Hygge Energy, pronounced as ‘Hoo-gah Energy’, is a blockchain energy start-up that aims to change electricity generation and distribution. In a conversation with EFY’s Sharad Bhowmick, the founder and CEO of Hygge Energy, Prateek Saxena emphasized the importance of local generation and absorption of clean energy to boost the EV charging infrastructure in developing countries. Here are some excerpts from the interview…
Q. What does Hygge Energy intend to do?
A. Hygge Energy is about local generation and local absorption of clean energy, which finally creates a net zero community. There are 2 billion people with no access to electricity and another 2 billion, who do not have access to reliable electricity. At Hygge Energy, we’d like to relieve the world from energy poverty by providing solutions to the geographies with no electricity. Our main patent and software are about tracking renewable generation.
Q. Can you briefly describe your main technology?
A. We track renewable energy generation. As carbon credits are not only a function of renewable generation, but also of consumption, Hygge’s patented software tracks both the parameters within a community (where Hygge’s platform is available) in each instance, i.e., the data is recorded for each millisecond.
For example, I’m in Canada, and if I push my renewable generation into the grid, where more than 80% of the energy is generated from a clean source, mainly from nuclear and hydropower and if it is clean then it is carbon-free. Similarly in Germany or other countries which are not powered by coal or oil, there is no point in supplying the generated energy back to the grid, because in that case, I am not generating any carbon credits.
So it is essential for me to have a system to identify where this one unit of renewable generation at that particular instance is going. So, we have this simple AI which identifies the most carbon-intensive application (within the community) and allocates that unit of renewable generation to that application, because electricity will always flow the way it flows, i.e. from high potential to low potential. So, it is just a matter of accounting, tracking and allocating.
The artificial intelligence algorithms developed by the company decide when to charge a battery or when to utilise the energy stored in the battery and how to record the data. The artificial intelligence and the usage of blockchain nodes embedded within the Hygge Box is an innovative way to reduce energy consumption and maximise profit for the users.
Q. What is the need for blockchain in your solution?
A. Blockchain is a trusted way where we know that there is a trusted buyer, there is a trusted seller, without revealing their identity and the transactions happen. It is required because there is a financial transaction happening between the seller and buyer, which is again on a millisecond by the millisecond and is based on the data which is being captured. So, by having blockchain nodes embedded in the box, those financial transactions take place in a secure manner.
But blockchain technology is considered a very energy-intensive technology. Hence, we went for a pattern which is unique and low energy intensive than blockchain technology. We embedded it in the Hygge box, which is an IoT box, and not on the cloud. We are probably one of the first few start-ups capable of doing it.
Q. Please explain the working of the Hygge box.
A. The hygge box is like a small computer where the AI and the algorithms are all embedded in it, along with the blockchain nodes.
For example, a Hygge box resides on the petrol pump and measures the power at the inverter, i.e. how much solar is being generated every second. The Hygge boxes are also connected to the consumption side at the loads and measure the energy consumption of different applications such as the lights, motor of the fuel pumps, office air conditioners etc. Now, there is a new load which is EV charging. So, it measures how much energy is being consumed by which load and if the battery pack is recharging.
So, the Hygge box is a proprietary technology developed by us, that precisely measures the utilization of energy and computes the carbon credits. This whole new data collection is all local and that’s the beauty of our solution. We do not push it into the cloud for processing at every second, which is an expensive, power-intensive and unreliable process. So, in our architecture, everything is very local as it is all done on the Hygge boxes.
Q. What happens in areas with frequent internet shutdowns?
A. It actually makes our system more reliable. After the ledger accounting, tokens get transferred. If a driver comes in at an IOCL pump to charge her EV and there is no internet connectivity at that point in time, they can still pay and charge their vehicle because the points or the EV charging tokens (and I’m not talking about crypto) on our app can be transferred for EV charging operations. And it is done by tapping your cell phone on the Hygge box. So, the tokens are transferred from your cell phone to the Hygge box. And it gets accumulated at the EV station.
Q. EV chargers require a large amount of power. Can the existing grid and transmission system support the growing energy demand?
A. A fast DC level 1 EV charger requires about 15 kilowatts of energy, whereas level 2 DC chargers require more than 30kW. Currently, most of the petrol pumps in India are fed by 5 kilowatts to 10 kilowatts of distribution transformers. So, the grid is not robust.
If you’re putting an additional load of 15 kilowatts into a petrol pump station, you have to upgrade your transformer to at least 50 kilowatts to cater to the load. Now, you not only have to upgrade the distribution transformer but also have to look if the neighbourhood is upgrading any other load.
If multiple new loads have emerged, then you have to even change your service station capacity and it’s not an easy problem to solve. And therefore, it would take a lot of time and money to upgrade the grid for recharging purposes.
Q. Please elaborate upon your current projects in India.
A. In India, the Hygge platform is being used by Indian Oil Corporation Ltd. (IOCL). They are using solar rooftops on their petrol pumps to power electric vehicles (EVs). Interestingly, the petrol pump load can be solely met by solar up to 80% of the time, including at night, which requires additional lighting. So, we have added battery packs that stores energy generated during the daytime.
We analyzed the energy consumption for the last 12-18 months and fed the data into our simulator. After calculating the size of the battery and the solar panels, we found that over 80% of the petrol pump energy requirements were met by that setup.
Q. Any thoughts on the current state of clean energy penetration, especially, solar?
A. Contrary to the general belief, nowhere in the world is solar penetration more than 10%. Even in California, which is considered a ‘Sunshine State’, the solar penetration is just 4%. Italy has achieved the highest in the world, which is a little less than 10%.
India is lagging in rooftop solar in their targets by almost 80%. A serious problem exists and so, it is very important for all of us to pay attention.
