Smart grid and demand-side management company Reactive Technologies has appointed Jens Madrian as both chief financial officer and chief commercial officer.
The former CFO of RWE npower takes up the role next month. He spoke to Power Engineering International about how he hopes to drive the strategic, financial and commercial development and growth of the company in the UK and overseas, as well as the challenges for large utilities and smaller companies in meeting the demands of a very dynamic market.
Power Engineering International (PEI): What made Reactive Technologies stand out for you ahead of other intelligent energy companies?
Jens Madrian (JM): Reactive’s heritage in mass communications engineering means its technology is radically different and more sophisticated than what I have seen offered elsewhere in the marketplace.
Reactive is bringing skills and expertise from the telecommunications industry, which went through a similar fundamental change in the 90s, something that the energy industry needs to go through now, as it urgently needs a new perspective and progressive strategies to deal with the challenges resulting from significant decarbonisation and decentralization of energy in a digital world.
The existing ways of working in the energy industry are not going to cope with the kind of structural re-organization that is going on here. What is needed are fresh ideas, innovative thinking and technical solutions which are fundamental game changers and really shake things up; that is what I found at Reactive.
The technological principles within Reactive’s patent portfolio offer immense potential to create value for grid operators, renewable generators, corporate consumers and of course for our shareholders.
PEI: You say the large utilities are not equipped to adapt to the rapid changes at play in the market. The likes of RWE and E.ON and all such utilities are attempting to address that weakness in their models – are you really that sceptical of their chances to be real players?
If they cannot adapt – like companies such as Reactive Technologies – what does that mean for the larger utilities –the end game?
JM: Take RWE – under the leadership of CEO Peter Terium, RWE is heavily driving the innovation and cultural agenda forward, things are happening for the better for sure. For large utilities in general, it is simply hard to turn course and re-invent themselves fundamentally in the same timescales as their core markets change around them.
This transformational change doesn’t happen overnight – it actually takes several years until it is fully engrained in everyone’s mind and soul, being at the heart of the companies’ culture.
Smaller, agile innovators with less ‘transitional luggage’ are able to react far quicker to market changes and moving customer’s expectations and needs. Being part of a small, innovative business certainly has its own challenges, but here at Reactive Technologies, we are determined to focus on the technical and commercial development of our unique and innovative energy management capabilities – smaller scale, but with truly transformational impact.
Our products and services are at the heart of the challenges the future world of energy with its megatrends of decentralisation, decarbonisation and digitalisation brings with them and pointedly address what asset generator, grid and retail customers really need going forward.
PEI: If the future is about a prosumer-driven society what does that look like in practice, for both a resident and a business?
JM: The prosumer-driven society is riding the wave of a couple of mega-trends we see which are ‘digitalisation’ and ‘democratisation’ of energy and information.
Incredible advances in information and communications technology are driving these two trends. We understand well how a solar PV plant generates electricity but when you add on intelligent energy management to connect that up to storage assets, demand flexibility and aggregate 50,000 or 1 million of those assets together, you take the potential of the prosumer to create value and benefits to consumers and society to the next level.
People are fluent in using sophisticated technology to book holidays, communicate with the rest of the world, shop around for the best deal on a savings account and to control the heating in their homes on a day-to-day basis; it’s now just second nature.
People are increasingly informed and connected. This means they have higher expectations when it comes to making informed decisions, availability of alternative options and what is possible technically. Where and how people get their energy is no different.
Trust issues with the legacy players is also driving a desire for more independence, transparency and choice. People want more control over their costs and where their energy is coming from, what social and environmental impact it has. This is true for residential and business consumers.
The crossing over of falling prices for micro-generating technologies like solar along with storage solutions driven by the electric car and computing industries, combined with sophisticated management and control platforms like Reactive’s mean consumers are moving into quite an interesting and powerful position to participate in energy markets and to pick and create tailored systems to fit their needs.
For businesses, a desire to have more control over their energy costs along with environmental concerns and corporate social responsibility has driven an investment in green technologies and self-generation within the corporate sector. Layering on demand side management (DSM), enabled by digitalization, on top of this gives businesses even more opportunity to integrate their consumption and production, save money and create new revenue.
The prosumer-society will be defined by a diverse range of supply and demand models, featuring multiple generating technologies connected by smart communications platforms like Reactive’s.
PEI: What sort of patents does Reactive Technologies currently own in this space?
JM: Reactive Technologies has an application list of around 80 patent cases with 35 already granted, all in the field of demand side management and intelligent aggregation of demand side loads. This IP portfolio puts us in a league of our own in terms of focused DSM technology IP.
Securing a patent for an invention says a number of things; firstly that something novel has been created – a new approach or technique that is better than what has existed before and secondly that as the innovator you have the right to commercialise it and this in turn gives your customers confidence that you have the ability to provide this capability to them with the certainty that you can, now and in to the future.
The technology underlying our Tradenergy demand side management platform contains techniques to remotely and safely aggregate small changes in the energy consumption of individual devices, using cloud computing technology and is protected by a number of granted patents worldwide.
We also have a number of large projects in Europe with, for example a large retailer and a grid company, proving that we can turn our technological competitive advantage into value generating propositions at scale. It’s not a question if it’s going to happen, but when and how quickly.
PEI: In the UK there are fears that a combination of coal being phased out, renewables being intermittent and nuclear being delayed or too expensive that the country’s energy security is in danger of being compromised. Do you see Reactive Technologies contributing in terms of minimising that possibility?
JM: The mega-trend of decarbonisation is delivering significant societal benefits but brings with it new, rather substantial challenges. Reactive Technologies is well placed technologically to contribute to ensuring the UK has a stable and secure energy system.
From winter 2015 to winter 2016 there was a net reduction in UK generation capacity of over 4GW, mostly due to old coal plant being phased out. This means the capacity margin, the difference between peak supply and forecasted peak demand, is extremely low. Reactive’s demand side management platform, Tradenergy, can help to reduce peaks in demand, directly contributing to avoiding a shortfall in the system.
More renewable generation means the supply of electricity is less flexible, as you cannot turn wind or solar up or down the same way you can with coal or gas. Being able to make demand flexible instead, as Reactive does with its demand side management platform Tradenergy, means the system operator, National Grid, has new tools to work with in order to manage supply and demand on a second by second basis and will pay customers for this flexibility.
In addition, more renewable generation means there is less inertia on the system. This means the electricity system is less able to absorb shocks – a sudden increase in demand or if a power station goes off line for example which will cause grid operators more and more sleepless nights. Reactive offers fast reacting frequency response services to directly contribute to stabilising the grid.
Gas and coal are the traditional options for responding to changes in demand or shocks to the system. Reactive, through its communications technology, is enabling existing assets – demand side loads such as fridges, pumps, air conditioning units – to do the same job more cheaply and without the carbon emissions.
PEI: Finally is there a danger with smart technology that it can be hacked – is there sufficient resilience going to be built into this smart energy future to prevent attacks?
JM: Security is in our DNA, with many of the technical team having had previous roles to implement highly secure mass scale communications systems.
This same “security first” mindset has been ingrained within the development of our Tradenergy® secure cloud platform from day one. Fundamentally, this has to be the approach. If you have not built a system with security in mind at every step of the way, then it is incredibly hard to comprehensively close down inherent design vulnerabilities.
We are fully committed to providing secure systems to our customers and invariably, we are working closely with customers and technical partners to ensure any solution is inherently secure and fit-for-purpose.
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