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Podcast S13E02

Making hot water tanks smart

Hot Water Tanks

In this episode we’re looking at the intersection of electric heating and the electricity system. In some parts of the world, there are times when there’s too much electricity produced from wind turbines. What if we could change the times that we heat up our hot water – or our homes – so that this surplus electricity was used? We look at the same concept, but with two companies focused solely on the controls aspect. We’ll explore both the customer proposition, and the benefits to the electricity system. Jon Slowe is joined by Sandro Iacovella, founder and CEO of ThermoVault; Eamon Conway, Managing Director of Climote; and Delta-EE expert Lindsay Sugden.

Episode transcript

[00:00:03.230] - Jon

Hello and welcome to the episode. Today we're looking at the intersection of electric heating and the electricity system. I'm going to illustrate this intersection with a simple but I think quite compelling example. In some parts of the world, there are times when wind turbines are producing too much electricity for the electricity system. So the wind turbines are paid to switch off. What if we could change the times that we heat our hot water or our homes so the surplus electricity was used and the wind turbines weren't switched off? I think it's a simple but really compelling example and fits in with recent episodes you may have listened to where we talked with Mixergy and Centrica, Viessmann and TenneT about how they're tackling this issue. Today we're looking at the same concept, but with two companies focused solely on the controls aspect, and we'll be exploring both the customer proposition and the benefits to the electricity system and more. So let's say hello. First up is Sandro Iacovella, founder and CEO of Thermovault, based in Belgium. Hello, Sandro.

[00:01:13.350] - Sandro

Hi, Jon.

[00:01:14.420] - Jon

Sandro, I apologise. If I didn't get your surname right, you pronounce it for me so our listeners can understand it properly.

[00:01:21.880] - Sandro

No, it was very well, Jon. It's Sandro Iacovella indeed.

[00:01:25.150] - Jon

Okay. Thanks, Sandro. Sandro, can you give us an elevator pitch for Thermovault?

[00:01:32.640] - Sandro

Sure. So Thermovault offers an all-in retrofit solution for existing electric space and water heaters. So that solution, it's both hardware and software. It transforms these appliances into energy saving storage devices and more specifically for our end customers, this allows them to save on their heating bill in a fully automated way while offering valuable grid services to system operators.

[00:01:59.330] - Jon

Okay. So from the customer's point of view, they get a control system that saves them money. And from the electricity system, they get flexible, they get a form of storage, they get flexibility, which they need.

[00:02:13.550] - Sandro

Exactly.

[00:02:15.030] - Jon

And what are you working with, Sandro? Storage heaters, electric boilers, heat pumps or all of those and more?

[00:02:22.050] - Sandro

Indeed, we currently offer the service commercially on exactly those three types of heating products that you just mentioned. So electric storage water heaters, space heaters, and about 1450 models of available heat pumps that are out there. Also, since about two years, we received a majority stake investment from the Ariston Group. So we are also working on offering these services on their factory appliances in addition to that retrofit model that we have.

[00:02:51.360] - Jon

Okay.

[00:02:53.310] - Sandro

It may be an interesting story to mention to you and to the listeners that the concept of Thermovault it really kick started on residential refrigerators. So back in 2015, I was working as a visiting researcher at UC Berkeley controlled strategies for large pools of thermostatically controlled loads. So any type of thermal loads that is temperature controlled by a thermostat. So the solution that we offer, in fact, both from a hardware and a software perspective, is able to steer any type of thermostat controlled load. It also takes into account their difference in size, in insulation, in temperature set points, end user behaviour and so on. The reason it kick started with fridges was because an opportunity arose. So on the Berkeley campus, there are more than 1000 dorm rooms and all of them have an identical small fridge.

[00:03:54.610] - Jon

Is that that for the students to keep their beer in?

[00:03:56.250] - Sandro

Yes! Depending on the content of what was in that fridge, even though they were the same volume, the same brands, their thermal behaviour differed quite a lot.

