, which are a very low interest to to the end user.

[00:30:07.870] - Jon Slowe

So, Joris, if I get out now the Talking New Energy crystal ball and set the dial to 2025, I want you to give me a portrait of econic in 2025. So maybe this will end up like our chat with a beer in the sun in 2018, being too conservative. Smart listeners may be thinking, OK, three times each year. Where does that get you to in 2025.

[00:30:36.440] - Joris Jonker

For me it's not a crystal ball, for me it's very clear. Right. In 2025 we will have roughly one million ehome customers. So they will not be 100 percent fossil free, but they are on their way to becoming fossil free with a hybrid heat pump solar panel or fully all electric electric home. So one million customers. And if you if you do the maths, then that works out. And it's 10000 this year, next year, thirty thousand, ninety, 270, 810.

[00:31:08.990]

And if you add it all up, it's somewhere around 8 point two million. So we we aim for one million customers. And of course it's not just about the home numbers and that about money, it's also about CO2 savings. So on average the one million homes will save 50 percent on their CO2 usage when you look at the oil or gas consumption. And we hope to be able to do that in probably in five to six countries in Europe alone. Sso no place to go outside Europe and still there.

[00:31:53.900] - Jon Slowe

And still then as you outlined at the beginning, that would be a huge achievement, but there would still be a lot more to do after that in terms of...

[00:32:01.050] - Joris Jonker

Exactly. So I'm of course, I'm proud to say this. And of course we will we will get there. But if you look at our mission, a world without emission, it's not enough.

[00:32:12.570]

Because there are two million homes, and if we only do one million in the next five years, it's not enough. That's another hundred ninety nine million to go.

[00:32:22.290]

So hopefully there will be many competitors in 2025 and hopefully we'll have this beer then Jon and then we got a lot further and further, further, further, further than one million because it's a yeah, we should have the two 200 million done in in 2050.

[00:32:45.330] - Jon Slowe

Yeah. Yeah. Well Joris, time's got the better of us so maybe. Yeah. I hope we have that there before 2025 and see how you're doing. Thanks very much for your time and congratulations on the success you've had with econic so far. I'm fascinated to hear that about that journey that you've been on and. Yeah, as last time. Let's see how you do. And if you could beat that target, I guess that would be fantastic.

[00:33:19.860]

And a great step on the way to, uh, in the energy transition and reducing carbon emissions.

[00:33:27.090]

So, uh, good luck in the next year. And thanks again for your time. Thanks for coming back on the podcast. Thanks to everyone listening. I hope you found that interesting and inspiring. I look forward to welcoming you back next week. Goodbye.

[00:33:45.360]

If you're as passionate about the energy transition as we are, then please keep in touch. You can follow us and me on Twitter, LinkedIn, or subscribe to the podcast on your chosen podcast platform.

[00:33:57.390]

If you like the podcast and like sharing, then please do rate us and to listen to archived episodes, to read transcripts and to see the latest Delta-EE insights. Then please visit Delta hyphen e dot com.

[00:00:25.550] - Jon Slowe

Welcome to Talking to Energy, a podcast from Delta-EE, the new energy experts. We will be talking about how the energy transition is developing across Europe, with guests who are working at the leading edge of this transition. Hello and welcome to the episode. The electric vehicle revolution is well underway. Many of you listening will have your own electric vehicle. Others may be thinking of buying, leasing or subscribing to one, I'm in that second camp. So, I'll also be looking out for a wall box to charge my electric vehicle because I've got off-street parking.

[00:00:44.420] - Jon Slowe

But as electric vehicles become more and more widespread, what about people that aren't lucky enough to have off-street parking? When, where and how will they charge their electric vehicle? That's the focus of today's discussion. And to dig into this area, I'm delighted to be joined by two colleagues, Alex Lewis-Jones and Kate Armitage. Hello, Alex.

[00:01:08.870] - Alex Lewis-Jones

Hi, Jon. Thanks for having me.

[00:01:11.360] - Jon Slowe

And, hi Kate.

