According to a 2019 PWC report, most electrical public services are at the start of their digital transformation route with 45% of the companies studied classified as “digital novices” and 38% as “digital subscribers”. At the same time, the rise in renewable energies causes a significant change in the market. In the past, the management of the balance between supply and demand for electrical energy has been relatively easy. The grid operators had to take into account only the variability of the load and adjust the supply appropriately. Fossil fuels and nuclear power plants could be classified effectively according to the amount of energy that must be generated and the lowest cost.
However, renewable energies, which play an increasingly large role in the portfolios of energy companies, also bring a lot of fluctuation to the supply of the offer. Consequently, the loading of the load becomes more difficult to manage and predict. Solar and wind energy depends on weather conditions and at least until storage technology improves in the coming years, renewable energies cannot really be planned.
The supply imbalance and requests means high costs for public electrical services. Having recognized this problem and the reality that many players in the sector must always discover the advantages of digitization and automation, now a Bulgarian startup called Tokwise tries to help energy companies to optimize their green wallets.
Provide the best commercial strategy
“Today, many industry companies are only part of the data available and work mainly with Excel. Unfortunately, these methods cannot follow the complexity of the rapidly evolving energy ecosystem. And, if the balance is not there, market players have to pay a huge cost – in 2018, it was around 4b euro for energy companies across Europe, “explains Krasimir Kolev, co -founder and executive director at Tokwise.
Today there are various other technologies used by energy companies that deal with certain aspects of the digital transformation course such as: Trade management systems and energy risks (ETRM) to calculate commercial risk for public services, advanced analysis tools, response programs to demand to manage proactive consumption, weather forecasts.
However, according to Kolev, such solutions often do not correspond to the expectations of sustainability and long-term profitability for two reasons: “On the one hand, these technologies only deal with the big problem with the cost of the imbalance and only have a dispersed impact on it. On the other hand, all these solutions require manual intervention to produce the desired result, for example: the entry data necessary for the Meteo forecast must be provided in a structured and complete form which is associated with an additional time and cost. The Tokwise Tech SaaS solution presents a new perspective in the approach to solve these problems and offers a wider range of advantages for our customers. »»
Tokwise has created an AI -based platform which, in a word, does three things – solves the data problem, injects AI into the process of driving forecasting and balancing value, and creates new growth opportunities in the end.
“We automatically collect, clean and aggregate various data streams relevant for forecasts (counting data, weather, geographic location, customer signals, technological assets, real -time data). Then, the clean and structured data is injected into the Tokwise ‘AI algorithm to predict consumption, production and imbalance prices. Finally, the Tokwise platform simulates different commercial and balancing strategies to identify the most optimal, ”explains Kolev.
To capture the variability of renewable energies, the Tokwise team combined advanced search trees with deep neural networks. These neural networks take historical production and consumption data, as well as additional relevant signals captured by Tokwise, as an entrance and process it through a certain number of different layers of network containing millions of neuron type connections. An advanced research tree simulates the result of various scenarios taking into account the probability of forecasting, risk tolerance, market situation and the production of better commercial strategies. Over time, algorithms improve and become stronger and better by learning and decision -making.
The main advantage for customers is that they become much more effective, decreasing the penalties of imbalance. Tokwise claims to allow up to 30 to 40% of cost reduction. In addition, companies can automate portfolio management processes, which should ultimately lead to time and reduce computer costs. There is also an opportunity to discover new sources of income.
“Responding more quickly and more flexible to unexpected situations (such as denominational blocking), offering a personalized offer to the specific needs of their end customers and be able to operate more quickly on the intraday and inter-mockery food markets are among the areas where we support our customers in an innovative way. We offer our solution as a single-counter platform and manage all business processes from data collection to AI business decisions in one place, ”explains Kolev.
The marketing plan
“Our immediate objective is placed on green energy suppliers. With our customers from France, Poland and Bulgaria, we have identified two main challenges which are quite urgent to approach on the market. The most obvious problem is linked to the cost (penalties) paid by suppliers who cannot effectively predict and manage their production and consumption expenses ”, shares Kolev.
In his opinion, there is another important aspect. Energy suppliers must face a portfolio of highly segmented customers (renewable, industrial and commercial producers, SMEs, micro-enterprises). For these customers, energy supply is not only a community service, but part of a wider solution to improve competitiveness, reduce costs, ensure continuity of activities and, more and more, build a better and greener brand. Understanding these needs and being able not only to meet them, but to exceed them will help energy suppliers to reach a lower unsubscription rate and better commitment with their customers. Thanks to digitization, they should be able to better understand and serve their customers.
Tokwise has two major strategic objectives for the rest of 2020. The first is to close an investment round in seeds and the second – the acquisition of customers in Germany and France. For next year, the team is planning the expansion of Austria and Romania and to exploit the market for renewable producers.
In the meantime, Tokwise will also seek to close an investment of € 250,000 – so that the company can hire additional automatic learning engineers and invest in sales and marketing to attract new customers. According to the projections provided by Tokwise, such financial support should also allow Tokwise to go for an investment of 1 million euros at the end of 2021. The company projects 8.5 million euros by 2025 with the EBITDA – 3.5 million euros.
Best startup at the online demonstration evening of How to Web
How to Web, based in Bucharest, is among the most famous digital commercial conferences in Southeast Europe. The organizers have also brought together more than 20 nights of demonstration whose main aim is to connect the technological founders starting with investors, supporting the development of startup communities in Romania and Bulgaria.
Since the beginning of March, these events have transformed into online pitching sessions and the last a few weeks ago has seen four faces of the Bulgarian startup ecosystem. In the end, the jury * voted for Tokwise to obtain the best starting price. In addition to the references to the main programs of corporate startups, accelerators and investors, as a winner, Tokwise will also receive a free stand during the How to Web conference and a Wild Card for the Startup Startup competition.
* The jury presented:
- Raya Yunakova, investor at Launchub Ventures
- Catalin Lupoaie, Senior Director of Public Affairs at BCR
- Yoanna Genova, Digital Banking & Innovation Manager at RaiffeisenBank Bulgaria
- Jaco Fok, head of innovation at OMV Petrom
- Irina Obushtarova, Tending Topic Directorial Partner See
- Daniel Tomov, founding partner of Eleven Ventures
- Dan Calugareanu, partner at the start of game
- Malin Stefanescu, president of Techangels Roumania
- Wiliam Bognar, product manager at Uipath
After the end of the locations, Rumen Iliev, partner of Launchub Ventures and Bogomil Balkansky, partner of Sequoia Capital also discussed new potential opportunities for innovation beyond coronacrisis. You can watch the whole session here