No matter which renewable energy generation or storage technology -- or combination of technologies -- an end-user chooses to deploy, it's crucial that the output and capabilities of those technologies are optimized. To reach peak optimization, more and more organizations are turning to digitalization. Krishna Vanka, Senior Vice President and Chief Digital Officer at Fluence, joins the show to explain how digitalization is boosting ROI for renewable energy and storage assets while helping create a cleaner, more efficient power grid.ABS Quality Evaluations
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(Note: This transcript was created using artificial intelligence. It has not been edited verbatim.)
Sean McMahon 00:09
What's up everyone, and welcome to another episode of the Renewable Energy SmartPod. I'm your host, Sean McMahon. And if you're a regular listener of this podcast, you know, I'm agnostic when it comes to renewable energy technologies, whether it's wind, solar, green hydrogen batteries, or whatever, we talk about it all.
But no matter which technology or combination of technologies an end user chooses to deploy, it's crucial, I mean crucial that the output and capabilities of those technologies are optimized. To reach peak optimization, more and more organizations are turning to digitalization and to help make sense of all those ‘izations’ … optimization, organization and digitalization, I'm going to be joined today by Krishna Vanka. Krishna is Senior Vice President and Chief Digital Officer at Fluence.
The team at Fluence helps firms navigate the global clean energy transition by providing energy storage products and services as well as digital applications for all kinds of renewables technologies.
Krishna is going to walk us through how digitalization is helping create cleaner, more efficient power grids. And in a world where artificial intelligence has been hit by all kinds of negative headlines as of late, this conversation might help remind you that AI can still do a whole lot of good for society. Before we get going with Krishna, Just a friendly reminder, check out other recent episodes of this podcast. On the last episode, we heard an outlook for renewables for 2023 from Tristan Grimbert and Raphael Declercq at EDF Renewables.
Before that, Larry Lawrence from IntercontinentalExchange joined the show to share his insights on the massive role data is playing in the world of sustainable finance. So we got lots of great information on this podcast from lots of leading minds. And before we hear even more from Krishna Vanka, here's a quick word from the sponsor of today's episode. ABS quality evaluations
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Sean McMahon 02:31
Hello, everyone, and thank you for joining me today. My guest is Krishna Vanka, the Senior Vice President and Chief Digital Officer at Fluence. Krishna, how're you doing today?
Krishna Vanka 02:40
I'm doing great, Sean, thanks for inviting me to your podcast.
Sean McMahon 02:45
Yeah, certainly great to have you on. Now, obviously, with a guest like you, we're gonna be talking quite a bit about digitalization when it comes to renewables. So let's kind of set the table real quick for our listeners - or set a baseline if you will. What role does digitalization currently play when it comes to renewables and energy management?
Krishna Vanka 03:00
Sure, if you look at the textbook definition of the energy management, right, it's essentially managing the energy flow through four stages. Think of it like you know procuring, generating distribution and consumptions, right. So a couple of decades ago, you know, it's essentially a one way flow of energy, right, it's coming from a couple of sources, and you're applying all the engineering practices to get the efficiencies and the biggest driver was the economic objective, you know, getting the economic efficiency as possible. And today, we have the whole environmental aspect and the legislation that is playing a key role in how we take this industry forward. So, along with engineering objectives, I think we have developed great management techniques and you know, how we look at the business and you are looking at getting best efficiencies and all these factors. And looking at generation of energy specifically, we have a variety of flavors right like renewables, which are somewhat unpredictable and then the storage which is really a two way system. And finally, the distributed energy systems where you know consumerization of energy generation in you know, in my view, when complexity of an industry like this multiplies with you know, all these add ons coming from different places, it is the digital that really holds the key for success, when you have this matrix of conflicting priorities and you know, multiple sources getting into it. The complexity also really roots from the fact that data, which is consider core of decision making in any of institution, system like this, when data generally explodes and you collect lots of data, it is the digitalization and the digital applications that can really help us make sense of data and make proper use of this data. So, the biggest role digitization plays in energy, this complex energy management where we are today is a ability for us to understand the data, make sense of data and use this data effectively.
Sean McMahon 05:00
The okay now when we talk about technology advancements and things like that, you know, one of the most common things or popular topics is artificial intelligence. And a lot of times AI is in the news for bad things, if you will, I think the latest thing is, you know, AI, college kids are cheating, using AI to write their papers and things like that. But you know, it seems like in this case, AI could serve a positive purpose. How do you see this role of digitalization evolving, you know, as advancements like AI and other things into the marketplace?
