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Integrated power grid

A city's revolution in energy distribution

A look at Germany’s energy transition under real-life conditions: With an integrated, decentralized system the groundwork for a 100 percent renewable supply has been laid. One municipal utility, which secures a reliable and economically viable coverage.

Marco Krasser doesn’t look like a revolutionary, and it’s a label that the managing director of the utility SWW Wunsiedel GmbH  would probably reject. Nevertheless, a minor revolution has taken place in this rural part of southern Germany, where innovative and adaptive ideas are being implemented at a rate that has attracted international attention. It’s the micro economic manifestation of a comprehensive overhaul of the country’s energy system, and despite its size, the small town is a trailblazer when it comes to the distribution grid.

I don’t like the term ‘energy turnaround.’ We aren’t turning anything around, and we certainly aren’t turning back. We’re making a transition to a better future.
Marco Krasser


Germany’s shift from large-scale, centralized power generation to a decentralized system geared towards the large-scale integration of renewable energy has been under way for many years now. Utilities like SWW have been adapting their business models to the increasing infeed of wind and solar power since the late 1990s. This development was accelerated in the wake of the Fukushima disaster, when the government decided to phase out all nuclear plants by the end of 2022.

The EU’s internal energy market director as well as the Polish minister of the environment and his Japanese colleague are among the distinguished visitors to have signed the guestbook, and many more groups come almost daily to witness the future of what some have termed Germany’s energy turnaround. “I don’t really like that term,” Krasser admits. “We aren’t turning anything around at all, and we certainly aren’t turning back. We’re making a transition to a better future.”

The pellet factory is an interface for sector coupling. “We use waste heat created by electricity generation from wood chips to store the energy in pellets,” explains Marco Krasser.

A local energy blueprint

When Krasser joined SWW as an operating engineer in 1998, the deregulation of the German energy market had just begun. It soon became clear that the utility would have to abandon its traditional business model – the straightforward commodity sale of electricity and gas – in favor of a more comprehensive approach in its mission to ensure a stable and economically viable energy supply to the public. This was the first step on a unique path towards a sustainable energy future, tailored to local conditions. 

The resulting municipal energy blueprint is the outcome of close coordination between the mayor’s office, the utility, and local businesses. Over the following years, the first citizens’ energy cooperative was built, an 80-kilowatt solar power plant. Soon, wind power and biomass were added to the portfolio. The goal is to realize, by the year 2030, an efficient and resource-friendly energy strategy. That means energy requirements for electricity, heating, and mobility will be fully met using biomass, solar, and wind power. It also means intelligent coupling of these sectors. Siemens was selected as technology partner for this project, which has since gained more and more exposure. In 2016, SWW won the German municipal utilities award for its innovative approach.

At the House of Future Energy, Marco Krasser (right) explains to journalist Christopher Findlay how digitalization enables coupling of the heat, electricity, and mobility sectors.

Explaining the future of energy

Wunsiedel and its environs in Upper Franconia are close to the former Iron Curtain that divided Europe until 1989. Though the Cold War is a distant memory, the region remains economically disadvantaged, a situation accentuated by its relative isolation within the horseshoe-shaped massif of the Fichtel mountains. Krasser believes that this helped to foster initial acceptance of the new energy concept. There were more vacant spaces for renewables, and despite some hesitations, people were generally more open towards change and new ideas, he says. “It’s also worth noting that we made a very big effort to communicate with the public,” Krasser adds as we visit the House of Future Energy, an information and visitor center that displays models of the local distribution grid as well as real-time data for energy production, infeed, and loads in the SWW grid.

If communication with the public is crucial, so is the digital exchange of information between the various infrastructure elements. The town is linking all households to a Gigabit Ethernet fiber-optic network, with 20 percent of buildings already connected. That is not only a locational advantage for businesses; with an integrated distribution network and high-speed data links, the vision of sector coupling to integrate heat, electricity, and mobility in a contiguous grid territory can become a reality.

A battery for self-sufficiency

How does this integration play out in practice? We take a short drive to the Holenbrunn biomass cogeneration plant, which is operated by an SWW subsidiary. WUNBioenergie not only generates heat and electricity for its customers – by burning wood waste from the nearby forests and using the waste heat to power an ORC turbine – but also produces wood pellets with high energy density from waste-wood chips from the neighboring sawmill. The company thus ensures a year-round supply that is both environmentally friendly and sustainable. Krasser opens a hatch and points to the belt dryer: “This is an interface for sector coupling,” he explains. “We use the waste heat from electricity generation to store it in the pellets.” He points to the huge stockpiles of pellets being heaped up by bulldozers near the power plant. “This is our gold,” Krasser shouts above the din, and just for a minute, the storage hall feels like the inside of Scrooge McDuck’s Money Bin.

Like Scrooge McDuck’s Money Bin: Marco Krasser and his hoard of pellets at the Holenbrunn biomass cogeneration plant.

For Siemens, one important aspect was that its partner SWW was not only focused on innovation, but also had a clear vision for a suitable business model. In close collaboration with Marco Krasser, Bernd Koch, Head of Distributed Energy Systems at Siemens Germany, and his team developed the corresponding ideas and models. In spring of 2018, a Siemens Siestorage battery storage system with a capacity of about 8.4 megawatts was commissioned on the plant site. It will not only allow SWW to manage the fluctuating infeed from local wind turbines and photovoltaic arrays better. The battery also opens up a new revenue stream. With this storage solution, the utility meets the technical requirements for participation in the market for primary regulation energy, where it can earn fees by absorbing frequency fluctuations in the grid. This income from grid stabilization will pay off the purchase cost of the battery – even when it comes to financing, SWW and Siemens are breaking new ground.

There are further advantages to this model of a self-sufficient urban energy cell with battery storage as an active component, as Stephan May, CEO of the Siemens Business Unit Medium Voltage and Systems, explains: “This allows us to absorb and release energy for a range of purposes, including maximizing security of supply and the ability to black-start the grid autonomously.” It’s a model that may soon be followed in many other places.

The next steps

“In a future stage, we are considering a power-to-gas component by providing customers with CO2-free gas created through electrolysis,” says Bernd Koch. Such a component might also see the systemic integration of an electrolyzer such as the Siemens Silyzer. By adding a power-to-liquid plant, it would be possible to process up to 1,000 tonnes of CO2 from a nearby glassworks into methanol annually. In parallel, infrastructure solutions for electrommobility are to be developed.

Another project for the future is the integration of the whole data network onto the new IoT-platform MindSphere. SSW would be the first municipal utility using MindSphere.

Krasser’s team also has lots of ideas for Wunsiedel’s path to the future of energy. The SWW utility is part of GOFLEX, an EU project to develop new market models for absorbing renewable energy into the distribution grid. The concept of the “city as storage system” and the integration of block chain technology into local markets are further areas where Krasser hopes to have an impact: “We want to show that our path is better – and together with Siemens, we will prove it.”

Christopher Findlay, independent journalist based in Zurich.
Picture credits: Bernd Schumacher