Post Interview Crowd balancing December 21, 2021

Sandro Iacovella & Giorgio Scaloni

Giorgio Scaloni, Executive Vice President, Water heating division, Ariston Group
Headquartered in Italy, Ariston Group is a global leader in renewable and high-efficiency solutions for water and space heating, components and burners. It’s committed to sustainability, developing renewable and high-efficiency solutions, such as heat pumps, water heater heat pumps, hybrid solutions and solar thermal systems.

Sandro Iacovella, CEO at ThermoVault

Belgian energy startup ThermoVault helps electricity consumers and utilities to save money while allowing for the integration of more renewables. The company has developed an all-in software and hardware solution for energy services that retrofits residential customers’ existing electric water and space heaters into energy-saving and lucrative grid-responsive energy storage devices.

Ariston and ThermoVault have been collaborating for the past two years on solutions for the energy transition, with Ariston’s holding company recently acquiring a majority stake in ThermoVault.

What is the ambition for your industry and organisation in relation to energy transition?

Giorgio Scaloni: The thermal comfort sector is crucial for the energy transition. Heat and hot water account for most of the energy consumed by European households (around 80%) and the related greenhouse gas emissions (around 35%). It’s no surprise then that our sector is becoming much more vocal in the energy transition conversation. We believe that through our industrial expertise and products we can support countries and economies to fight climate change, which is the defining challenge of our time.
More than 260 million people worldwide are already using our products every day. This means we can make a real difference in promoting the use of efficient and renewable products. In fact, this is our mission: to be the world’s preferred partner in delivering energy efficient and renewable solutions for heating and hot water.

What role do consumer-owned devices play in the future electricity landscape?

Sandro Iacovella: The electricity sector is undergoing its most profound transformation yet, moving from a centralised, fossil-based system to a decarbonised, decentralised and digitised one.
As part of this shift, the European electric system will face a series of crucial challenges: ensuring appropriate flexibility to cope with an increasing share of intermittent supply generated by renewables; ensuring that new, emerging technologies like EVs and heat pumps can be integrated into the system without creating dangerous imbalances, and, more generally, making sure that the new prosumer-focused, electrified and low-carbon world keeps the costs of the system as low as possible.
We believe that heat pumps, electric storage water heaters (ESWH) and heat pump water heaters (HPWH) can play a crucial role in this transition and facilitate the integration of other technologies (like EVs or home batteries) in the new, greener electrical system.
We’ve developed the technology and the artificial intelligence to transform distributed devices into the equivalent of electrochemical batteries, at a fraction of the cost.
The number and the properties of our technology are astounding. For instance, in a country like Italy we currently have around 7-8 GW-equivalent of ESWH installed: that’s the rated capacity of seven nuclear plants! And these can be switched on or off in an instant, with a resolution of a single kW, precisely when and where the system requires it.
This is a total revolution: the full digitalisation of demand response.
But providing precious flexibility to the system is not all we do. We can also help demand synchronise with energy production, maximising the self-consumption of renewable energy exactly when and where it’s happening, on the roof of your house or at the school across the street. We can make local energy communities so much more efficient!

How do you prepare your organisation for the required change?

GS: We put our money where our mouth is. In 2020 alone we spent about 75 million euros on R&D and investment activities. We don’t only want to catch the next wave of energy innovation in the thermal comfort space, we also want to be the go-to provider of innovative, future-proof solutions.
For instance, the Group acquired its majority stake in ThermoVault to enhance demand response and optimisation of the timing of heating schedules. ThermoVault works to make users’ ESWH smarter and controllable by using a simple retrofit box and a string of proprietary algorithms to align consumption with intermittent and distributed renewable resources.
Also, we recently created an internal centre of competence so that everything related to home energy management can be investigated and understood in a coherent, all-encompassing manner. Last but not least, thanks to Thermovault’s technology, our latest-generation ESWH will have all the demand response functionalities already embedded, so they can contribute to provide flexibility from the get-go.

How do you engage consumers in this change?

GS: Consumers are becoming more and more aware of their role in the energy transition. They want more control over how they contribute to a more sustainable planet. We engage them on two main topics: providing them with tools to control and monitor their thermal control directly – with our app and cloud system – and giving them the opportunity to save money through the AI optimisation of their energy efficiency, their self-consumption, and even the consumption of their energy community.
We also provide them with the opportunity to contribute to a greener future through participation in the demand response services.

What are the biggest challenges in relation to sector coupling?

SI: Firstly, perhaps we should be talking more about system integration rather than sector coupling, given that the former implies the coordinated planning and operation of the energy system across multiple energy carriers, infrastructures and consumption sectors. The biggest challenge in relation to this is regulation. Regulation can be empowering, but also a critical roadblock.
At present, decentralised demand response (DDR) still faces a series of regulatory hurdles in many countries. Why? Probably because the regulators (and the TSOs) need to turn the old paradigm of centralised production, decentralised consumption on its head.
We need, as encouraged by the European Commission, a regulatory framework that accommodates the ‘digital revolution’ constituted by the prosumer and DDR. Solutions like the one pushed ahead by Equigy, based on decentralised metering and transaction validation, are necessary if we want to unlock the volume of precious, and cheap, resources available to us today.

What is the biggest change we will have accomplished by 2035?

GS: The energy system will have moved towards decarbonisation and decentralisation, with some of the staples of the ‘old’ system (e.g. back-up gas generation) still required as we transition towards a fully decarbonised society by mid-century.
The biggest challenge will be to make sure that the goal of decarbonising the system will not come at the expense of lower security of supply, or higher costs.
We truly believe that our distributed demand response technologies and solutions can play a crucial role in this, and will be instrumental in allowing other, newer solutions (like cheaper electrochemical batteries or hydrogen) to become mainstream.

What does the energy transition mean to you?

GS: Everyone is talking about moving from gas to electricity but there are so many problems still to be solved. The risk is that if we can’t solve these, we won’t make it work. But, of course, if we at Ariston and ThermoVault can deliver on our vision, the contribution to society would be huge. Let’s wait and see.
SI: The energy transition is really about placing control and ownership of this complicated world in end-consumers’ hands. It’s about power to the people. That, combined with the fact that there are GWs of “sleeping” thermal batteries out there that we can unleash, is an insanely motivating and thrilling opportunity that comes along once in a lifetime. The technology is there. Platforms like Equigy are there. We have the appliances. We have the technology. It’s a unique moment in time where we can transform the entire energy system.

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