The Decentralized Energy Revolution Business Strategies for a New Paradigm

235 Pages·2013·2.827 MB·English

by  Burger, Christoph;Weinmann, Jens

The Decentralized Energy Revolution
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The Decentralized Energy
Revolution
Business Strategies for a New Paradigm
Christoph Burger and Jens Weinmann
© Christoph Burger & Jens Weinmann 2013
All rights reserved. No reproduction, copy or transmission of this
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Copyright, Designs and Patents Act 1988, or under the terms of any licence
permitting limited copying issued by the Copyright Licensing Agency,
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Any person who does any unauthorized act in relation to this publication
may be liable to criminal prosecution and civil claims for damages.
The authors have asserted their rights to be identified as the authors of this work
in accordance with the Copyright, Designs and Patents Act 1988.
First published 2013 by
PALGRAVE MACMILLAN
Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills, Basingstoke,
Hampshire RG21 6XS.
Palgrave Macmillan in the US is a division of St Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN: 978–1–137–27069–6
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A catalog record for this book is available from the Library of Congress.
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Printed and bound in Great Britain by
CPI Antony Rowe, Chippenham and Eastbourne
Cover image: Stylized detail of the US electricity distribution grid
Contents
List of Figures ix
List of Boxes x
Acknowledgments xi
List of Abbreviations xii
Introduction: Decentralized Energy as a Disruptive Innovation 1
The design of the future energy system 1
How to read this book 4
1 Empowerment Paradigm – The Age of the Prosumer 7
Technological drivers 11
Regulatory drivers 13
Empowerment drivers 14
Agents of change 15
2 Small Is Beautiful 17
Theoretical framing 17
Industry development 17
Innovation competence of incumbents 18
Micro CHP 19
The efficiency advantage 19
Exploiting scarcity pricing in the wholesale market:
virtual power plants (LichtBlick) 32
Manufacturing synergies and economies of scale (Volkswagen) 41
Micro turbines 51
Aviation technology for the energy market 51
Market entry and sales strategies (Greenvironment) 54
Cooperations and alliances (Greenvironment and Viessmann) 58
Findings on micro CHPs and micro turbines 61
3 The Rise of Island Systems 64
Theoretical framing 64
Capabilities and collective empowerment 64
Race to the top and strategic differentiation 66
Bioenergy villages 68
The countryside strikes back 68
v
vi Contents
Ownership and participatory processes (Jühnde) 69
Information dissemination and Smart Community
consulting (Jühnde) 77
Recommunalization 80
The concept of citizen value (SWK, SWU, GASAG) 80
Findings on empowerment and recommunalization 84
4 Smart Management of Electricity and Information 87
Theoretical framing 88
Network externalities 88
Standardization and lock-in effects 89
Smart grid 91
The feed-in induced revolution (Siemens,
EnBW Regional, and ODR) 93
ICT to manage bidirectional power flows (Itron,
Argentus, and ODR) 105
Smart meters 110
Competing standards (Itron) 110
Netting peak-shaving and increasing the share of
flexible power demand (Itron, SWU, and Siemens) 119
Smart home and cross-selling opportunities (Siemens, E.ON) 125
Findings on smart management of electricity and information 127
5 Local Storage Solutions 131
Stationary storage 131
The alternative to grid renewal 133
Developing the blueprint for carbon-free
energy systems (Younicos) 136
Electric vehicles 140
A hype revisited 140
Combining lead markets and lead suppliers (Daimler) 144
Findings on stationary storage and electric vehicles 149
6 Enabling Negawatts 150
Theoretical framing 150
Inelastic demand for durable goods 153
Split incentives and the principal-agent dilemma 155
Transaction costs and incomplete contracts 156
Building efficiency 158
Technological progress driven by standards? 158
Creating lasting ties with the building owner (co2online) 164
Energy performance contracting 169
From engineering to economics 169
Contents vii
Product standardization as the key to customer
management (Argentus) 178
Risk reduction via guaranteed energy savings (Argentus) 181
Findings on building efficiency and energy performance contracting 183
7 Insights from Germany for a Decentralized Energy Future 185
1 The decentralization snowball 185
2 Emotionalization of energy 186
3 From single technologies to systemic viability 187
4 Exploiting market volatility 188
5 Guidance in the information tsunami 189
6 From optimizing to satisficing 189
7 Innovation and dissemination networks 190
8 The right sequencing of the energy transformation 191
9 From unbundling to rebundling 192
10 Public service obligation for transparency 193
Appendix: Company and Interviewee Profiles 194
Argentus 194
Konrad Jerusalem 194
Bioenergy village Jühnde 195
Eckhard Fangmeier 195
co2online 196
Johannes Dietrich Hengstenberg 196
Daimler 197
Ulrich Müller 197
E.ON 198
Eckhardt Rümmler 198
EnBW Regional 199
Michael Kirsch 199
GASAG 200
Andreas Prohl 200
Greenvironment 201
Radu Anghel 201
Itron 202
Karsten Peterson 202
Werner Paech 202
LichtBlick 203
Ralph Kampwirth 203
ODR 204
Frank Hose 204
Siemens 205
Michael Weinhold 205
viii Contents
Stadtwerke Krefeld 206
Carsten Liedtke 206
Stadtwerke Unna 207
Christian Jänig 207
Viessmann 208
Manfred Greis 208
VW 209
Jürgen Willand 209
Younicos 209
Alexander Voigt 210
Notes 211
References 213
Key concepts, persons and technologies 219
Companies and organizations 221
List of Figures
1.1 Energy system trajectory 8
2.1 Efficiency gains of cogeneration, compared to
conventional methods 20
2.2 The China Pavilion, an energy-saving building at the
Expo 2010 in Shanghai 22
2.3 Residential fuel cell unit used in the ENE-Farm initiative 27
2.4 Global micro CHP unit sales by technology 28
2.5 Industrial production of micro CHP units at Volkswagen 46
2.6 Quiet Revolution turbine at Environment
Energy Centre, Leyland 50
2.7 Micro turbine CHP plant with biogas in Muntscha 53
2.8 Recharging with the Nuru Power Cycle 62
3.1 Energy-supply concept of the bioenergy village Jühnde 68
3.2 Samsø’s main energy production sites 70
3.3 Jühnde villagers in a meeting next to the biogas plant 76
3.4 Proposed master plan of Masdar City 79
3.5 Solar thermal heating in Dezhou 85
4.1 The externality problem with the design of smart grids 89
4.2 Components of the smart grid 92
4.3 Ownership of decentralized energy generation
units in Germany 100
4.4 Smart metering solution by Siemens 113
4.5 Smart home vision by General Electric 125
6.1 McKinsey abatement-cost curve for the buildings
sector in Germany, year 2020 152
6.2 Share of German heating systems replaced annually 154
6.3 Energy efficiency measures implemented in
commercial buildings 158
6.4 Celebration at Druk White Lotus School, India 170
6.5 The concept of energy performance contracting 172
ix