Soliverse Podcast:
Redesigning Solar with Hybrid Data, Storage, and Smart Demand Matching

[Peter Pongracz 00:21]
And we are live, ladies and gentlemen. Joachim, welcome to the show.

[Joachim Reinhardt 00:25]
Thank you, Peter. Really excited to be on the show. Thank you for the invitation and really looking forward to our chat today.

[Peter Pongracz 00:31]
Me too. This is an exciting segue from our typical programming. So we were chatting before the show and you guys are doing some interesting things at variate.energy. So walk us through — how did you come up with the idea?

[Joachim Reinhardt 00:53]
Okay, wow, that's a big one. So I'm gonna perhaps start by give a view of how I or we would see what is currently happening in the energy industry and then sort of where it's going to go. So I think if we look at, you're doing a PV podcast, so let's focus on the PV side first, although we do hybrids, but in PV, let's say there's a lot of software and simulation and then you have data and you have all these things that are built up from it. And I think a lot of that is, like from my point of view, that's really working and that's figured out.

So we have proven technologies, like you can get the annual energy production of a plant within a few and you can do the simulation and now you have even the software that does the whole layout for you. I think there are some parts that are figured out, but I think we have to look where is the sector going to go and where is the industry going to go. I think all these tools that we currently have, they're all targeting a framework that I think we're not going to see so much in the future anymore. You have a project, it's a standalone PV project, for example, it's going to feed in, it's maybe backed up by a government subsidy. Basically you feed in and every kilowatt hour that you produce has the same value. This is a way that projects have worked in the past, and the industry has even accepted it to a degree that some people have convinced themselves that this is all there is to it.

But if we really look at it, then the energy production is there to meet the amount. You supply it to meet the amount. And we're seeing that in areas like the grid. For example, in Germany, the grid is now one of the major bottlenecks in deploying new projects. We see it with the market. You have the really dropping capture rate from solar. So the idea that we see for the future is you're going to design projects that are really not just producing, but that are designed to sort of produce a valuable energy output. Like, and that could be valuable on the electricity markets, valuable to an off-taker. And a lot of these things are going to involve sort of designing projects that are not just gonna maximize the total output from your plant, right? Gonna need things like a battery to store the energy. You might hybridize even with a wind farm to get like a complimentary profile from the wind and PV production.

So this is sort of the idea where we think the market is going to go and that we want to build for. Now to what we solution that we offer. Building in this world, like we call it like the next frontier or the new way that the energy market is going to go, you will look at a lot more data than just, let's say, the total energy output. You will be looking at really time series of energy production and not just from a single source, not just from PV, but you're going to look at from a hybrid plant, you're just going to have to put together multiple sources. You're going to have to look at how your production is meeting demand. You're going to need to analyze demand data. If you have a PPA, you might have to analyze even in the grid production from other power plants in the grid, curtailment data, market price data.

So coming back to where I started with this answer is you have this part that's really well figured out, which is the side. We have the simulation tools, we have some of the data, and where we want to come in is then what do you do after that? Where do you take it from there? You have to look ahead and position your project as well as possible to be competitive in the future. And that involves supplying energy and meeting offtakers demands and hybridizing your projects and things like that. So this is sort of the big goal and the big challenge that we want to address. It's really about data and modeling such projects and analyzing this data that you have.

[Peter Pongracz 04:24]
Yeah, and I guess... all are driving in data, but what you do with that data, that's the key takeaway here. And most people are typically focused on the beginning, right? So pre-construction of the projects and maybe a little bit less so when it comes to the O&M stage. And did I understand it correctly that you guys are trying to put all of this data together and basically put a little bit of a future view of the project as well to be able to see how will this project perform exactly in the future and what are the variants that we can tweak to have the optimal output?

[Joachim Reinhardt 04:59]
Let's say, for example, let's go into detailed project modeling. What did we have in the past? We had maybe, you get a TMY and you load in the PVsyst and then you get the report and now you have the annual figure of energy production. This is how a lot of it has worked and then you have maybe a P90 for the bank, things like this. But what is going to happen if your PV plant is going use together with a wind farm to supply, let's say, a data center, then you are going to worry about, is the energy that we are producing going to supply the demand? Is it going to be there when we need it? So that will mean you have to analyze in high granularity the production data.

