230. The growing complexity of battery fleet management - May26

With a round segle end from London and Gerard read from Berlin. This is redefining energy today. On Redefending Energy job, we're gonna talk about the growing complexity of battery fleet management. Oh yeah, not easily wrong, not easy topic.

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Make your life easier, make your business more flexible. Back to the show. Batteries can be anything from a battery in your home is nine kilo what hours and then you can have a gig one hours on the other side, and there's a sports not just in one country, but a copy across the world. Yeah, so that's a big topic.

Now. The thing is, with the development of batteries, you would think that battery management would become easier, but in fact it's becoming more complex because you have data risk. You have a growing number of suppliers. The supply chain which is to be integrated now are in disintegration mode.

The software stack are evolving all the time, the regulation changes. It's so easy to lose control of your battery fleet. Absolutely, as we believe that storage is really one of the revolutionary technologies of the twenty first century, we need to think it's important a cage need to become a little bit peakish, dig into the weeds and stuff. So we have a great guest, Stefan rou the CEO of Twice, one of germany leading battery analytics company.

Yeah and back around. Twice has become a major global player in recent years with over one hundred and fifty employees basically made up a battery scientists chemist, software engineers, data scientists and the copy is raised about irking sixty million in equity at this point in time and twenty five million adapt finance EIB with a big growth opportunity in front. Before we bring Stefan on the show, we have something new, the Geek Alert. It is a very geeky episode.

I love it. Stefan. Great to have you on the show. Thank you for having me.

He Stefan, what you're doing looks extremely technical, so please get you explain a bit what twice is doing in terms of services. Twice as an independent data analytics platform for proactive best operations. That sounds long, but basically what it is. When IPPs or utility companies build up portfolios and operating energy storage I talk about larger scale utility scale energy storage, they really need to understand what is the performance of the system or the system safe, how long do the system run, do I still operate the systems in the warranty or not?

And all of those kinds of things can be very much like data power data informed. So due to that we are you know, like pulling out the data from the storages in operations and give our customers, the IPPs and the utilities, the asset management teams, the performance engineers, the maintenance teams one few of their single storages, but also of the whole portfolio and help them to level up performance to really make sure that they have like the right risk assessment of their storage is when they operate them, and also helping them do that all more efficiently.

Because everyone started developing batteries but really last year a lot of the assets get reoperational, and now like the operational challenges are getting more severe and the companies also get serious about it, and Twice really focusing on this proactive BASS operation. So that's at the core of our company. So basically, you're plugging on the BMS or the EMS, you'll tell me which one, and you're capturing voltage, temperature. What kind of data are you managing exactly?

You can imagine like Twice is really sitting above the EMS system, So we're pulling data from the skater system or the EMS system, and it's AC level data and DC level data pH back from their PCs, from the inverters, but also from the REX so from the DC plocks down to at a certain extent to the cell level, but in most cases it's right like a bit higher level. We're putting all this voltage and temperature and current data out and then we push it into our platform and then then like we unify the data and then we calculate a lot of different insights or generate a lot of different insights.

For example, what is the usable energy of the system. Everyone thinks, you know, it's a straightforward KPI how much energy you can use from the system. But it's just not true because a certain extent year of your system is parts of offline. Some systems are imbalanced.

You have some weak components in this system, and that all takes it into consideration, sums it up to a usable energy and then our customers can really assess, Okay, I have four and ot mega about hours installed, but I can only use three hundred and sixty megabout ours? Actually, where do we lose those forty mega about ours? And what do I need to do? What do I need to change?

How do I need to run my maintenance? And may recur to really unlock those forty mega about ours? Steppen, maybe just jump in there and just I'd like to talk a little bit about the best market in general, right because I mean, I think what's happening around what one hundred percent go along with the view thaties are a revolution, But the one thing that I see is a lot of the operators actually don't know how to run these batteries properly, and they're probably not set up. They've been used to sort of solar feed and tire some wind freedom towers for many many years and now suddenly they've got this dynamic asset, which is yeah, it's very different than what they've been used to beforehand.