[00:04:06.120] - Jon

Okay.

[00:04:07.010] - Sandro

So it was important to take those differences into account. And in that pilot, we showed that we could successfully and commercially viably balance the Californian transmission system on one of their most stringent products. So this really kickstarted Thermovault it got us into UC's deep tech accelerator programme. And eventually where we are now. The main focus, the core appliances, are electric space and water heaters, because that's where we generate the most value to the customer and to the grid.

[00:04:41.370] - Jon

And where are you on your journey, Sandro? Can you give a listener's idea of how many devices, how many products you're controlling or how many megawatts or some idea of scale?

[00:04:52.780] - Sandro

Yes. So our core market is still Belgium, where we have more than 1000 appliances under control. We're commercially active in three countries and we're now speaking about several megawatts of connected capacity.

[00:05:06.940] - Jon

Okay, great. Thanks very much, Sandro. I'll come back to you shortly. Let's say hello now to our second guest back for his second appearance on Talking New Energy. Hello, Eamon.

[00:05:18.010] - Eamon

Hi, Jon. How are you doing?

[00:05:18.970] - Jon

So some of you may know Eamon Conway, who is managing director of Climote based in Ireland from talking about smart thermostats a while back. Eamon today, we won't focus on your smart thermostat offering, but your Smart immersion Controller, can you tell us a bit about this?

[00:05:36.990] - Eamon

Sure, Jon. Yeah. The Smart Immersion controller. We launched formally about six months back, so that's evolved really out of our being in the space for about ten years and really following the sort of evolution of where the industry is going towards electrification of heat and transport, but in our case, more the electrification of heat. And when we looked at our strength as a business, which is basically putting smart controls and facilitate energy saving with the smart thermostat on the heating side and then looked at what the next thing when you look at electrification options, we looked at the fact that there were so many immersion tanks in situ in UK and Ireland to be over 12 million alone. And we thought, well.

[00:06:22.590] - Jon

Each one of those Eamon has got a three kilowatt immersion heater or something.

[00:06:26.080] - Eamon

Yes, three to six kilowatt loads. And the fact of the matter was that if you can hot water heating is 20% of a consumer's energy bill. So while there's a lot of talk about EVs and heat pumps and that's all valid, our view was that, well, it's the lowest cost way to start decarbonisation would be to try and smarten up the electrification of that existing infrastructure base. So that was the genesis of the idea. And we kicked off a project about three years ago with EirGrid the National Grid in Ireland, whereby they deployed 100 odd of our beta devices amongst some other technologies. And that was quite successful in terms of the consumer uptake on the usage of a project called Power Off and Save.

[00:07:16.110] - Jon

That's basically turning the immersion heaters on and off at times when it suits the grid?

[00:07:21.570] - Eamon

Yeah, that trigger from the grid. Yeah. Some really good feedback on that two, three years back. And then we decided to go and actually develop the product and bring it to market. And that's what we've done.

[00:07:35.650] - Jon

What's the proposition for the customer? Because for many people with a hot water tank, if they want a bath or a shower, they don't know exactly how much water they've got left in the tank.

[00:07:47.130] - Eamon

A total guess on that side of it, Jon, from a consumer's point of view, there's a couple of key points in this. One is that if you don't have a comb boiler, but for the houses that don't have combis, there's quite a few of those still, obviously, say in UK and Ireland are 12 million tanks. It's a bit of a guess how much hot water is in your tank. So our device gives you visibility of usable hot water. So that's in effect an energy saving piece of kit by itself. But on top of that, and this is probably more to do then with how the consumer can start their journey on electrification. So we would know from our own research and from industry research that there's a large cohort of consumers who would like to do something to help the environment, but they are bamboozled by heat pumps and bamboozled by the amount of information that's coming at them about words like decarbonisation and electrification, which we all understand because we're in the industry. So one of the simplest things for a consumer with access to a tank is to go - particularly with the advent of smart tariffs and smart meters being deployed, that you can have a proposition for the customer, which (a) give them visibility, visible hot water so they can control it. But also you can, for a relatively small amount of a couple of hundred pounds, have a device fitted and with a smart tariff, you can heat your hot water using renewable sources instead of fossil. And you've started your journey on electrification and you're doing your bit for the environment. And with the price of the electricity then being comparative to fossil, it's not cost them anymore. With the smart tariffs. There's many of the utility retailers now have these type of tariffs where it's cheaper to, cheap electricity rates for overnight charging. And obviously the beauty of the hot water tank is that it stores the energy.