[00:01:12.800] - Kate Armitage

Hi Jon,

[00:01:14.210] - Jon Slowe

So, in the introduction Kate, I framed this as people with on the street and with off-street parking and people that don't have off-street parking.

[00:01:25.160] - Jon Slowe

But that's not quite the right way to think about where we charge, is it? Can you just remind us of how to think about the different charging segments about where people would charge their electric vehicle?

[00:01:37.230] - Kate Armitage

Sure.

[00:01:38.750] - Kate Armitage

So, we can really talk about the three main segments, which is home charging, charging in the workplace and then public charging. And within that, we see home charging as being the most predominant. So that's charge people who are lucky enough to have off-road parking and can charge privately workplace charging will also be dominant. And public charging is the third segment within public charging. We have that fit's down into on-street and we also have a segment which is destination charging.

[00:02:19.250] - Kate Armitage

So, that would be

[00:02:20.090] - Jon Slowe

Would that be driving to the cinema or supermarket?

[00:02:22.790] - Kate Armitage

Exactly. At hotels, supermarkets, public-private car parks, restaurants, that kind of thing. And then the other public charging segment is what we call transit. So that is where you would find rapid charges on petrol station forecourts, motorway service stations, and effectively somewhere for a very fast charge when you're usually in the middle of a longer journey in the future. We may see that transit charging being used slightly differently within the public charging segment when we see more people who don't have access to private parking at home, starting to switch to electric vehicles.

[00:03:07.260] - Jon Slowe

OK, so we've got those three groups charging at home, charging at work and public charging and then lots of different sorts of public charging, as you outlined. The most popular today, what are we seeing amongst people that got electric vehicles of those three? What predominates or is it a fairly even split?

[00:03:28.440] - Kate Armitage

So, within the Delta service, we run a series of research studies with consumers and we see from that home charging is by far the most popular segment within a public charging.

[00:03:48.360] - Kate Armitage

We see that usage of on-street charging infrastructure today is actually very small. So, these are drivers, mostly drivers, who have access to off-road parking. There are differences between countries. So, it's really important to call that out. So, within the UK and Germany, for example, our respondents, four to five percent of the respondents said that they used public on-street charging that's even lower in France only one to two percent of respondents and in the Netherlands, it was a substantial 16 percent.

[00:04:28.170] - Jon Slowe

OK, but most people are charging at home. And does that mean by implication, most of the people who have got electric vehicles today have off-street parking?

[00:04:42.260] - Kate Armitage

Yes, that's exactly it. So, it's very dangerous to look at who's got an electric vehicle today and make a judgement about how people will be charging in the future.

[00:04:52.840] - Jon Slowe

OK, so today's electric vehicle owners are definitely not representative of the wider population, which suggests that we need to come up with solutions for people that don't have off-street parking, because that's probably an underserved segment today, from what you said.

[00:05:12.040] - Kate Armitage

Yeah.

[00:05:13.990] - Jon Slowe

OK, so if we're going to get to the levels of EV adoption that we want to, we'll have to crack this nut of on-street charging or people will have to charge at supermarkets at destination's, at other public charge points or at work.

[00:05:37.090] - Jon Slowe

So, how can we do that? What are the different ways that people can charge near their home without having to hang a cable out of their window across the pavement to their electric vehicle, which is definitely not a good idea.

[00:05:55.420] - Jon Slowe

Alex, what are you seeing in the market at the moment? Is this a really active part with loads of exciting things going on? Is it still a tomorrow market that people aren't looking at yet? How would you characterise it and what are the different sorts of things we're seeing?

[00:06:11.620] - Alex Lewis-Jones

Sure. And I think you made a really good point there. I mean, one of a really common way that we do see is people are trailing cables across the pavement to get to their cars here where I live in London, I see semi-regularly. So, it is a concern for public authorities to make sure that that is not the future of on-street charging. I think a good way to think about this is to think about the challenges we see with it.

[00:06:41.530] - Alex Lewis-Jones

Of all the different charging segments that Kate mentioned there. This one we do, we call it, you know, a medium hanging fruit because it does have a few more challenges associated with it than other segments, particularly that's around finding the right combination of factors that make it easy for all stakeholders to operate these charge points. So, first of all, it's putting in a location which is controlled by a municipality or local authority.

