”More cost-effective energy storage solutions is crucial for the widespread adoption of renewable energy”
On why the future of the energy industry is so fascinating
November 30, 2023
Who are you?
— I am the CEO & one of the three co-founders at Synergi, a Finnish technology company developing software solutions to make electricity consumption smart, flexible, and accelerate the transition toward sustainable energy sources. Currently, we serve both consumers and utility companies.
Can you tell us more about your offering?
— For consumers, we have developed a smart electricity application that removes the need to think about electricity consumption manually and links to major electricity resources at home. All in the same app. Users can link household devices such as electric vehicles, solar panels, and heat pumps. Our smart algorithms help users optimise the electricity consumption of those devices according to spot prices and grid carbon intensity. Users save money on their electricity bills and reduce their emissions further. We also support solar charging, so EV and solar panel owners can use their own solar power to charge their vehicles, says Hämmäinen, continuing,
— For utility companies — companies selling electricity contracts — we bring branded access to our application as a turnkey solution to their customers. This is for small and mid-size utility companies, who don’t have to build their own in-house application, which helps make their offering more competitive and increase customer loyalty. Consumers today want more control over their electricity expenses. They also wish for their energy provider to play a role in enhancing their electricity journey with new products and services.
Your sector is always extra relevant when winter is coming in Scandinavia. What do your clients ask about?
— In winter, customers are the most conscious of their electricity expenses, especially with home heating and EV charging. The new wave of households having the most modern smart devices want us to add even more device support, such as smart meters, home batteries, and thermostats in the future. On the utility company side, the smaller players are looking for a cost-effective solution to swiftly deliver a branded smart electricity app. Some of the more prominent players are looking for partners with whom they can build reward programs for end users, where users would get paid for not using electricity when demand is high.
You also talk about the EU Electrification Strategy. For those who don’t know, can you describe it?
— That’s how we substitute the highly polluting fossil fuels — coal, oil, and gas — with electricity generated from renewable energy sources, like wind, geothermal, hydropower, and solar. This is just one of the strategies the EU has to mitigate emissions so we reach the net zero goals by 2050. The more ’electrified’ our consumption becomes, the greater our chances of reaching net zero. For example, substituting oil or gas boilers for heating at home with heat pumps or combustion engine vehicles with electric vehicles are some examples of the electrification that has to take place in the EU in all households, but also in industry as a whole.
How’s your sector doing?
— The energy industry is changing rapidly, and utilities are facing several challenges. For example, new utility companies are coming to market with modern offerings, presenting more competition for the more traditional players. Since consumers are also looking for the best-priced electricity contract, they switch providers more frequently, so utilities face high churn rates. Last but not least, digitalisation is a challenge to overcome as well. Digital adoption is forcing utilities to rethink the services they provide and their business models.
— These are some of the top-level difficulties and these pressures are forcing utilities to transform into dynamic service and product providers. For example, nowadays, from a modern utility company, you can get your electricity contract, you can buy smart hardware like heat pumps, or they can even get you set up with solar panels. On top of that, utilities are also transforming into software providers because they have to help their customers optimise their consumption with software tools that they either buy from providers or build in-house.
You’re also present at Slush this weekend. What do you present?
— We are launching one of the first spot price optimisation products for heat pumps in Europe, Synergi Smart Climate — a fully automated way of optimising heat pump usage according to a user’s preferred indoor temperature and spot electricity prices. If you have a heat pump, you can reduce your energy bills by five percent by lowering the heat pump temperature by one degree Celsius during the heating season. However, using electricity during cheaper hours contributes to increased savings, which can sum up to 20% of total heat pump electricity costs. This new feature offers shelter to families over the crazy price volatility, especially in wintertime. Heat pumps are also considered a central technology in the transition to secure and sustainable heating globally.
Can you share a future perspective? What will we see?
— The future of the energy industry will be nothing short of fascinating. What personally intrigues me the most is to see how countries can drive their own energy-transitions forward. Every country is moving with a different pace and has their own strengths and weaknesses. For example Finland has really good potential in wind power, and it is also investing a lot in creating it to be a hydrogen economy. Finland aims to produce 3 million tons of hydrogen annually by 2035, generating €33 billion in new annual revenue. Also, the beloved neighbouring country of Finland, Sweden, has been a forerunner in energy transition, global leader in building a low-carbon economy, with the lowest share of fossil fuels in its primary energy supply among all IEA member countries, and the second-lowest carbon-intensive economy. But alternatively, when you look at countries such as Poland, where most energy is produced with fossil fuels, it is coming far behind in the whole energy transition when compared to the rest of the EU, Hämmäinen shares. He continues:
— What also excites me is the breakthroughs we are going to see in energy storing. The development of more efficient and cost-effective energy storage solutions is crucial for the widespread adoption of renewable energy. Advances in battery technology, as well as emerging storage technologies like hydrogen-based systems, will play a pivotal role in ensuring a reliable and resilient energy supply. It’s going to be interesting to see the various applications of storage, as there are no limitations of where we can store energy. Nowadays it’s batteries, EV’s, but in the future it can be literally anywhere. It’s just a matter of which technologies reach commercial scale and can have the cost per storage unit low enough.
— Moreover, the future of renewable energy looks bright. It is expected that renewables will dominate the global electricity production by 2050. Solar is set to overpower fossil fuels as the dominant electricity source and may have already reached an ’irreversible tipping point.’ And it’s also getting a lot cheaper. We will see more renewables deployment in the next five years than we have in the past 20, and this is because governments are quickly beefing up their climate policies and investing more in renewables.
What else is on your mind now?
— The industry, traditionally known for being very slow to move, is moving forward in leaps. The adoption of DERs (Distributed Energy Resources), such as EV’s, solar, or heat pumps are changing how households use energy and utility companies are trying to stay on top of the development. The transition is changing utility company business models and also how consumers interact with energy companies, transmission companies, and grid operators. The transition is moving the consumer from the passive participant to active contributor of the energy system, for example through participating in the demand response reserve markets and actually earning money from consuming electricity smartly and flexibly.
— Also, regarding the future of the energy landscape, as solar panels grow in popularity, the need for smarter ways to consume your own produced energy are needed. The phenomenon is called the Duck Curve and it represents the potential for power system instability, as the grid attempts to cope with extreme changes in demand across different parts of the day. As more solar energy is exported to the grid, usually across the middle part of the day when the sun is shining, the curves deepen. For example, the Netherlands are planning that, by 2031, producers would only benefit from power they actually consume and not get compensated for any excess.