Krishna Vanka 05:28
Yeah. So I'll start where I left off, so the data, right, so, you know, it's, as I said, the core reason for the software and digital is to make sense of the data. So there is a fundamental principle on data, it's called garbage in, garbage out, right. So any properly developed software system has to essentially manage this data very well, from the ingestion to the decision making step, right. And I think the recent advancements, as I said, in AI and whatnot, are helping us significantly in getting the real value from data. Let me explain you this through an example like at Fluence digital, our software, you know, we go through these few steps, the first step is making sure that data is coming from right sources. And we are actually pulling it from multiple fronts, right? It's the weather sometimes that is important in the decision making process, etc, for example, and once we have it in the system, our machine learning platform, you know, the ML, as we call it, you know, really helps find the patterns and the historic trends, right? What's happening historically, what are the patterns here, and then we combine these findings with our algorithms that take care of the users ultimate goals, as we spoke, you know, sometimes it's the economic value, sometimes it's the environment, sometimes it's the legislation. So, you know, we believe like, every user has a different ultimate objective that they want to achieve. And these objectives also change and evolve with time, as is a products mature and adoption increases. So our, you know, machine learning algorithms, you know, ultimately takes care of what user wants. And then we use the AI to combine these algorithms, and the machine learning patterns. Essentially, this is like the third step, if you think about it, so the AI combines these, and then it generates the best outcomes that our customers expect. And wherever possible automation, which is, again, an evolving technology, we talk about autonomous cars. Similarly, there are, you know, automation is coming everywhere, right? It is the automation that the platform ultimately provides. And it's a trust that gets established between user and the automation, which leads us to the adoption. So we use the same approach for both of our products, we have a product called Mosaic, which is automated bidding application for renewables that goes through these few steps I mentioned. And it is very key for not only battery, it is also key for you know, all renewables, we can talk more about it. And then our list per product, which is really an intelligent asset performance management platform, which is deployed across the world, they also go through this type of a process I mentioned for us to be able to predict, hey, you know, how is an asset performing. So I think the key of you know, where we are going, what we are able to deliver to the market today is coming from these advancements in AI and ML at the highest level.
Sean McMahon 08:25
So obviously, this is a podcast about renewables and renewable energy. And you started to mention some of the ways that these applications are used and certain, you know, battery or things like that. But, you know, what are some other examples of how these digital applications, you know, improve the ROI for various renewable technologies should,
Krishna Vanka 08:41
As I mentioned, both of our products are focused on the users. And when I say users, it really translates to the ROI, you know, but the ROI comes in different forms. For example, the mosaic bidding application is all about optimizing the bidding choices and generating the highest amount of revenue for the user. So it's the top line that our renewable energy users are looking for, you know, the operators and the asset owners, right. And we even ended up creating a specific version of this platform just for renewables, for example, in Northam in Australian market, what's what we call them? It's because the rules for the renewables are very different they are and the approach is unique. And if you look at our municipal asset management platform, wind and solar are our key assets on the platform today. And you know, we specifically built modules for these asset classes, we have what we call PV, digital twin, you probably know the concept of digital twin. So photovoltaic digital twin is something very unique on the platform, we proactively find and also try to rectify issues at a string level on a PV. So this way, in this case, the ROI is really the performance of the asset, ability to operate the asset and bring the best operational efficiency so As I mentioned, you know, based on, you know that it is bidding it is the top line revenue, if it is a nice variety is the bottom line, ultimately, operational efficiencies, we manage about more than 16 gigawatts of assets across both platforms. And I believe we are just getting started. So this is how the digital applications are helping, they're helping not only to go live, but also during the operations and to ultimately get the top dollar for renewable resources specifically,
Sean McMahon 10:30
And you mentioned PV and with energy storage assets, we kind of folded into that whole platform as well.
Krishna Vanka 10:35
Great question, Sean. Storage has its own unique challenges in my opinion, it's because you know, it goes to the fundamentals right storage means two way flow of electrons, which means two way flow of data again, going back and forth, right. The systems also have to be designed for scale and performance, because the amount of data you collect through a storage asset is uniquely pretty high. But at the same time, yes, storages either when you come combined with renewables or even as a stand alones, you know, can provide unique uplifts, like for example, on the mosaic platform, we see like storage is almost giving like a 40% of lift for our customers when deployed properly. Whereas sometimes renewables are a little bit less and this is because storage as you know, higher opportunities for ROI than just beyond generation storage can be used in you know, like the whole grid reliability audit helps in transmission and so on.
We’ll be right back.
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Sean McMahon 12:27
And now back to my conversation with Krishna Vanka, Senior Vice President and Chief Digital Officer at Fluence.
You mentioned grid reliability, so I just kind of wanted to dive into that a little deeper. So how do these applications improve overall grid reliability? And it sounds like efficiency as well?