[00:07:16.030] - Alex Lewis-Jones

So, how do they know to install charge point? This is quite a new thing for them. Do they have the resources that they have planning? Do they have which team takes control of this? Secondly, do we have the capacity for our local networks, or do we need to dig up the roads and install brand new cables? And finally, can we get it to work for the customer? It's really convenient. If you can just park in your driveway in your own charge point that is only ever used by you is available.

[00:07:53.500] - Alex Lewis-Jones

But if you're in a case where it might be somewhere down the road or in the next street, is that going to be available? Is it going to cost me the right amount of money?

[00:08:02.110] - Jon Slowe

Sounds quite hard Alex

[00:08:05.320] - Jon Slowe

Yeah, that sounds like quite a challenging part of the market.

[00:08:11.830] - Alex Lewis-Jones

Yeah.

[00:08:12.620] - Alex Lewis-Jones

And if you're on these charging providers, who's looking to find a really good business model, it can be a bit overwhelming. But at the same time, this is a really important nut to crack. So, there are opportunities out there. So, lots of different innovations are happening. We categorise this in three ways. So firstly, it's about building, new infrastructure, what you'd expect, but build it to fit in with the environment so that it works for all stakeholders.

[00:08:50.260] - Alex Lewis-Jones

Option two is to retrofit it into existing infrastructure. There's lots of electrical infrastructure in our roads. Can we find furniture that can already take in these charge points?

[00:09:03.190] - Jon Slowe

Like a lamp post?

[00:09:05.380] - Alex Lewis-Jones

Like a lamp post.

[00:09:07.300] - Alex Lewis-Jones

There might be some other options will come onto that. And the third one is by providing the charging as a service model whereby we don't necessarily install a new infrastructure by you. But you might have the charging brought to you as a service and we can explore what that means probably later on.

[00:09:32.500] - Jon Slowe

I'm intrigued about that one, but let's look at those in order then. And if you and Kate can share some of the exciting or most promising developments that you see, that would be great. So, I think the first was building new infrastructure. So that might be like a charge point on the pavement or just on the road that I could plug into?

[00:09:54.670] - Alex Lewis-Jones

Yes, exactly. So, you'd expect to see, like you might see a parking metre being installed on your road for paying your parking, the same thing, having a charge point installed in a box that is mounted onto the floor that you can connect into. Kate, I'll come to you on this because you've looked at this across various different countries, but I'd say that's the most common option that we've seen in Europe, particularly in the Netherlands, but also France, with the local energy networks, local energy syndicates installing these as well as the Stadtwerke in Germany as well.

[00:10:40.610] - Alex Lewis-Jones

What do you think, Kate?

[00:10:42.020] - Kate Armitage

Yeah, I think that's certainly the most predominant it's also the most obvious in that it's really taking a kind of classic charge point operator model in terms of existing hardware and saying instead of putting it in a car park, I can put it on street. And that's what journalists pick up on the most. I think, you know, they tend to show something that looks a bit like a parking metre that has been embedded into the pavement.

[00:11:23.750] - Kate Armitage

So that's the most mature market.

[00:11:27.380] - Jon Slowe

Is that scalable and financeable? Is it publicly funded as a privately funded?

[00:11:34.460] - Kate Armitage

Well.

[00:11:34.880] - Kate Armitage

So, if I think back to the barriers and challenges that Alex was talking about, so I think of them as this financial, this political, this behavioural. Certainly, it is putting a new bit of kit within electrical supply running to it in the pavement it's expensive because you have to dig up the pavements. You've got groundworks. You need a lot of certificates to do that. There's not a ready-made electricity supply, so you normally have to put in a new metre and make those electrical connections.

[00:12:15.290] - Kate Armitage

So, it's the most obvious. But there's also the kind of from the local authority point of view, there's this other downside of adding more street furniture at a time when the trend for a lot of cities and towns is that they want to remove street clutter as much as possible. So, where we are today that's what's been installed. That's what people understand. But is it scalable? Question mark, that all really depends on utilisation based on the utilisation rates that we were talking about, one or two percent or even as high as 16 percent in the Netherlands.