[00:09:51.950] - Jon

It’s a great form of energy storage. Yeah. You mentioned the trial with EirGrid, the system operator in Ireland. How far have you come since then? So roughly how many of these smart immersion controllers have been installed, or where are you on the journey of scaling that up?

[00:10:07.690] - Eamon

We'd be in the low thousands now, Jon, in terms of deployment. So it's still fairly early days to say we brought the product to market formerly there about six, seven months ago. So we're working with utility partners in the UK, Ireland, France and Spain at the moment at different levels, at different levels of deployment. So very early days. And there's many other angles to it for the wider industry, which I'm sure we can come onto in the conversation.

[00:10:39.730] - Jon

Okay. Thanks, Eamon. I'll ask you later on if we got time about EnergyCloud, which I think is really interesting. Come back to that later on. So my third guest today is my colleague and Delta-EE expert Lindsay Sugden. Hello again, Lindsay. Thanks for joining me again. You've been on a few podcasts recently. So, Lindsay, we're going to get in a minute to what Climote and Thermovault are doing in more detail. But when you look across the sector, this intersection between electricity and electric heating, Themovault, Climote, Mixergy, who we had on the podcast are all new companies that have seen an opportunity here. We had Viessmnan, who is an incumbent manufacturer, doing this. And interesting Thermovault had investment from Ariston, another manufacturer. But what do you see in terms of is it innovation in these sorts of areas coming from incumbents, the big product manufacturers or from new entrants or from both?

[00:11:42.670] - Lindsay

I think there's really a mixture. I think across the industry, there's a recognition that if these goals of high electrification, high shares of heat pumps and so on are going to be achievable, then electric heating and hot water needs to be flexible. And this is one of the key things that's driving innovation across the whole sector. Of course, you got really interesting products coming out from these companies like Climote and Thermovault that we've got on today, but there is a lot of activity from the incumbents as well. At least some of them are really positioning themselves to try and benefit from what is likely to be in future, a much bigger not just a necessity for the energy system, but also a way to generate value for themselves and also hopefully for the customer. So you've got companies like Viessmann, when you mentioned then companies a lot of the companies in the Nordic markets where dynamic tariffs have been available for a lot longer have been actively creating smart controls that can automatically shift the operating times of electric heating and heat pumps according to those tariffs. I'd say it's a theme across the industry, but there are certainly some who are ahead of others.

[00:13:06.420] - Lindsay

And these new companies or newer innovators like we've got on the podcast today are definitely capturing the interest of some of the incumbents as well.

[00:13:17.590] - Jon

Hopefully shaking up the market a bit and driving activity because it's a bit of a mixed picture among incumbents. Some are active, some are less active.

[00:13:27.250] - Lindsay

Yeah. They're all looking at it in some way. They all know that they have to be looking at it and if they're not doing something really interesting, they're all talking about ‘smart’ anyway.

[00:13:38.630] - Jon

First step, although we need talk, but we need lots of action as well to meet the 2030 targets. Sandro and Eamon, in one way, what you're doing is quite obvious and quite easy to understand, I think using the example I gave at the beginning, but I know it's not easy. So I'd like to ask each of you to get to where you've got to today. What's been the hardest part of that or to ask another way, what are you most proud of in terms of what you have in the market now? Early stages, Sandro, maybe starting with you.

