In conversation with Ruud Nijs and David Peters
2022 saw tremendous growth in battery requests. Batteries are important in the energy transition and an opportunity to make optimal use of our grid, but they also bring challenges. That’s what our CTO David Peters talks about with Ruud Nijs, CEO of GIGA Storage.
‘2022 is the first year of the big acceleration in the battery market,’ begins Ruud Nijs. ‘The year before, there was great hesitation. Now you see many parties standing up and working together. Geopolitical developments play a role in this, because we no longer want to be financially and availability-dependent on energy. In addition, of course, congestion is increasingly a factor.’ David also sees that for the first time, the energy transition has “come off the paper. ‘You see that everything is moving on all fronts. Storage has long been seen in our models as a necessity for the future energy system. Now we really see it, a real tsunami.’
‘You can see that everything is moving on all fronts. Storage we saw in our models for a long time as a necessity for the future energy system. Now we really see it, a real tsunami’
GIGA Storage’s growth shows something of how fast that market is going: in five years, the company grew to 25 employees with the two largest batteries in the Netherlands under management. Ruud doesn’t experience growing pains so much as change pains. ‘Storage can really help solve congestion. Now you see everyone looking at each other with rules from the old economy.’ As a battery operator (and developer), he sees two challenges in particular: queuing and transportation costs. ‘A grid operator has to connect in order of request. You come neatly to the back of the queue. But does that make sense?
Then there are the transportation costs. By law we are both producers and consumers but of course we are neither. And as a consumer you pay the full transport costs. This while we can help prevent congestion.’
Looking up the lines
The current situation sometimes means coloring outside the lines, or at least crossing the lines. And that brings dilemmas. David: “I have no problem looking at the queue or transportation costs differently, if it means I can connect more customers socially. In return, then, I want the batteries to optimally help the grid. And that makes it complicated: not all operators are willing to make agreements. And if we don’t make agreements, batteries can actually cause congestion.’
Ruud indicates that his raison d’être as a battery operator is to help solve congestion with batteries rather than gas plants. He has little sympathy for operators who do not have that goal in mind. Laws and regulations play an important role here. In doing so, of course, operators have to remain commercially realistic. ‘Transport costs make it difficult to make the business case round. The trick lies in a local revenue model – transporting less – and in IT solutions: Internet of Technology. Eventually we will become more and more of an IT company, where the algorithms indicate the best times to buy and sell energy.’
The flexibility offered by storage is an important piece of the puzzle in the energy transition. David and Ruud agree on that. At the same time, weighting the cables remains necessary, says David. ‘Without reinforcement, meaning more cables and more stations, we won’t make it. We also have to take a good look at how we smartly set up and adjust, so that we use the flexibility properly.’
‘Without gaining weight, i.e. more cables and more stations, we won’t make it. We also need to look closely at how we smartly set up and adjust, so that we use the flexibility properly.’
What would Ruud do if he were sitting in David’s chair? ‘First of all, continue to seek cooperation, with all forums: from ACM to commercial parties. I would also have operators pay part of the investment upfront. That way you separate the wheat from the chaff.’ And the other way around? David, laughing: ‘Especially connecting everywhere!’
What is certain is that the current time is a pioneering phase, bringing a lot of innovation. Ruud: “I assume it will eventually become a procurement market, where we place batteries in locations designated by regional grid operators. And the technology, it will move very quickly, Ruud thinks. ‘I think that’s incredibly cool. We are leading the way in this in the Netherlands. Technical universities visit us, an awful lot is happening there.’ We are going to see a lot of unexpected things in the next two or three years and not only for storage, David also expects. ‘We can’t yet estimate the effects 100%. That makes this an exciting time.’
Ruud Nijs: CEO of GIGA Storage
David Peters: Stedin-CTO