01 Jul 2015, 00:00
New technologies for the Energiewende

Technology to transform the energy sector - made in Germany

Germany’s energy transition anticipates a vastly more efficient and interconnected energy system in the future. It also poses huge technological challenges – and challenges for legislation and business models keep pace. But German scientists say their work has already made important contributions to the global goal of decarbonisation.


Solutions for flexibility and integration

Mixed reviews of German R&D efforts

The right industry partners

“Technologiefeindlichkeit” and Germany’s love of the combustion engine

Keeping the market in step with the new energy landscape

Germany’s gift to the global Energiewende

On a warehouse door on the outskirts of Berlin, a sign recalling the city’s period of post-war division reads: “You are now leaving the CO2 producing sector.” Inside, thousands of lithium-ion and sodium sulphur batteries buzz away in gleaming steel racks. The space, a test facility of energy storage company Younicos, is pristinely high-tech.

In one corner, a small area containing a diesel power generator is closed off. Here, fuel is burned, water is heated, and steam passes through a vent to turn a mast 50 times a second. Simple but incredibly powerful, this is the technology that has powered industry for the last two centuries. But, as Younicos spokesman Philip Alexander Hiersemenzel explains, when it comes to regulating the frequency of the grid, this steam age technology is far from precise. Conventional fossil-fuelled power takes around 30 seconds to ramp up and down generation, and then only reaches a fuzzy approximation of the desired output required to stabilise the frequency. Batteries, on the other hand, perform the task in milliseconds, and with complete accuracy.

Younicos, whose 120 employees are mainly software engineers, completed Europe’s first commercial battery power plant for German local utility WEMAG last year, in Schwerin, Mecklenburg-Vorpommern (about 200 kilometres northwest of Berlin). The windy north German state now generates more renewable power than it consumes – offering a taste of the future of the German energy system.

The German Energiewende – or energy transition – is a generational project aimed at decarbonising the economy and at the same time phasing out nuclear power. Since Germany began its high-profile transition in earnest in 2000, photovoltaic (PV) cells have become more efficient, while wind turbines have been repowered to soar to great heights and operate in inland areas previously considered unsuitable for wind power generation. Last year, the country covered 28 percent of its energy consumption from renewables. Now, the Energiewende is hailed as entering a new phase.

“What we will have is an electricity system that is very cheap in terms of getting fuel for free,” said Hans Schäfers, an expert in smart grids at the Hamburg University of Applied Sciences. “The next stage of the Energiewende is that we really have energy in abundance and we think of new ways to use it.”

Solutions for flexibility and integration

The technological challenges of volatile, fluctuating and decentralised renewable production envision a vastly more flexible and integrated energy system. Converting renewable power into other forms of energy isn’t only about greening other areas of the energy system, it is also key to keeping the grid stable – too much power being as disruptive as too little. Scientists are now converting electricity into methane, with the aim of using the gas grid as a form of storage and reducing dependency on carbon-emitting natural gas imports. E-mobility and fuel cells not only offer the prospect of low-CO2 transport, but could also contribute to stabilising the grid as excess power is channelled into the transport sector. Solutions are also needed for a more intelligent grid to cope with power fed in by “prosumers” with home PV systems, as well as utilising the flexibility of large power consumers that could deliver services such as voltage control.

Optimising the entire system for maximum efficiency is also a major field of research. Across the three major energy sectors of electricity, heat and transport – but particularly in the latter two – experts say there is much to be done to reduce the amount of energy used. There are also savings to be made in homes, businesses, and industrial processes.

To meet these challenges, the Ministry of Economics and Energy’s (BMWi) Energy Research Programme  has almost doubled research and development (R&D) funds in under a decade, from 400 million euros in 2006 to over 819 million euros in 2014, with renewable energy and energy efficiency research receiving 73 percent of that funding. Funds are focused on public-private partnerships, with industry usually required to match public funds. Small and medium-sized enterprises (SMEs) are sometimes eligible for up to 100 percent funding. Since 2008, the government has invested over 200 million euros in energy technology research and innovation (R&I) by SMEs, under the Central Innovation Program SME (ZIM).

