Germany's smart connections
The global energy system is entering a new, more collaborative phase. And Germany is leading the change, explains Andreas Kuhlmann, Chief Executive of the Deutsche Energie-Agentur (DENA)
Energy transition is entering a new phase. This is especially apparent in countries like Germany, where renewable sources of energy have already gained a considerable foothold in the market. The question now is, how do we get all the different parts of the energy system connected in a smart way? And how do we foster innovation that serves this cause?
The term "energy transition"—or Energiewende as we say in German—refers to a major change in our energy system. In Germany, it started at some point in the 1980s, through developing alternative energy scenarios and producing power from wind and solar. A real push came in 2000, when Germany passed the feed-in tariff law—known as the Renewable Energy Sources Act—which made it much easier to connect alternative electricity to the grid. At the same time, Germany decided to abandon nuclear power.
In the beginning, the energy transition was focused on taking wind and solar power from niche fuels into the mainstream, and phasing out nuclear power.
But things are changing. The energy transition is a concept which is in transition itself. Today, Germany has one of the most diversified energy supply systems in the world. Bringing more solar and wind power into the grid is still important. But in the new phase of the transition, the real challenge is to bring the decentralised components of all sectors of energy production and consumption together in a system that is convenient, affordable, secure, and free of CO2 emissions. In order to achieve this, we have to think across the established sectors—power, heat, mobility, industry—and pave the way for energy efficient technologies and renewables in an integrated energy system. More and more players from different sectors, among them many start-ups and joint ventures, are beginning to see the opportunities that this development brings for businesses.
In Germany, a lot of things have already been set in motion to get ahead, but there are areas where we could be bolder. Energy efficiency is one of them.
Despite being a driver of innovation, energy is often very sporadically distributed. There is still too little being done in the transport field, but that will change. As well as this, we must consider whether the regulatory and legislative framework we constructed during the first phase of the energy transition will still support what we have in mind for the future. This may be the greatest challenge for energy politics in Germany in the coming years.
How policy will develop over the coming decades can't be foreseen now. But what is clear is that in the future energy policy has to set a framework that provides the right incentives for innovation within the sector and allows all suitable technologies to prove themselves on a level playing field. It should also strengthen international partnerships. After all, more and more countries are committing themselves to the goal of climate protection and sustainable energy development, especially in the wake of the Paris Agreement.
This dynamic is a great opportunity for a global energy transition and innovation is one of the key factors for success. Without innovation, everything comes to a standstill. And we cannot halt anthropogenic climate change if progress towards the energy transition is standing still.
Energy transition has long since ceased to be something that only concerns established energy providers. It's a project that spans a multitude of sectors and branches of industry. More and more innovative companies and smart ideas are springing up. Digitalisation offers a strong tool to develop new business models that match the needs of both consumers and climate protection at the same time. In order to connect entrepreneurs and stakeholders of the global energy transition, the German Energy Agency (DENA) started the initiative Start Up Energy Transition (SET), which aims to provide a global platform linking like-minded people from various fields to promote innovation and to make global energy transition a success.
The SET Award identifies the most promising start-ups worldwide that are working towards energy transition and brings together international venture capitalists, investors and partners in the public sector.
With over 540 applications from 66 countries for the award in the first year, the initiative has already gained a global platform and identified start-ups in various ecosystems worldwide. We will continue to strengthen innovation for a global energy transition with our initiative, together with partners like the World Energy Council. The next SET Award will be launched at COP23, the 23rd Conference of the Parties of UNFCCC in November 2017.
This article appears in the annual issue of World Energy Focus, the magazine of the World Energy Council, with content produced by Petroleum Economist. For more information and to read the annual in full, visit worldenergy.org.