[00:14:17.550] - Sandro

Indeed. Interesting. But the difficult question, Jon, thanks. I think for Thermovault it's been the offering of our fit and forget product. So really having something that does not require any configuration by the end user or by the installer we saw from the initial prototypes that we had in the US but also in Belgium that resulted quite some friction to get successfully installed. And in the end it also required from our sites fitting together quite a lot of puzzle pieces. Now at the current stage with the solution that we have, we think that this is a solid foundation for the company whereby at all times we are in control of this balance between energy efficiency on the one hand and demand response or timing of consumption on the other hand. We believe that looking ahead in the upcoming years, regulations will change, tariffs will change that. This is critical to be in control of at all times.

[00:15:20.900] - Jon

So that's the brain of your optimization then? Is that what you're talking about?

[00:15:26.050] - Sandro

Yes.

[00:15:26.880] - Jon

Okay. What has been hard about that? Is it to get that optimization working smoothly, both so the customer is warm and they've got hot water and the system has got what it needs. Is it the algorithms? Is it the recruiting, the data scientists that you need? Tell us a bit more about how you've overcome that.

[00:15:50.410] - Sandro

So the appliances that we encounter in the field, they differ quite a lot. We encounter vessel sizes that range between 50 litres, the smaller ones in Belgium up to 300 litres, the big ones in France for example, and equally so the rated power of those appliances differs from one kilowatts to three, 4 kw. So it was crucial for our business model that we ended up with a solution that could scale that would really be copy- pastable for us as well. So it meant taking into account differences in vessel sizes in heating speeds, in cooling speeds and end user behaviour to end up with a virtual power plant that is compatible with anything we encounter in the field.

[00:16:39.530] - Jon

Yeah. Okay. Is your system automatically learning how these devices behave, how the customers use these devices?

[00:16:46.070] - Sandro

Yes, exactly.

[00:16:47.770] - Jon

Okay. Eamon, how about you? What would you say has been hardest or what are you most proud of in terms of where you got to?

[00:16:54.190] - Eamon

I guess there's a degree of pride being the first to bring a product such as we have with the smart immersion controller to market. From that perspective and the way the team have really worked hard to make that happen. I guess the hardest part of that, Jon, in reality is when you're bringing products to market in advance of all of the market opportunity being in place, then it's difficult to raise the appropriate capital that you would like to do because a lot of the investment folks want to see where the money is. So there's a bit of vision required to put the cart before the horse, so to speak. So that can be difficult. That's probably what we find is that we've got to be really clever the way we use the resources to bring it to market and get it done successfully.

[00:17:50.550] - Jon

That seems Eamon like the dynamic tariffs not being that widespread when you started, for example.

[00:17:58.730] - Eamon

It's a bit of a long story, Jon, but you could look at it holistically and go, the industry in the future needs to be more joined up from the wind farm on one end and the consumer at the other. And as we all know at the moment that's in all sorts of different silos. So when we're into the electrification piece, there is value to be had in virtually all of those areas, but not all of it is there yet and it will require some market mechanisms to be changed, which is happening and there's an understanding that it will happen. But they're not all there yet. And obviously when they become more apparent then the market opportunities are, the commercial opportunities become more crystallised for potential funders.

[00:19:50.920] - Jon

So Sandro, Eamon talked about some of the frustrations about the value of that flexibility not being there yet. Do you share those same frustrations? Has that been really hard for you to try and monetize that flexibility or to get people on board to share the vision of how it can be monetized in the future?

[00:20:16.430] - Sandro

Yes, I definitely share Eamon's vision. I've been working on this topic of the presidential demand response for over ten years now, so it has been quite a struggle. The thing we now commercially offer to customers is this combination of energy efficiency and demand response towards system operators. But it's only a minor portion of the markets, the demand response markets that we are able to capture at this moment in time. Now we see this evolve whereby more and more ancillary and adequacy products are opened up to residential demand response. So there's definitely a positive outlook there. But also from the commercial perspective, the end consumer perspective, we see tariffs evolve across Europe, whereby timing is becoming much more important than the quantity of consumption, the annual quantity of consumption, so incentivizing end consumers to self consume their locally produced solar, incentivizing them to reduce the peak day costs on the distribution grid, higher capacity tariffs, all these things will facilitate and accelerate our solution across households in Europe.

