Virtual power plants

What role will virtual power plants play in this regard?

Fischedick: To integrate renewable sources of energy into the current supply system, we have to tackle several challenges. One of them is managing their expansion more intelligently than we have so far. This applies both to the fuel mix and the geographical distribution of energy. We need to expand and strengthen the grid, and ensure efficient load management. In addition to this, high-performance storage systems are required, as are power-to-x solutions. These make it easier to turn power into more storable forms of energy such as heat, hydrogen, and fuel. With the help of modern information and communication technology, virtual power plants bring the energy system’s individual elements together. They can be decisive in including renewable sources in system services, for instance by making balancing energy available.

What are currently the biggest challenges on the path to a decentralized energy supply?

Fischedick: The energy turnaround and the resulting need to change our energy systems is a complex transformation process, especially in light of today’s central coal-fired and nuclear power plants. Promoting renewable, decentralized sources of energy not only calls for technical solutions that reliably integrate solar and wind power, both of which are heavily weather-dependent. It also involves addressing another decisive topic: the future design of the energy and power market, which needs to ensure a reliable power supply and stable systems. In order to succeed, the energy turnaround must involve tackling infrastructure challenges and improving social acceptance. These two factors are crucial. Ultimately, this is a project that calls for broad participation, and which will take a generation. We can only master the challenges ahead if everyone commits. Clearly, the challenges of the energy turnaround are not only technical in nature.

And yet technical innovations are an important component of the energy turnaround’s success. How well developed are current storage and control systems?

Fischedick: The use of storage power plants is not new to the electricity industry. To name just one example, we have been using pumped-storage plants for decades. However, the operating conditions for these very plants have changed. In the past, the rule of thumb was that electricity prices were high during the day and low at night. This reflected the laws of supply and demand. But as renewable sources of energy are increasingly being fed into the grid, such rigid rules no longer apply. And this is why today’s storage systems must be far more flexible. In light of the energy turnaround continuing work to further to develop storage technologies thus makes sense. This applies to everything from advanced battery concepts and compressed air reservoirs to redox flow batteries, flywheel energy storage, and superconducting coils.

What types of storage systems will be needed in the future?

Fischedick: In the long term, there will be an ever-greater need for systems that can store power for longer periods of time. From today’s point of view, only chemical storage systems come into question. With such systems, power can be stored indirectly in the form of hydrogen, synthetic methane, or synthetic liquid fuels. Even though the basic principles of these “power to gas” and “power to fuel” concepts already exist, a number of development steps must still be taken on the road ahead. Above all, storage costs must be significantly reduced. In addition to this, managing power generation and demand intelligently via load management will be decisive in the future. Virtual power plants are the perfect places to do this. In recent years, there have been a number of demonstration projects that provided valuable insights. Among other things, they demonstrated that by making system services available, virtual power plants could potentially become the cornerstone of a promising and safe energy supply for the future.

What must companies consider to succeed in the market for a decentralized energy supply?

Fischedick: Above all, they must be aware that technical innovations alone are not sufficient. To redesign the energy system, a link must be drawn between technologies and social change. This is needed to develop system innovations. Technologies require the right framework, for instance intelligent service offers and adequate connections to infrastructure. Innovations can only succeed on the market once this framework has been established.

Which political framework conditions are needed to push the expansion of virtual power plants ahead?

Fischedick: In the coming years, the energy and electricity markets need to be overhauled, or rather redesigned. The current system is strongly based on a power generation structure in which large power plants dominate. During the period of transition, ensuring that there is sufficient incentive for the establishment of central system services is important, as this is the only way to maintain a reliable supply. The aim should be to find a solution that is as competitively neutral as possible, one that doesn't favor certain technologies over others. In such a political framework, virtual power plants will find their place.

How is power going to shift in the global energy market as a result of the energy turnaround?

Fischedick: A few large companies still dominate the energy market, but it will become more complex in the future. It is conceivable that models promoting self-sufficiency will become more common, and that new actors with specific service offers will enter the energy market. Thanks to their proximity to customers, public utility companies will one day also have good opportunities to position themselves with customized service offers in the field of renewable sources of energy and energy efficiency. Overall, the market of the future will be more service-oriented, and not nearly as driven by the simple selling of kilowatt-hours of power or cubic meters of gas.

(Interview with Prof. Dr. Manfred Fischedick in October 2014)