Yes, so you're absolutely right. There are two thoughts here. So first, what changes with batteries is that they are really getting like a fundamental part of future power system, So they're getting part of the grid. Therefore they need to be fully reliable.

Are we there right now to operate them fully reliable? Not in our opinion, not yet. Which just made a survey beginning of this year and interviewed around hundred operators IPPs utility companies and how often do they experience incidents and it's around eighty percent of them experience more or less monthly. Some unexpects that incidents in their storages and around forty percent of them have like some revenue impact.

So there you can already see that as operational excellence of those The storage market is not thea yet to really be a fundamental part to the grid. What you're referring to is why does that happen? And you're up to right. Most of the companies, especially in Europe, which move into storage r have developed and operating solar plants before or wind plants before, but it's a completely different game when you now add storage, and storage is very different to solar.

Why is that a different beast? Solo and wind not power generating assets. Storages are some like a dispatchable capacity. You can charge and discharge them.

It also has a lot of different elements to it. When you think about solar, then it's basically you can measure more or less all like the performance of the system. You can really measure it. When you can't measure, you somehow like model it.

So you do some performance forecasts and then you review it annually. And then there are companies who have this kind of mindset move it to storage and then they learn. For example, one of the most important KPIs on storage is like the level of charge, so the state of charge, and it's actually not measured, so you have to estimate it basically like the fundamental most crucial KPI on storage. It's even not measurable, but it's just estimated, and things can go wrong along the way because you do that for all the components and you aggregate it up that we get one sec for the whole storage.

Then second, those storages generate per megabat around ten to hundred x more data, so it's a completely different call it the data shock. It's just like the number of data which you pull out of the storages is in the completely different more order of magnitude compared to solar. Then third one is in the story side. You build up your ltus as your contractors with like integrators, then you think you're prepared, but at the end, all this operational burden is still with the operator and we all know that storage is you have a completely different form of complexity, so you have a lot of different cells in there inverters HVAC system.

It's also degrading how you operate the system like a solar plan is there. It's just that you have a performance with PVCYST, you have a performance forecast and then you can trust it and you just check infrequently if that is really right or wrong. And on the best side, it's it can change from one month to the next. So there's like a lot of technology nuances, a data complexity, but also like the contractual elements are quite different on the best side compared to the solar side.

Can I follow up and just asked us a question from a different side, which is quid operator. What I certainly say is that what you've got is a lot of grid operators that are scared, say batteries, and they're even blocking them. And particularly in your own home country, Germany. What's your view with that and what would you say to a grid operator if they were from TNL.

What grid operators are really like a scared of is that when they need the capacity, the capacity or the power needs to be there from the storage because they need to be fully reliable for operating the grid that a certain frequency and a certain reliability, and I think they are not used to it or have don't have the experience yet if that's really happening, and due to that they're building up some worst case scenarios. So when in Germany you want to place a storage somewhere in the grid, they always make some calculation and say, okay, when for example, in a certain moment in time, the storage does something wrong in charges instead of discharging, what does it do the grid?

And then of course they calculate a lot with the worst case scenarios and somehow disappear what time that's this may hope, when like the industry is really making sure that the storage is all behaving how they should behave and that is also like the point where where we are plucking in the more model storages get part of this critical infrastructure. You really need to make sure that when the grid requests a certain power level or a certain energy level, that the storage really performs how the grid is demanding it.

And that's not in all cases really true. Right now, if I. Look at the markets that are developed the most recently, so California, AIRCOT, GB, Australia, and I guess you've got clients in all those places. Other data and condition the same all over the place.

Or it's more like supplier dependent, like if I put the Tesla, it's going to behavey like this, and if I put the fluence or BYD is going to so is it geography or a supplier. Linked Right now, twice we have experienced Australian market, the European market, and the America, so North America but also South America, and there is like one overarching theme there. Batteries get part of the critical infrastructure. And like most of the suppliers right now are coming from Free or China especially, and there's a lot of regulatory happening.

