Germany Invests Heavily In Alternative Energy Production

This year’s closing ceremony of the innovative event series New York Energy Week ended on a high note. It featured a familiar topic in energy circles: Utilities’ shifting role in the power generation market.

Peter Molengraaf, CEO of Alliander – a Dutch distribution grid operator – wasted no time and cut right to the point with the following unequivocal statement: “Life for utilities will never be the same!” He added that customers – a major force to watch in the future – have decided to become a “utility on their own” and therefore not only make, but need more choices. At first glance, his list of challenges for utilities is unsurprising:

1. Reliability and Resilience

2. Integration of Renewables

3. Facilitation of Electric Vehicles and Smart City Initiatives

However, it got interesting fast when Mr. Molengraaf explained to the large audience that “in Europe integrating renewables does not stop at 100 per cent capacity, which is in stark contrast to fossil-fuel power generation.” “In many regions in the Netherlands and Germany renewables account for 200 to 300 per cent of typical demand,” he added. Consequently, demand response will not help anymore, which means that – according to Mr. Molengraaf – “either you switch off [the renewable overcapacity] or you find additional transmission capacity or you find new demand.” The latter basically refers to changing production times at energy-intensive manufacturing facilities. So, obviously this makes very clear that the solution cannot be to add more transformers to the grid.

Instead, the energy system of the future will have to deal with “different rules and a different reality.” Mr. Molengraaf argues here for – and that applies especially for distribution grid operators like Alliander – an “Integrated Supply Chain” with accompanying general transparency. Note, the new reality now also includes an increasing number of power customers on the supply side. “We need to open up in many ways [ranging from] new thermostats, working with customers, new energy market models, and demand response to grid companies sharing data,” he reasons.

His last point about sharing data via, for example, sensors deployed across the distribution system on energy flows, outages and voltages is critical because this – according to Mr. Molengraaf – will lead to sorely needed “new societal solutions”. Once these data points are out in the open and thus open to public scrutiny, this would ultimately “stimulate creativity in order to help find new technology solutions,” Mr. Molengraaf stressed.

These are interesting ideas, especially Mr. Molengraaf’s elaboration on transparency and data sharing in order to spur technological innovation in the power generation space. However, many incumbent traditional utilities will likely need much more persuasion in this regard because they view those data sets as proprietary information with significant implications for the fight for power customers in an increasingly competitive – and arguably even government-distorted – market.

The following graphic shows Honeywell’s Micro Grid Concept – integrating local supply in a smart way. This concept may become an integral part of smart city initiatives in general. As Mr. Molengraaf himself noted, it is the continuous population shift from rural areas to urban centers that will exact the implementation of such concepts in order to ease pressures on critical infrastructure as well as clean water, air and energy.

Honeywell Micro Grid Concept

Honeywell Micro Grid Concept

Source: Honeywell