Mixed reviews of German R&D efforts

“SMEs are quite strong in Germany and there are many Energiewende products that come from SMEs,” Alexander Knebel of the German Renewable Energies Agency told the Clean Energy Wire. Knebel points to companies like Enercon, Germany’s market leader in renewable wind, and solar firm SMA, which started as an offshoot of R&D activities at the University of Kassel. "These are start-ups that have evolved into companies with thousands of highly qualified employees,” he told the Clean Energy Wire.

But it’s not a straightforward picture. In the summary of its 2015 report on Research, Innovation and Technological Performance in Germany, the Commission of Experts (EFI) notes (p. 5) that, “between 1995 and 2012, innovation expenditures in relation to turnover decreased considerably among SMEs.” The EFI also said (p. 4) that Germany needs to increase its overall R&D spending – which is currently just under the EU target of 3 percent of GDP on research and development.

Still, the EU’s Directorate-General for Research and Innovation reports that Germany’s economic impact through innovation was among the best in Europe (p. 7), reflected in part through the activities of SMEs, and that patenting levels in Germany are high, particularly in the environment and energy sectors (p. 5). Patent applications in Germany’s renewables sector more than doubled between 2008 and 2014. According to the OECD, business expenditure on overall R&D in 2012 was 2.02 percent of GDP.

The International Energy Agency (IEA) acknowledged (p. 190) in its 2013 report on German energy policy that the government has made “significant” funding available for R&D linked to the energy transition and concluded that, “Germany’s steady and strong commitment to energy R&D will benefit not only Germany, but the global energy sector.”

But the EU Directorate-General for Research and Innovation notes (p. 126) that Germany’s performance regarding new science and technology graduates has only just surpassed the EU average but new university programmes are springing up across the country, focused on the technological challenges of the energy transition. By 2013 there were over 380 renewable energy-related programmes at German universities.

Some of them at major new facilities like the Hamburg University of Applied Science’s Competence Centre for Renewable Energies and Energy Efficiency (CC4E), which opened this year, with its own wind farm and demand-side integration laboratory, which combines research with interdisciplinary educational programmes.

The right industry partners

As well as funding via the Economy Ministry, energy and climate-related R&D are publically funded via the Environment (BMUB) Education and Research (BMBF) and Food and Agriculture and Education (BMEL) ministries, with the latter particularly focused on bioenergy.One of the major recipients of public funding via the BMBF is the Karlsruhe Institute of Technology (KIT), one of Europe’s most renowned research and teaching institutions. KIT is coordinating a 310 million-euro, five-year Helmholtz Association project exploring the integration of renewables into the grid. Its main research areas represent the upcoming challenges of the Energiewende: new grid structures and storing or converting renewable power into other forms of energy – electrochemically (in batteries), as synthetic hydrocarbons, fuel cells, and thermal energy.

“I have been in this field for more than 20 years, and I have never seen such a change in energy before,” Mathias Noe, director of the Institute for Technical Physics at KIT told the Clean Energy Wire. “Of course, that puts a lot more pressure on industry and on research. We have to find solutions fast. It is certainly exciting – the possibility to develop new technological solutions that you could not have dreamed of 10 years or 20 years ago.”

This is being achieved by working closely with industry. But abandoning the models that have supported Germany’s growth as a major industrial economy raises a whole host of challenges. Kurt Rohrig, deputy director the Fraunhofer Institute for Wind Energy and Energy System Technology in Kassel, which works on application and industrially orientated research and development, says the reluctance of major energy companies to shift away from conventional power has been a stumbling block. “This hampers our power development,” Rohrig told the Clean Energy Wire. “We need money from industry and we need to sell our R&D results. When industry is too slow, this is a problem.”

