“Energy systems with a future are decentralised”

New ways are needed to connect energy producers and users where electricity grids are the bottleneck of energy transport. And also a new way of thinking about our energy system: decentralised, efficient and intelligent. Ove Petersen, co-founder and CEO of GP JOULE explains the energy system with a future in our interview.

Mr Petersen, even a simplified picture of an energy system with a future requires a foldable plan as large as a map. Why does it have to be so complicated?

Ove Petersen: It’s not that complicated really. It’s just a network. Electricity, heat and gas lines connect the different elements with each other. This shows the mutual dependencies. At the same time, we can show ways to improve the efficiency of the entire system. For example, electricity was often produced in the old, central coal and nuclear power plants without using the waste heat. That meant that a large part of the energy was lost completely uselessly. Energy systems with a future, on the other hand, are decentralised. Local heating networks are created wherever heat is generated. They transport the heat to where it is needed. And the electricity network is also connected to the gas network via the hydrogen production and feed.

You mention “energy systems with a future”. Why the plural?

We want to make it clear that an energy system with a future must continue to develop. There is no such thing as the energy system of the future that can be completely planned as a one-off; new elements are constantly being added. For example, we have not drawn data centres in our plan. Large computers need a lot of electricity and give off a lot of heat. We know that there will be many more new technologies – so we do not claim that our depiction of an energy system with a future is complete. Rather, it is intended to explain the basics. It is also important that such an energy system with a future can, in principle, be replicated in all regions. We will need more or less of certain elements depending on needs and local resources – but the basic principle always remains the same.

Not every component in the system is fully established. The raw materials might not be available, for example, or it takes a lot of time for the implementation – if you think about the expansion of the networks. What about electrolysis? Hydrogen is expected to play a crucial role.

More production capacity is still needed for that, but we have the technology. It can be quickly realised from a technical perspective. In terms of raw materials, we need some valuable elements for electrolysis, such as platinum as a catalyst. It’s quite expensive at the moment, but not critical. Firstly, platinum itself is not as scarce as, for example, lithium, which is needed for batteries. And secondly, it is easy enough to switch to other elements, for example gold, which are also available in sufficient quantities. We have to keep an eye on the resource issue – globally as well. Here in Germany, we can afford to buy scarce lithium for our batteries. We ourselves may be able to rely exclusively on batteries as storage, but other countries lack the raw materials for this. We therefore need a variety of technologies to find a solution that works worldwide.

You also gave a copy of the Plan for Energy Systems with a Future to the Minister for Economic Affairs and Climate Action, Robert Habeck. What were you trying to tell him?

We wanted to make it clear that we urgently need to connect the sectors today, including in the form of decentralised hydrogen production. “Sector coupling” was a term on everyone’s lips a few years ago. Today, the government is focusing almost exclusively on electricity and an all-electric world. Yet we already have regions that generate almost twice as much renewable energy as they need in the form of electricity. We have to keep shutting it down because grid capacity is limited and will remain so for the foreseeable future. It must be possible in such regions to use the electricity in other sectors, i.e. in the form of heat, mobility or gas. The technology for this has been available for a long time. We now need to finally allow it in regulatory terms.

So what is needed?

The very first thing we need to do is to remove the barriers that stand in the way of coupling the sectors. These include, for example, electricity grid charges for certain applications. Reduced grid charges now apply to heat pumps because, ideally, their flexibility stabilises the electricity grids. This must also be the case for electrolysers. Generally speaking, electricity grid charges need urgent reform. Up to now, industry, for example, has been 95 per cent exempt from grid charges if it consistently purchases a large amount of electricity. Those who behave flexibly and in a way that is helpful to the grid end up paying more in this system – which is absurd. And then it is a matter of intelligently connecting and controlling the decentralised elements. Digitalisation makes this possible. A photovoltaic system, a fleet of 100 cars or a series of small electrolysers can be real players. And all the biogas plants that already exist would run specifically as electricity gap fillers in an intelligent energy system with a future – no longer as base load as is the case today.

What does the greater decentralisation of an energy system with a future mean for the grids? Will we need fewer cables and pipes in the future?

The grids are a limiting factor for transporting energy – decentralised generation and use counteracts this bottleneck. It is often claimed that the power grid can transport all the energy away, but this is not actually the case. Neither is there a rapid expansion in sight, nor is the grid free of charge. We must produce electricity with wind and photovoltaic plants where it is needed to avoid transport costs. Where this cannot be done, it must be ensured that the energy is transported to the consumer in a different way. The electricity grids are inadequate for this, so we have to use the existing gas infrastructure, among other things. The German gas grid can transmit much more energy than the electricity grid. It also serves as a real energy store when there is no wind and the sun is not shining. On the other hand, we urgently need to expand the heating networks. This is the only way we can achieve the heating transition, connect large-scale heat pumps, distribute waste heat from industrial processes in a sensible way and thus implement genuine and efficient sector coupling. We don’t just need these heating networks in large cities like Hamburg or Berlin. An example from my own region: as long as heating oil is still being delivered to North Friesland, we should also be using the local electricity from renewables here with heat pumps or with waste heat from electrolysers. It therefore also makes sense for the electrolyser to be on the same side of the grid bottleneck as the generation plants.

How does this help people who do not live near an electrolyser?

An energy system with a future will actually be able to use heat that previously was just a by-product, making it less expensive. This attracts more businesses that need that heat, like garden centres with greenhouses. This plays a major role, not least with today’s rising energy prices. So we can keep these operations in Germany. Something like this doesn’t work if the electrolyser is located in Canada or Saudi Arabia.

Everyone benefits from the value of heat. After all, it cannot be a matter of getting hydrogen or optimising a single component in any way. It’s about making the whole system more efficient. Selling the by-product heat lowers the costs of hydrogen supply. The same goes for oxygen. So everyone benefits from the use of the heat, because the hydrogen then becomes cheaper if you make the best possible use of all the by-products. And that’s how we create an energy system with a future.