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This is what it’s all about: Optimising our electricity supply system to ensure that the share of renewables can be further increased

Nothing beats a good home-made stew – and what you put in it is up largely to your own creativity: if you run out of potatoes, you can just add carrots instead. If you have already added a good pinch of ground pepper, you might leave out the chili peppers this time. So making a great stew means making the best possible use of the ingredients you have available.

The same concept applies to the energy transition and to combining different flexibility options. Just like you add different ingredients to make a good stew, you can use different types of flexibility options to make the electricity supply more reliable, secure and affordable.

As the energy transition is being rolled out across the country and the share of renewable energy continues to grow – it is set to reach 50 per cent by 2030 and 80 per cent by 2050 – the way electricity is supplied needs to be optimised. Renewable energy is cheap to produce, but it is also volatile. In order to ensure that our electricity supply is secure and affordable at the same time, we need to use the right combination of flexibility options.

Option no. 1: flexible supply

Most types of renewable energy are weather-dependent. Wind power and solar energy are generated whenever the wind blows and the sun shines – irrespective of the actual demand for energy. However, if there isn’t any wind or sun, no electricity is generated – this distinguishes wind turbines and solar installations from fossil-fuel power plants that can supply electricity around the clock. In order to balance supply and demand, our traditional coal and gas-fired power plants need to be able to respond more flexibly, to adapt the amount of electricity they generate both to the demand that exists, and to the amount of fluctuating renewable energy that is being generated. Basically this means that fossil-fuel power plants need to reduce or increase the amount of electricity they supply more quickly and more frequently.

Ingredient no. 2: demand-side management

Having to respond to an inflexible supply of electricity is nothing new. Large-scale electricity users in the industrial sector, but also in commerce, trade and the services sector have had to respond to inflexible sources of electricity – for example nuclear power – in the past. They responded by consuming more electricity at times when it was cheap, for example during the night.

Renewable energy, too, requires electricity consumers to adapt: they need to consume electricity at times when large amounts of wind and solar power are available. The price on the electricity exchange is a key indicator here: if supply greatly exceeds demand, prices on the exchange will fall. Large-scale electricity consumers, in particular, can benefit by consuming more electricity at times when large amounts of electricity are available and therefore prices on the electricity exchange are low.
They can, for example, use any extra electricity to produce heat (power to heat) and therefore reduce their demand for fuel oil and gas. To learn more about this, please click here. In addition to this, electric cars can be charged at times when there is plenty of electricity available.

Ingredient no. 3: flexible storage

Electricity in itself cannot be stored. Kilowatt-hours don’t wait around until they are needed. Storing electricity means transforming it, for example in pumped-storage facilities or batteries.

Storing electricity is necessary in situations when electricity generation is inflexible and consumers cannot manage demand. In situations like this one, usually, pumped-storage facilities in the Alps are being used. This has been sufficient up until now. In the future, however, it might be necessary to use additional storage facilities, which are located in Scandinavia. These could be tapped by laying additional marine cables, which is relatively cheap. Battery storage units are a lot smaller than pumped-storage facilities. They help balance small fluctuations in supply and demand – so-called frequency variations – and therefore make a key contribution to ensuring security of supply.

Ingredient no. 4: expanding the grid

The most import flexibility option of all is the grid. It ensures that fluctuations in supply and demand are balanced across regions. If, at one given moment, one German region is producing large amounts of electricity, but the demand for this electricity in this region is low, the electricity is transported on to another region, where the demand is higher. However, in order for this to work well, the grid needs to be in good shape. If there are bottlenecks in the grid, the wind power that is being generated in the north of Germany cannot be passed on to the large centres of demand that are located in the west and south of the country. The Federal Government is therefore doing everything in its power to build high-voltage power lines across the country in order to ensure that the electricity can be transported to wherever it is needed.

Making the grid more flexible across the whole of the EU will also help improve security of supply. If Germany is generating plenty of wind and solar power, for example, it can supply it to neighbouring countries that urgently need it. It also works the other ways round: at times when the wind is blowing less hard and the sky is cloudy and Germany has a high demand for electricity, pumped-storage facilities in the Alps and Scandinavia can be used to bridge the gap. As Germany is also part of the European grid, it needs to maintain fewer back-up power plants. This reduces the total cost of its electricity supply (to learn more about the Energy Union, please click here).

This also means that putting in place a well-developed grid in both Germany and the EU will make using other flexibility options – which are usually more expensive – obsolete in the medium-term. This is another reason why flexibility options are at the very top of the Federal Government’s agenda.

The more the merrier

The four ingredients named above are only a few examples of a wide range of flexibility options that can be used to bring about an energy supply that works well. And at the heart of all of these options lies digitisation, which connects electricity generation facilities, consumers and the grid in an efficient and smart manner, helps use less energy, and lets us use energy more efficiently.

At the end of the day, the market will decide which flexibility options are the most sought-after. And it will be only the most effective and efficient ones that will help make the energy transition a success.