Optimising energy storage assets for a more flexible grid

**Pamela Largue** (0:11)
Batteries are becoming one of the most important technologies, enabling a cleaner, more flexible electricity grid. But building battery energy storage systems is only part of the equation. The real challenge lies in using these assets intelligently, maximizing their value while supporting grid stability in increasingly complex and fast-moving electricity markets. In this episode of the Energy Transitions Podcast, we're exploring the rapidly evolving world of battery storage optimization and the growing role of AI in energy trading. To unpack this in more detail, I'm joined by Henri Taskinen, CEO and co-founder of Capalo AI.
Henri brings a unique perspective to one of the energy sector's most exciting intersections, where digital intelligence meets the clean energy transition. He explains how sophisticated algorithms determine when batteries should charge, discharge or provide grid services, and why intelligent optimization can make or break the business case for energy storage investments. We also discuss the importance of protecting battery lifetime while maximizing revenue, and how AI is transforming decision making in real time. I'm Pamela Largue, and this is the Energy Transitions Podcast.
Henri, thank you so much for joining me today. It's a pleasure to be talking with you about quite a complex topic, and that is battery energy storage optimization and the trading of storage assets. So I think before we delve into the discussion, for those listeners who might not be familiar with the topic, can you explain what a battery asset trader actually does?

**Henri Taskinen** (1:59)
First of all, thank you for the opportunity to be here. What does battery storage system trader optimizer do? Before answering that question, I think that we have to go back a bit. So why are batteries needed for the green energy transition? And why is the build out so rapid right now? And how do batteries benefit the grid and earn from it at the same time as well? So because we are building so much wind power and solar power, so clean energy, which is a great thing, there is also a challenge that emerges. And the challenge is that it's weather dependent production, intermittent production. So when the sun is shining and the wind is blowing, there is a lot of production. And when not, of course, then the production drops and it can drop quite drastically.
And how the electricity system works, how the grid works, is the way that at every moment of time, production and consumption have to be balanced. And if the balance deviates too much, then grid frequency deviates and then electricity devices stop working. So that's why it's crucial that there is always this balance between production and consumption in the grid.
And now, because there is more and more renewable energy, the challenge is that the production side is more and more volatile because of the movements of the weather and changes in the patterns there.
So you need some energy assets that are flexible. And what the flexibility means is that they can increase production, decrease production, increase consumption, to keep the balance at every month of every time and to deliver this crucial service for the system operators, so transmissive operators and the wider society.
And now batteries have emerged as the most cost-effective and multifunctional tool for this grid balancing, for this flexibility for the system. So batteries, of course, can start charging or discharging almost immediately. So provide this fast dispatch or then deliver this power for longer duration of the time, depending on the duration of the storage and the state of charge.
And now, because batteries are so multifunctional, they can be utilized across a variety of grid balancing services for the system operator, and they can also participate in energy trading. So buying energy when there is excess of it, so the prices are low, and then selling it, storing it first, and then selling it back to the grid when the grid needs it. So there is a deficit of it and the prices are higher.
So batteries can do this energy trading, but also participate in these grid balancing services. And now what an optimizer does and a trader does, so what we do is to decide fully automatically how to utilize these batteries across these services to maximize the benefit for the system and value for the battery owner. Because all of these services pay different prices at different moments of time, so we need to use and choose how to use the battery across these services to maximize the net revenues for the battery owner. And at the same time, what it means to supply the battery power capacity and energy to the service or to the market that needed it the most. Because it's always supply and demand in these markets. And if the price is the highest, then the difference between supply of power in that market, for example, and the demand was highest as well. So the benefit for the grid is that it's the best when we use the batteries in the markets that pay the owner the most. And now our role is to choose this every month of every day, take into account the battery's physical characteristics. So the power rating, energy duration, warranty terms. So how much can we run the battery every day?