Start-up Interview – "We Are Able to Determine the Price of Flexibility"

Start-up Interview – October 24, 2022

Exnaton supports utility companies with the billing of complex energy flows

Buying locally helps protect the climate. This is equally true for lettuce bought from the local farm shop and for electricity produced in the vicinity. According to EU plans, energy communities are to make an important contribution to a decentralized energy transition. But how can energy flows between neighbors be billed? The Swiss start-up Exnaton has developed a software platform to do just that. In this interview, co-founder Liliane Ableitner explains how this works.

Dr. Liliane Ableitner founded Exnaton as a spinoff of ETH Zurich together with two partners in 2020.

Your software-as-a-service platform PowerQuartier enables local trading of renewable electricity. How exactly does this work?

PowerQuartier is a billing solution for decentralized renewable energies that combines various complex energy flows on one bill. This is supported by an app which formats and visualizes the energy data.

PowerQuartier can be used for three different areas of application: Firstly, it can be used for energy sharing, also called collective self-consumption or tenant power. Energy sharing is based on the concept of mutual trade of electricity between households. Secondly, for people who do not own a roof but would still like to invest into the energy transition, there is the option of buying a share of a large photovoltaic installation. PowerQuartier can bill the virtual self-consumption of these investors. And thirdly, our software can be used for different dynamic tariffs, such as the spot market price or a dynamic local tariff based on the grid load within a particular neighborhood.

Your target group are utility companies. How do they benefit from your billing solution?

Many utility companies would like to offer more flexible tariffs, but refrain from doing so because they can’t bill them. Our solution allows them to introduce new tariffs, thereby expanding their product range.

More and more households are investing into photovoltaics to produce their own electricity. As a consequence, utility companies are seeing a drop in revenues. At the same time, more and more households would like more information and are prepared to pay for this information.

Utility companies can offer renewable energy services in order to help their customers to take the right decisions in the changing energy market. Instead of just supplying the missing electricity, they can add information and services to their portfolio. This enables suppliers and households to take the next steps towards a transformation of the energy system together.

"Turn on the appliances" - PowerQuartier notifies members when there is excess power in the community.

How can end customers use PowerQuartier?

Energy sharing means that customers trade in electricity within their neighborhood. They can sell electricity to their neighbors, or buy it from them. This optimizes the energy system at a local level, creating independence, offering a sustainable solution and giving consumers the feeling of doing the right thing.

In a second step, PowerQuartier could help reduce the electricity bill a little, provided the legal framework allows this. The European Union is looking to introduce energy sharing across the board. Member states will be called upon to prepare concepts to implement energy communities domestically.

Austria has already cut grid charges and surcharges for energy communities considerably. This can help households to save around € 100 per year, I would say. This is a substantial financial benefit.

We have been speaking about households. But aren’t energy communities also interesting for commercial operations?

Absolutely! As a matter of fact, the ideal composition of an energy community is a mix of private households, companies and small industries. We have to coordinate the consumption and the production of electricity. That is why it does not make sense if ten households owning a photovoltaic installation sell electricity to another ten households, where nobody is at home during the day. Coupling private and commercial customers is the perfect solution here because their load profiles are usually contrary to each other.

How is electricity priced within an energy community?

The price is either entered into the system as a fixed tariff agreed by the households, or a dynamic tariff is used. If a dynamic local tariff has been chosen, the software establishes the production and the consumption of electricity for each billing period – which is usually a 15-minute interval. The price is then calculated based on the energy community’s consumption during that specific interval. Electricity is cheaper during times when a lot is being produced and goes up in price during times when a lot is being consumed and no locally produced power is available. This sets an incentive of shifting the consumption of electricity to those times during which it is easily available.

This takes us to the important issue of flexibility.

Exactly, dynamic tariffs are tied to the topic of flexibility. PowerQuartier can create the right incentives, so that the consumption of electricity can be particularly cheap or particularly expensive, depending on the time. That means that we are able to calculate a price of flexibility. Households can adapt their consumption behavior accordingly or – and this is an increasingly popular solution – control batteries or heat pumps in response to the price signal.

You already mentioned Austria as a role model for energy sharing. What regulatory and technical requirements must be met to use energy communities?

First of all, the EU Directive must be translated into national law. Some countries, such as Austria, have already done this. But energy sharing must not just be permitted. What we need, secondly, is a financial incentive for the creation of energy communities. The third point is of a technical nature. It is about the data basis for the calculation of the energy flows. We typically use smart meter data at 15-minute intervals. We then superimpose load curves to calculate who is trading electricity with whom.

Which European countries are currently offering the most attractive conditions for energy communities?

Without a doubt, Austria, whose legislation is very advanced. But we are observing growing interest in countries such as Belgium, Italy and Spain, as well as Denmark, Luxembourg and the Netherlands. The number of energy communities is on the rise and will be established all across Europe.

Do you think that in the future, we may all be part of a decentralized energy community, producing our own electricity within our neighborhoods or regions?

We hope so. Renewable energies will lead to a more decentralized energy production. Consequently, optimized decentralized consumption patterns must be achieved. This means that we have to adjust our consumption curve to the production costs of wind and solar power and create effective incentives for consumption at a time when renewable electricity is being produced. Energy communities have great potential to achieve this.

What are Exnaton’s goals for the next two or three years?

Of course, we are continually working on refining our product. Last year, we launched PowerQuartier for energy communities, and the development has been quite impressive. In 2022, we launched another product, Shared Investments, and we have stepped up our work with dynamic tariffs. At the same time, we are always adding new functionalities to PowerQuartier. Obviously, we are also interested in contributing to the energy transition through the involvement in e-mobility and heat. We absolutely want to be the leading billing platform for complex energy flows and help as many utility companies as possible with billing novel products more accurately and establishing them in the market.

You presented yourself as a start-up company at EM-Power Europe last May. How did you enjoy it? Would you recommend other start-ups to take part in EM-Power Europe?

Absolutely! We thought that EM-Power was awesome. It was our first time there. We had a great time, many interesting conversions and enjoyed being part of it. There was a general pioneering mood, a really positive atmosphere in the sense of: the time to act is now, so let’s just do it. We thought that was really brilliant.

The interview was conducted by Simone Pabst.

PowerQuartier analyzes the high-resolution electricity data and displays it clearly in chart form, at the neighborhood level and also for the individual members of an energy community.

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