[00:12:59.490] - Kate Armitage

And it's not terribly attractive.

[00:13:03.350] - Jon Slowe

Yes, so hard to privately finance. Or very capital intensive, it sounds to me like using that how to crack this nut you need that's quite a big hammer to crack the nut and it's quite an expensive hammer.

[00:13:18.770] - Kate Armitage

Yeah, yeah. And there's a time when potentially some of that early government funding for demonstration projects that we've seen in Germany, France and the UK that approach to funding this is disappearing. And we're looking much more to private sector funding who are less good-willed in their spending.

[00:13:45.310] - Jon Slowe

They need a return. OK, then let's move on to retrofit.

[00:13:54.790] - Alex Lewis-Jones

Sorry, Jon, could I just have one extra thing to Kate's point there. There's a really good point you raised about avoiding street clutter. And actually, where we see a lot of the innovation happening today is actually trying to make the charge point fit in with the landscape as best as possible. So, to give you a few really good examples, there's urban electric networks who are building pop up charge points.

[00:14:25.910] - Alex Lewis-Jones

It's actually sinking them underground. And then you drive up to it and it pops up just when you need to use it. So, it doesn't take up space unless there is somebody charging there. Similarly, there are yeah, they're very low-level charge points as well. Connected Kerb is another company developing low impact infrastructure and a final one that I mentioned is Trojan Energy, who are developing an almost, you take the charge point with you, they call it a lance, but essentially the charging pole is your own that is attached to your charging cable.

[00:15:08.940] - Alex Lewis-Jones

You keep it in the boot of your car. And in that way, you can just have a flat charge point service on the pavement.

[00:15:18.580] - Jon Slowe

So, yeah, I had in my mind a public charging point on the pavement or this parking metre example. But those examples are quite different, maybe a bit, but I don't know they're more expensive or not.

[00:15:29.370] - Jon Slowe

But yeah, it's quite interesting for the visual impact.

[00:15:34.500] - Kate Armitage

And has advantages in terms of vandalism or accidental damage as well.

[00:15:41.130] - Jon Slowe

OK, let's move on to retrofit and those lampposts or other street furniture. Who wants to give us a bit of a flavour of what's going on there and some of the exciting innovations?

[00:15:56.160]

{Cross talk}

[00:15:57.330] - Alex Lewis-Jones

I'll kick off because we've had a look at a few of these thinking about that point about how much street furniture do you have?

[00:16:07.720] - Alex Lewis-Jones

There's lots of different things installed on our roads that already have electricity connected to it. And one example would be the telecoms network, who actually have a lot of private wire networks across all of our urban areas. And they all have some bits of capacity in them. So, is there a business opportunity? We're seeing some companies exploring that. And one would be telecom in Germany. Who are you actively looking at is their capacity that they can get access to at a street level and create a charge point?

[00:16:48.210] - Alex Lewis-Jones

And that's really good fleet who are looking to switch to electric as well. It might be that they can plug in and charge whilst they are in the area doing upgrades for new 5G broadband and the like. We have seen an example of a phone box which has electricity connected to it. And that has also been converted into a charge point, not really seeing phone boxes as the future of the landscape.

[00:17:21.030] - Jon Slowe

Bit of a dying breed.

[00:17:21.900] - Jon Slowe

But an interesting, I guess it gets you thinking about, OK, what has got an electrical connection that's already on the or by the street.

[00:17:32.070] - Alex Lewis-Jones

Yeah. But obviously, the key one is, is the lamp post. There are millions of lampposts all over every country and a lot of them being upgraded or have been upgraded to LEDs for energy efficiency reasons. But that might mean that there's a little bit extra capacity within their network to install a few charge points. And the key one here, and I'm a little bit biased because I know they exist on my road but is ubitricity.

