In the second out of a series of three interviews pv magazine conducted after visiting Amsterdam’s Johan Cruijff ArenA in June, to attend the inauguration of Europe’s largest energy storage system using new and second-life energy storage batteries in a commercial building, founder and CEO, Thomas Raffeiner talks about TMH’s involvement in the project, and how EVs are revolutionizing our electricity grids.
pv magazine: How did TMH become involved in the ArenA project?
Thomas Raffeiner: It was actually The Mobility House who came up with the idea. I got in touch with ArenA’s CIO, Henk van Raan about seven years ago. At that time, he was talking about diesel generators and energy supply in the stadium, and upgrading the solar systems on the roof. So we suggested to invest in a battery storage to use the produced solar energy more efficiently, instead of expanding the current system. He liked the idea and, thus, an innovative and successful collaboration was born.
What were the challenges, and how were they overcome?
I would say there were no real challenges, only opportunities. The main opportunity was that the projects we have done so far are basically for one main purpose: grid services. What I liked with the ArenA project from day one, was this multi-use approach.
When the sun shines and there is no football game, the produced energy can be stored and harvested, instead of being wasted. In between, the system can do frequency control. The multi-use purpose of having an energy storage for many different applications convinced us to do the project.
And, this is just the beginning. The interesting phase will start now that we have stationary storage, but in the long run, lots of mobile batteries will be integrated in the arena and I am sure that we are going to face a lot of challenges as well.
Can you elaborate?
The Mobility House believes in electric cars, in mobile storage, and in flexibility. So the ArenA has a 2.8 MWh battery now, but soon there will be around 200+ electric car charging points. Imagine we had a lot more cars than that and half of it were electrified, we would have so much more additional power available in the parking lot.
We want to use this flexibility. The Mobility House is a technology company, so this is why we have developed a technology to utilize those assets. Adding the cars to the system is phase two after having implemented the storage.
The battery storage is being used to provide primary control power. Currently, tenders are being held one week in advance, and soon the mechanism will be converted to daily auctions. You have previously mentioned that around €100,000 per megawatt per year of revenue can be earned. Are daily auctions being held? Are these numbers still correct?
Auctions are planned to be daily from this November on. Whether this will be the final date is still up for discussion, but we are prepared for this change. The price patterns will most likely change, due to the regulatory change. But generally, nobody knows what the regime is going to be like in five years. That’s why multi-use is so important. We have seen significant price drops for frequency control within the last months. In case this product will not be attractive in the future, we will come up with another solution, like providing more backup power to the nearby hospital, or participating in other energy markets where flexibility is needed.
We strongly believe flexibility will have a lot of value. At the moment, we are not sure about what kind of product we are going to create in the long run. That’s why the technology we create is so important for us. It needs to be flexible to whatever the product will be like in five years. Maybe by then, the biggest value is simply the ability to absorb power. Because we may have so much solar and wind in the system, we have to have a reaction time, which allows us to immediately absorb power locally and to perform frequency control as well. The technology absorbs power and manages the local district’s utility, before it goes into the grid.
What kind of value are those products going to generate? We are not too sure about that yet and I don’t think anybody else is. Of course we see all those price prediction curves, and I’ve seen many gas forward curves, but the ones I’ve seen were all wrong. I haven’t seen a single one that was really correct and I am sure that that’s what’s going to happen here as well.
There has been criticism that the idea of using EVs to earn money, while nice in theory, is difficult to implement in practice. Indeed, people want to ensure their cars are fully charged and ready to go. How do you respond to this? Is there really a strong business case for customers? And what kind of paybacks can they expect to receive?
In my experience, the people who see the biggest problems in driving long distances with an EV are the ones who don’t have one. If you talk to the ones who do drive EVs, they are not experiencing any trouble regarding this.
The product we will introduce is very different. Imagine having a blackout for example. We already have some backup power in storage for that case. We don’t need 10 MW, we need 1 MW. So, in the case of a blackout – which is not very likely to happen – the car owner will provide The Mobility House with 1% of their battery, for a free ticket, for instance. Or, if they give us the flexibility that we don’t charge their car for 15 minutes, if I have a problem, and they get priority parking in return. Most people would take the opportunity, I think.
A rise in EVs will increase electricity consumption. How will this affect the average EV driver? How will charging be handled in the future?
There will be a positive impact on prices. Why? Let’s assume I get to the office and my battery is 30% full, and I need it to be full by tonight. However, it doesn’t really matter to me if it will be charged now, or in half an hour. So I provide the operator with flexibility. During lunchtime, we have sun, too much solar, so why don’t I take this solar energy from the building and fill up the car with it?
