"Technologically, we have everything we need for the energy transformation."

High up in the former RWE tower in Essen, on clear days, Jens Kanacher has a good view of the Ruhr's major power stations. The energy transformation does not stop at them either. A conversation about solar energy from Spain and mobile energy storage.

At the time of the interview, Jens Kanacher was head of the competence centre for energy systems and storage at the European energy company Innogy. His work focused on questions relating to the transition to a CO-neutral, digitalized and decentralized energy industry. In mid-March 2020, he then moved to Dortmunder Energie- und Wasserversorgung GmbH as head of asset management.

2018 marked a turning point in power generation. Since then, eco-power systems have theoretically been able to generate more power than conventional producers. However, with significant capacity fluctuations. Does this change put our energy system to the test?

Despite all the catcalls, our system has proved to be amazingly robust. For a long time, there was a prevailing opinion that it would not be able to cope with more than four percent renewable energy. But look where we are now. In 2019, the share of renewable energy in overall power consumption was almost 40 percent. And, so far, this has worked with substantially the same infrastructure.

Will that continue to be the case in the future?

Naturally, the growing share of renewable energies also requires investments in the networks. This is especially obvious here in the Ruhr region, which is home to major industries and there is a large power station every ten to twenty kilometers. This system of production close to consumption no longer works unconditionally with renewable energy sources. Instead, we need to transport wind power from northern Germany to the south via corresponding networks and power lines. At the same time, we also identify challenges at the level of distribution networks. For example, if more and more photovoltaic systems feed power into the network on sunny days, we could find voltage problems arising in the future. We are responding to this by making our networks more intelligent.

The power network is becoming digital?

Yes, exactly. Instead of in new lines, we are investing in smarter networks wherever possible. At the extra-high voltage level, we are already quite far along. However, the closer we come to the domestic power supply, the less we know about the status and actual utilization of network capacities. Here, there are still hidden reserves that we can exploit. It's like driving a car. You can also reach your destination without a fuel gage, and maybe you have a pretty good idea of how far you'll get with a full tank. But you'll probably stop to refuel sooner than you need to.

What other options are there to coordinate power generation and demand more efficiently to ensure more flexibility?

There are various aspects to flexibility in the energy system. The most short- term flexibility is required for the so-called primary control power. This is when it becomes necessary to compensate sudden power fluctuations in a matter of seconds, to maintain a stable network frequency. Then there are time-based fluctuations that are caused by such things as differing demand during the day. However, flexibility can also be necessary for longer periods, for example, because we have to store more energy for heating in cold winters. There are various ways of providing flexibility for these different scenarios.

Could you describe the most important ones?

First, we have the option to control power generation as well as possible, for example by controlling the output of wind farms when there is no present demand. On the other hand, for example. Biogas systems and hydrogen electrolysis allow us to produce green energy in line with demand from the outset and also, so to speak, right from the start. However, flexibility can also be achieved on the demand side. Owners of heat pumps are familiar with this. The provider offers reduced charges in return for a measure of control over the system. Other options include network expansion, energy storage and digitization, as already mentioned.

Speaking of energy storage: What forms are available?

The most short-term method we are looking at in the energy sector is the lithium-ion battery. It enables us to store electrical energy efficiently for a few hours. Other technologies, first and foremost redox flow – a battery technology based on two liquid electrolytes which is suitable for storing very large amounts of electrical energy – allow somewhat longer storage. However, this is comparatively complex and therefore more expensive. There are also so-called material storage methods, for example hydrogen, synthetic methane, methanol or ammonia. These can be used to compensate seasonal fluctuations. What is more critical for us is to compensate for good and bad wind years. In the future, for example, as wind power becomes increasingly integrated, this difference could account for up to 25 percent of the current electricity demand. In a year with low wind levels, we would need to obtain around one quarter of the power requirement from other sources. That's a major challenge.

So we would need to store enormous amounts of electrical energy?

Yes, store them and also transport them. We should not think too nationally when it comes to the energy transformation. After all, the good news is that wind levels are not low everywhere at the same time. Just as we don't have a very cold winter everywhere. In the future, material storage methods will give us an outstanding way to transport renewable energy forms over long distances and ensure worldwide compensation.

That sounds complex and expensive. Will the energy transformation become very costly?

