FEMI OKE: Have you ever wondered how we will power our lives in the future?

THOMAS RAFFEINER: People see that renewables are coming. We have cheap power, and we need something to take out the volatility of the system. And here, car batteries can do a great job.

LIZZIE O’LEARY: How we’ll meet our basic human needs for food, housing, goods, and care?

INDIA HARDY: New reconfigurations in the future of how we care show real promise for equity in a way that we haven’t seen before.

LIZZIE: In ten years’ time, how will we be moving around? What will this world look like? And what does it mean for businessand society?

GREG OBERTI: The possibilities are enormous. Societies will benefit, and society can benefit, because ultimately, you’ll have more reliable delivery of major projects.

LIZZIE: I’m Lizzie O'Leary, a podcaster and journalist.

FEMI: And I’m Femi Oke, a broadcaster and journalist. And this is a special new series of Take on Tomorrow, the podcast from PwC’s management publication, strategy and business.

LIZZIE: Each episode, we’ll look at a different human need: from the way we fuel and power our society to how we build, care for each other, make things, feed ourselves, and move around. We’ll meet the innovators forging the future. All with one mission: to chart the next decade of change.

FEMI: As megatrends like disruptive technology and the energy transition play out, trillions of dollars of value are in motion. We’ll learn how businesses are creating economic and societal value in entirely new ways. And we’ll discover the insights you can take away—whatever your industry.

LIZZIE: Today, how we fuel and power our society.

LIZZIE: As the way we power the world transforms, we need to think about our sources of energy differently too. Could your electric car help make the electricity grid more stable—and more green? We’ll be talking to the CEO of a company trying to do just that.

FEMI: But first, to help us set the scene on what this industry looks like today—and give us a glimpse of what the shift ahead could look like—I’m delighted to be joined by Jeroen van Hoof, PwC’s Global Energy, Utilities & Resources Leader, from PwC Netherlands. Hello, Jeroen, welcome to the podcast!

JEROEN: Well, great to be here, and thanks for having me.

FEMI: What challenges are businesses in this industry facing today?

JEROEN: I think we have seen quite a lot of challenges, of course, over the years moving to renewables. But offshore wind, solar, that’s all becoming more and more large scale and competitive. And I think that train, it’s safe to say, has left the station. There’s also a bridge from the power domain to the fuel domain, with the new fuels like hydrogen. So that has created new ways of working between industries. Power on its own without infrastructure is nothing. So, heavy investments in infrastructure. Total fuel demand has never been as high as it is today. And with data centers and other things kicking in, there’s still a big need for fossils for the next decades to come. Can we then maybe decarbonize those fossils, think about carbon storage? So again, that poses challenges and changes also to that part of the industry.

LIZZIE: I hear you talking, though, about a series of shifts. And I wonder, when you look at that shift, what kind of opportunities you see that bringing?

JEROEN: So, if you think about emerging countries, we see that these are being set up by the use of new renewable sources. So not necessarily the old model with a big infrastructural grid and everything, but just closer to home, directly rooftop, solar, and other solutions—use of batteries, technologies that haven’t been around in the past and actually provide access to electricity to emerging countries and regions and people that wasn’t possible in the past. So that is an example. In emerged and developed regions, there is already the use of renewables. We see cities with rooftop solar, electric vehicles moving in. That increases demand on infrastructure. So it means investments in infrastructure. It also means technology needs to play. Because how you manage a network like that is very different to how it was managed in the past. There’s more imbalance, because renewables don’t always produce. There’s an increased need for storage. So that’s where the battery play comes in. And often technology. So AI, blockchain, and others, to enable peer-to-peer production and consumption are innovative opportunities that again provide options for companies to play around with.

LIZZIE: Thanks so much, Jeroen. We’re going to come back to you later to hear more about some of the innovations you’re excited about. And speaking of new opportunities, Femi, what would you say if I told you that your electric car of the future could be used to help power your house, and stabilize the energy grid?