So you need to know when exactly is your PV plant producing your wind farm, when do you have gaps that you have to fill with the storage, things like this. Are those gaps in times where your electricity prices are going to be very high? So you have to have that risk component as well. And then you can base decision making on that. So you would be able to design then hopefully plants that are, let's say, more able to supply the energy that people need. And that is a lot more valuable than just going to produce something that has a high number in total, but it's not producing at the time that people need it. Simple example might be like you have a tracking PV system. that's going to have a much more, let's say, smoothed out production in the morning hours and evening hours and things like this. But you're not necessarily going to see that when just looking at the total. You're going to have to dig into the data. You're going to have to see when are you producing. Is that a time when electricity prices are high? Is that a time where you have to fill a gap from other technologies? Is the grid really already stressed during those times? So these are the things that we feel you're going to have to be looking at in the future.

[Peter Pongracz 06:42]
For sure. Trackers are actually becoming more and more particularly in Europe as well, and especially in Germany, where we have the two shoulders of production, where you can actually make really good money with your energy that you produced. You don't want to blast all the energy at noon to the grid and get penalized for it. So this is extremely important to zoom out and see the whole system of when is it worth it to be produced and how is it meant to be either sent back to the grid or stored in a battery pack.

[Joachim Reinhardt 07:11]
Exactly. And I think that every project developer now secretly or openly wants to be an IPP, like an independent power producer. And rightly so, because I think that's where the value is going to be. But I think for that, what I think we are going to see that you will have companies that are really going to embrace this. They are going to be like power producers, power suppliers. They will come up with concepts of how to deal with these things. cannibalization from PV. You don't want to produce everything at noon, like you're saying. And then I think you would have on the other side is what I would call then you have commodity projects. If you're just going to continue building the same projects like you did in the past. I think we're seeing what is happening on the energy markets, for example. Capture rates are going down and the value is not going to increase in the next five years, but there really is an opportunity and there's a demand for it to be supplying like a more stable, reliable, and also maybe to the offtake, even guaranteed power supply and there's value. And that's also going to be more valuable on, let's say, the energy markets and so on.

[Peter Pongracz 08:14]
Makes sense. How do you guys actually get this data? How do you generate the data that you need?

[Joachim Reinhardt 08:20]
We call our tool a data analysis platform. So there's the two components to it.

So we have the data side and on that side, sort of a simulation, like what you would get out of PVsyst or maybe on wind, it's going to be windpro or some trusted simulation software. That is, for example, one way to get data. Another way to get data might be if you have an already operational farm, then you might have something from your monitoring system. So there's a lot of data that you can have. Then you can have additional Let's say weather sources, we have inbuilt simulation as well. So that is for us always to get, let's say, data. And then the challenge is going to be, or some challenges that we see is then you have a lot of data and you could. going to have to structure that in a way that you can make sense of it. This is the data part of the solution. You can go in and upload a simulation report, upload data that you have from your monitoring system, do a simulation in our tool, and then you can compare that. That's going to be in a structured format and in a way that ensures that you don't have a mismatch of timestamps or you have maybe different time zones in your data, things like this going to be taken care of.

Then what you need is the second part is the analysis part. This is then where you can create the value. Once you have all the data ready, then you can look at it and get insights from how is your plant, how would it be performing, how stable is the production, what is the best way to design your power plant, how should you size the components like a battery, how should you size the PV or wind. And that is then the analysis part where then you can unlock that value from the data that you have. So this is sort of the solution that we are building.

[Peter Pongracz 09:54]
So basically we have kind of two starting points, right? On one hand, you are providing some data sources, like you mentioned, from PV Assist, which of course is bankable and quite highly regarded. On the other hand, if the developer actually has his own data based on production or operation, they can also bring this data and then the platform kind of interprets the two batches of data in a more understandable format.

[Joachim Reinhardt 10:18]
Yeah, exactly. The idea is typically what happens. Maybe you do one simulation and then you're going to treat that as the only source of truth. I think this is not necessarily a good idea because you might have other data and maybe the other data is not in itself as accurate as the best one you can get, but it's still a data point. You should be looking at as many data points and simulation sources and simulations as possible. I think this is also going to involve, in a project, maybe for the first pre-feasibility, you're not going to use the best data that you have. preliminary analysis, then the design might change and all these things.

And you're producing a lot of data and all that should go in into like a dashboard where you can see it, analyze it, you can draw the conclusions about the financial performance of the project, about what to be expected, about the sizing of the components and these things. It shouldn't be hard to do that. It shouldn't be a day of work to put all those data sources together and look at them. This is the idea of the data and analysis platform that you put it all together and then can just start analyzing, can start.

Before the call, we'll be talking about automation a little bit. You need to focus on those parts where you are creating the value. This is going to be where you are going to structure your project, for example, for an authtaker into a very valuable product that is a very high value to them from the individual component. And this is sort of where you should be spending your time. And this is then the analysis part. Like we believe you're going to be spending a lot of time analyzing the data, putting together your project and things like this.