[00:18:06.360] - Alex Lewis-Jones

That has been the biggest disrupter to the on-street charging market in Europe, in my humble opinion. And they have installed little sockets onto lampposts. So, you might not even notice that they've rolled out thousands of charge points across London and are doing so across other places in the UK and a thousand in Berlin as well, where they're based.

[00:18:33.770] - Jon Slowe

OK, and they were bought by Shell recently, weren't they?

[00:18:38.320] - Alex Lewis-Jones

Indeed, the latest acquisition in a growing portfolio for the oil majors, and I think it's a really smart move from my side.

[00:18:51.430] - Alex Lewis-Jones

I think what's really interesting about you, ubitricity, is that they've done the most thinking around how to solve a lot of the problems with building new infrastructure now very simply, if you've got lampposts, they are probably being paid for by the council in terms of their electricity supply. So how do you make sure that councils not just paying for me to charge my car all the time, so you need some kind of metering system that fits into a nice, narrow lamp post, and they came up with a solution that did get accepted by the regulators before anyone else and essentially putting the metre outside of the lamp post and actually on a connected cable.

[00:19:42.580] - Alex Lewis-Jones

And that helps people to be able to just carry the metre around with them. And it all gets built very cleanly. And that's why we've seen such rapid growth across the UK.

[00:19:56.120] - Jon Slowe

OK, what's a lamppost in some ways is obvious, but there's a lot of as in everything, the devil is in the detail. There's a lot to get right. And now you've got that combination maybe of Shell with the ambition and potentially the capital, and ubitricity, having worked through a lot of those detailed issues that could be quite a potent combination, I guess?

[00:20:17.790] - Kate Armitage

Yes, it is worth saying, Jon, that there are other lamp post solutions emerging, which is a good sign because it does mean that there's obviously a good business model sitting behind it. But we've got in the UK, there is a CityEV and there's also Chargie who are developing and they're all working with different local authorities. It's not perfect, Jon. So, I don’t think neither Alex nor I are sitting here and saying lamppost charging is going to rule the world and we're seeing a lot of short-term success because it is relatively low cost compared to the traditional floor-mounted charge points.

[00:21:09.460] - Kate Armitage

So, you get more bang for your buck in terms of being able to connect more cars simultaneously for the same investment be that local authority or private investment. But that's really how Ubitricty have managed to propel themselves to one of the largest public charging networks in the UK in a very short period of time.

[00:21:32.920] - Kate Armitage

The downsides,

[00:21:36.520] - Jon Slowe

I was waiting for this part Kate.

[00:21:38.740] - Kate Armitage

Well, the downsides are unfortunately, lampposts aren't necessarily positioned where you need them to be.

[00:21:47.180] - Kate Armitage

And a lot of local authorities, for the safety reasons, have spent a lot of money repositioning their lampposts so they're on the inside of the pavement.

[00:21:58.900] - Jon Slowe

If I look outside, that's exactly what happened on my street.

[00:22:07.030]

{Cross talk}

[00:22:07.030] - Kate Armitage

So suddenly we need those lampposts to be back where they were and where we didn't like it from a health and safety point of view.

[00:22:13.700] - Kate Armitage

So, I think the whole thing with retrofitting is you've got to work with what you're given. So, there will be whole streets, potentially whole towns where this solution doesn't work, number one. Number two, as Alex has already said, a lot of these lampposts have been converted to LED. And thank goodness, because that's what created the headroom in the available electricity. But you're talking about two or three kilowatts charging.

[00:22:44.420] - Jon Slowe

So, trickle charging.

[00:22:47.030] - Kate Armitage

Trickel charging which of course, is fine if you’re parked up overnight, that's absolutely perfect. So that works well. And then, of course, there is the issues with the metering and the billing because a lot of lampposts are traditionally unmetered supply.

[00:23:02.720] - Jon Slowe

OK, so definitely not a panacea, but right for part of the market or help, certainly. So, we've had building new infrastructure, a lot of nice solutions, but not cheap with potential visual impact so they can deal with that retrofitting, existing street furniture, definite opportunities, but again, not a panacea and some issues there, the third category was service style models, which listeners may have a bit of trouble imagining what they are. So, Alex do you want to demystify this last category?