It will get even sharper and strengthened the last couple of years. How like this critical infrastructure gets analyzed, monitored, observed, what kind of data gets out of the storages? How do you control it? And in Australia, in Europe, in the US market, everyone thinks from their geopolitical perspective, batteries is part of the grid infrastructure and are very mindful of what kind of suppliers they're pulling in.

Due to that, when you're like, for example, a Chinese bettery integrator, you have hard time to also do the monitoring or analytics in Europe, the US or Australia, that's of course not true like in countries like China. That is one big element and that gets sharpest. For example, on our end, we have a local cloud in the US market, we have a local cloud in Australia market, with a local cloud in a European market. Because every country tries to regulate and really wants to make sure that no foreign party gets access or control of this critical infrastructure.

There's one element, and the second one is because you're asked about the suppliers, that definitely has changed. I'm in the industry now over whatever like eleven twelve years, and there is overall the trend. When the industry is younger, companies start vertical, try to do it all. And when the industry is more maturing, you have like more specialized solutions which more or less pile up.

And that happens there as well. Right like you have integrators who wanted to do everything, like you know, like DCAC block the EMS, the monitoring and everything. But now when you go and step back, you're an ipp you buy and storage from for example, Fluence, then you have one storage from Fluence. So when you buy the monitoring or like the emas from Fluence, that works.

But as soon as you add a second or third or fourth at a certain moment in time, all of our customers are start diversifying. So you can't put all your eggs in one basket. When like there's an insolvency, bankruptcy from an integrator or some risk to it, so they have to hatch and that basic leads that they have usually portfolios they're building up with different integrators at a certain extent, different emas providers. And then you need like one single pane of glass or like one single place of truth for your data.

But this trend also shapes for example, data availability because before, when like it's very verticalized and vertical integrated, there will more data scarcity. And now actually it opens a way more up because the portfolios are differentiated and the IPPs get more professionalized, and then really also choosing the right supplier for the right topic. For instance, in Europe we've seen recently there's a bit of a clash around the Chinese invertors, and I guess they are not a load in the US, but probably there are a load in Australia.

I don't know. So how do you navigate all that, especially data protection and certainly cyber the government ask you anything when they start putting those regulations, or you just find out reading the newspaper. On our end, we definitely are like cyber security and data security is a very important topic for us. That's like core of our business as we're dealing with a lot of the data.

There are so many dynamics right now in those countries and every country is handling it a bit differently. But the overarching trend when you think about the invertor side, the European Investment Bank and European Investment Fund they are investing in renewable projects in Europe, and what basically like this ban is about says that those two entities European Investment Bank and European Investment Fund, they are not allowed anymore after November to invest into battery projects but also solar and wind project which has inverters which are owned from you know, like risky countries like for example China.

At the end, for US, it does not change a lot. I think it's the trend is that it just adds more complexity in the supply chain because you get more different vendors because you still source like the DC blocks from China. Now what it does change before it was integrated your DC and like the pcsory, like everything bundled together. Now what it does basically rip this component out again, so now it gets again more diversified.

You buy the DISC block from this company and thenvert it from the other company and MS from the next company. At the end, you have like one hundred million of dollar asset or eurosset out there, and you need to make sure to independently analyze and monitor it. And really also when things go sideways or wrong, who has to solve it? When you have an LTZA in place, actually you know who breached it, and to get like this perspective strengthens what we are doing.

But independently from that, on the other hand, the downside of its complexity, and you know, like you always pull the industry a bit back and slow it because it just gets either more expensive when you source the PCs inverters in Europe or DS market, you have less suppliers and all of those kinds of things. So I think, can I just follow up on that? You know, for me, and a verter is a piece of hardware, right, the key thing is the control system. So surely what you have to do is you put a control there on top of and I'm not even just talking about future but I'm even talking about existing inverters that around there.

Surely that's what we have to do going forward. Or am I thinking about it wrong? No, you're right. So at the end, like every integrator would say, no, batteries are not just a piece of hardware, But you're right, like the hardware gets more commoditized.