[Peter Pongracz 11:48]
And when we are looking at the EPC world or project developer world, a keyword that you mentioned here that struck me is right sizing. So what really is important is that you need to right size your projects. What I mean by that is. You know, let's say we can put 20 megawatts of solar here and without any battery storage or any wind to compliment it. Sometimes it might not be the right solution. Sometimes it would be enough for us to put 15 megawatts of solar and then a little bit of storage to compensate for the peaks and troughs of the whole system. So this is super valuable because if you look at holistically, you know, it's around three and a half, maximum four cents to put up a utility scale size project, plus another three cents of storage. We can run the calculations quite clearly and easily with your platform to have a realistic idea of what I actually need because sometimes we are not building the right solution.

[Joachim Reinhardt 12:42]
Yeah, really great point. And I think I like also that you were mentioning the cost because I think there it becomes a very clear picture of where the value might be. In the US, all the tech companies have started now building up the AI data centers. It's a huge investment, it's very important for them, they put in a lot of money. And what I found super surprising is when the news came out that they were actually signing contracts, PPAs with nuclear power plants. So that is quite surprising. They were backing renewables before quite a bit. So they were the first to have like PPAs and then do like 24/7 energy supply even.

But now they were actually signing contracts with mostly existing nuclear plants. And the second thing about that is if you look at what is reported, what they paid for that. It's in the range of between 8 and 11 cents per kilowatt hour. If you compare that now with what you mentioned, or maybe in the US, you have 3 to 5 cents for a PPA from wind and PV, that is less than half. So what is the difference between the two? One is the PV plant, which is produced, let's say, during the day, it's unstructured, and then the off-taker would have to put that into the profile that they need. But the nuclear provides a stable output, and this is what they felt was probably necessary because the investment in these data centers was so massive. that they need to have a high utilization.

Now, if you can find a way to combine that 3 or 4 or 5 cents PV and wind, maybe with battery storage, into a more stable profile, and then you can create something that is almost twice as valuable, then you see where that value is going to be. And this is also why we believe that these things like the sizing and the putting together is maybe the part that's not as figured out as maybe knowing how to build a PV plant. At this point, these things are quite figured out. You can do that. You have a lot of software, you have a lot of tools. But what is then where we see the value going to be in the future is how do you combine that into something that is actually valuable? If you look at those numbers, then you can imagine how much more valuable that is going to be than just building a PV plant and just feeding it.

[Peter Pongracz 14:44]
For sure. A couple of points that you mentioned are super interesting. The first one, I partially agree with the nuclear as a backup because basically they need all the energy they can produce at this stage. has been quite flat in the last 10 to 20 years at four terawatt hours of production. And when you see the graph of China, it's off the chart. And the tricky part here is that I think to It's not really apples to apples comparison because the nuclear, although it's more stable, it takes you seven to 10 years to go online. Nobody wants to really have them in their backyard. Solar can be done in maximum 17, 18 months to be operational. So it's much quicker and it's producing cheaper. It's very important for project developers, PPAs, to have the full picture and to really look at the data from end to end, because I've seen this in the EPC world as well. They just focus on putting the solar project out. giving it to the customer and that's it. But if you don't really think through the operational cycle as well, and also the cost cycle, which is even more important, I think you will be in trouble.

[Joachim Reinhardt 15:51]
Definitely. And yeah, on this debate with the nuclear, I'm obviously on the renewable side, right? I believe in it and I believe sort of you can combine them to provide something that's very valuable, but it's just something that you cannot really do it as easily with the current tools. They are built for a world sort of Yeah, maybe a bit of background. When we started out, sort of the idea was always to focus with variate on this part, the intermittency. What was really striking is sort of like five years ago or seven years ago when we started first working in this area is that renewables weren't really intermittent to people because sort of for them, They had the subsidies that were being paid out no matter what they were producing. So all the fluctuations were canceling out. So renewables weren't really intermittent for the developer or for the investor.

And this has worked well for a while, but I think now that's really changing. I mean, you can see things going on with the grid. So you have a lot of grid congestion, a lot of curtailment is going on. And so the reality is coming back in. But for a long time, people were living in a world where actually intermittency wasn't really a point. Like the work we were doing was really more in, I would call it niches, like let's say off-grid systems, things like this, sort of where you really have to worry about balancing the plant and demand. But I think sort of now, maybe 2025 is the year where it came, like renewables became intermittent again. Like when you were seeing at the beginning of the year, all those charts with the capture rates for solar just dropping and it shocked so many people in the industry. Because they weren't used to that being an issue. So every kilowatt hour is the same. You're going to just focus on how much you're going to produce, but now that's changing.

