Climate politics, grid expansion and smart cities

While contractors are busy building the stands in the Essen exhibition halls, next door in Hotel Atlantic, grid expansion, smart cities and climate protection are on the agenda. This is where decision-makers from the energy sector have come together one day before E-world opens its doors – in anticipation, so to speak. Every year, the Energy Leadership Meeting brings together the boards of directors of major energy suppliers and network operators, representatives of associations, politicians, scientists and officials of regulatory authorities. This time around, the following issues were discussed in great detail.

Grid Expansion

Peter Franke, Vice President of the German Federal Network Agency delivered a keynote speech on this topic. Franke also referred to the current state of affairs, given that the transmission system operators had also published an up-to-date draft of the grid expansion plan, on that same day, which stipulated that two additional north-south power highways were required. First, however, he addressed the changes to the framework conditions for the energy transition.

Whilst climate targets call for an accelerated expansion of renewable energy plants (RE plants) and an increased expansion of the grid, acceptance for the expansion of renewables and expansion of the grid is decreasing. In addition, the Federal Network Agency is holding back on tender processes for renewable energy plants. “A tender for onshore wind power had, in fact, already been signed,” Franke explained. This creates additional urgency while at the same time adding stumbling blocks for certain projects. “All in all, these are trying baseline conditions,” said the Vice President of the Federal Network Agency.

A two-pronged approach is intended to secure the increasing transport of electricity. On the one hand, existing networks are to be optimised, and on the other, network expansion is to be accelerated. Instruments for optimising networks, such as overhead line monitoring or high-temperature conductor lines, have already been incorporated into network planning, according to Franke. Other optimisation devices are yet to be reviewed. In relation to which Franke says, “ys much grid expansion as necessary, but as little as possible.”

In the ensuing discussion, however, the focus was less on transmission networks and more on distribution networks. “Distribution networks need considerable investments” explained Joachim Schneider, innogy’s Chief Technology & Operations Officer. For example, sector coupling, e-mobility and renewable energy installations would have to be integrated into the system. Urban Keussen, member of EWE AG’s Board of Management, also sees gaping investment holes when it comes to distribution networks. Yet until now there has been a lack of incentives to turn to smart solutions. Where possible, we should be looking to “intelligence instead of copper”.

Smart Cities

Before Ralf Christian, CEO of Siemens AG’s Energy Management Division, addressed the energy consumption of cities, he spoke about the electrification of other sectors. “Sector coupling will be the big issue of the future,” Christian declared. And the potential is said to be immense. Just one example: In order to electrify all traffic in Germany, electricity production would only have to be increased by 20 percent. In the heating sector, also, heat pumps in homes and CHP generation for larger units could significantly reduce greenhouse gas emissions.

According to Christian, energy is primarily consumed in cities – their share of global electricity consumption is around 75 percent. And according to forecasts, demand is set to increase significantly: By 2030, 125 million electric cars could hit the road across the globe and sales of electric buses could rise to over 80 percent. The advantage: “Electricity is efficient and versatile”, explains the CEO. The fundamental technology for sector coupling is already available, but there is a need for automation and network creation.

Different energy sectors are increasingly being interconnected with one another. From central power generation and a unidirectional grid to a remote and distributed energy system, says Christian. Different technical developments are important for the creation of a ‘smart city’: intelligent power grids, remote energy generation and improved energy efficiency through data analysis using cloud computing. “Millions of sensors and intelligent devices” are to make the cities of the future smart.

Climate Protection

The recommendations of the German Growth, Structural Change and Employment Commission to phase out coal by 2038 were naturally also discussed at the Energy Leadership Meeting. In his keyote speech, Thorsten Herdan, Head of Energy Policy at the Federal Ministry of Economics and Technology, explained that there was “a great deal of political drive” to address the proposals. The Commission had sent a clear mandate to the federal government to “wrap it up” by 2038.

This consequently means that from the target year onwards electricity demand is to be covered entirely by renewables, gas and electricity imports. “We must now create the required framework conditions,” Herdan explained. It is important to “put our heads together” for the future expansion of the electricity and gas infrastructure grid. The Commission’s proposal to reform taxes and charges on electricity must be taken seriously. “It is clear that we will not be able to progress with the high levies on sector coupling as they are now,” Herdan stressed.

The concluding panel discussion ‘On the road to climate protection law – opportunities and challenges’ also dealt with the recommendations of the Growth, Structural Change and Employment Commission.

RWE CEO Rolf Martin Schmitz, Stefan Kapferer, Chairman of the BDEW Executive Board, Jörg Rothermel, Managing Director Energy-intensive Industries Germany, Manfred Fischedick, Vice President of the Wuppertal Institute for Climate, Environment and Energy and Oliver Krischer, Vice Chairman of the Green Parliamentary Group took part.

One by one, the participants praised the work of the Growth, Structural Change and Employment Commission, which brought together various stakeholders and had come to a consesus. Green deputy parliamentary group leader Krischer, for example, emphasised the Commission’s “ability to come to an agreement”, which sets Germany’s procedures apart from political processes elsewhere in Europe. Rolf Martin Schmitz stressed that the federal government should now seek out the companies concerned without delay in order to shape the phase-out of coal, thereby ensuring planning security. Not only in light of the fact that changes to operating licences are set to take several years. The concern is first and foremost dedicated to the employees, for whom so much is at stake, but also the economy, which is dependent on a secure and affordable energy supply.

Nevertheless, the participants in the discussion found the recommendation to phase out coal-fired power generation by 2038 to be a major challenge. The Vice President of the Wuppertal institute Fischedick spoke of a “Herculean task”, whilst Kapferer called the plans to also phase out coal-fired power generation following the foreseeable end of nuclear power “undisputedly ambitious”. His assessment of a supposed end date: “An expedited deadline, given the current situation, seems unrealistic to me.” The issue of acceptance, the grinding expansion of the grid and the implementation of the plans are, in fact, the real challenges.