FEMI: I would say, where is that car today?

LIZZIE: [Laughs] I spoke to the CEO of a company that is doing this—Mobility House’s Thomas Raffeiner.

THOMAS: The Mobility House—our vision is, since 2009, by the way, is zero emissions at zero cost. So how do we do that? We integrate vehicle batteries into the power grid using intelligent charging and energy solutions to stabilize the grid. That’s what we do.

LIZZIE: Two thousand and nine is quite a long time ago. And I wonder, as you have grown and expanded globally, what are the shifts that you’ve seen taking place that have created the space for you and your company to scale?

THOMAS: When we started with this vision and we went to carmakers and say, “Hey, let’s integrate electric cars into the energy system,” the people said, “There are no electric cars.” So when we went to the utilities and said, “Hey, let’s use electric cars to stabilize the grid and help you to do a better job,” they said, “Hey, don’t fool around with my grid.” So it was very difficult at that time to convey to the players in the industry what we are doing. Since then, things changed. There are electric cars. And the penetration of renewables is, fortunately I should say, very high in all the countries, probably around the globe. So people see that renewables are coming. We have cheap power, and we need something to take out the volatility of the system. And here, car batteries can do a great job.

LIZZIE: So, yeah, that’s what I would really love for you to explain to me, because my understanding is that a really key focus for the Mobility House right now is bidirectional charging. What exactly does that mean? How does that work?

THOMAS: Bidirectional sounds very complicated. It’s charging a battery and un-charging a battery. You do this every day with your smartphone. You do this every day when you drive a car. You charge it obviously at home or at work, and by driving it, you discharge it. So it’s not a technology that has to be invented. The only difference is that we don’t discharge the car via the engine, but taking the power again back into the grid, or back into the house. So every battery is by definition made to be bidirectional.

LIZZIE: Could you make the argument for me as to why everyone should adopt bidirectional charging?

THOMAS: Because the value is so big, we have a project or now a commercial offer with Renault, with the R5 in France. And we offer for Renault customers who have a bidirectional car, zero cost, zero emissions. What does that mean? These car owners drive free of charge because the value they provide to us with the bidirectional vehicle is higher than the cost of charging.

LIZZIE: Wow.

THOMAS: That’s why everybody will do it, because it makes sense. Even if you have a unidirectional car only, there is some value. We can always stop charging, but it’s way lower. So that’s why at the end of the day, all the cars will be bidirectional. And I’m quite sure all of us will use that bidirectional technology to make some money while the car is parked.

LIZZIE: You know it sounds to me like you’re talking about an overlap in a Venn diagram that you’ve built, that you think about how our traditional energy systems function, and you might have cars over here and the grid over here. But what, is this just a shift in thinking that actually all these things could be seamless?

THOMAS: Yes, you’re absolutely right. So before, somebody produced power in nuclear power stations, coal-fired power stations, you name it. Somebody was distributing it, and then somebody was using it. So basically, the whole energy regime was top down, from somebody’s producing it, the production was very predictable, and also the consumption was very predictable. We knew when there were peaks, we knew that Christmas Eve was a peak. So it was relatively simple to match supply and demand at that time. Now, both elements of the value chain change dramatically. Number one, we have renewable sources. They’re volatile. So wind blows or doesn’t blow. Sun shines, there are clouds, so it’s unpredictable. And also on the consumption side, we have electric cars, we have new forms of consumers, we have data centers. So, also the consumption is very, very volatile. And to bring them together is very difficult. And this is why storage is so important. And many, many utilities have difficulties in matching those two. And here, batteries come in.

LIZZIE: Well, this is sort of taking me to where I wanted to go next, which is the impact that all of this has on electricity supply. Even in some wealthy countries, you cannot always get reliable supply. So how does your technology kind of slot into that picture?