[Peter Pongracz 17:35]
And I think you need to look at when that's going to be produced.

[Joachim Reinhardt 17:39]
Exactly. And this is a different way of looking at the project. And I think there are some things where we want to support our solution, as I said, with the data part and the analysis part, because we just think this is going to be quite valuable and important to companies in the future.

[Peter Pongracz 17:56]
Makes sense. And you know, I think these type of tools are really needed in the industry because the more efficient we can be, the more CapEx, less CapEx we need to include at the get go of the project. And ultimately it's going to be cheaper to produce these type of systems. So it's very important to have all the pieces of the puzzle together and think about it in a more holistic manner. And. Who are your typical customers? Who are the kind of success stories that you guys work with?

[Joachim Reinhardt 18:24]
So this type of technology that we're developing is interesting for everybody, has a stake in a project that is sort of really there for supplying power. So maybe not the subsidy projects where sort of you get the fixed feed-in tariff, but as soon as you have connection with the energy market, the PPA, then sort of this is who we target. this becomes valuable for every stakeholder. So this could be the developer, investor, financiers, even grid operators, I believe, because they have to sort of judge if a new project is going to be fitting well into their current system and the off-taker stand in case of a PPA. And of those groups, let's say the The one group that has the most ability to do something is the developer because they can make a choice. So they can actually, like things like sizing typically are decided at that point and on their side. So this is sort of like where we try to support as well, not just to analyze such a project, but to give recommendations into things like sizing, optimization of the project, risk analysis, also these things. So I think the developers have the amazing like role. where they can really shape what is going to happen. So this is something that we focus on, but then I think for the whole value chain, these things are important.

[Peter Pongracz 19:39]
And how easy is it to typically use the platform? So how long does it take for somebody to get up and running and start really getting the benefits of it?

[Joachim Reinhardt 19:49]
Yeah, that's something that we were thinking about from the start. We didn't want a platform where you have to rely on maybe running a different tool, then importing the data, and only then you can start. You should never have to bring your own data. You can do everything in the tool. You could go in, enter a location, and then run a simulation. Then later on, you can supplement that with simulated data, more high-quality data that you might have. But you should be able to start immediately. This is one principle. Never have to bring data. The second thing is, you can always bring your own data. Any data that you have, it's an open platform. You can load it in. It's going to be timestamp matched. It's going to be immediately usable. And then you can start working with this. So this is the two things. So you can really start immediately.

And when we do demos, that's also the beauty of it. You can really start from scratch and then see in 5, 10 minutes, you can already start analyzing a project to something that's a lot of fun. It's also fun to see the reactions when somebody sees it for the first time. A lot of people in the industry are not used to looking at the data in that way. For example, if you plot the PV production, you can see that in the tool for basically the whole year or multiple years and you could just go through it. When you have it in front of you, how high is the peak of a PV plant or maybe how low is the production in winter and you have that visually in front of you or how that matches with production from another source. how it matches maybe the load for an off-taker, then it's really a moment. And I guess it's really fun because then you see for the people, it's like, I didn't, never looked at it in that way. So this is something that we want to enable. And I think it's also an important part because sort of you are going to be, like if you build innovative projects and you are going to have to communicate that to other stakeholders, maybe venue company, maybe to like externals, financers, off-takers and so on. And it helps if you are like seamlessly be able to show that to people. And they can, like it's full transparency, like you're not hiding anything in a report, you can like all the data is there, people can go in and look at it.

[Peter Pongracz 21:54]
For sure. What you mentioned is, you know, I assume it comes with quite a lot of education as well, right? So typically people are used to working in a certain way, and when you show them a different, even just visualization of the same data, they might be surprised. So what are your approaches of, you know, getting people familiar with the platform or how to use it, et cetera?

[Joachim Reinhardt 22:16]
It's sort of the idea is to make it flexible in the way you use it. But I think it's also for something like this, you have to have a vision and idea of how people are going to use it. You have this idea and then you can do a bit of nudging also to people. For example, when you upload data into the platform, you're always required to have a real timestamp. The data you upload is going to be for the August 2025 and that already discussed like it discourages that you upload like a TMY because a TMY like it's not a real timestamp and it's really hard actually if you're going to start designing such a project using a TMY because each month in the TMY, it has a different base year. So it's not a real time series. And if you are then going to match that with, let's say, production from another plant or market data, that is going to be an issue. So this is something like it has to have a real time stamp to go into the database properly. It's like a little nudge that we have.

