Bartosz Kwiatkowski
Vice-President
VPPlant

24 April 2020

Virtual Power Plant LLC (VPPlant) works in the field of energy management and development of IT systems for the optimization of energy profile of commercial buildings. The main goal of VPPlant is to make smart buildings a backbone of virtual power plantsd.

What were the circumstance in which VPPlant was created and what sits at the core of your work presently?

The initial goal for the company was to become a fully functional virtual power plant (VPP), an idea brought from d Australia by one of our shareholders. We had to postpone this ambition though, as for many years the regulatory system was not ready in Poland. 

One could technically build a virtual power plant but not generate substantial revenues, because no energy operator would be eligible to buy services in such a market. Back then there were also few local RES generation assets, no photovoltaics on a bigger scale and a limited amount of wind farms. 

From a technological standpoint we are ready to offer the aggregation of commercial buildings as energy assets, and once regulation is up to speed we will see how we proceed, but for now the focus is on commercial buildings. Optimization of commercial buildings is a non-regulated business with a lot of untapped potential – be it energy savings, extension of automation lifecycle or improving indoor air quality. Specifically we developed a flexible software overlay for legacy Building Management Systems (BMS), capable of saving  between 10-30% of energy used.

That is an interesting switch of focus. What was the opportunity you spotted with commercial buildings?

 

Construction, maintenance and operations of buildings account for 40% of CO2 emissions in the national economy. These are emissions largely ignored, as efficient management of fragmented building automation systems is very difficult. 

 

However, it is exactly what we had been working on for many years. All modern buildings, specifically commissioned over past 20 years – which essentially make up most of office and retail space in the CEE region –  have their own builtin software to control heating, ventilation, air conditioning, elevators etc. We are not replacing them, rather taking control and implementing own AI-augmented algorithms to manage them in real time. 

What value does this overlay add to a standard Building Management System (BMS)?

BMS is usually preconfigured when installed in the property and typically these pre-programmed schedules stay as they are, even though every building has its own life – undergoing refurbishments, upgrades, experiencing tenants coming and going, changing owners, changing roles and so on. Our overlay gives building owners all the flexibility they need, as our algorithms adjust building performance to actual requirements in real time.

What is more, there are not yet common standards nor backward compatibility between BMS vendors so they are not always compatible to each other. The cases are commonplace when the client installed different systems in separate wings of their buildings, and essentially ended up with diverse systems which did not talk to each other. We are able to interface with each separate BMS and dynamically control the entire setup.

 

We can shift the load between peak and off peak hours, what is especially appealing if the property contracted energy on the basis of variable rates. 

For instance we just finished a pilot project for a shopping mall - hitherto they were consuming 65% of total energy volume in the off peak hours (the cheapest tariffs) but after installation we increased that share to 77%. This is on top of reducing the overall consumption of the building by 15%.

 

How is the market responding to this solution, do you notice good appetite for adoption?

The market in CEE is still in an early stage, at this point we need to create awareness among the business community. There are only a few other vendor independent companies across Europe offering a similar solution – savings-as-a-service - and their progress has been in line with ours. We are all still making leg work to explain the full potential that these solutions carry. 

I would say, however, that we are moving towards a tipping point. The clients started to realize that we can easily configure a tailor-made solution for them, weighing their priorities between energy savings, supporting technical personnel in failure detection and maintaining superior comfort for tenants. The discussions we are having this year are much more filled with interest compared to what we noticed in the past. Climate change and energy transition are potent market drivers – with unpredictable energy prices and the spectre of global warming hovering above every procurement process, corporations started to seriously consider their carbon footprints, including energy expenditures.

Do you already have a sense of how the COVID-19 outbreak will be impact your business/the energy sector in the short term?

A more precise question would be to ask how administrative measures adopted to curb the COVID-19 outbreak affected the market. Among most severely affected sectors of economy are retail stores. Rents charged by shopping malls operators are dependent on the revenues generated by shops. With shops closed, revenues of shopping mall operators nose-dived and they frantically started to look for savings. 

What first measures did you set in place to manage the crisis?

 

COVID-19 outbreak will change the behavioral pattern of business for years to come. Entire industry is undergoing rapid digitalization. In such environment a more receptive attitude towards remote and automated services such as provided by VPPlant is certain to emerge.

 

One unintended consequence of the COVID-19 outbreak was increased interest in remote services – and not limited to videoconferencing. In the wake of broad adoption of home office policies, we provide our Clients with the capability to outsource monitoring and adjustments of BMS settings to our system and our team of remote BMS operators, offering much needed relief for overworked on-site technical personnel. Our Clients were also able to benefit from swift support in configuring the optimal “lockdown mode” for their respective properties – to both save energy and ensure safe operations of buildings.

 

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