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Siim Täkker: How to banish the extremely high and volatile energy prices yourself?

energy prices r8 technologies

What would happen if we banished the high energy prices ourselves, as in controlled and curbed them to a significant extent? Such a statement may seem somewhat unrealistic to a bystander, but having been deeply involved in energy efficiency issues in commercial real estate for the past 5 years, I dare say that, at least for commercial real estate, it is anything but utopian. In fact, it is a matter of reducing energy consumption, which has a direct impact on energy costs.

But to begin with, did you know that as much as 18% of the world’s energy is spent on managing commercial real estate? And that 41% of that is spent on heating, cooling and ventilation?

This is an enourmous amount of energy, which, incidentally, in line with the climate neutrality targets set in the European Union, must be reduced by 2030 so that CO2 emissions are reduced by as much as 55% compared to today.

While climate agreements seems to be more of a peacetime topic at the moment, the latest grim war-related developments in the energy market present us with another inevitability today – for the sake of sustainability of day-to-day operations we simply have no choice but to come up with and implement efficient technologies to optimize energy use to the extent that our energy costs will remain on a similar plateau in the future. We must mention here that costs can and should be saved without compromising on our consumption habits or quality. Otherwise, would you be willing to accept that the internal temperature of buildings should be a chilly 16°C in the winter and a stifling 30°C in the summer?

But how to achieve this?

The simplest way to significantly increase efficiency fast, even by more than 30%, is to use artificial intelligence. It is the AI technology that is leading us into a new and significantly more energy-efficient era today. If we add that the scalability of such systems is very good and that the financial threshold for end-users to deploy them is non-existent, it is a win-win situation in the best sense of the word.

For example, in several countries including Estonia, the R8 Digital Operator was established based on AI technology which has given remarkably good results in the field of energy efficiency in several shopping centers, office buildings and hotels. For example, the R8 Digital Operator was able to reduce the energy consumption of one large shopping center in Estonia by as much as 30,000 euros – and all that in just one month!

Why am I writing about this?

Probably now that the volatility of energy prices has reached unprecedented levels and the price of gas and other fuels is rallying, there are many who are vigorously seeking a solution. The situation on the electricity market is illustrated by the graph below which shows the average price in the electricity market by months. If only a year ago the average market price of electricity was approximately 44 EUR/MWh, then since the summer of last year electricity prices have started to increase steadily and now the new market price has become about 150 EUR/MWh – 3.5x higher. However, the price fluctuates significantly over the course of 24 hours, and it would be hugely beneficial to direct consumption to cheaper hours or even to sell unused energy with the help of a virtual power plant.

It is a time of changes, when strong technological innovation based on artificial intelligence is helping to counter the energy price uprising. Only those who take real action now will remain competitive. And the solutions for this already exist, and I am very pleased that Estonia is also world-class in terms of such services.

Siim Täkker
CEO, R8 Technologies

Siim Täkker, CEO R8 Technologies

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