[00:23:42.110] - Alex Lewis-Jones

Yes, in the if we just drew on the example with ubitricity and some of the drawbacks that are commonly associated with a lamppost charging now we're seeing lots of evidence coming through that are well. If people are parked in front of those lampposts, then you can go to the next one, you can go to the next one, you'll eventually find one that's available from a customer experience that might not be convenient and that might not be what people are looking for.

[00:24:15.160]

They might just want to get home, park in front of their house and be done with it.

[00:24:22.990] - Jon Slowe

Yeah. I remember before I had moved into a house with off-street parking, it was a pain in the neck, enough to drive around with a lot of shopping in my boot and look for a parking space near my flat, let alone a parking space with an EV charger available.

[00:24:38.210] - Jon Slowe

So, yeah, how could I just pull up in the charging space nearest parking space and have a service that would charge my vehicle?

[00:24:45.790] - Alex Lewis-Jones

So, imagine that you've just come home with your shopping and have parked where you want to in front of your house. But a concierge service might come and access your vehicle, take it elsewhere to where they know that there is a charge point available to charge up your car for you and then return it with a full battery as possible at the time that you will next require it so they could go and drive your car away overnight and return with a nice full battery.

[00:25:24.370] - Alex Lewis-Jones

That's one option that's being explored. Another way could be. Well, let's just bring the charge point to you. So have a van with some large batteries in the back and charge up people's cars again overnight whilst you're sleeping so that you have a nice full battery in the morning.

[00:25:44.110] - Jon Slowe

OK, so yeah, interesting ideas. And I guess if they're driving it to somewhere, I can imagine a supermarket overnight might have a lot of charge points that are not being used. So, there could be a range of places they could go take it to.

[00:26:00.690] - Jon Slowe

Are there companies are actually doing this today? Is this ideas? Or is this actual on the ground practise today?

[00:26:08.220] - Alex Lewis-Jones

Yeah. So, one example, again, lots of innovation happening out of Berlin, but there was a company called {illegible} Mobility and they pioneered actually putting batteries onto bicycles and driving those batteries around to cars that were parked, plugging those batteries in, cycling off, picking up another battery and redistributing them. They've been doing that for a few years. They've received a lot more investment and are doing a lot more of that kind of mobile charging style approach. Back in the UK, we are seeing some companies Charge Fairy are doing the option with the van when they bring that along.

[00:26:52.500] - Alex Lewis-Jones

And also, Zumo charge is the concierge service, which is launching this year.

[00:26:58.860] - Jon Slowe

Okay, so those cyclists cycling around with those batteries must have pretty powerful thighs then because that must be quite heavy to cycle around.

[00:27:08.530] - Kate Armitage

Yeah.

[00:27:09.640] - Kate Armitage

And with the service approach tends to be a subscription-based model. And you allow that service provider to monitor the state of charge of your battery so that they can begin to anticipate and plan when you're going to next need that service.

[00:27:28.880] - Jon Slowe

OK, so there's quite a lot of peace of mind in the offering then.

[00:27:31.950] - Kate Armitage

Yeah, the question, Jon, is willingness to pay.

[00:27:39.520] - Jon Slowe

Yes, just peace of mind, equal willingness to pay, equal profitability.

[00:27:46.330] - Jon Slowe

OK, keeping on time here, we were going to touch briefly on models where people don't have their own cars and needed to charge so car clubs, taxis. In fact, car clubs I think people can get their heads around the idea of using taxis for mobility. Just very, very briefly, is that something you see getting more and more traction? I mean, maybe in cities with younger people?

[00:28:15.700] - Alex Lewis-Jones

Yeah, I think we're just on the car club front, it's something I'm personally quite interested in because I don't really want to own a vehicle like, you know, like to use myself and thinking of that kind of millennial demographic.

[00:28:33.040] - Alex Lewis-Jones

And actually, I just want to pick up any car off the street and use that for the very few car journeys that I need to do in the city centre.

[00:28:40.930] - Jon Slowe

You're such a millennial Alex.

