Energy shift necessitates a novel "operating system": Rich's perspective
The German government is set to transform its energy landscape with a new "operating system" for the energy transition. This ambitious plan aims to modernize the regulatory and technical infrastructure of the electricity grid, making the energy transition more cost-effective, flexible, and adaptable to the increasing demand for renewable energy.
Grid Expansion and Modernization
Germany is investing heavily in expanding and upgrading its transmission grid. By 2045, about 14,000 km of new power lines are planned to support 80% renewable electricity by 2030. This includes the introduction of more efficient high-voltage direct current (HVDC) technology connecting northern and southern Germany, along with integration of solar, wind, electric vehicles, heat pumps, and storage systems.
Regulatory Overhaul for TSOs
A comprehensive overhaul of the grid tariff system starting in 2029 is designed to adapt to the new technical, economic, and legal requirements of the energy transition. Known as AgNes, this overhaul will change how electricity grid tariffs are set, ensuring fair, sustainable financing and incentivizing efficient grid management and investment to accommodate fluctuating renewable power and maintain reliability.
Flexibility and Cost-Effectiveness Through Backup and Digitalization
The government also plans to supplement renewables with backup gas-fired power plants, ideally hydrogen-ready in the future, to secure electricity supply during low renewable output periods. Additionally, research efforts include developing lightweight, tailored software systems and potentially quantum computing solutions to optimize energy networks, reduce costs, and increase flexibility.
Balancing Supply and Demand
The focus of the energy transition is shifting to questions of cost efficiency and supply security under the current black-red coalition. The proposed "braking" in the context of the energy transition refers to slowing down or hindering the expansion of renewable energies, particularly in the synchronization of supply and demand. Additional hardware like dispatchable power plants and storage, as well as updating the "software" for an efficient power market, is needed to create an efficient energy system.
The coalition agreement states that network charges could be reduced by up to five cents, which would help with climate protection by making the operation of electric vehicles and heat pumps cheaper. However, it was explicitly announced in the coalition agreement that the electricity tax would be reduced to the European minimum, but it has been postponed due to the budget situation.
Looking Ahead
Predicting electricity consumption by 2030 is challenging due to factors like the development of the gross domestic product and the demand for data centers. Nevertheless, the potential for reducing costs and increasing efficiency lies in optimally and efficiently bringing together supply and demand, creating flexibility, and shifting consumption to hours when cheap electricity is available.
Critics like Katherina Reiche and Bernd Weber, head of the Epico think tank, agree that the energy transition needs a new "operating system". They argue that the actual problem is not addressed: The power grids are overloaded because supply and demand do not match, and network charges are an important lever to bring supply and demand together more efficiently.
With the new operating system, Germany aims to transition from a fossil-fuel-based static grid to a dynamic, digital, and renewable-centric energy system that can handle variability in renewable generation, manage demand dynamically, and ensure grid stability while minimizing costs. This shift in focus is a significant step towards a sustainable and cost-effective energy future for Germany.
[1] Source: German Federal Ministry for Economic Affairs and Climate Action [2] Source: Fraunhofer Institute for Solar Energy Systems ISE [3] Source: German Federal Network Agency [4] Source: German Aerospace Centre (DLR) [5] Source: AgNes project website
1. The German government's energy transition plan includes an overhaul of various policies, such as community policy and employment policy, to accommodate the growing demand for renewable energy in the electricity industry, ensuring efficient financing and supportive infrastructure.
2. In the quest for a cost-effective and adaptable energy landscape, the German government is considering the implementation of backup power plants, ideally hydrogen-ready, and digital solutions like lightweight software systems and quantum computing, to optimize renewable energy supply and manage demand variability in the renewable-energy-centric industry.
