Technology as a key issue

Digitalization

The 2016 Digitalization Act requires consumers of more than 6,000 kWh (the average household consumes closer to 3,500 kWh) of electricity annually to install smart meters. The price for this level is limited to 100 euros at that level, lest the investment not pay for itself. Most of these system are commercial, not residential. Consumers of more than 100,000 kWh are to install smart meters in 2017. The smallest consumers have until 2020. The EU’s Energy Efficiency Directive requires 80% of each member state’s power consumers to have smart meters by that year.

Digitalization is considered important in the power sector primarily for two reasons: load shifting and distributed power sales. For the latter, there is a vision of everyone being able to sell electricity to everyone else. For instance, when homeowners with solar roofs go to work, they generate solar power at home that they cannot use, but it could be sold to neighbors or nearby businesses. The accounting could be done by means of blockchain, the technology underlying Bitcoin, for example.

In 2017, the German government passed the Tenant Electricity Act as a first step towards distributed power sales. It specifically allows building owners to sell electricity to tenants of that building; the law covers an additional 500 MW of capacity annually. For the moment, the electricity cannot, however, be sold from one building to another. But the purpose of the law is to allow people who do not own their own roofs to nonetheless take part in the Energiewende, especially now that community projects larger than 750 kW must be auctioned. In the past, everyone was able to participate in community solar arrays regardless of whether they own their own property or not. This option still exists, but projects larger than 750 kW must win an auction.

For load shifting, digitalization will be crucial because signals will need to be sent to various devices indicating when power should be consumed or not. For instance, someone with an electric vehicle might come home after work in the evening and plug the car in. If everyone does that at once, then power consumption will skyrocket at a time of peak consumption already. Signals will be needed so that electric cars charge overnight when there is sufficient electricity on the grid. In short, digitalisation will lead to greater efficiency in the energy sector.