The property sector has a unique chance to help build a fossil-free future by capitalising on the EV charging business. A smart grid, smart buildings, and smart charging. Together this powerful trio creates a system that enable the real estate sector and investors to provide resiliency to the electric power system, future-proof their premises to carbon-neutral legislation - and create a new revenue stream.
Guests:Ilkka Koisti, Sales Director, Customer Solutions at Virta & Martti Savenius, Real Estate Investor
Host: Jason Millward
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Intro
Jason M.
Hello there and welcome. My name is Jason Millward and you are listening to Plugged into Virta - the electric vehicle charging podcast. The future of mobility is electric. In this podcast we will discuss the newest and hottest topics in the world of e-mobility, smart EV charging, energy management and the business around it. We will go under the surface and discuss openly about the challenges, opportunities, solutions and trends.
We will give you honest, fact-based information and tell you what it means in practise, in plain English. So, if you want to hear insights from top experts, learn more about the world of EV charging and the future outlook, or just want to listen to some inspiring stories from around the world of EV charging, this podcast is for you.
Interview
Jason M.
In this episode we're going to talk about real estate and how to future proof real estate business. My guests today are Ilkka Koisti and Martti Savenius. The property sector has a unique chance to help build a fossil-free future by capitalising on the EV charging business. A smart grid, smart buildings, and smart charging. Together this powerful trio creates a system that enables the real estate sector and investors to provide resiliency to the electric power system, future-proof their premises to carbon-neutral legislation - and create a new revenue stream.
So, guys, before we dive into today's subject and talk about the challenges in real estate sector and how electric mobility can help to solve them. Could you maybe introduce yourselves and tell us a bit about what are you up to?
Ilkka K.
Thank you, Jason. My name is Ilkka Koisti. I'm coming from Virta, working with the business development. Real estate, sustainability and carbon neutrality are close to my heart and part of our company solution is actually for that exact business – real estate – to make it more carbon neutral and sustainable.
Martti S.
Hi, thanks for having me. My name is Martti Savenius. I'm a real estate investor and operating partner for institutional private equity real estate investors and most recently was COO of Blackstone Portfolio Company.
Jason M.
Thank you for joining us today. So, let's set the scene first. What's happening in the real estate sector and what are the biggest challenges, what are the requirements?
Martti S.
Well, I think today the biggest theme is definitely Covid and how Covid is impacting real estate, particularly real state income. I think office space requires lots of modification. How do people work? There's been a lot of work from home and that's going to be modified and it's yet unknown to what extent will it be modified.
Retail is undergoing massive disruption. People don't necessarily want to go to the shopping centres. We saw very dramatic shutdowns of shopping centres in North America last year. Westfield closed their malls, which is, I think, pretty dramatic. We're seeing logistics coming up a lot in supporting online retail. There's a big disruption going on and I think going forward, the key thing is that how do you get people to the real estate and how do you get them to use the real estate? But I think EV has interesting perspectives to that. This electrification of traffic means that cars, when they are parked, need to be charged. So, I think that's a new requirement which will be essential for protecting the income, whether that's offices or creating traffic for retail assets.
Ilkka K.
Yeah, based on my latest discussions with the real estate investors and developers as well, they seem to have a big hurry to increase some other type of investments for the logistics centres. And of course, real estate as where people are living. As Martti mentioned the shopping malls, they have some challenging times at the moment. But as we see, there's also a lot of renovations, and converting the buildings for some other purposes, and then it's a perfect time as well to invest into this traffic electrification and local energy storages, local energy production because that increases the value of the building, but also lowers the emissions, towards carbon neutrality, which is definitely a hot topic in the society at the moment.
Jason M.
Okay, how about the e-mobility sector? What's the future outlook there in general?
Ilkka K.
As we see every day in the news and papers and online tabloids, there’s a lot of discussion about the emissions overall. And of course, new car models are coming, they are fancy, and they are looking nice and even more, they are getting cheaper as well. So, there's also lower budget models available that increase the request and demand for the car that can reach those electric charging stations and can utilise the local energy production and storages as well. Definitely, the curve is there and happening right now.
Jason M.
Ilkka, you said that the property sector has a unique chance to help build a fossil free future by capitalising on the EV charging business. So, what does that mean? What does e-mobility have to do with real state and how the electrification of mobility will affect real estate industry within the next three to five years?
Ilkka K.
What I have again learned from the discussions with the real estate developers and investors is they have been using a lot of budget and euros and US dollars towards the sustainability, the carbon neutrality and they have been exactly spending that money. Now with our solutions related to the local energy production and also consumption, we can actually turn that spend into revenue streams. There's now new opportunity to start making money or let's say revenue streams and profit at the end from the local energy production and electrification of the transportation in those real estate properties. That is a quite unique proposition. So, sustainability is not only a cost, but it can also be a revenue stream. That is something that has changed and is changing towards even more profitable and shorter return of the investment as well.
Jason M.