In the longer term our energy supply will not cost less, but it doesn't have to be more expensive either. Let's take the example of green hydrogen, which we can produce by the electrolysis of renewable electrical power and water. Again and again, we hear that this is not cost-effective because the efficiency levels are too low. If you look at the output of an average photovoltaic system in Germany, you will find that the yield is relatively low even in good locations. The annual maximum is 950 kilowatt hours per installed kilowatt hour. In very sunny regions such as Spain, Australia or North Africa, I can obtain up to 2300 kilowatt hours from the same system. So, even if I produce hydrogen from this and lose half in the process, I still have a higher yield compared to local production in Germany. Furthermore, there are regions of the world where we have much more space for large systems. This is why international trade will pay off in the end.

But at the same time we are still dependent on imports.

With one key difference. Crude oil reserves are highly localized, but the sun shines in many regions of the world. Our geopolitical dependence will thus be greatly reduced. After all, we could obtain wind energy from Greenland or hydroelectric power from Canada. What we really need is a strategy for shaping the future importation processes.

Back to energy storage systems. Do we have enough available yet?

Yes, we have. This is shown for exampleby the prices for flexible energy, which are lower than ever before. At present, the market provides no incentive for more storage facilities, nor do we need additional capacities from a physical point of view. This will change in the future, however. The automotive industry is the best example. As the changeover to battery-electric vehicles goes on, vehicle manufacturers will have a storage requirement that exceeds enormously what we need for energy supply. There are many indications that the industry will be the major technological driver of storage system development. And that both the technical characteristics and costs will gradually improve.

There is frequent talk of integrated energy management in connection with decarbonization. What does this refer to?

The basic purpose here is to make all the energy supply sectors – for example power, heat, transportation and industry, households, etc. – climate-neutral across the board – not separately. The most favorable energy source we have available for this is electrical power from renewable sources. This is a paradigm change, because to date we have needed for example fossil energy sources to generate power. This made electrical power the more complex and expensive product. However, if we generate power from the sun and wind, and produce something material from this, as for example synthetic fuels, these will be the more complex and therefore expensive product. This is why it makes sense to change the mobility, heat and industry sectors, which are still heavily dependent on material sources, over to electrical power. The challenge this presents is of course obvious. We need to include the new, large sources of demand in the supply system without overloading it.

Can you illustrate this with an example?

The automotive industry is a very good example. If all vehicles were to be changed over to battery-electric drive, we are confident that our power system would be able to cope in principle. A problem arises when demand for this large, new amount of power peaks at certain times. For example, if all drivers of electric vehicles were to recharge their cars between 6 p.m. and 7 p.m. this would result in a peak load we are currently unable to manage. So that's precisely what we need to prevent. As I've already mentioned, by more intelligent control of the power networks, built-in buffers in the form of energy storage systems etc. However, we also need to think carefully about the needs of customers and the resulting power requirements for the energy system. It's like constructing a tubular system: The greater and more flexible the customer need, the more complex and expensive the conversion.

What control mechanisms are available?

On the technological side, we have the storage systems, among other things. But, at the least, it's just as important to allow consumers a clear choice. As we all know, private consumers currently pay a fixed price per kilowatt hour. Regardless of when and how much power they consume. With a few exceptions, there are no incentives to use energy depending on the time of day. Neither do the current regulations allow much scope in this respect. Furthermore, the price differences are still so small that most customers consider unrestricted use to be more advantageous for them. So, more powerful pricing signals would be one possibility. Those who are prepared to accept certain restrictions could save money. Conversely, energy providers would pass on part of their additional costs to consumers who want to enjoy complete freedom.

How can the automotive industry contribute to a successful energy transformation?

It has two major tools at its disposal. One is the industrial production processes. This is where the industry can use all the already available possibilities to make energy consumption more flexible. In addition, there are still many processes that have not yet been converted to green energy but have the potentialto do so. The second tool is the vehicle itself, and we have already spoken about this. If we are able to integrate electric vehicles into the existing system, this would be a wonderful thing.

What is needed to do that?

Technologically, we have everything we need for the energy transformation. Now we need a suitable regulatory framework, but also a change in social attitudes. If we all continue to prefer an unrestricted user experience, it will be more expensive overall. The good news is: the consumer has the choice.

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