Leading Voices

The future of the energy system in Germany

Interview with Michael Weinhold, CTO Energy Management, Siemens AG

How is the future energy world shaping up, in your opinion?

Electrical energy will play the key role in our future sustainable energy world. Only electrical energy systems allow the direct and highly efficient integration of large- and small-scale renewables and efficient transmission and distribution to end-users – and it also improves the efficiency of infrastructures like mobility and heating and cooling. This development is accelerating due to the massive cost-out of wind and photovoltaic power plants in recent years. At the same time, automation and digitalization technologies have the capacity to manage the growing system complexity. IoT operating systems – for example, Siemens Mindsphere – are already being used to achieve an overarching optimization of system infrastructures.- system Examples include the coordination of variable renewable in-feed with dispatchable loads in industry, and emerging charging infrastructures. In this context, artificial intelligence is of growing importance in conventional and renewable power plant control as well as grid planning, control, and market integration. The future energy system will also see the production of hydrogen, chemicals like ammonia, and synthetic fuels like methanol from renewable energies. Here again, the diminishing cost of wind and photovoltaic electricity production are a key driver, in combination with PEM electrolyzer technology. Synthetic fuels enable the decarbonization of infrastructures like aircraft, trains, and long-haul trucks that can only be partially powered by electrochemical batteries.

Please share with us the challenges that utilities are facing today in Germany.

Germany already has an installed fleet of about 110 GW of renewable energy, primarily wind and photovoltaic power plants. The potential for hydro, geothermal, and biomass power production is limited due to geographical and space constraints. Because the majority of wind power plants are in the northern part of Germany, DC interconnectors will be built in the coming years to bring this energy to load centers in central and southern Germany. A huge re-dispatching cost on the order of already about €1 billion per year is the result of the insufficiency of the existing electrical grid transmission capacity and the need to power down renewable power plants. The need for these interconnectors will become more urgent as we approach 2022 and the complete shut-down of nuclear plants. In 2017, renewable energies accounted on an annual basis for more than 36 percent of electrical energy consumption. On some days, renewable load coverage exceeded more than 80 percent for several hours. As a result, the conventional power plant fleet is running for fewer and fewer full-load operating hours, and due to the variable renewable power supply the conventional power plants need to be operated in a highly flexible manner. The electricity system is regarded a key enabler for decarbonization of other sectors, including the mobility and heating sectors. The distribution grids are therefore being transformed into smart distribution grids by deploying solutions like sensor technologies, energy storage, and smart meters. Beyond the grid’s edge on residential, commercial, and industrial sites, more and more distributed generation solutions like combined heat and power generation (CHP), photovoltaics, and thermal and battery storage technologies are being deployed. This also results in increased efficiency and flexibility on the load side. As a result of these developments, many technical innovations are being installed by power plant and grid utilities, and there’s also a lot of business model innovation taking place, including virtual power plants and virtual storage offerings for end-customers.

What is your vision for the future of the energy system in Germany?

The future energy system will see significantly more wind and photovoltaic power plants and electricity usage: for example, for e-mobility. HVDC interconnectors will transmit energy to the load centers, and active grid elements like FACTS controllers will ensure system stability. There will be more sector couplings from electricity into gas, chemicals, and synthetic fuels. IoT operating systems will enable efficient and secure energy system management, and they will also allow end users to become active market participants with the rise of distributed power generation and storage facilities. Conventional power plants, especially gas-fired plants, will still be needed to manage periods (days and weeks) of no significant renewable intake. In this context, an energy exchange with neighboring countries will become more important, and we may even see the emergence of a European or even Europe-Asia or Europe-Africa Supergrid to achieve trans-continental system efficiencies.

Empowering electricity, water, and food security

Electrical energy is the key enabler for achieving sustainability in other sectors as well: for example, microgrids in rural areas to enable more efficient farming, water supply, and healthcare.

Harmonizing the regulatory framework for utilities

Regulatory frameworks set the boundary conditions for today’s investments – but they must also allow space/provide incentives for deploying innovations: for example, in the field of energy storage and sector coupling.

Racing with technologies

Innovation is happening globally, and the most successful companies are leveraging this collective of internal and external intelligence and creativity. The Internet is a huge enabler of this co-creation. As a result, innovation speed is accelerating every day.

Impact of environmental regulation on utilities

This offers numerous new business opportunities.

Convergence of utility businesses

This is leading to countless new business opportunities, because the utility of the future will be much more than a commodity provider. Utilities are already helping their customers manage their own energy systems more efficiently. In addition, we’re already seeing partnerships of utilities with mobility providers: for example, to offer increased convenience and comfort for the end consumer.

Transportation electrification, storage, and renewable energy integration nexus

Renewable energies will provide electricity directly to transportation systems: for example, via overhead lines and also indirectly with batteries, hydrogen, and synthetic fuels. This makes renewables and the electricity grid the key enablers for creating sustainable transportation systems.

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