But other than that, I think from the feedback we have, It's quite intuitive to use. I think for me, when I go in and use the tool, it's also fun. It's always fun to look at data. It's always fun to see all these things, to dig in and be able to do that. I think this is how we envision that somebody in a development company, an engineer, somebody's going to use it. They are the people who are going to make the eventual decision, but they need the best possible foundation for that. And this is what we are trying to provide. And it should all be as easy as possible. So the not so nice parts get automated, and then you focus on creating the value and focus designing the project, designing, structuring your, let's say, product that you are going to develop. As a developer, like the energy product that you are going to put out and sell.

[Peter Pongracz 23:59]
Yeah, and I mean, the devil is always in the detail. And it's also from a software perspective, it's always quite tricky to have the flexibility and at the same time have a kind of proposed blueprint or vision for the customer journey, right? So they are really two sides of the same coin and you really need to balance them carefully to achieve the optimal results and the optimal usage.

[Joachim Reinhardt 24:21]
Definitely, yeah. And this is something where we sort of, we spend a lot of time thinking about how that should be, because I think sort of there's The way I see it in software, you always have like two paths that you can go. The one path is sort of you have a very clear idea of what people are going to do with it. And then you can build that with relatively little resources. But then whenever somebody has a slightly different problem, then sort of it doesn't work. And then the other way is sort of, which is a lot harder and let's say in some aspects slower, but also more powerful is you try to keep everything as modular and flexible as possible. It puts a bit more demand on the user because then they have to know things that in other solutions you can build in.

For example, in our solution, we don't suppose any, let's say, policy or regulatory framework. Like it could be different every country, every continent, you have very different rules. You have the tools to implement that, but we don't presuppose it. That is the drawback is then somebody from, let's say, Netherlands can't go in and have exactly their setup already there, but the tool is usable for a lot of situations. I think the benefit of that is also that it allows you to innovate and then come up with something that we don't have to presuppose for our users, so they can come up with their own ideas and own frameworks. I think this is the choice that we made, but you have to think about that from the start. to really know, okay, we're going to take this a bit more painful path to keep it flexible and modular, and then hopefully that's going to pay off. And I think we think it definitely does.

[Peter Pongracz 25:54]
Indeed. And I think if you're building a global product, you really need to be careful of what sort of details do you go into per country, per region, because As you mentioned, it gets quite, quite tricky. So if you give the user the, the possibility to kind of pre-calculate or preset their own preferred way, then that should be enough for them to operate functionally and efficiently. And if, if you were to dig into every single country, every single code, et cetera, it would be quite complicated and quite problematic also to maintain, upgrade, et cetera.

[Joachim Reinhardt 26:29]
Yeah, I think it's a balance, actually. I think you can have a bit of that and a bit of that. You have data tools in the world out there. Let's say Excel is the perfect example. You can do anything with it. Whatever you're going to do, you can put it in there up to a limit, but it's very, very flexible. We don't want to be as flexible as that. It should be opinionated. It should be specifically for renewable energy data. This is the idea, but then as long as you're working on renewable energy and energy projects in general, then it should be super So it has a bit of the opinion in there and then like as much flexibility as can be.

[Peter Pongracz 27:05]
Yeah, I mean, getting that balance right is quite an art form. And we talked a little bit about, you know, different countries, different regulations. You guys are operating globally, right? So what countries would you say are the most interesting or tricky to work in?

[Joachim Reinhardt 27:22]
I mean, each country. country has their own difficulties and challenges. But I think as the tool is so flexible, and I think I said in the beginning, when we're starting out, this concept wasn't really everywhere. You had some places where you really had the need to build, let's say, off-grid systems, things like this, but that was then quite dispersed. And then, let's say in Europe, you still had a lot of subsidy-based projects where you didn't really have to look at these things in as much detail. So there's a challenge then of having to operate in a lot of different areas.

But I think the benefit from that is what you learn is that the, what we call energy transition moves at different speeds in different places. And like one place might be advanced in a certain aspect, not in another. And it sort of really helps to put together an image sort of where you think things are going to go to have that global perspective. Like for example, so we were active in Asia a lot and there the like problematic or the issue of the grid was always very present to people. And if you look five years ago in Germany, for example, that wasn't the same. It was still you weren't really worrying about it. You were building your PV plant. It wasn't really an issue. You weren't thinking about curtailment, these things. And now, five years later, that is coming with full force. So now this is almost like a major bottleneck if you're trying to develop a project or if you're trying to set up a battery in Germany, the grid and to get the permission from the grid operator and so on is almost the number one thing that you focus on.

