In the electricity market, production and demand must be in balance at all times. When the balance is upset, a conventional solution has been to compensate electricity production with the help of hydroelectric and thermal power plants. However, the proliferation of variable energy production, such as solar and wind power, is making fluctuations more rapid and commonplace.
Responding to rapid fluctuations requires demand response. This means that large electricity consumption loads must react to disturbances in the grid in real time. Virta charging platform connects charging stations into one demand response reserve that participates in Fingrid’s national frequency containment reserve market. Furthermore, using bidirectional charging technology, the battery capacity of electric cars may be aggregated into the power grid to compensate for production shortfalls without power plant projects that are slow and require massive investments.
“Participation in demand response was already one of our key visions when the company was founded. We want to integrate electric cars into the energy system. The number of charging points and electric cars connected to our platform has now reached a level that makes it possible to implement the plan so that it begins to have a real impact,” says Elias Pöyry, Virta Co-Founder and Chief Business Development Officer.
Established in 2013, Virta mission is to contribute to a profitable and rapid transition to sustainable mobility and a sustainable energy system. The company’s current goal is to be the leading service platform that combines electric transport and energy systems in Europe and Southeast Asia.
Business Finland has been involved in Virta journey since its beginning. As the company has grown, its projects have also grown. Business Finland financed the virtual power plant project with EUR 20 million, and this contribution helped Virta to raise EUR 65 million in capital investments from its current investors in the spring of 2023.
“As a growth company, we have to wait for the right moment, but it is always crucial to start concrete work before there is demand in the market. This is exactly what Business Finland’s funding made possible in this case. We would be late if we only started when the market already exists,” Pöyry says.
While the operating model was outlined ten years ago, thanks to Business Finland’s funding, Virta was now able to pilot it on an international scale. The service platform developed by the company has been successful in the Finnish pilot market, and the company has already launched several international pilots and is about to launch more.
“One recent proof that the method really works was gotten when Olkiluoto 3 went offline in Finland. Our solution, which had aggregated more than 10,000 chargers in the country, provided crucial automatic flexibility during the first few seconds and contributed to preventing a more severe disturbance in the power grid. The more renewable energy is used, the greater the need for such flexibility in the energy market,” Pöyry says.
About ten years ago, Tekes, the predecessor of Business Finland, had an Electric Vehicles (EVE) program, which opened up the possibility of establishing Virta. EVE helped growth companies by funding them and organizing activities related to internationalization.
“Business Finland’s funding is extremely important for the management of a growth company. It enables advancing the management’s vision and developing a business idea further than would be possible without it. This promotes the building of a sustainable competitive advantage,” says Pöyry.
Virta has the courage to think big and implement its vision.
“Virta project concerning demand response and an internationally scalable virtual power plant is the fifth in which Business Finland has been involved. Working with Virta is rewarding because it has invested heavily in product development and international growth from the beginning. Business Finland can support both with its services,” says Business Finland’s Account Lead Jari Seilonen.
Business Finland considers it positive that Virta has the courage to think big and implement its vision. The service platform developed by Virta also supports Business Finland’s thinking, as the electrification of mobility promotes sustainable development.
“They have the ability to take risks and invest in the realization of their growth vision. The company has done well in international competition, and the Financial Times has already included it four times in its annual list of the 1,000 fastest growing European companies,” Seilonen says with pride.
In ten years, Virta has progressed to the phase of rapid growth, and according to Seilonen, this is very important in the company’s line of business.
“The platform economy is a challenging environment because only a few players that grow large fast enough typically make it in the competition. Virta must also grow extremely quickly, since at some point businesses in the sector will start consolidating. Hopefully, at this point, Virta will be able to acquire smaller operators,” Seilonen explains.
The common journey of Business Finland and Virta has been long, but the joint projects still feel fresh and exciting.
“Cooperation with Business Finland is going really well. I must raise my hat to them! When we presented our latest project to Business Finland’s experts, they saw its global potential and understood how fast the market moves. The time between the submission of our application and the decision was amazingly short. Their expertise is simply excellent, and they have the ability to understand a growth company’s playing field, which deserves separate praise,” Pöyry says.
According to Pöyry, the importance of Business Finland for growth companies extends significantly beyond the funding itself.
“I would like to stress that Business Finland’s impact on the Finnish growth company field is greater than the financial impact alone. They help in making your ideas clearer and stronger because you must develop them through projects. Both Business Finland and the Team Finland network are of great help in international circles: they open doors that otherwise would not open easily to growth companies in new markets,” Pöyry says.
Foto: Ville Vappula
The decision taken at the COP28 meeting in late 2023 to move away from fossil fuels further underlines the inevitability of a future with electric vehicles. To realize the electrification of cars within the desired schedule, the world will need up to a ten times larger smart, grid-connected charging infrastructure by 2030. The fast growth rate also poses a challenge to the development of battery technology and the increase of carbon-neutral electricity production.
“No one knows what the future will bring. One thing is certain, though: battery technology will evolve constantly. Innovations emerge in locations where they are funded the most. Of course, not all innovations will be commercialized, but the battery technologies currently being studied use different materials,” Pöyry says.
Business Finland aims to accelerate the emergence of new battery solutions and is thus preparing for the future of electric motoring.
“We have launched a program related to batteries. The goal is to develop the Finnish ecosystem so that batteries could be manufactured here. In the coming years, we plan to invest in the circular economy, and this will be one of the themes of the battery program, too. We believe in the development of batteries and the Finnish battery expertise,” Seilonen says.
We can see that less-motorized countries are shifting directly to electric cars.
Pöyry points out that electric cars are technically very simple compared to combustion engine cars.
“Roughly speaking, manufacturing an electric car is like manufacturing a vacuum cleaner but connected to the digital world. If we compare the prices of a vacuum cleaner and a combustion engine car, the difference is clear. We can see that less-motorized countries are shifting directly to electric cars. They are cheaper, especially when you can use lots of inexpensive renewable energy all year round,” Pöyry says.
Throughout history, major changes in motoring have aroused strong emotions in people. Electric cars are a hotly debated topic in both the traditional media and on social media, in which every car owner seems to be an expert on the topic. According to Pöyry, progress in different countries only follows different schedules.
“During our ten years of operation, we have seen the same pattern of electric car adoption in several countries: at first, electric cars become available, and after this, the denialists voice their opinion. Every country believes no one has thought about the challenges related to the change before. Self-appointed engineers soon arrive with their solution proposals, and finally, committees and politicians sit down to think about how to solve the problems. In the end, however, everything will resolve itself, as the number of cars increases and the market takes care of the problems,” Pöyry says with a smile.