Flexibility services expected to grow

— Right now, there’s a lot of talk about flexibility services, explains Stefan Sonnerstedt, Senior Investment Manager at Fortum Innovation & Venturing.

Fortum well-advanced

Fortum’s innovation activities are in well-advanced. Energy storage, digital energy solutions, and hydrogen are some of the areas of interest. Investing in start-ups is one way to stay ahead, but it also involves fund investments and joint venture projects. So far, Fortum has invested in six start-ups, and the goal is to double that number.

— There are many interesting energy-related startups in the Nordics. Fortum’s latest addition was Swedish Fifty Energy AB, a company with a strong position in flexibility services—an area we see growing in the future. Together with Fifty Energy, we can now offer our B2B customers more efficient electricity use and reduced energy costs through smart control based on price and capacity,” says Stefan Sonnerstedt.

Investments in startups and funds are part of Fortum’s innovation strategy, but also complement the core business’ own development work. Fortum’s investments are long-term—at least five to six years—and Fortum always strives to initially own at least 10 percent and have a seat on the board.

— Returns from the startup portfolio are, of course, important, but strategic relevance is even more crucial. We only invest in companies where we can contribute something beyond just capital,” Sonnerstedt emphasizes.

What trends and needs do you see ahead? 

Electrification is a major shift affecting both businesses and private customers—not least because electricity availability and prices will continue to fluctuate.

— The need for services that help customers turn these variations into savings through smart control will definitely increase. Therefore, anything that supports more optimized energy usage—such as storage, smart control, and optimization—will be of interest,” he explains.

This also opens the door to new business models like Energy as a Service, where energy is no longer seen as a commodity purchased per kilowatt-hour but as a service where the provider manages several parts of the customer’s energy system.

— It’s important to understand which needs will be significant going forward, but at the same time, it’s important to remember that changing consumer behavior takes time,” Sonnerstedt concludes.