So I think it really helps to have these perspectives from different places because you can sort of see, in the end, it's all a physical system and you cannot cheat on the physics, right? It might be that some regulatory framework, it delays things in one place or another. But yeah, in the end, you have places where you have an energy market, you have places where you don't have an energy market. Energy markets are super important and they're really, really sort of what keeps the system running and also makes it efficient. But I think sort of it can sometimes confuse people because what is the market in the end for? The market is in the end for to balance the demand and the supply. So really if you designed for your project to meet like the demand, electricity demand as good as possible, that is going to perform well on the market. So sort of it's important not to get too like confused by things like, like maybe price projections 30 years out or something. Because in the end, if you have a project that is really well able to supply electricity when people need it, this is going to be valuable and something that you can control also.

[Peter Pongracz 30:01]
So basically, if you have good design, your project should be in principle future-proof as long as the playing field or the rules don't change, right?

[Joachim Reinhardt 30:09]
Yeah, or maybe even if the rules change. I think it's sometimes not a good idea, maybe if you get that guarantee, but it's maybe not a good idea to expect that the regulatory frame and everything is going to be exactly as it is now in the future. So you have to sort of think about what makes sense already right now. And if you do that, then I think you might notice trends already a bit earlier than, let's say, other companies or your competitors, and then you have that advantage. And I believe we are going to see a splitting of maybe the sector from project developers. I think you are going to see companies that are building projects that are basically commodities. So they are very good at doing that, very fast, very efficient. They know how to build the project, get the permits and so on. But there's a lot of competition in that area and there's a lot of pressure on the price and what you can do there.

And then you will get a few players that are sort of rising to let's say, the challenge and manage to build projects or build portfolios that are very valuable in terms of what they produce and they are going to sell it to the right, let's say, offtecher that is actually willing to pay a lot of money for it because it's very valuable for them. So I think then you will have something like a bit of a premium product that companies can offer. And these companies, I think, are going to doing really well. And then if it's sort of your ideas to just build as fast as possible with as many megawatts as possible in a similar way like in the past, then maybe it's not the best business model, right? Because the competition is always very high, costs are going to decrease and there's a lot of pressure on that. So I think the companies that are going to embrace this and think about things like hybridization, batteries, all these things, there's a big opportunity, I would say.

[Peter Pongracz 31:53]
For sure. And I mean, it really comes down to where do you create the value, right, for your customers. So if you are really just focused on a building projects and churning it out as quickly as possible. Yeah, you need to really maintain economies of scale to be competitive in the landscape. But if you are trying to build a more of a premium product, where you mentioned if you have a larger portfolio that would command a premium price, it's a whole different business case. And I think tools like yours are really important in building that. And you actually mentioned a couple of things that I wanna come back to. Are you guys currently focused on utility scale only, or are you also looking into the C&I or maybe even community solar.

[Joachim Reinhardt 32:33]
It's a quite good question. I think utility scale is sort of where the energy is, right? Because these projects are much larger and there's much more you can do and you also can afford to have much more planning and sort of focus put into that. But at the same time, I think like a C&I segment and a community project, their approach is actually quite good because in these cases, you automatically think about sort of, you have to meet the demand, otherwise it's not going to be the valuable. Few people would max out their roof just to have a lot more solar than they would ever need. You automatically have these constraints and you see the adoption of batteries was actually earlier than maybe even in utility scale side. So I think there's a lot to learn from there.

But I think where it gets interesting is then you have the industries. Heavy industries need a lot of electricity. And this is something that in Europe we are trying to preserve and build up. And then energy for them is important. It's a cost driver, but it's not their main business. I think what we are going to see a lot or where a lot of value is, is lying is able to provide these industries with the supply that they need from ideally cheap electricity and clean electricity from renewables, but not in a way that sort of every company has to have a has to build it up from themselves. At these times, if they buy a PPA, then they have to buy one here and one here and one there. And really a lot of the risk is with them. But I think the opportunity is then, again, and I think it's quite illustrative to look at what happened with these data centers. Prime example, they really need their electricity, willing to be paying a lot for it. Important to them is that it's available for them when they need it. So if you are able to build such a solution and supply it to these companies that are so important in Europe, everywhere in the world, So I think sort of C&I, yes, but maybe not on their rooftop, but like supplying them. I think this is sort of, sort of where, where the value is going to be and where there's going to be so much potential. Yeah, going forward.

[Peter Pongracz 34:30]
And I mean, what I'm also surprised by is that, you know, as you mentioned, the residential market almost embraced the whole hybridization and the end-to-end system from the get-go. And then now it's working its way up to the CNI segment as well, while once you get to the utility scale side of things and reach the kind of behind-the-meter type of battery packs, it gets a bit trickier. It's something that will need to happen. It's not really a choice. We need to have the batteries in the system as well to be able to balance the grid and provide energy, as you mentioned, at the right moment, at the right price, and I think companies will realize this as soon as it really starts hitting their bottom line.