This year the government is launching Schaufenster Energiewende, a major demonstration project aimed at providing data to inform legislation. Regions are competing for 40 million euros in government funding over four years for projects. Hamburg and Schleswig-Holstein – another northern German state where renewable power supply often outstrips demand – are jointly bidding for the wind section of the project, which will show how information and communication technology (ICT) and market integration can provide solutions for a 100 percent renewable energy supply. Industry partners must match public funds, and the New 4.0 proposal includes Vattenfall, Siemens and Bayer Material Science among its 50 partners. But Schäfers says raising the private sector funding was a challenge.

“I have had a lot of talks for our Schaufenster application where I had industry saying this is what we could do – we will do it as soon as it pays off,” said Schäfers. “You have to justify it in front of your stakeholders and if the return is not high enough they hold off. Where it gets interesting, the needed investment is an issue.”

Schäfers says that energy systems are still not an attractive investment for private investors outside the energy sector, and the big energy companies are used to very high returns of investment. But smaller energy companies and local utilities (known as Stadtwerke) – like WEMAG – are more enthusiastic about development in this field.

“In many cases the Stadtwerke have lower revenue expectations. The re-flowering of the Stadtwerke is a nice tendency,” Schäfers told the Clean Energy Wire. “When there is not enough return to be made for the big companies, there’s a gap opening up for other players and that’s what we see happening.”

Municipal utilities also make good partners because they are less wedded to the old power system. Siemens collaborated with Allgäuer Überlandwerk (AÜW), as well as university and ICT company partners on the publically funded IRENE and IREN2 smart grid projects in the southern German village of Wildpoldsried, which explored systems for integrating the region’s high share of PV power into the grid. AÜW is a local energy supplier but also operates the municipal distribution grid.

“What we needed was a partner that takes the challenges as opportunities,” Siemens project manager Michael Metzger told the Clean Energy Wire. “It doesn’t matter if they are a Stadtwerke or a big energy company, but they must see these new developments as challenges rather than threats. Both sides of Allgäuer Überlandwerk were interested in new business opportunities.”

“Technologiefeindlichkeit” and Germany’s love of the combustion engine

While the German power system has gone through radical changes with the uptake of new technologies, other sectors have dragged their feet. There are huge opportunities for the transport sector to play a major role in the new energy system, but that means turning away from the traditional combustion engine – a technology in which Germany is a proud world leader. “E-mobility is happening way slower than we thought,” says Schäfers.

Yet it’s not just Germany’s car-manufacturing sector that is wedded to the fossil fuel-powered vehicle. “There’s a lack of acceptance to buying a car that would get you only 150 or 200 kilometres,” said Schäfers, who works at CC4E. “We are not used to cars that work like that. We have an e-car connected to the e-campus here which we use to visit the companies we work with and we often wonder if we are going to reach the next destination.”

And observers point to “German angst” and “Technologiefeindlichkeit” – technophobia – as an obstacle to potentially cleaner options for conventional power production. Carbon capture and storage has met resistance in Germany, as has hydraulic fracturing, and of course, nuclear power. Opposition to nuclear power engendered the Energiewende, but some still believe nuclear could make an ideal, flexible, low-carbon back-up partner to renewables.

Still, if Germany is shy of developing new ways to use conventional energy sources, renewables are another story. The government’s Energy Concept, launched in 2010 to outline the transformation of the energy system by 2050, has broad support among the public and politicians. But getting the legislative environment to support the technology needed along the way can be tricky.

Battery company Younicos argues that the way the power market is structured in Germany isn’t always conducive to the technological solutions his company provides. The WEMAG battery park earns its keep by providing frequency control services. But the market does not reward suppliers for speed and accuracy, one of the major advantages of batteries compared to a conventional power plant.

Keeping the market in step with the new energy landscape

Another problem of conventional power plants is that though generation can be ramped up and down, most have to be kept running the whole time. When there is an excess of power in the grid, it is renewable production that must be curtailed, and that comes at an expense, because the operators of renewable facilities still receive their guaranteed feed-in tariffs and there are substantial costs for redistribution.

“Batteries make the system more efficient,” Hiersemenzel of Younicos told the Clean Energy Wire. “The question is, who gets that efficiency right now? We (consumers) all have to pay for that excess power – not the conventional power plant operators. Storage can prevent that, but storage doesn’t get any of that money. Batteries are commercially viable but the profit they get doesn’t reflect the profit they bring to the entire system.”