THOMAS: Even the stable grid, in the morning, for example, California, they call it duck curve. So the sun rises, everybody’s leaving the house, generation comes in, and consumption goes down because nobody’s at home. That is a huge problem for the grid operators to follow that very, very steep curve. So it is, not necessarily has to do with the stable grid, but with the change over time, and change of demand and supply over time can be very, very fast. And this is where batteries come in. And this is what sometimes politicians in Europe don’t understand. They see electric cars as part of the problem and say, “Hey, you come in, you charge. We don’t know when and how.” And we say, “No, no, no. It’s the opposite. If we do managed charging, the same vehicle is part of the solution.”.And this we can see in China. China is doing that already for many years, and I think they are ahead of the curve. Not just on batteries, but also on this—they call it V-to-G, vehicle-to-grid—on this bidirectional stuff.

LIZZIE: One of the things that PwC has found in their research is that, as well as having, you know, traditional supply chains, businesses that are successful are also increasingly working with other organizations as partners going to market together. How does that work for you? Are you looking sort of outside the traditional supply chain world?

THOMAS: Absolutely, absolutely. First of all, the utilities and the grid operators, they are an essential part in that game. So we need to understand what’s the status of the grid, where the problems occur. That’s one partner. The other one is the carmaker. To say “Start charging” sounds very simple, but we need to send a signal to each and every VIN number, so the vehicle number, so and so, and so. You stop charging. You start charging now. So the connectivity to an OEM is very important. This can only be done in cooperation with carmakers or back ends. So we need utilities, you need carmakers. And then you need the heart, which is in this case Mobility House, to say, “How much flexibility do we have, where and when?” So we aggregate, basically, cars, and then make sure that the right vehicle at the right time does the right job. And this can only be done with partnerships. There is no company in the world who can do that on its own, because either they don’t have the grid data, or they don’t have the vehicle data.

LIZZIE: Well, I would imagine that it might be tough to tell a bunch of competitors, “You all have to work together, now. There's no trade secret here. This is for the good of the grid.” How does that part work?

THOMAS: Absolutely true. But I think by now, we had to learn that huge problems, probably like climate change, can only be solved together. It’s a cooperation between at least two industries, probably a third one. And the third one is a tech, has to do with connectivity, has to do with communication between vehicles. That’s not so easy. And here, it’s really, really important that we are, we are working real time. So if the frequency goes down, we have to react within milliseconds.

LIZZIE: It sounds like what you’re saying here is almost a mental reframe, where you could think about an electric car company as actually also a power company that the silos are mentally limiting.

THOMAS: Absolutely. I say it, I don’t mean this as a joke. I have been kicked out ten years ago in a conference for that. I said to the utilities, “Maybe Tesla one day is your biggest competitor.” These car companies do have very, very large installed capacity. So if you just take the Teslas in Europe, you are talking about a hundred nuclear power stations that they have on the road. This is a very big power station, and they can control those vehicles. They know where they are, they know the state of charge, they know the behavior, they know the temperature. So, I do see that some of the carmakers will become big—I wouldn’t call them utilities—but big energy players.

 LIZZIE: Wouldn’t this put traditional utilities out of business? What happens to the utility industry if this happens?

THOMAS: Yes, this will be a big challenge. So utilities will have to either change their business model dramatically or they will die.

LIZZIE: So let’s say we adopt this vision that you have laid out. What does the energy system look like? Who are the players? Is it one where there are big players, or are we talking about a much more distributed business system too?

THOMAS: Look at yourself. You have a house, and in ten years from now, you have a rooftop solar, or you are in a community that has some rooftop solar. Why would you pay 40 cents per kilowatt hour? Because there is lot of solar available. So you either then go to somebody, a community and say, “Let’s share the cost, and then we pay that to the rest.” Or a carmaker comes to you and says, “Hey, here’s a car. It comes with free energy. I also supply your house.” You might want to sign that contract with your carmaker, right? Or somebody else comes in and says, “Hey. I’m the solar guy here, and I have a heat pump, and I also supply your car free of charge by the way. So sign an energy contract with me.” Utility might be an option if they’re good, and if they can provide that service. Or you might say, “I want to have a dynamic service, but someone should manage it for me.” And these will be the players in the market, hopefully Mobility House. So it’s a total different business model.

