In this podcast with Dr Ole Langniß of Fichtner GmbH, an Engineering and Consulting Firm based in Germany, we talk about the various challenges that renewable integration faces and key aspects that must be addressed in order to fully realize the potential of a clean grid.
Dr Langniß suggests that the current grid needs to be remodeled in order to support the increase in prosumers and bidirectional power and data streams. He explains that a great deal must change to ensure grid stability. Data and physical infrastructure must adapt to the changing transfer of power streams.
In Germany’s case, there has been a significant increase in renewable energy being introduced to the grid. In order not to waste this excess, Dr Langniß suggests that energy generation be distributed close to the source to avoid the erection of new transmission lines and the consequent loss in power during long distance transmission.
The excess in energy is also an opportunity for Europe to share its intermittent renewable resources. This has occurred in the past where France and Germany shared renewable energy but it was a “random” decision whereas a systemic dispersion of energy across the EU should rather be considered. He says that cross-border trading should prove to be more effective in realizing the potential of renewable energy.
Spot the issues
Dr Langniß points out that renewables in Germany were originally placed on a spot market following a “needs-must” strategy but spot pricing is no longer ideal due to the current high influx of renewables. He says: “Germany is now at a tipping point. Everything is now on the table and should be revisited in terms of best price for excess energy.” He points out that excess renewable energy is being sold at a loss and that this must be remedied.
“If everything is joined up correctly, you could be getting a market rate for that energy. We need to have different ways such as the bundling of renewable energy and the creation of virtual power plants.” In this way, consumers have enjoyed the best value and usage of renewable energy. The Spot market should only be a short-term pricing indicator-it should not be used to govern large amts of renewable energy. The problem with renewable energy generally is that it is entirely on the spot market.
The Prosumer - where utilities dare
The utility needs to adopt a more proactive relationship with the prosumer. Many utilities are struggling to view the customer as a potential generator. Dr Langniß suggests that new business models be created. He says: “Utilities are generally unaware of their very unique selling points-for instance, there is a perception that the German utility is still a reliable organization.” He goes on to explain that utilities should include the prosumer in new business models as they do have the expertise and infrastructure to assist prosumers.
Many prosumers are heavily reliable on the main grid for power. Utilities will come across different customers and should adapt biz models accordingly. He suggests that “unbundling” should also be revisited, as well as a market-driven storage market.
We must Adapt
Generation is changing so grid facilities must adapt, explains Dr Langniß.
The energy industry should open up to other potential stakeholders such as real estate developers who create smart grids to encourage a two-way conversation with prosumers and customers.
Dr Langniß ends the interview by saying that new business approaches will end up helping the prosumers to realize the full potential of renewable energy and smart grids.