[00:21:31.910] - Jon

These price signals are coming. Lindsay, you mentioned the Nordics earlier. I guess dynamic tariffs have been available in the Nordics for quite some time. And would you say from what you've seen, customers there have got used to that, and they're quite comfortable with the idea of their heat pump operating at different times depending on when electricity is cheaper or more expensive.

[00:21:54.410] - Lindsay

I think that's true to an extent. But there's also a difference between dynamic tariffs actually being available. For example, in Sweden, it became law since 2017 that energy companies had to offer dynamic tariffs. The law doesn't say that they have to promote them, though. So actually it's not that everybody is using them. However, the feedback that we've had from some of the heat pump companies in particular who are selling systems that respond to these tariffs is good. There's kind of tens of thousands of customers who are actively using these with heat pumps, and the satisfaction seems to be very good. And the problem with the Nordics is that the potential value to the customer from the flexibility there is not necessarily that high. So the invariability electricity price in an Nordic market is relatively stable, which means that the flexibility is not that high. Therefore, the potential value is maybe not as high if you have the same model in Germany or the UK, for example. So I think they're saving maybe around 5% on running costs in Sweden, where they might be able to save 10%, 15% even in Germany or the UK. And that's a pretty critical point.

[00:23:31.490] - Jon

Eamon, Sando, what have you learned about customers? Lindsay talked a bit there about customers in the Nordics. You've both got thousands of people using your devices, your products. Have you learnt much about customers yet or has it been sort of the innovators, the geeks, the early adopters who have been using our products?

[00:23:55.290] - Eamon

If I jump on there, Jon, I mean, we have a lot of experience of dealing with consumers through our smart, thermostat deployments. Like we've well over 100,000 consumer interactions on the back of that project over the last few years. So for me, the biggest learning point is how you integrate with the customer and basically the sales pitch to them. And we've learned a lot of lessons on how to simplify that and try and help our channel partners simplify that to get the products installed. And what we have found is it's very much that lots of our customers would tell us, I didn't realise this thing would be so useful to me. I didn't realise it would be so good. So there's still a lack of awareness in the general consumers on the smart technologies, despite the fact that many products are out the market for a while.

[00:24:55.510] - Jon

Do we have an example of that simplification just to make it real for us, our listeners.

[00:25:02.110] - Eamon

What we found is depending on the product, now when it came to the smart, thermostat it was basically just articulating to them that 60% of their energy is spent on space heating and irrespective of the price of the commodity of the fact you can take control of that more with a smart device every year and can give you accurate data on what's going on in your house is a good start point. And then it depends what the offer is with particular utility, which is our main route to market. So not really getting too involved what the product does, just more the benefit to them in simple terms and also clever ways of digitally engaging with them. So with the advent of Covid, we were partnered with some of the utilities to offer like a digital video service around the house to offer advice. So that complements the utility sales channel through like a service called a virtual audit, virtual energy audit. So things like that we've learned in terms of the engagement piece, Jon, to be honest, and then the post user feedback has generally been, wow, this is really good. I just didn't know I wanted this or didn't know I needed it.

[00:26:17.840] - Jon

You've got to articulate it in really simple, not a simple way, but a clear way and take customers on a journey. Sandro, what about you? What have you learnt from working with your customers, your ultimate customers?

[00:26:29.890] - Sandro

Yeah, we learned similar things that indeed energy efficiency is appreciated and is desired by consumers, but it should be communicated to them very straightforward and to the point. So we measure on each appliance, we measure the power consumption, we measure the temperature, so we know exactly what type of excesses or radiations that the system currently has or has. And we know the financial impact of what we do and we can communicate that to the people. So not only in percentages or in kilowatt hours, but really in euros. And I think that was a big discovery for Thermovault that using the technology, we are able to do so. So really informing customers about their behaviour and the positive impact that we have on their energy bill was critical to get into the market.