[Joachim Reinhardt 35:13]
Yeah. I mean, that's the only thing that is going to be waking. This is the wake-up call. And I think it happened a bit maybe beginning of this year, as I said, with sort of the scare with the capture rate. So this is really then hurting. You can't ignore it anymore. There's a company here in Germany, 1KOMMA5, probably you know it. They built these home systems and their CEO, he's a I think he has this terminology of the new solar versus old solar, which I really like, because more mean, I think he sometimes called it dumb solar, I don't know. But a system that is just feeding in into the grid, no matter if there's demand, no matter how overloaded the grid might be, is really not the future. And then on the homeowner side, you have really super smart systems that are balancing out everything.

And I think if you take a bit of that idea and move it to the utility scale, that could be extremely powerful. For example, you could have hybrid plants, if you're able to hybridize wind with PV and add battery storage, then you can already start sort of smoothing out fluctuations even before it gets to the grid. So that should be for the grid operators, should be something that they would embrace. And then you can sort of supply something that's quite stable. This is going to be quite a valuable supply of electricity.

I mean, the grid connection is something that I think is a good example. If you build a PV plant, 100 megawatts, your grid connection is 100 megawatts. How much of that are you utilizing? I think if we look at capacity factors, something is something like 10% or 12% in Europe. Like you have this huge grid connection and then you should be able to utilize that a lot more. And if you then hybridize sort of what we see in the data also is you don't get a lot of instances. If you take 100 megawatt of wind, 100 megawatt PV, and you combine that, the joint production is not that often more than 100 megawatt. Like it really complements each other so well that you can have something that's just a more stable thing, uses the same grid connection really well, and at the same time is more valuable to most people that would buy electricity. So I think this is something where sort of development probably is going to go because the advantages are just quite there.

[Peter Pongracz 37:22]
And if you look at it from a pure business perspective, I think where we see a little bit of like drawback is that there are too many players in the whole ecosystem. operators have a little bit different incentives and basically KPIs to, to meet than basically the, the guys who are building and operating the solar power plants and the wind power plants. And I think it would be quite sufficient to try to align those stakeholders and to make sure that we are playing on the same, same playing field. So maybe it could be that, you know, you see many of the utilities in a couple of countries in Europe, they are already building their own power plants as well, which I think is the right way to go. But ultimately, I think from a pure business perspective, it really needs to be a bit more concentrated in terms of building operation and the grid side as well.

[Joachim Reinhardt 38:14]
Yeah, I can see that definitely. Or maybe you can find standards that are more acceptable than they currently are, because then you have, maybe currently you have on the developer side, if If they're very good, then they're going to already have a lot of data. Then they go into the discussion with the grid operator and they only look at the capacity. Then the discussion stops because, for example, the hybrid project then looks like it's going to be too large for the grid connection. If you were actually looking at the data and granularity, you might see that's not the case. This is, of course, not the same everywhere in the world. In some places already, the grid and regulators really embracing it and saying, Hey, we need to have these hybrid projects. We need to have this these type of smart electricity supply.

But yeah, I agree that sort of there needs to be a bit more of like looking at the data or looking at the things in the same way and then maybe standardization or let's say at least attempting to talk to each other also about the details, not just like it's not sufficient anymore to just hand over the report. You sent the PDF and then that's it, right? But it has to be a bit more of engaging with what is the project actually going to look like. Like I think Something that struck me a while ago, we have now the new government in Germany and the new minister for energy, Katharina Reiche. So she said something that I found quite interesting. She said sort of renewable energy, they have to take more responsibility for the grid. And I think what she meant by that, they have to pay more for the expansion of the grid. And I don't disagree with it. I think it's correct. But sort of then you should also give the opportunity to a project to be able to show that it's beneficial or not detrimental. to the grid. And if a project can do that, it should be exempted from that or at least be paying a lot less in fees, right? So responsibility, yes. And then on the other side also, you need to give projects, the ability to do that.

[Peter Pongracz 40:07]
Yeah, you don't want to end up like the next Portugal or Spain with the blackout. So it's very important to structure it the right way. We mentioned AI a couple of times, first as a consumer of electricity, then a little bit as a producer of the electricity. How about we dig a little bit deeper into how AI can actually help build these systems and also operate them?

[Joachim Reinhardt 40:27]
Yeah, great question. I think sort of the view that we take on AI is sort of as a tool, right? So I think as soon as something you can automated fully using AI sort of it loses a bit its value because it becomes a commodity. So you should be using AI and intelligent systems for as much of the way as you can up to the point sort of where you come in and where you are going to create the value. We have in our tool also optimization layers included where sort of you can optimize the sizing and these things in an intelligent way.