And there is for example, this survey we all did together with EPRI in the US, whether they build up this failure database and they looked into where do actually like safety interdets come from, and forty percent are actually from the control part, forty percent are from balance of material like h VX systems and all other components inverts ands on, and twenty percent comes from the cell. Of course, the cell and the batteries are still like the major part of the storage is there are certain parts get more commoditized, but you're right, the control part plays a big grow in the future projects.

But there are two elements to it. The control layer is not one layer because you usually you have like your storage, then you have an energy management system which is really there to operate the storage based on how this battery should be charged or discharged. But then they're also like additional layers on top of it, for example a monitoring analytics layer to understand across the fleet the performance capabilities and those kind of things. So there are different layers which are stacked up to really like make a not the single storage, but really your whole portfolio for a customer work.

Yeah, I was just want coming from an energy security point of view, if you're talking about making the system resilient against cyber attack, if I'm managing an asset and I've got a fluent energy management system, and then i might have a Siemens one. This is all too complicated, So what I want to be able to do is to have one system, which sort of tells me that you're going to end up with the control system being independent of the manufacturer, because from a portfolio management perspective, I want that, and secondly, just from a national security perspective, you want that as well.

Exactly the way you see that going forward, you're right. The control but also like the monitoring analytics layer or two elements which will most of the time not come from the hardware manufacturer. But having said so, the energy management system is such an integral part of an energy storage and everyone there author party solutions out there in the market, and we have a lot of customers who use them as well, but it's very hard to integrate them because it's also like a lot of their hardware integration into the storage assets, which make it way tougher to functioning.

So maybe it's better from a level perspective, and maybe it's better from a cybersecurity perspective, but you know, you still need to be able to operate your storages in general, you're right, several layers control, monitoring, the reporting layer. When the portfolios are growing, you will try to unify that and it also makes it a way easier for you to protect it. And the first level you're doing is you really separated. You read or read and write.

For example, our system, we are only read. We take the data, generate informations, give it to our customers, but we don't have direct control access to the assets. That is for example, one part of it. But there are like certain things like EMS, which is always like very controlled because you're really writing and steering their assets.

And due to that you also need to certify and with the grid operators your EMS and so on, and that is out but also challenge because when you go and step back as an ipp or utility company, you grow your portfolio and you need to always de risk it. So you build up your portfolio with different integrators, but you will also need to build up with different revenue models. But you also need to build up with different markets. So when you're based in the UK market and build up your portfolio, try to also put some storages in the Italian market, or you put also some storages in the Australian market because you just also like hatch the market risk.

But then the challenge is that often the control piece it's maybe not certified in Australia or not certified in Italian and so due to that, it's very challenging for IPS and utility companies to really get this one layer for all, especially on the control side. Surely the big opportunity for you going forward is to move from being a read player to a read and write player. In other words, you really do offer the controls. On our end, there are like too many opportunities.

That's usually hard things for companies when there are too many opportunities and you need to make sure that you still keep focused. Our core goal is to really help our companies to turn to proactive best operations. That basically means that they across their fleet. When you have an asset manager, you can overseee a lot more than you have done before that you really make sure you always understand what are actually cause performance problems and how to fix them.

When there would be a warranty lane am I prepared for it? So really making sure that everything which comes from properly operating and managing those assets that it's going deep and across the portfolio and it's really like more and more optimized. That is our core intention to do. And when you move into the control part, you're really integrating with the asset, which makes it for our customer harder when you really also especially are scaling globally.

Those batteries are supposed to last ten, fifteen, twenty years. That long duration has been properly managed by solar and wind, but we've seen recently that some system dating from even like eight nine years ago, and of course they were made by power an MC Korean. I don't want a necktive supplier than to ignite. So how do you see your role in relation to those asset degrading over time?