Q. What according to you is the problem, then?
A. The problem is not about technology or the knowledge of its benefits. The problems are multifold.
The first is with the basic business model. We have noticed that the current model is monopolistic, where no one else but only the state electricity board along with one or two corporates are supplying electricity. So, for a rooftop solar owner, it’s not a very rewarding condition. The utilities get hit because of rooftop solar.
The second problem is for the rooftop solar owner because if they are not home or not using the business, so, for example, there are many schools that have installed solar but during the summer time they are not operating so they are not consuming their own solar generation. So, the solar which is being generated is not fully consumed or accounted for.
The third problem is that solar energy is generated as a low DC voltage, which is stored in low-voltage battery packs. So, if it needs to be transported or shipped from one part of the country to the other part of the country it needs to be done on a high-voltage grid. Therefore, the low-voltage DC needs to be stepped up to a higher voltage and converted to AC power, which is expensive and requires new infrastructure.
Q. Please shed some light on your business model.
A. First of all, we believe that the biggest cost—the battery—should be owned by the utility. So, if a consumer wants to install a rooftop solar, they don’t have to buy an individual battery with the inverter. The utility company would install a battery within a community and these batteries can be as large as a trailer’s size. By using those batteries, utilities will be able to build non-solar customers at a traditional price, without losing out on the revenue which is happening because of the installation of solar.
Secondly, we make sure that they are able to install batteries and get a way to recover that cost through our platform. It is because now, they are getting paid for a renewable generation as they are redistributing it. So, it also helps them to create resiliency within the community. The Texas power crisis of 2021 is a classic example where there was no electricity for almost two weeks. If they had batteries like what we are proposing, it would have created resilience for some period.
Q. Do you think your tech is capable of accommodating future EV charging demands?
A. In our design, just by putting the battery, there was no need to upgrade the transformer. It can provide system reliability. By catering through a solar rooftop, we avoided upgrading the distribution transformer for our client by ensuring that 80% of the petrol pump load is met. Moreover, the bill for the petrol pump went down from Rs 20,000 to around Rs 3500. And this year, there was enough power to power electric cars for up to eight hours.
Q. What has been the response to the net metering program in India so far?
A. In India, there are very few states which have got net metering and customers are very reluctant to apply for net metering because there are a few benefits to it.
For example, in a net metering program, utilities are buying energy at a wholesale price while they are selling you at a retail price. So if the wholesale price is Rs 3.5, whereas, the billing customer gets electricity at Rs 11-16, there is no net benefit of the solar rooftop net metering program.
Q. What challenges did you face working in the Indian solar industry?
A. In our projects within IOCL, it was observed that the utility will not let us sell more than 80% of the solar generated, which stalled our returns. It was more economical to book the battery and pump it back to the petrol pump and reduce the load. That was a better return on investment than investing or enrolling on a net metering program.
Q. How have been the reviews for the tokenized payment and advance booking facilities?
A. The tokenized payment system is your payment gateway that may or may not work because you want tokens in your wallet, which can be exclusively used for recharging purposes.
The advance booking of EV chargers sounds very simple, but it’s a huge problem, especially in the context of India. Do you remember when India launched CNG filling, there were long lines for filling CNG by taxi drivers? But with our Hygge box, every driver can book and recharge at their desired time.
The hygge box is a plug-and-play device, it’s like a router built with protocols which communicate not only with the inverters and batteries but also with the EV chargers on a standard protocol. By doing that, it connects to our app and facilitates advance booking.
Q. In such a ‘connected-network’ scenario, what are your plans to mitigate the impending cybersecurity issues?
A. Although cybersecurity is a major problem in any connected system, having blockchain as one of the technologies for our platform, we don’t foresee big security challenges.
But again, like any other technology, it needs to be tried and tested. I don’t think that blockchain has got that exposure, being a relatively new technology. But yes, we’d experience and learn more about that as we go along.
Q. Hygge Energy is a software-centric company, but what about the hardware? Do you design and manufacture or procure the hardware?
A. All the computation is done in the Hygge box, which resides on the generation side and on the consumption side. And it records the data of generation and consumption for each millisecond, and it matches on the platform. Since this kind of hardware is currently not available in the market, we built it for ourselves.
Q. Can we say that Hygge Energy is a microgrid as a service (MAAS) platform?
A. That’s our long-term vision. I’d defer by saying that we are a purely software-hardware combo platform, but we are not asset-based. So, we are the Ubers, the Olas, or the Swiggys of this domain, and we are making this happen on a software platform.
Our main customers are not solar rooftop owners, but utilities. We promote solar community programs as utility programs. We are more of a B2B company than a B2C company.
Q. What’s the next big leap for Hygge Energy?
A. For the next five years, we will be very geography-focused as we are promoting our solution based on the need of a particular geography.
For example, in India, we promote only solar-based EV charging solutions. And now, we are scaling it to almost five lakh EV charging locations in India. But in North America, we are focused on community-based net metering. Here, we can promote solar to a community of 50 people and make it net zero. We are anticipating almost 100 communities in the next five years.
In the long term, we want to integrate all the solutions on our platform and become a global aggregator of carbon credits. Today, the carbon credit market is about $ 3 trillion, and it is estimated to grow by almost 25% CAGR. It’s going to be a huge market differentiator for us.
Q. In your opinion, with what skills can a final-year student or an early professional stay relevant in today’s market?
A. One of the crucial differentiators which I find between the Indian and Canadian education systems is peer-to-peer learning. In the West, I learned more from my peers than from my professors. In India, you learn from books, professors and classes, but get very little exposure to practical problems.
So, I would encourage students to not shy away from getting hands-on experience. In school, you will definitely get that engineering knowledge but for the practical experience, you have to push yourself and do things with your own hands.