LIZZIE: For this to work at scale, it takes behavioral change.

THOMAS: Exactly.

LIZZIE: Behavioral change from consumers.

THOMAS: Yes.

LIZZIE:—behavioral change from producers and governments. Who can drive that change?

THOMAS: Do good stuff and talk about it. We see this technology happening in India now. So in the village in India, you will see batteries, you will see solar systems. People will ride their cars free of charge, take the battery home into the village at night. They're not connected to a big grid. They're not connected to a power station, and they will manage decentralized emission-free networks with this technology. And this we will see. So it’s not necessarily driven by the Western world only, but it will be driven by very cheap economic solutions. And it’s not because these people have climate change on their top priority. They want to survive, they want to have cheap power, they want to have power at all, and this is the best way to provide them with power.

LIZZIE: All right then, I’m going to ask you to make a prediction. So, if you were to spin forward ten years and think about the way the world is powered in a decade, what do you want it to be? And what do you think it will be?

THOMAS: I’m bullish here. It’s a hundred percent renewable. When I say a hundred percent, it’s maybe, it might be 98, but it’s very clear. It’s all electric.

LIZZIE: Powered by renewables?

THOMAS: Powered by renewables. There is always an exception to the rule, but we will see only renewable investments. Nothing else will be competitive. On the mobility side, again, we will see electric cars only. Not because [of] politics or regulatory requirements. Because they’re so cheap. Electric cars, only very few, very rich people can afford to drive a combustion engine. So the cars will be electric. And the generation is renewable. And probably most of the people around the world will not have a very big energy bill at all. Electricity will be very, very, very cheap, across the planet. On planet Mars, I don’t know. I’m talking about planet Earth. [Laughs].

LIZZIE: Thomas Raffeiner. It has been really a delight to talk with you.

THOMAS: Pleasure was all mine. Thank you very much for having me.

FEMI: Jeroen, in that interview, we heard all about the potential for car batteries to be used to help stabilize the grid. That’s just one type of innovation. What else in this sector are you seeing that excites you?

JEROEN: I mean, the example you have just been discussing in this interview, is a great one, right? The role of batteries in the grid is important storage and managing storage also in intermediate periods where there’s less power production is providing opportunities for sectors to work together. At the same time, think about the rise of data centers. Data centers are coming in everywhere, and there’s often collaborations happening with utility companies. Utility companies have to make sure that there’s access to renewable power, for example. So building data centers close to regions where it’s possible to bring in that power is one of the examples. And that in its turn means that these data centers start to play a role, themselves, when it comes to balancing the grid or using excess power for other purposes. Small scale nuclear reactors working in dense areas are also things that we will start to see emerge. The geopolitics that are happening. We are also thinking about availability and affordability of this whole thing. To remain competitive, you also have to think about other alternatives, and that’s where small scale reactors or even nuclear fusion could bring a solution in the future.

LIZZIE: I hear you describing a kind of creative thinking that reflects some of what Mobility House is doing, where you take really two different types of industries, and in that example, it’s mobility and power. And I wonder where you see more examples of this kind of crossover, where it’s not just two industries that might traditionally have been grouped together, but finding the power industry and the energy industry working together to create some kind of new product, new solution, new way of doing business.

JEROEN: Well, an interesting example is, think about greenhouses. They’re traditionally fuelled by fossil fuels gas. But there’s alternatives to that. But another element, which is not thought about often, is the carbon element. If you put a greenhouse next to an industrial cluster and you do carbon capture, and use that carbon actually to feed into greenhouses, you have a win-win. Carbon isn’t emitting to the air. Greenhouse products grow faster when carbon is brought to the equation in these greenhouses. I think that’s a nice example. So greenhouse will be the offtaker of carbon. It’s already happening in, for example, in the Netherlands in the region where I live.