Krishna Vanka 12:43
Yeah I mean, our grids are essentially designed, you know, not for renewable assets, right. They're designed for the old school in many ways. So when you when you add renewable assets to the grid, the variability and intermittent of the renewable asset throws a lot of challenges into the process, right. And renewables are anything but a steady stream, you're essentially depending on the nature, which is a great thing, but at the same time, you know, it is pretty variable. So what does this really translates to, you know, when some production stops, suddenly, you have to rectify it, within microseconds, you don't have a long time of rectification process here, it has to be super fast. And it poses a very serious problem for the grid if you cannot do it. So this is where a digital applications for a critical role it is bringing the reliability and stability to the grid, it is our ability to rectify faster. And with our digital applications, I don't think you can do much of this because that's the brain behind the operation, right. And also, the ABS software solutions are loaded storage acids to respond to great needs. With that speed I mentioned, which is very important. If you take mosaic our bidding application as an example, it's not only just bidding the energy, but it's the ancillary services that we also provide to the wholesale markets, which helps us for the grid reliability, a that it is regulation, or spinning or non spinning reserve products, all of these help degrade to be stable. And all of these are essentially software driven decision making processes on when to provide the regulation and how to, you know, spin in the right format for us to get that stability in the grid. So this is how I think, you know, digital applications are contributing, you know, further great stability directly and also indirectly,
Sean McMahon 14:38
Okay, now, when it comes to transmission, you know, how are these technologies going to be able to help us do more with less because right now, there's a huge backlog. And so we can't wait for all that transmission to come online. So we're kind of stuck with what we got or what what we're going to add slowly, as anyone will tell you. So yeah, how do we do more with less?
Krishna Vanka 14:56
Absolutely, that's a great question. And that's one of the biggest factors of using energy storage as a transmission asset, let me try to explain this to you in simple terms, right, like the transmission is built with a n plus one redundancy factor, or in other simple terms, there is a main power line that we use. And then there is a backup power line, that is only a word used in case of emergencies. But once you put a battery energy storage system on either end of the existing transmission line, you can then literally use this batteries as the backup, you don't really need the second line, right, so the second line suddenly became available. And you now can double the utility of your existing infrastructure without having to build a new transmission line. And of course, when you talk about this complex system, when you're when you're talking about a bad battery, energy storage on either ends, this is where the software plays a critical role, right? Like the batteries need to be super intelligent microsecond, even Milli, milli or microsecond, reliability is to respond, and also ability to dynamically adapt to these emergencies and change. So I think this is this is again, that's something that is getting started, as you know, we look at deploying more of these battery assets, these are the types of innovations that can happen that not only helps battery as a, you know, classic storage system for solar or any other sorts, but also, you know, solving the greater problems with transmission grid reliability, and so on.
Sean McMahon 16:31
And all your applications, you know, technology agnostic, when it comes to battery, meaning like, you know, lithium ion or iron flow, or even, you know, the energy ball guys, we're doing, you know, concrete kinetic type stuff. So, for applications doesn't matter what the underlying battery technologies,
Krishna Vanka 16:46
The try to, you know, stay outside that level of involvement with respect to the actual battery technology. If you actually look at how we describe the fluids, we have our cubes, which are, you know, the physical batteries, and then we have a Fluence operating system that sits on top of it that's providing the communication or the intelligence have to manage the batteries. And then we have these digital applications like mosaic and nespra that sits on top of it. So they are definitely abstracted from the core details on what's inside the battery or how the battery operates.
Sean McMahon 17:21
That's fascinating. Okay, now, just shifting gears a little bit here, since the passage of the inflation Reduction Act, I've been asking all the guests on the show how that's going to impact their individual markets. So, how do you see the IRA impacting the markets in which fluids operates?
Krishna Vanka 17:35
Yeah, I mean, as you know, science is in our V ha ha storage products for the first time, we have seen a tax credit directly attached to the storage and storage is you know, plays a significant role in stabilizing the renewables as well as providing additional features. So, the tax credits we saw in a previously red light connected to a storage plus solar but you know, thanks for you know, the IRA we are essentially able to decouple and really test what you know, the battery systems can do, how can they add for grid reliability, how can they add for transmission, you know, betterment of transmission and so on stability and so on. So, this is where we are seeing a lot of value coming from on these additional use cases for storage, which can not be driven forward, the innovation can be driven forward through IRA, we are expecting there will be about 100 gigawatts of storage will be added in the United States itself, by 2030. Through this process of IRA and the probably translates like 3040, between 30 to $40 billion of investment into this. So there's a significant role that IRA will be playing specifically on we had the Fluence operates from storage perspective.
Sean McMahon 18:52
But in terms of capabilities, it sounds like obviously, there's gonna be more investment, you know, billions and millions of dollars and batteries and testing and things like that, but for your offerings, what do you see? Or how do you see those capabilities scaling up or improving as propelled by the IRA?
