Accelerating the German Energiewende
The German power industry is facing a tremendous challenge, but also an opportunity, namely the decarbonisation of the entire energy sector. The country’s geographic location and meteorological conditions offer ideal conditions for solar power and wind energy, thereby making it possible to cover the country’s entire energy need with the help of renewable energy sources. But structural challenges are preventing the rapid adoption of such technologies – and I will explain how they could be tackled.
Currently, the German energy market remains dominated by energy that is generated from fossil fuels. Why? Firstly, the biggest downside of renewables is that they are generated only when the sun is shining, or the wind is blowing – and that might not be at the same point of time when they are needed. This issue can be solved through large-scale energy storage and a more flexible set-up with CHP plants – just like I have argued before. My colleague Ville Rimali has already elaborated on this issue as well.
Secondly, fossil fuels often have a clear advantage over renewables because of market protocols that place power on wholesale energy markets, making fossil fuel energy widely available to utilities and municipalities. It can be drawn on to meet the demand. This established market advantage needs to be countered with suitable economic arguments.
Thirdly, the transmission system in Germany also has constraints that currently limit utilisation of renewables: Explicitly, renewable energy from wind in the north of the country cannot always make its way to the south because of capacity limitations along the way. This is especially problematic because the energy demand in the south and west of Germany is larger than it is in the north – and it will increase further once traditional coal power plants are shut down entirely in these heavily populated regions. Therefore, I am convinced that Germany’s transmission system is in need of an overhaul that will lead to increased capacity and flexibility.
How to overcome these three obstacles? The answer may appear a little worn, because it is a buzzword that has popped up in any industry sector at this point, really – it’s digitalisation! The increasing digitalisation of power plants, from equipment to software, affects both thermal generation and renewable energy plants. Both will be key elements in the design of future energy systems that support the growth of smart grids and improve the efficiency of electricity generation and the interaction between electricity customers and energy providers. By using efficient technology, energy storage paired with sophisticated energy management software, renewables will be able to be increasingly integrated into the system economically and provide necessary grid stability and flexibility along the way.
How does that work? If an energy storage system, which harbours excess energy from renewables, is connected to a smart auto-bidding software, providers will be able to maximise their profit margins and guarantee that they utilise these energy supplies in the most efficient way – making sure that energy needs are always met but never oversaturated, thereby keeping price volatility at bay. The use of machine learning (ML) and artificial intelligence (AI) add value to all parties. It not only maximises the yield of a particular plant (i.e., the plant owner, operator, etc.), but also lowers overall electricity prices for consumers.
At Wärtsilä we are at the forefront of this digital transformation, reinventing the electricity system by introducing sustainable solutions using cutting-edge technology. Wärtsilä offers the necessary technology solutions in the form of our sophisticated GEMS Digital Energy Platform: a smart software platform that pairs with energy storage to monitor, control and optimise all of the energy assets in a single energy system with unrivalled safety, reliability, and flexibility. The latest addition to the suite is a smart software platform, the GEMS IntelliBidder.
Wärtsilä’s GEMS IntelliBidder financially optimises renewable energy: Utilising AI analytics of historical data and statistical market prognosis the software is able to make propositions for the most financially sound bids. It helps facilitate the energy transition by ensuring that renewables are bid into the market at attractive rates so that they are prioritised over fossil fuels. With the emergence of our GEMS IntelliBidder, the transition to a 100 percent renewable energy system is no longer solely an ethical imperative; it also makes financial sense. Integrating market bidding into the operation of renewable energy and energy storage assets unlocks a part of the electricity market value chain previously unavailable. Automated bidding software enables renewable energy participation in daily energy markets, the largest source of energy demand, and is critical to decarbonising the grid.
Having countered economic issues, the challenge of transmitting large amounts of renewable energy from north to south remains. This, too, can be resolved by using smart energy storage. Endeavours such as the German GridBooster project are providing the right tracks here: The idea is that the electricity grid could be given a boost by large battery storage units. This way larger amounts of energy generated from renewables could be stored in high-capacity batteries that could be placed all throughout the German grid. Then those storage units would be able to discharge energy back into the grid when demands are high enough – managed by intelligent software systems. And they could do so exactly at the local point of the grid where it was needed without the obstacles of time and grid limitations, hence providing more stability for the energy grid and offering sufficient amounts of energy on demand – as flexible as necessary. At Wärtsilä we are looking forward to establishing more and more largescale energy storage projects on the German market to make this vision a reality over time.
In fact, we have already underlined our expertise regarding large-scale energy storage projects in other markets: In the UK, for example, Wärtsilä is proving this expertise for Pivot Power in a project, which focuses on renewable transport, namely the capacity for rapid electric vehicle charging. Here we are providing the necessary energy storage solutions totalling a capacity of 100MW across two locations. Each 50MW energy storage system employs Wärtsilä’s GridSolv Max solution and GEMS optimisation technology. The software leverages AI forecasting and ML to smartly manage various assets, such as storage, EV charging, and grid fluctuations in the UK market. The way the storage systems for Pivot Power are set-up is very similar to what the German energy grid could benefit from: The storage units will interact with transmission system according to real-time energy demand. They are charged when there is a high influx of energy and they discharge when the energy is needed, i.e., to rapidly charge the vehicles at the charging destinations. This way the grid is never under- or oversaturated and vehicles can be charged quickly and without negative impact on the local grid. In providing much-needed grid reliability in the UK energy balancing markets, the project will contribute to greater National Grid stability and flexibility. In turn, a more stable energy structure permits a growing share of renewables and their optimisation in the UK.
Another example for the potential of high-capacity energy storage can be found in the USA. In this case, Wärtsilä will supply its advanced energy storage technology for two major projects in southern Texas. The interconnected stand-alone systems will have a combined rated capacity of 200 MW. These storage systems will deliver valuable grid support to the Electric Reliability Council of Texas (ERCOT), who are responsible for managing the electric supply to more than 25 million customers. This project features Wärtsilä’s GridSolv Quantum solution as well as GEMS Digital Energy Platform to monitor and optimise the flow of energy. The result: grid support for critical weather conditions, such as the ones found in Texas during the recent winter months, while also enabling further decarbonisation of the local electricity market.
For me these projects all outline that the future lies in a combination of high-capacity energy storage set-ups coupled with advanced software solutions to make renewables more profitable. Further, the outlook for technologies suggests that AI approaches will become the gold standard for future growth in the power generation and utilities industry. Ultimately, these solutions offer an enormous push to the German Energiewende. We just have to make use of them.
Author: Jan Andersson, Market Development Manager, Wärtsilä Energy.
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Storage meets the operational requirements of a power plant to provide frequency regulation services to the Germany’s “Primärregelleistung” (PRL) market.