Redefining Energy

The global market for Virtual Power Plants is assessed around 100GW (+/- 20GW). It is a 7bnUSD expected to grow at a CAGR above 20% in the next 5 years to reach 40bnUSD within a decade.   VPP are a digitally coordinated flexible network of distributed resources: cheaper than central stations. They manage behind the meter assets like Solar, batteries, HVAC, EV…  

VPP is a term invented 30 years ago by US economist and finance scholar Dr Shimon Awerbuch, who died 20 years ago in a light plane crash over the Alps. Only aged 51, he leaves a great legacy. His foundational work in 1996 was called “The Virtual Utility” where he demonstrated that Electricity generation must be treated like a financial portfolio. He proved that Renewables (even if they were very expensive at the time) were a powerful hedge against fossil fuel volatility.  

In our series about how digital is transforming the how we track, trade, and optimise energy, Gerard and Laurent have invited Marc Rühs, CEO Next Kraftwerke, the world largest VPP with 15GW Capacity. Connecting more than 14,000 decentralised electricity producers, consumers, and storage facilities, the company contributes to grid stability and optimizes electricity production and consumption based on price signals. It trades its electricity on various European exchanges via its own 24/7 electricity trading platform. Next Kraftwerke has been part of the Shell Group since 2021.

We have a deep conversation about how VPP work, their impact on flexibility, and the fact that they used to be ignored or discarded by incumbents. But that is changing with the arrival of AI providing better systems and increased demand.  

Along the way, we pop some balloons, such as V2G or Heating management, which work great in theory but are non-significant from a volume point of view. Maybe they will in the next decade.   As Shell is reducing its footprint in Clean Energy transition assets, it is reinforcing its position in the VPP market, as Next Kraftwerke is fully integrated into Shell trading organisation.  

Marc demonstrates that the future of energy lies in intelligently connecting renewable generation, storage, demand-side flexibility, and trading capabilities to create a more resilient and sustainable energy system.

Joseph J. Romm (1960–2026) was an MIT-trained physicist who became one of the most prominent voices in the U.S. climate movement after serving as Acting Assistant Secretary for Energy Efficiency and Renewable Energy at the U.S. Department of Energy in the 1990s.  

He founded the Climate Progress blog, authored ten books—including The Hype About Hydrogen and Hell and High Water—and was named a Time “Hero of the Environment” and one of Rolling Stone’s “100 People Who Are Changing America” in 2009.  

Later, as a Senior Fellow at the University of Pennsylvania’s Penn Center for Science, Sustainability, and the Media, Romm continued to challenge what he regarded as dead-end technologies and costly distractions, including hydrogen, carbon offsets, and carbon capture.   Romm died unexpectedly at the age of 66 on September 14, 2026, in Washington, D.C.  

Michael Barnard and Joe shared a long history of friendship and collaboration, strengthened by a memorable conversation 18 months ago following the release of the second edition of Joe’s seminal book, The Hype About Hydrogen.  

That conversation between Joe and Michael was a fascinating and uniquely candid dialogue about the real solutions to climate change—and about technologies they believed risked diverting attention and investment from more effective pathways, including hydrogen, carbon capture and storage (CCS), direct air carbon capture (DAC), and some proposed approaches to green steel.

Joe had an extraordinary influence on the climate and energy-transition debate over the past three decades. His rigorous analysis, willingness to challenge conventional wisdom, and ability to communicate complex energy issues shaped the way many of us think about the transition to a clean-energy economy.  

He will be deeply missed. He will not be forgotten.

In our series: How AI is revolutionising Energy, Laurent and Gerard dive deep into the intricate corner of Energy Management system for large industrial clusters.  

You would believe that legacy providers such as Siemens, Schneider Electric or Hitachi would provide such solutions. They are not. Indeed, they provide legacy Scada systems which are hardware linked and bottom up. There is no glue to optimise them as a group and deliver access to Energy markets.  

Two young Belgian engineers have decided to address this blind spot and come up with a new generation of software: AI powered EMS. That is what Companion Energy has achieved. We bring in its CEO Thomas Vyncke.  

Most of the European energy conversation still focuses on front-of-the-meter flexibility: batteries, renewables and other assets participating in wholesale and balancing markets. Thomas’ thesis is that an equally important — and much less developed — opportunity sits behind the meter, inside large industrial and commercial companies.  