Krishna Vanka 19:06
Yeah, so definitely, we are already seeing a lot massive scaling of energy storage and renewable assets happening globally, not just in the United States and IRAs just going to add, I would call you know, the fuel to the fire. So, the great thing about the AI based applications we spoke about and the digitization is that you know, they will help us scale in a cost effective and timely manner. Those are the two dimensions we need to be really aware of as we start scaling rapidly right. If you if you stick with the old manual, you know principles, for example, the manual trading techniques or traditional asset management tools that come with sometimes the hardware, they are very manual in nature, they are essentially depending on the asset owners and operates to make decisions. Whereas if you start adopting this digital technologies we mentioned, were a time in automation. And also the ability to self rectify, you know, are the key points that is where that will help, you know, the asset owners and operators to open themselves for scalability and not, you know, not get stuck in operations slow down and hinder the growth. So I think it's, you know, it's a win win situation. Really, as we add more scalability, the digital applications will play a greater role. As the market needs more applications to solve their problems, there will be a lot of innovation happening. So we expect to see the capabilities provided by digital platform software to scale up rapidly as adoption scales up.
Sean McMahon 20:42
So one of the things I'm kind of interested to see is how the IRA affects energy markets, not just here in the US, but globally. And so I want to ask you, how many countries or regions are you operating in right now?
Krishna Vanka 20:51
So Fluence operates in 40, markets globally, we have footprints in more than 40 markets. And as you know, when I say Fluence, we are a unique company with storage products, the related services and the software all put together under the same roof. So that is where our footprint is, if you consider my products, we call them the Fluence, IQ digital platform, we have the two products, I mentioned mosaic and espera. And with more than 16 gigawatts of footprint all over the world disparate, especially can be deployed anywhere in the world, whereas the mosaic is the building application is market specific. So that's where we are today.
Sean McMahon 21:34
Yeah, and ask that because you know, one of the things I think is underrated about the IRA is that some of the the growth and increased capabilities that it drives domestically, can then just be applied everywhere. Obviously, that mosaic for the bidding piece, but some of the other stuff in local markets where it's applicable. I think people just kind of overlooking that a little bit.
Krishna Vanka 21:50
Yeah, the work we are going to be doing for this para how we are going to develop the asset management automation. And you know, self correction through IRA in United States is immediately applicable instantly all over the world. So yeah, definitely get the benefit of it.
Sean McMahon 22:05
You said you've listened to this podcast before. So one thing I'd like to ask guests is for their bold predictions, I'm gonna put it to you, where do you see these capabilities? And you know, this these technologies and digitalization and say, five to 10 years, where are we
Krishna Vanka 22:18
sure, the next five to 10 years is, in my opinion, rubber meeting the road, right? We are now deploying and infrastructure is getting deployed, which means there will be a lot of adoption, along with macro changes we discussed, like, you know, the D S, where it's more of a consumerization of the whole system, right? This is where the digital becomes critical. And I think what's going to happen is, it's not only that the digital is a differentiator for you to be successful operating these systems, but it is also the platform on which we are going to innovate new solutions to answer for these markets, right? The energy companies, as I talked with more energy companies on a day to day basis, day to day basis, I see them thinking themselves as a technology company generating energy or, you know, managing energy delivering energy. It's not the vice versa, like few years ago, where hey, we need technology as well to deploy right. So I'm very bullish on how software can be, you know, directly impacting this whole adoption, and also how, you know, it impacts our environment. As we go through this process. The analogy I can give you is because you asked for a bold prediction, today, we are cutting this Motorola cell phones that came in 1980s. And what's going to happen in the next five to 10 years is that every kid will start having an iPhone, it's going to be as different as that. So that option is because of the technology, the digitization availability of the software. Personally, I'm hoping that, you know, our mosaic breeding application will be there in every deregulated market that we can technical in support, our nespra product really becomes one of the world's leading a PMS. And I even think of it like a Google map of renewables, I would love to see almost all the world renewables being tracked through earnings per platform. So you know, I don't know if that is bold enough for you. But those are the big bets that are definitely happening in the industry, where I think digitization and the software is going to play the critical role for the rubber meeting the broad context.
Sean McMahon 24:32
Well, I think that's bold enough, because I do believe that we went from Motorola brick phones to iPhones in about 20 to 30 years. And so if you say we're gonna do that in this space in just five to 10, I'd say that's pretty bold. Exactly. Yeah. Okay. Well, I thank you very much, Kristen. I really appreciate your time. And your insights have been fantastic.
Krishna Vanka 24:51
Yeah, I also want to you know, thank you for giving me this opportunity. And I really want to say, as bold as it sounds, I want to see this spark is becoming the top podcasts in the world that's actually making a difference for what this industry is doing. I want to thank you for this opportunity again, Shawn.
Sean McMahon 25:09
I appreciate that. That's what we're trying to do. Great, thanks.
Well, that's our show for today. But before we get out of here, I want to say one final thank you to the sponsor of this episode, ABS Quality Evaluations.
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