What we do is trigger an impulse in our decentralized system – some people call it blockchain technology, we call it decentralized intelligence – so an intelligent controller will be installed in the building, and one in the car. The car communicates with the operation system informing it that its battery is at 30% and needs to be charged. Maybe the car next to it is 100% charged and doesn’t need to be charged anymore at that moment. Our technology enables us to charge sun to vehicle, vehicle to vehicle, or vehicle to grid. So at any time, we make sure to get the most valuable charging options out of the building, from the other vehicles, from the sun, or from the grid. We are moving towards a very smart, decentralized world.
That means the cost per unit, the cost per charging decreases drastically, so the benefit will be distributed back to the consumers. That’s why charging at home, or on the road, is a key element for The Mobility House.
I would like to refer to a project we are started last May with a grid operator in Germany, called TenneT. In Germany we face situation – 30-50% of the time – where we have too much energy in the system. Then the grid operators have to shut down wind farms in the north, because the grid can’t absorb the power. That’s the situation right now, and the German grid system operators have to pay redispatch costs of more than €1 billion per year. That’s a high number.
Last year, the German energy customers paid these redispatch costs, just to shut down wind farms and other assets, because there was too much power. Via this new project, TenneT can tell us when there is too much energy in the system, which we can then absorb accordingly into the batteries. The first connectors have already been installed.
How does the current infrastructure support this? What needs to be done on a regulatory level?
There is a nice theater play, called ‘Waiting for Godot’. At the end of the play, the guy dies because he has been waiting for something that never happened. We could also wait for regulations to come, or until everything is set, and then we start. This is not the way we work, though. We solve the problems ahead, probably create other problems, and solve them again. That way, we are learning by doing.
So you design your systems to fit into the current structure, and by doing so, change the structure?
Is TMH working with agencies or regulatory bodies to create new rules for digitalized intelligence?
When we first told the regulatory bodies we wanted to use car batteries to stabilize the grid, they replied that it wasn’t reliable. They were asking what we would do if the battery wasn’t there. And since it is a decentralized energy supply, how could we assure everything?
Their first reaction was very natural, but we explained to them that we have so many MWs, we can add cars, so they should not worry about whether one car is there or not. If one is not there, there are the other cars which will take over. At the beginning they thought that the cars were a problem for the grid. They have changed their minds though and understand that right now, electric mobility is not part of the problem, but part of the solution.
If electric cars had been introduced without any control, there would have been lots of problems, because peaks are being created and the entire system is unpredictable. If you manage the power grid in a smart way, you can help it to be better and more efficient. We don’t want to change the current situation with theory, white papers and laws, but by providing a decentralized smart system. This is more reliable than any nuclear power station. If one of these stations fails, the power grid is experiencing trouble. If 10 cars out of 10,000 are not connected properly, there isn’t any major problem with that.
This hinges on the use of bidirectional inverters, which are currently a niche. Is this a technology that will grow in importance in the future?
Yes, definitely. Step by step, vendors are moving towards that direction. We haven’t implemented unit costs yet, but we are getting there.
Talk to me about the costs.
The first charging points we sold eight years ago, cost around €5,000 a unit. Now we are down to €500. The first controllers we used for the first second use batteries cost us €2,500 per controller. Now we are down to €50. These are real numbers, and this is not the end of it. They will come down much lower than that. We are not talking about 5% per year, but definitely magnitudes of price decreases, just like flat screens, just like storage facilities, smart phones, etc.
You are working with Renault on a project on the Portuguese Island of Porto Santo. Can you tell me about it?
This is an island where 5,000 people live, and there can be up to 15,000 tourists in summer. The island is supplied by four diesel generators, wind turbines and a huge solar system. If one cloud covers this system, the entire energy supply gets out of control, because the frequency can drop by up to 2 Hertz.
The Mobility House implements controlled charging on unidirectional EVs to flexibly support the local utility in reacting to renewable energy fluctuation. So at the time a cloud hits the solar plant, we can immediately stop charging, and the bidirectional cars can feed in, maybe only for a couple of minutes. Additionally, the stationary storage supports the system.
We encourage people to always plug in their EVs when they are not driving. That way we gain flexibility in controlling the charging behavior and provide a flexible asset to the utility. Through that we can support providing cheap electricity to the consumers. This is a perfect example of what electric cars can do for electric grids.
Software communicating with the EVs and the grid: this is great when it works. What happens when it doesn’t?
Our system is robust, because it is decentralized. So if one controller fails, there are still others that are working. We can isolate mistakes and errors, so if someone puts a virus in the system, we can immediately shut it down. Decentralized systems are a lot safer than centralized ones.
Do you have anything to add?
Very soon, I assume it is only going to be wealthy people who drive combustion engines. Most people simply won’t be able to afford a combustion engine anymore. We will shut down the last coal fired power stations in Europe, and we will be 100% emission free. What a wonderful world!
Read the first interview, with Eaton, where Frank Campbell, President, Corporate and Electrical, Eaton EMEA spoke about business cases for energy storage systems in stadiums, hospitals and data centers.