FEMI: Thomas touched on it in that interview, talking about the challenges utility companies might face as this sector evolves. Is this really a do or die situation?

JEROEN: Well, I think the example Thomas gave is a great example of an opportunity in a specific area. But I think the energy system is much broader than only balancing the grid in a densely populated area where vehicles are around, where this business case makes sense. But there’s definitely still a very important role for many utilities to play. Think about, for example, the fact that you need backup power, which means we will still need to have bigger power plants, nuclear or otherwise fuelled, at the back of it. And maintaining that backup function, I think, is something. And providing energy when it’s required, utilities will have to provide, because if they’re not, they’re not around. This, by the way, adds to the cost of the whole system. And I think there’s also still a business case to be made by utilities in that space. So I think Thomas’s point is clear and a great business case. But it doesn't automatically, to me, mean that utilities are out of business or they’re the dinosaurs to go next.

LIZZIE: Well, how do you have that conversation with a client?

JEROEN: Every company has to think about its business model. The pace of change in today’s world is bigger than ever. So maybe in the past, utilities had had a very stable business model. And nothing changed a lot. Well, these days are over. So it’s clear that they have to rethink their business model. And depending on where they sit, they have to just think about what role they want to play. Do they want to become more the agents of buying and selling power, playing a role in running this whole system that is the grid system, that is changed? Is it they want to play a role in just providing this backup power? Or is it they want to be still a full integrated utility, that not only provides power to households but also adjacent services?

LIZZIE: So if you are an executive listening to this and you run a business, run a company, what should you be doing right now, or thinking about right now, to think about how your power needs are shifting and are going to shift in the next five years, ten years, 20 years?

JEROEN: I think it’s all got to do with the awareness that the way we provide energy, energy is generated, is changing. So there will be a diversification of energy sources available to the market, which means, I think, if you are on the consuming side of things, you need to really think through what energy consumption really means for your operations. If you’re a manufacturing company, you need to think through, Can we be more efficient? Can we use different ways of energy consumption? Can we partner potential, find potential alliances? Like with industrial clusters, with greenhouses or chemical companies, with energy companies? Think through the product you are making. So basically, with all this change happening, it’s very important to learn to look outside the borders of the existing sectors, or where you see emerging opportunities, ways of collaboration, and then think through what that means for the way you produce, deliver. And this is the time. If you don’t do it now, others will do it for you.

LIZZIE: Jeroen, thank you so much for your time and for talking through this with me.

JEROEN: Thank you.

FEMI: Lizzie, while I was listening to Jeroen and Thomas, what struck me was just how matter of fact they were about extraordinary changes that are happening right now. The train has already left the station. No biggie. We’re already in the future.

LIZZIE: I have to admit, I totally agree with you. I was struck by that as well, where I felt like I’m still living in this world where I come home and turn on the lights, and it’s like a very old school model. And they are talking about something completely different. And I also really appreciated thinking about it from a financial perspective, right? Like, the way that these companies make money could change so dramatically. That is, I think, a totally different way, for me at least, to be thinking about something that I take for granted a lot of the time.

FEMI: That’s it for this episode. Please follow Take on Tomorrow wherever you listen to podcasts to make sure you never miss an episode. And if you learned something new, then consider leaving a review. We love it. It really helps others to find the show. For more, visit pwc.com/takeontomorrow.

LIZZIE: Next time—what happens to our healthcare system when we put you, the person, right at the center of it?

ALI HASHEMI: The entire endeavor is all about the human. And when you think about building a healthcare system or healthcare service, you start with that and you end with that.

FEMI: Take on Tomorrow is brought to you by PwC’s strategy and business. PwC refers to the PwC network, and/or one or more of its member firms, each of which is a separate legal entity.