[00:28:43.200] - Alex Lewis-Jones

AI know, I want that to be an electric one and I want that charged. I don't want to have to worry about that. So, there's got to be some solution there. Now, if we look at examples from you know from Paris where we know that we've had electric car clubs before, they have struggled with that early business model. But the idea of, OK, we provide a load of specific cars that are just designed for car clubs where you have to drop them off is exactly where they have to charge up a great idea.

[00:29:24.160] - Alex Lewis-Jones

The difficulty was the operating costs associated with that. Keeping those vehicles clean and usable meant that they didn't last. But the concepts still there. So actually, if you look at companies like WeShare the Volkswagen subsidiary, they're going all-electric in German cities and Zipcar, again, are looking at going electric in many European cities. I know them because I use their electric vehicles here. A quick word on taxis. Again, really interesting situation that we're finding in London is that because the black cab is so, so emblematic of London, and so key to its transport system, they get their own rapid chargers, so really fast charges and they are placed on the streets as well.

[00:30:20.380] - Alex Lewis-Jones

And interestingly, they are infrastructure that are not available for the general public. So, you do go along and see these charge points that have handwritten signs on them saying, please don't try and use this. This is for us cabbies because we need this for our jobs. So, there are interesting opportunities for certain niches in those different customer segments.

[00:30:44.800] - Kate Armitage

And another example, Jon in Oslo, where they're trialling electric I-PACE taxis that are compatible with wireless charging, so when the vehicles at the rank, it is wireless charging. Taxi's is a really special niche use case.

[00:31:08.130] - Kate Armitage

But large volumes when you look at it across Europe.

[00:31:14.970] - Jon Slowe

Well, maybe the shared economy and taxi's and abilities of service deserves a separate episode, so hopefully, we've whetted listeners appetites with those examples. Let's get the Talking New Energy crystal ball out on the desk next to me and do our looking forward part.

[00:31:35.790] - Jon Slowe

So, I've set the dial to 2030 this week.

[00:31:39.690] - Jon Slowe

And the question is this and there's two parts to the question, what proportion of drivers will be using on-street charging as their main form of charging by 2030?

[00:31:54.240] - Jon Slowe

So, you alluded at the beginning of the episode, Kate, most people charging at home what proportion of people will be using on-street charging as their main form of charging by 2030. And of the three examples, you outlined Alex, building your infrastructure, retrofit and service {illegible} models, what will be the predominant model? So, in the interest of time, keeping your answers brief. Kate, do you want to go first?

[00:32:20.780] - Kate Armitage

Yeah.

[00:32:21.280] - Kate Armitage

OK, so it's really important to understand what percentage of households in each country do not have access to off-road parking.

[00:32:37.430] - Kate Armitage

The extreme is the Netherlands, which is why they've got such a mature on-street parking network and it's well utilised. 66 percent of households do not have access to off-road parking. The other important aspect with the date of 2030, Jon, is that both the Netherlands and the UK have set the ban on new sales of  ICE (internal combustion engines) vehicles to 2030. So, I don't want to be pinned down to a percentage, but I think you're going to see the Netherlands looking definitely the strongest market in Europe, perhaps not in absolute size, because it's a small country, but in terms of percentage of their public charging will be on an on-street high, well over 50 percent.

[00:33:34.830] - Kate Armitage

More like 60 percent of all public charging will be on-street. The UK, Germany and France have a slightly smaller, so it's about roughly 30-35 percent of households don't have access to an off-road parking. And within that context, you've also got to allow that there will be workplace charging, destination and transit as well.

[00:34:02.970] - Jon Slowe

So, it will be part of that 30 percent.

[00:34:06.150] - Kate Armitage

Yeah, yeah.

[00:34:07.860] - Jon Slowe

Which of those three forms, if you have to pick one will dominate or be the most popular? Or too early to say.

[00:34:23.700] - Kate Armitage

Well, this kind of comes down to the local authority municipality approach in the Netherlands, they very much taken a concession-based approach where some of the more traditional CPOs are bidding to install infrastructure, whereas in the UK it's much more exploratory in terms of driving down that cost of infrastructure. So, I think it will vary by country.