To structure the question? First of all, you're right. So the first asset there was for example HEAH in the UK, mar Get the fire in May and rofered from twenty seventeen and it was like an MC battery from like a Korean supplier pouch cell. All of our current systems which are deployed or LFP cell chemistry, so in general they are safer and that is like the current technology.

But in the past, the industry deployed mc batteries. And at the second one is the storages. We were installed in twenty seventeen. They were completely differently tested and different sheams, and it's also a way less professionalized how it's run today.

Having said so, it was caused from a cell problem. We also have seen this problem already before in some other data sets, and those things can be detected. It's just an event everyone wants to avoid or should avoid. When you look into the data, it can be very helpful.

Can you detect all of the problems. Likely not, but you can find a lot of things months in advance before those things are happening. When you think about like the twenty years or fifteen twenty years of lifetime, what we are experiencing is actually the storages get deployed, and very important of the first couple of years. It's the commissioning phase of the storage, the first one two years, because there's actually where you have more or less than most problems, because you really need to make sure that the storage is really cables of banded the right way and the fans are all working and just like a mature, proper project, and you need to fix some things in this early phase but then when you have done your job well, it's running for a couple of years quite well, and then you're right, things are degrading from the batteries, from the worked, the fans, all of those those kind of things.

The industry still not really focuses on that right now because everyone is really focused on making money, which is also a fair thing to do, and you want to squeeze out of your storages. In markets like Germany where you have like a lot of return per megabt right now, you squeeze the most out of your assets as you can with the certain limitations of performance guarantees in ltsa's and so on, and then hopefully you're more or less write it off the asset. But from a societal perspective, these assets will be in the grid for next fifteen to twenty years, so there will be a lot of operational challenges needs to be solved also for the LFP run newer systems in five, six, seven, eight years from now.

Maybe the last question you could just talk a little bit about how you see the future twice and this exponentially growing battery mark. Our role gets more important when companies start really taking best operations series basically have a larger portfolios with different integrators and want to get the most out of their assets, want to avoid warranty claims, want to get better insurance premiums because they are real proactive in their best operations. And going forward for US is most of our existing customer bide based globally.

They will double or triple they install capacity in twenty thirty so next three to five years, and we're really focusing on building their operational layer between like the EMS and their ASSEM management and performance engineering team. And it's a very crucial piece because as mentioned before, we remit to make sure that those assets are reliable and operating well in the system, and we will do that globally, so we already like have customers and assets in Chile and Australia and Europe.

In the US market, that also is a quite interesting development because the batteries are all the same at a certain extent, but the operating models different regulatory setups are all quite different, and there will be a lot for us to explore the next couple of years to really help our as management perform the engineering teams to scale the best operations. The future is bright and you're a busy man. Stefan, thank you very much for coming on the show. Thank you very much.

Thanks Sarah and. Lauren, Yeah, thank you great having you wellther wrong thoughts. Oh mg, it's great to have a guests like Stefan because you realize a certain number of things. Number One, best is a totally different beast from solar totally just the amount of data you receive.

The second is, the competitive edge in batteries is not about buying proper hardware or software, is the excellence in operation. The third point is the issues of sovereign TEA are putting a lot of stress on the hardware and the software. And then what we concluded on is the twenty year question. Those are sets will remain on the grid for decades and you really need to track them down every second from system level to the same level, so it is super complex.

Yeah. I want to make a point though as well, is the industry is really maturing. So if I go back to the first battery project I was involved with a decade ago, and even just the battery system that put in my house right by the way it had to be replaced, it gives you an idea there was a lot of mistakes made in the early adoption, but at this point in time, we are really managing these batteries in a safer way and a more economic way, and that's good for everybody. It is, but at the end of the day, we need guys like Stefan to harness that soon ami of data flows.

That's how you perform and manage a battery fleet. You just can't use Excel sheets. Agreed. Total, Well, we like to thank Steph Fun It was a very illuminating conversation and Joe I took to you next week.

Good order. Thank you for listening to Redefining Energy. Don't forget to rate the show and subscribe on Apple, Podcast, Spotify, or the platform of your choice.