Can you tell me about smart EV charging and smart energy management, could you just explain a bit more what that actually means for the layman?
Ilkka K.
Sure. Basically, as it's today, if you install one EV charging station on your property, it's not a challenge because there's enough power available from the building to charge that car. But when you're increasing that one to 10, to 15, 20, 50 or even hundreds of charging stations at the same location, same property, there's not enough power. That's why we have built a solution that enables you to control the load of those charging stations. You can prioritise the charging, you can control the energy levels of those charges and if you have already a photovoltaic available, windmills available, you can utilise that local energy towards those electric cars as well.
On top of that, you can have a bi-directional charging. Basically, you can push the energy towards batteries when you have a lot of photovoltaic, wind available, but also when the wind and sun is not shining, you can actually take away the energy back to the building. The energy that you have stored in the electric vehicles’ batteries. Plus, it's kind of more interesting to utilise also local energy storages, local stationary batteries, which are basically reused EV charging batteries.
Jason M.
So, instead of having a central capacitor, you've just got essentially millions of small capacitors in people’s vehicles to go both ways to help the national grid provide power to everyone else and then back and forth.
Ilkka K.
Exactly, exactly. You are absolutely correct. The distributed energy production is becoming more and more available. But if you have a distributed energy production, you need also balancing capabilities and these electric vehicles and energy storages on those real estates will be one key asset for that business.
Jason M.
Could you breakdown what the main benefits of smart charging are for the real estate sector?
Ilkka K.
Well, one of the biggest and quickest benefits is that you can make the tenants happy because you have electric vehicle charging capabilities in your building. That's the first thing, so you can keep your investments and their return of investment, because you can have those customers coming into your properties.
The second thing is that you can save a lot of costs by smart charging because you don't need to right away invest into the bigger made supply fuses because you can control the charging smartly as well. And then, if you invest more in the photovoltaic and local energy storages, you can be a big part of the energy balancing into those grid networks, which gives you a possibility to make some revenues from this investment.
The main thing for most of the investors, since they are looking for carbon neutrality, they say that it’s a demand, that you need to prove that your building is not that brown anymore, that it's getting greener, and you need to prove how much emissions you have saved by this transmission to electrification or local energy production and consumption as well. So, it’s very critical that you can show those values, real KPI that are really happening in the building. What's happening today. What has happened yesterday, last month, last quarter and so on. And you have evidence for that every time you want.
Jason M.
Ok, and what does the future look like guys? Are we going to save the planet?
Martti S.
I think it's been surprising how dramatically the traffic has kind of frog leaped into hybrid and electric vehicles, and I think that's kind of cascading that the change is coming really fast. I would say that in the next 5 to 10 years, we're going to see a dramatic shift, how buildings will become smarter. There's been a lot of talk about smart buildings, but I think this is one of the keyways, this energy management, to make a building smart and support the decarbonisation of traffic, support sustainable energy production, like Ilkka talked about the photovoltaic and wind to kind of balance the peaks in the grid. So yes, we are going to save the world.
Jason M.
I hope so. I mean, you can certainly see how fast vehicle-to-grid is growing, it’s almost rocket exponential growth. Let's say, we hope we can save the planet, guys. Do you have anything to add to that, Ilkka?
Ilkka K.
Yes definitely. The idea behind sustainability and smart charging and smart energy management is actually not to save the whole carbon neutral problem on those properties, but it will be a major part of that story. With the solution that you're investing in, let's say sustainability and smart charging is giving you that the tenants will stay at your buildings, you can actually keep the rental levels on a certain level because you're attractive as a property owner, but also instead of only investing, it gives you the opportunity to sell energy towards those electric vehicles and that gives you a new revenue stream. Plus, you can actually be part of the energy balancing market, which will give you even more revenue streams at the same time. It’s quite complicated, but that's why we have thought about making it automated, as a solution that you don't need to care as individual. So, the solution is taking care of this complex energy balancing, energy pricing, which direction the energy will flow every day, in every minute. And that is a service that we have provided and that will give more green value for the property owners and the property investors as well.
Jason M.
I guess at the same time, the individual user can also feel that they are contributing a little bit too.
Ilkka K.
Exactly, they have a clean mind.
Martti S.
And maybe to add to that, as Jason you mentioned that rather than having a centralised system, the electrical vehicles are kind of decentralised, all these buildings are decentralised, and you need to manage it and that's why Virta really is cutting edge, that they're able to manage the granularity of these various electricity streams both ways and also across different markets where they integrated software platform. So, managing all this is also at the heart of it, and I think Virta is doing a great job at it.
Jason M.
Okay, thank you guys.
Martti S.
Thanks, Jason.
Outro
Jason M.
And that’s it for this episode of Plugged into Virta: The electric vehicle charging podcast.Thank you for listening!
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And if you are looking for more information about EV charging, e-mobility and energy management, visit us at www.virta.global.
Until next time, thank you for joining us. Let’s take charge of the future – together.
