Start-up Interview: “We Turn Flexibility into Money on the Intraday Market”

Start-up Stories – January 25, 2021

Flexibility is the new energy transition buzzword. It is important for balancing out fluctuations in the power grid which increase as a result of using more renewable energies. Trading flexibility means earning money. enspired is a Vienna-based start-up which was just founded in January. The company has developed an AI trading platform and now offers intraday trading as a service. Founder and CEO Jürgen Mayerhofer explains how this works.

enspired Trades its Customers’ Flexible Assets on the Short-Term Electricity Market

Jürgen Mayerhofer founded enspired together with Mario Schmoltzi in January 2020. Their fully automated flexibility trading on the short-term electricity market promotes the expansion of volatile, renewable energy use.

Mr. Mayerhofer, since January of this year, enspired has been working as an energy trader to market its customers’ flexible assets on the intraday electricity market. Why is flexibility so important?

As part of the energy transition, we have to keep expanding photovoltaics and wind power. But this type of power generation fluctuates drastically. These fluctuations have to be balanced out to keep the power grid stable. There are two schools of thought in this regard. One focuses on constructing as many new flexible assets as possible – such as batteries. The other recognizes the previously unimaginable amount of flexibility which often goes unused, for instance from heat-driven assets which are not yet set up to offer their flexibility in the short term.

In Germany and the rest of Europe, we have already experienced several near-blackouts. Normally, 1 MWh costs between €30 and €40 on the energy exchange. In mid-September, these figures jumped to €1,500/MWh – during certain 15-minute windows even up to €4,000/MWh – all because we did not have any more reserves to meet short-term demand. One week later, these figures shot down into the negatives at around -€100/MWh. In cases like this, consumption is low and so much wind energy is available that people actually get paid to consume electricity.

You can imagine, when wind power doubles and nothing is done in terms of flexibility, these extremes will only become more common and power supply more expensive. In my opinion, the flexibility market is essential for successfully effecting the energy transition. That is why it will continue to gain importance and volume.

enspired is the youngest start-up that we have interviewed in this series. Since its founding in January 2020, you have set up a fully automated trading platform for European intraday electricity trading within mere months. How does your business model work?

As a service provider, we work for our customers by offering their flexible assets on the short-term electricity markets. That means that if a company operates a CHP plant, a battery, a pumped storage solution or the like, or it aggregates charging processes in the e-mobility sector, then we take this flexibility and use it to earn the company as much of a profit as possible on the energy exchange. This is particularly useful for companies for whom trading would be too much effort, or for energy-related sectors – for instance e-mobility – that have previously had little to nothing to do with short-term electricity trading. We work purely based on successful performance. Our customers are left with minimal effort and no risk, since it is impossible to lose money with flexibility.

Your customers’ marketed assets include short-term storage systems, e-mobility, thermal and combined heat and power plants as well as virtual power plants. Are there specific requirements that must be met before you accept an asset for marketing?

Yes, there are two requirements: We take over starting with technical control and take care of commercial optimization. So, we do not control the assets themselves, but rather we only handle the flexibility. It is important to note that the result of our commercial optimization can only be driven by the physical assets. But we do take into account all commercial and technical restrictions such as lead times, ramps, load points, etc.

On account of the energy exchange’s minimum contract size, there is also a lower output limit of 1–2 MW. In the exciting sector of e-mobility, this makes sense from about one hundred charging points, for instance with corporate charging. We are also currently in conversation with municipal utilities which are interested in aggregating 2,000 customers into one virtual battery.

What are the greatest differences between your AI-based trading platform and fully human-conducted trade?

The automated platform offers many advantages over humans. For starters, it prevents human error. Moreover, algorithms do not have emotions. This means that there is no panicked reaction of “Oh my goodness, I’ve got to immediately buy or sell.” Another benefit is that the algorithm never gets tired. Contrary to the stock exchange which closes each night, the intraday market runs 24/7 on 365 days a year. Another factor is the integration of loads of data. We can feed data into our platform from an unlimited number of sources independently of any human cognitive abilities.

Finally, the AI components come into play. There are 96 quarter hours per day where trading takes place on the energy exchange. Other products are also traded at the same time in half-hourly or hourly increments. Many factors come into play here, including whether or not more or less wind energy than expected is actually available, how steeply a load increases or decreases, or the effort required to start up a power plant. I would say that taking all of this into account to the extent that we do would not be possible without AI assistance. This technology learns to optimize its trading behavior based on the current market environment.

In September, enspired announced its partnership with has·to·be, an e-mobility platform provider. What motivated this decision?

We have joined forces in order to bring these two worlds of e-mobility and the energy industry closer together. has·to·be brings e-mobility expertise to the table, we bring our knowledge of the energy industry. While has·to·be manages the charging stations, we take care of commercial optimization.

In the energy industry, there are two peak electricity consumption times, when electricity becomes expensive. One is in the morning when industry is starting up for the day and the other is in the evening when everyone comes home, turns on their lights, starts cooking or watching TV, etc. Corporate charging offers exciting opportunities because employees plug in their electric cars at the charging stations at a time when electricity is expensive. The same is true for company fleets that return to their home bases in the late afternoon to be charged.

The goal of an initial stage is therefore to optimize the energy efficiency of charging profiles. In a second step, we will trade the flexibility created by the charging cycles. We are also looking to work with vehicle-to-grid (V2G) systems in the future.

This interview was conducted by Simone Pabst.

For more information, please visit: enspired

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