Storage is one of the few key areas where technology still needs to be developed. Facilities like the WEMAG battery park in Schwerin currently focus on the frequency control market. In May, a new player announced a different, decentralised approach to entering the utility storage market – combining it with the fast-growing market for home storage systems. Tesla has joined forces with German energy IT firm LichtBlick to offer Powerwall Home Batteries that will integrate with the energy market to charge when renewable power is abundant and feed into the grid during times of lower generation. “Consumers who integrate their batteries into the cluster will benefit from energy market revenues through LichtBlick,” the companies announced

How much renewable power the grid can handle before such facilities are needed to provide actual storage is debated, with some experts saying that by the time their share reaches beyond current levels, it will be essential. Others argue that alternative solutions – such as better grid connections across the country and internationally – can hold off the need for commercial storage until close to 90 percent of the country’s power is derived from renewables.

But now that the focus has shifted – or at least broadened – from power generation to systems management, Schäfers at the Hamburg University of Applied Sciences says the market needs to catch up with the technological needs of the Energiewende.

“Do you earn money running energy storage? Is supplying flexibility to the system rewarded or hindered? Neighbouring countries – like Denmark, the Netherlands, and Switzerland – are way ahead of us on this. They have market rules that actually encourage flexibility. Traditionally, we’ve just relied on the big conventional power producers and not penalised inflexibility.”

Still, progress is being made. Currently, demand-side integration is discouraged by regulations that see large energy consumers rewarded for evening out their load on the grid, even though, with an increasingly fluctuating power supply, the opposite is needed. But based on proposed legislation by Germany’s energy minister Sigmar Gabriel (Social Democrats) on the future design of the energy market, these obstacles are expected to be removed, providing economic incentives for much-needed smart grids that provide information to trigger demand-side responses.

“We are currently throwing away the possibilities for demand-side management with stupid regulations,” said Schäfers. “This new legislation is a big step away from that.”

Germany’s gift to the global Energiewende

At the core of the Energiewende, the Renewable Energy Act has revolutionised the energy system through feed-in tariffs that have given renewable power facility operators guaranteed returns on investment, fuelling demand for the technology and bringing down its costs. But the role of the feed-in tariffs in R&D is disputed. The EFI says in its 2014 report (p. 52) that the levy for renewable power has had no “measurable innovation impact,” arguing that it creates a stronger incentive to exploit existing technology than to invest in R&D.

Others say that the gradual reduction in feed-in tariffs means that technology has had to become more efficient to keep pace. “The feed-in tariff constantly dropped, so if you wanted to get the same output you’d better get some innovation going – at least so that you get the same amount of energy from your PV set with less investment,” said Schäfers.

Still, reduction in feed-in tariffs has not gone smoothly. A series of sharp reductions beginning in 2012, combined with competition from China, caused a collapse in the German PV industry. Yet Schäfers argues that while it was a disaster for the many German companies put out of business, the process made a vital contribution to the world.

“Germany shouldered the development costs of PV,” Schäfers told the Clean Energy Wire. “It reached a technological level where China could copy it for 10 percent of the price, and therefore it is available for everybody because now the price is low. Somebody needs to be there, and it has to be a country like Germany that is rich enough and has enough technology resources, science resources, to get the technology there and make it available for the rest to follow - and I don’t mean walk behind but pick it up and carry it further. So that’s the role that we accepted and that we are playing here.”


Ruby Russell is a freelance contributor to the Clean Energy Wire. She has also written for Deutsche Welle, The Guardian, The Washington Times and The Telegraph, among others. You can contact her in Berlin at or +49 30 2844 902-16.

All texts created by the Clean Energy Wire are available under a “Creative Commons Attribution 4.0 International Licence (CC BY 4.0)” . They can be copied, shared and made publicly accessible by users so long as they give appropriate credit, provide a link to the license, and indicate if changes were made.


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