The energy transition is local – this phrase has been uttered ever since we began transforming our electrical energy supply, and it is still popular and frequently used today. And it is true, of course. The greatest technical changes for the electrical energy supply are decentralization and dynamization. Decentralization because, in the future, millions of small, decentralized plants will have to do what has historically been done by a relatively small number of large power plants. And dynamization because the dependence of new renewable sources on weather conditions can cause much larger and faster changes in system operation than in the past.
Local self-sufficiency – not at all costs
Decentralization is often still equated with local self-sufficiency. You just have to decentralize in the right way and then, among other things, we can do away with unpopular networks. The latest approach in this line of thinking calls for local, and therefore probably small, electrolyzers for decentralized hydrogen production. To be clear, this is indeed one way of imagining local self-sufficiency – but it requires the installation of high generation capacities, since you have to make do with the local weather conditions and cover the conversion losses in electrolysis. A high level of installed capacity means an inefficient deployment of the associated investments for one thing, but above all it also means an inefficient use of land. In light of the existing resistance to the further expansion of renewable energy on land and the foreseeable additional demand for electricity in the transport and heating sectors, it is more than questionable whether we can find sufficient space to produce hydrogen on a large scale in Germany. To avoid misunderstandings: this does not mean a rejection of local optimization measures. It goes without saying that, in the future energy supply system, as much as possible should be resolved on the ground and only more complicated tasks should be delegated further up the chain. The Society for Energy Technology in VDE (VDE ETG) has always made that clear. But the opportunities and limitations of local measures must be seen in the context of what the overall system requires.
Let’s talk more about distribution networks
There is another consequence of decentralization – one that has surprisingly not received much attention so far: in the future, energy will be fed in predominantly at the distribution levels, but from there it will have to make its way throughout the whole system. This requires not only the expansion of transmission networks – the long-distance lines – but also the adaptation and reinforcement of distribution networks – the feeder systems, so to speak. While politicians have promoted network expansion at the transmission level and large-scale generation projects for many years, especially offshore wind farms, there is still hardly anyone talking about the distribution networks. The bottlenecks there are already large today. Unlike the transmission level, however, this is less a matter of electrical bottlenecks and more one of bottlenecks in the supply chain. Distribution transformers are currently one of the most scarce products that are needed to equip electrical networks. And the shortage of skilled workers will of course have a much greater impact on distribution than on transmission – simply because there will be far more projects at the distribution level.
Assessing opportunities realistically and taking on challenges
The energy transition is local – without a doubt. Everyone – the experts, of course, but ultimately all citizens – needs to develop a clear, unbiased understanding of decentralization and its consequences. VDE, with its unique combination of an expert network and local anchoring, can and must play an important role in this.
The term decentralization has a positive connotation in Germany’s energy policy discussion. The concept is mainly associated with – in some cases unrealistic – opportunities, but rarely with the resulting obligations and challenges. However, there are two sides to the coin, as so often in life. Decentralization means lots of small projects with a great need for components and workers. And this concerns not only the decentralized systems that are still relatively easy to procure and install, but also the corresponding conversion of the networks – and especially the less visible distribution networks. An obvious step in facing up to this challenge is to transparently quantify the task ahead of us. For example, development plans for the distribution networks should show all the actors along the energy supply value chain exactly what they need to prepare for in the coming years.
Prof. Jochen Kreusel is Market Innovation Manager at Hitachi Energy and member of the VDE Supervisory Board