[00:34:56.220] - Kate Armitage

I think that return on investment and utilisation are absolutely key. And on that basis, lamppost charging is currently my favourite. That has the potential to really rollout high level and really give good bang for the buck in terms of ROI.

[00:35:18.780] - Jon Slowe

OK, thanks, Kate. Alex, your view, a proportion of people on the street and most popular type.

[00:35:29.710] - Alex Lewis-Jones

OK, I would say. In terms of the charging sessions, if you have 100 percent of charging sessions and we say that about 59 percent across all of Europe is charging in driveways and garages of people's homes today, I think that a wedge of that's going to be taken and shift to on street. So, I'd say that would go down to 50 percent so that nine percent will get added to the five percent of on-street. So, I reckon about 15, 14 or 15 percent, to be very precise.

[00:36:03.810] - Jon Slowe

Very precise Alex.

[00:36:09.380]

{Cross talk}

[00:36:11.460] - Alex Lewis-Jones

But that would be where I see it. And I think it would just be that switch around in terms of residential charging, do I charge in my home or is it in a public location. In terms of what's going to dominate I feel like there's going to be a bit of a revolution in terms of ways of thinking about on the street in the coming years because a lot of the infrastructure, like Kate mentioned, has been around for a few years and they're going to need to upgrade it and rethink about it.

[00:36:43.470] - Alex Lewis-Jones

And I would say that it's going to be the new build infrastructure, probably more local charging hubs. So, they get away from having to install lots of distributed charge points. Maybe just one hub where people can collect is probably going to be the preferred option, even if it might not be the most efficient option. The third point that I'm going to say is my prediction for 2030 is that we won't have parking wardens anymore we will have charging wardens because there will still be a considerable problem with trailing cables and knowing whether people are charging at a location whether to charge point accessible.

[00:37:29.160] - Alex Lewis-Jones

It's going to be a huge resource for local authorities to manage. And I think that's a huge new job for the category of parking warden.

[00:37:39.930] - Kate Armitage

And I think those parking wardens are also going to be looking at icing I think you're familiar with icing Jon?

[00:37:50.290] - Jon Slowe

No,

[00:37:50.870] - Kate Armitage

No?

[00:37:51.400] - Kate Armitage

So, that's when an ICE vehicle parked in an EV charging spot and in the Netherlands, they already have a problem with charge point blocking. So, the average time on charge for an electric vehicle in an on-street space in the Netherlands is less than two hours. But the time it stayed in that parking spot is on average, 10 hours.

[00:38:18.490] - Jon Slowe

Oh, dear and that's a very valuable number of hours that other people would want access to.

[00:38:24.340] - Kate Armitage

That's time that you can't {illegible} electricity.

[00:38:28.310] - Jon Slowe

Well, it sounds to me like this is an absolutely critical area if we're to hit our decarbonisation of transport targets if we're to get EV adoption spreading through people without off-street parking.

[00:38:45.450] - Jon Slowe

And there's a lot of learning going on, a lot of great ideas, but a huge amount more to do and a lot of challenges. So, thanks very much, Alex and Kate, for sharing your thoughts, your research highlights. I found it a fascinating discussion, one that I think everyone listening will be able to relate to. If you don't park on-street, you'll undoubtedly know someone that does and will have these challenges or maybe even has them today so.

[00:39:14.240] - Jon Slowe

Thanks, Alex. Thanks, Kate. Thanks, everyone, for joining. We hope you found that useful and interesting discussion Alex and Kate, I've stored your predictions in the crystal ball as with all other predictions we'll come back to them in 2030 and look forward to welcoming everyone back to next week's episode. Thanks very much and goodbye.

[00:39:49.610] - Jon Slowe

If you're as passionate about the energy transition as we are, then please keep in touch. You can follow us and me on Twitter, LinkedIn or subscribe to the podcasts on your chosen podcast platform.

[00:40:06.050] - Jon Slowe

If you'd like the podcast and like sharing, then please to rate us and to listen to archived episodes, to read transcripts and to see the latest Delta-EE insights, then please visit www.delta-ee.com