But I think this should only be a tool and eventually it's going to depend on the developer to make the smart decisions and they're going to have the people that are going to be running the things. So I think it's something you have to supply them with everything they need, but then the value is going to be in somebody sitting there and figuring out what is the best solution and putting together, I would call it a product. So you don't build just a power plant, you're actually developing a product. The electricity you sell is a product, and it's not going to be always the same. Not every kilowatt hour is the same. Your job is then to make it count the most you can, make it create the most value, find the right people that are paying for it too. let's say, human part. And then everything as related to the grunt work you can automate. And this is the part sort of where you have to enable and empower the decision makers.

[Peter Pongracz 41:50]
I see it in a very similar way as well. The humans should be kind of the ones who are giving the direction. And then once you have a sufficient workflow that's quite efficient, then the AI should be able to scale and take care of the rest. So you will be able to get more reps in with the same input. So I think that's going to be extremely valuable.

[Joachim Reinhardt 42:11]
Yeah, and their technology on that front can help a lot. And then I think the companies and structures that are going to be successful in the future, they manage to automate everything as much as possible up to the point where then they have the best people that make the decisions and empower them to do that. And there are the values happening and everything else. Companies like us can figure that out. There's technology providers that can help, but in the end, the human factor sector is what counts then.

[Peter Pongracz 42:40]
Yeah. And speaking of people, you guys are a collection of people as a company. What type of partnerships are you guys looking for?

[Joachim Reinhardt 42:49]
So the stage that we are currently in is our platform, our tool is being used by individual companies that we have pilot agreement with. And so far the feedback is quite well. So this is sort of what we are looking for currently as partners, let's say, are companies that agrees with the vision, that we have that are trying to build these projects that are, let's say, future proof, not commodities, like valuable projects, let's say. And these are really the partners that we are currently looking for to work together. We put our technology into it, they can use it, we can create the value together for these projects. They can see sort of how a different way of approaching projects can look like. And this is sort of the current phase, how we interact with companies.

And I think As far as, let's say, and I think I said in the beginning, you have a lot of this part, like in solar PV simulation, you had a lot of things that are quite figured out. PV systems are a great tool. We're not trying to replace that. The idea should be to embrace that. It's a standard. It's very useful for everybody. You should be able to load it and then take it from there. This is the idea that every data provider, every simulation software that's already established in the market should be integratable into the tool and then put to value there. You don't have to reinvent the wheel, let's say, in that regard.

[Peter Pongracz 44:08]
Yeah, it's important to build an open ecosystem. And if you had to spell out, would these companies be typically developers or or investors or who would they be?

[Joachim Reinhardt 44:19]
Yeah, I think developers are either our favorite a bit because they can do something about it, as I said. So the developer has the ability to sort of make the decisions and then you have other stakeholders. For them, it's very important to understand such a project as well. But things like the decision making is actually happening at that side. And I think there are a lot of value can be created by having the right data and right analysis tools for actual decision making. So this is sort of the favorite partner for us at the moment. But of course, other stakeholders in the project, they can also benefit and they're also very important. So something that we look at is also grid operators because they are sometimes the bottleneck and sort of like, what can we do there to sort of help them convince, help them understand. understand maybe the value of a project because it's just such a bottleneck in many areas. Like in Germany, this is currently quite a bottleneck for new projects.

[Peter Pongracz 45:13]
What would be the right way to reach out to either yourself or variate?

[Joachim Reinhardt 45:17]
I mean, go to a website, write us an e-mail, connect on LinkedIn. I mean, this is something, so we're quite passionate about this topic. It's a lot of fun for us to work on these things. If you're sort of sharing that vision and working on these projects, I think there's, like we have started, I think, in maybe even 2018, we were already working on, let's say, off-grid hybrid simulations, and we have some experience already in that area, and it was a bit more niche then than it is now. But these things with analyzing a lot of data, putting together a valuable and stable supply, figuring out the right structures for your product that you're putting together, we can really support there. So this is something we encourage everybody to reach out to us. And as I said, we currently have this pilot phase where we are putting our technology out there. And the feedback has been very good. Yeah, if that sounds interesting to you, then please, please reach out.

[Peter Pongracz 46:09]
Excellent. We'll definitely link to all of those in the show notes below. And on that note, Joachim, thank you very much for sharing your knowledge. This has been fun. I hope to speak to you again soon and wishing you all the best and very yet as well.

[Joachim Reinhardt 46:21]
Thank you, Peter. Really enjoyed our session today. Thanks for all the great questions and invitation.