[00:27:25.160] - Jon

So both of you have a similar point there about communication and making it really clear, not communicating about the product and what it can do. Clear communication about the benefits.

[00:27:35.670] - Sandro

Yes, we see uncertainty in the end consumer market as well. Like Eamon mentioned before, what type of appliance should I get? What should I do with tariffs, X or Y? So we see a lot of uncertainty into the market with respect to future energy prices, future tariffs or upcoming tariffs. So safeguarding consumers and helping them make informed decisions about what to do is something we can really do with the solutions that we both put in the markets.

[00:28:09.370] - Jon

Okay, it's almost time to bring out the Talking New Energy Crystal Ball. Before that Eamon, I'd like to briefly just ask you about EnergyCloud. In a nutshell, I think it's a really cool initiative from what I understand. In a nutshell, can you just describe what it does?

[00:28:26.950] - Eamon

Yes, Jon, EnergyCloud was set up about a year ago now and the backdrop to it is a bit like I articulated earlier about the challenge of bringing all the stakeholders in the industry together to see the end to end picture. So the gem of the idea emanated from an industry called Food Cloud. And Food Cloud was set up as a non for profit charity to distribute excess food from the likes of Marks and Spencer, Tesco, et cetera, rather than dump it. So we looked at the curtailment and looked across Europe, but particularly in our own market of Ireland where it was 12% renewables and winds curtailed in 2020 and we go, okay, well, that is such a waste, such a lot of energy, and that's only going to get bigger because as more and more generation comes on, the problem is going to get bigger. So effectively we thought, wouldn't it be a good idea not to waste that energy and then could it be deployed in fuel poor homes as a start point? So the EnergyCloud is a non for profit entity. Its members include the Wind Association of Ireland, the EirGrid, the National Grid, ESB from a network operator point of view, Clúid Housing Association representing the fuel poor, Climote from a technology partner, one of the universities, Technology University Dublin for modelling purposes.

[00:29:55.630] - Eamon

Kingspan is also a member from home fabric perspective. And basically what we're looking to do is take that excess wind that is being dumped and deployed in fuel poor homes. Now, some of the early modelling on this is quite positive in that it looks from the University are looking at numbers whereby something approaching 500,000 deployments into fuel poor homes would suck up 90% of that wasted energy. So you can almost obliterate Ireland's current curtailment overnight and give it to good use. And the cost of this would be like €100 million. And you put that in context. The Irish Minister for energy announced recently that he was given everyone in the country 100 Euro credit to help with the energy price. So you can just look at the funding a different way and give people a sustainable benefit in energy saving and on helping them decarbonize and helping the country decarbonize.

[00:30:57.790] - Jon

I think it's such a great analogy with food waste. There's energy waste. We switch paying wind turbines, winter farm operators to switch off. Why not use that waste?

[00:31:09.550] - Eamon

Absolutely. It's really good, Jon. We've got our first deployments included. We're putting about 50 in and at the moment, just to get the devices in and one of the utilities just go to sponsor on a trial basis from free electricity. But the business model has been pretty much agreed by the team there, and I think we want to move it to the regulator in Ireland to try and work out how to get the market to promote the free electricity. And hopefully that will become apparent over the next twelve months or so.

[00:31:39.090] - Jon

Well, best of luck with it. It sounds like you're doing a great job of getting everyone together to make it work. Now let's bring out the Talking New Energy Crystal Ball, and I'm going to set the data to 2027 - five years from now. For Eamon and Sandro, I'd like each of you to describe where you'd like your companies to be in 2027, and very briefly, the biggest challenge that you think to reaching that point. Lindsay, for you, I'd like you to say, how widespread do you think this integration of electric heating and the electricity system will be in 2027? And your biggest challenge to overcome to unlock that potential? Sandro, let's start with you and then Eamon and then Lindsay.