The problem is complexity. Every enterprise site is different: different tariffs, contracts, generation assets, batteries, EV fleets, boilers, industrial processes, grid constraints and operating requirements. The opportunity therefore isn't simply to buy cheaper electricity or optimise one battery. It is to continuously optimise the entire energy system of the site against its operational and financial reality.  

That is what Vyncke and co-founder Jonas Verstraeten are building with Companion.energy, founded in 2022. The platform provides transparency on energy costs and automates optimisation across complex behind-the-meter environments.  

The company says it currently optimises more than €500m of energy spend and 350+ MW of assets across Belgium, the Netherlands, Switzerland and Romania, working with companies including Proximus, TotalEnergies and Port of Antwerp-Bruges. It recently raised a €7.8m seed round to support international expansion.  

And it is just the beginning…  

 
With the energy industry's largest proprietary dataset, world-class experts and decision-grade models, all powered by Synoptic AI, Wood Mackenzie delivers Intelligence Connected across the energy and natural resources landscape.

There is simply too much greenwashing happening. Environmental reporting has become a meaningless bureaucracy feeding a fictional reality through glossy reports that nobody reads anymore.  

But things are changing; the impact of climate change (heatwaves, floods) is hitting back at governments trying to ignore it. Some BigTech, historically in favour of renewable energy are now busy building the biggest gas plants in the world for their datacenters, while pretending still to be on track for their “net zero” commitments.  

They maintain the fiction through carbon accounting tricks, maximisation of loopholes and heavy PR campaigns run by the American Petroleum Institute and McKinsey.  

Fortunately, there are a lot of companies which start to see the direction of travel: a more granular way of accounting for Energy and Emissions. Not by the year, where summer solar can be accounted for winter consumption, but by the month and soon by the hour.   Hourly matching is new, tough, but far from unsurmountable. That is what new companies such as Renewabl are enabling: by cutting though the bureaucracy and Excel Sheets, and helping the forward thinkers to present, report and optimise their energy and emissions profile.  

Laurent and Gerard have the privilege of receiving Carolyn Addy, Head of Commercial at Renewabl, to talk about the new trends, the innovations, and how progressively, we are entering a more transparent and efficient world.  

We talk about immediate non-regret solutions and the impact of AI in the process. We also dive into how hourly PPAs are progressively making their way into the market, and whatever perceived additional work they require, in fact they provide better hedges against volatile energy costs.

Where Are BESS Making Money? Gerard and Laurent had the pleasure of welcoming Ed Porter Director Europe at Modo Energy for an insightful discussion on battery profitability and the evolving economics of Battery Energy Storage Systems (BESS).  

Modo Energy is a fast-growing data analytics and market intelligence platform helping energy professionals benchmark asset performance, forecast revenues and evaluate investments in renewable energy and grid-scale battery storage.  

Ed outlines three stages in the development of a battery market:Stage 1 – Pre-saturation: Batteries can achieve attractive payback periods, sometimes as short as three years, primarily through ancillary services.
Stage 2 – Wholesale market competition: As ancillary service revenues become more competitive, batteries increasingly rely on wholesale market opportunities, as seen in Australia, Texas and Great Britain.
Stage 3 – Sophisticated grid services: Once wholesale markets become saturated, batteries move towards more advanced and specialised grid services (voltage, inertia...).
  The technology is evolving rapidly, as is the deployment of new battery capacity. This makes future revenues increasingly difficult to predict, particularly because of the cannibalisation effect: as more batteries enter a market, they compete for the same revenue opportunities and can progressively reduce market spreads.  

From Australia to PJM, ERCOT and CAISO, and across Great Britain, Spain and Germany, we explore the fundamentals driving battery profitability in different markets.   With CAPEX around $500,000/MW, a decent return might be in the region of $70,000–80,000/MW. Yet the picture varies dramatically by market. Poland can deliver around $300,000/MW, while ERCOT and Australia's NEM are currently below $30,000/MW.  
These differences highlight why investors need to look beyond headline revenues and consider market structure, competition, saturation, technology and future revenue cannibalisation.  

We also discuss Long Duration Energy Storage (LDES) and explore the deeper market and technological levers that can make batteries a profitable long-term investment.   A compelling conversation on where BESS is making money today—and, perhaps more importantly, where the opportunities may lie tomorrow. 
With the energy industry's largest proprietary dataset, world-class experts and decision-grade models, all powered by Synoptic AI, Wood Mackenzie delivers Intelligence Connected across the energy and natural resources landscape.