[00:32:25.290] - Sandro

Okay. Currently we are mainly advocating and promoting static energy efficiency gains that we can help achieve for end consumers. The demand response is only accessible to a portion of the market, small portion of the market. What we hope that the world will look like, or that consensus could be across stakeholders in the energy system, is that there should be focus on the dynamic system efficiency, the gains in that domain that we can achieve with our technology, and whereby timing and its associated cost and emissions are more prioritised and more rewarded than just the annual consumption.

[00:33:10.580] - Jon

Ok. So you're really unlocking that residential demand response potentially, yes. Your biggest challenge, Sandro?

[00:33:19.050] - Sandro

The biggest challenge would be then to follow up or be an active stakeholder or facilitator in such a world in 2027. I hope that we're speaking now about megawatts. I hope that by 2027 we are speaking about gigawatts. Ariston is currently across Europe selling gigawatts of electric storage water heaters per year. So it is a vision and a mission that we hope to have achieved by then.

[00:33:48.070] - Jon

Okay. Well, best of luck in reaching that gigawatt scale in five years time. Eamon. How about you in five years time?

[00:33:52.330] - Eamon

Jon - We would expect that the market triggers will have evolved substantially for flexibility for grid services, probably from policy point of view to incentivize electrification. And we would see ourselves then being well on the way to be fairly well scaled up in several countries across the world, achieving energy saving and carbon reduction and electrification, facilitating that on the way for millions of consumers. That's what we see.

[00:34:28.820] - Eamon

Now, how far will be in that journey? I don't quite know, but I know if all of those things happen, it'll be substantially further than we are now.

[00:34:35.760] - Jon

So getting into the hundreds of thousands?

[00:34:41.090] - Eamon

Oh yeah and the millions, that sort of level of customer numbers would be definitely the target. The biggest challenge is probably two or three interlinked ones, having the electricity market reform to create the value streams and policy which would drive some of this stuff, bringing the industry together so everybody can seize the value, and there's value in this type of stuff for every player in the industry, from the consumer to the utility retailer to the grid, to the wind farms to governments even. I think the other bit then finally would be a good bit of consumer education on this, which we will play our part in. And then the other bit is really having the finance in place to see you through the journey, Jon. That's the challenge to scale.

[00:35:35.980] - Jon

So unlocking the demand response potential, getting that customer proposition right. So customers are biting your hand off for this product and the finance to enable you to do all of that.

[00:35:47.460] - Eamon

Yeah, absolutely.

[00:35:49.830] - Jon

Thanks Eamon. Lindsay. Last but not least, your views on how widespread this will be and challenges.

[00:35:58.350] - Lindsay

Yes, I think it will be a lot more widespread than it is at the moment, and we've estimated that there's about 200 gigawatts, or more than 200 gigawatts of available potential flexibility from heating, cooling and hot water systems that are installed in Europe at the moment, but less than 1% of that is actually being used for any kind of demand side flexibility. So five years time with the right customer propositions, perhaps 10%, that's perhaps optimistic, but I think that's necessary as well. I think the biggest challenge is getting the customer proposition right, and that's as has already been said, it's not an upfront cost for end users and the value comes back to them or a decent savings. The experience to date has been that actually what comes back to end users isn't really enough to get them on board. Hopefully with these new propositions from Climote and Thermovault you'd be really interested to see what kind of savings come back. But yeah, I think increasing that is the key thing.

[00:37:18.990] - Jon

Thanks very much, Lindsay. I agree. I think we need that - where we get to not sure, but we really need to unlock this potential flexibility if we're to decarbonise our electricity and energy system as we need to by 2030, so we'll leave it there. Thanks very much, Sandro, Eamon and Lindsay s been fascinating discussion and great insight on what you've been doing. Congratulations good luck for the next years and thanks for your contributions today. Thank you to everyone listening. We hope you enjoyed the episode and look forward to welcoming you back to another episode of Talking New Energy next week. Thanks and goodbye.

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