Montel Weekly: Both More Grids and Their More Efficient Use Is Needed
Date: June 2nd 2020
Author: Tanja Srnovršnik
There is no doubt that electricity demand will return and will even exceed pre-crisis levels, said Susanne Nies, Country Manager for Germany at the San Franciso-based Smart Wires, in Montel’s Weekly podcast on Friday. Nies views the EU recovery plan, presented by the European Commission last week, as a kind of a “Christmas package”. She also stressed that while Europe needs to build more grids, it also needs to use the existing networks more efficiently.Last week the European Commission proposed a EUR 1.850 trillion package for Europe's recovery from the COVID-19 pandemic, which includes EUR 1.1 trillion for the long-term EU budget for 2021-2027 and an additional EUR 750 billion for the new recovery instrument, Next Generation EU. The green and digital transitions are at the forefront of the proposed recovery plan (MORE).
Nies thinks the overall direction of the package is “absolutely right”. “When COVID-19 appeared, no one was speaking about the Green Deal anymore, and I think it is great that this recovery plan of EUR 750 billion has now been aligned with the Green Deal,” she said.
According to Nies, this “green Marshall plan” is, however, different from the initial Green Deal. “It is a new plan. Greater importance has been placed on, for example, the renovation of buildings. It is also clear that insisting on renewables has become much more important because numerous policymakers and the industry alike are afraid of seeing a slowdown in investments in renewables. Greater emphasis has been placed on cleaner transport as well as the just transition, which is taking everyone along with it which is really important, even more so in COVID-19 times. Thus, I see a change in priorities and am also happy that importance is being placed on infrastructure and innovation,” she explained.
Meanwhile, Nies does not “really see any losers. There are some delays to projects and some hype can currently be seen, for example, there is a lot of attention on sector coupling, hydrogen, these kind of things, but it isn’t on the front page of this package. Of course, we need to see how it will be implemented. At this point in time it is merely an announcement and has not yet been adopted.”
Electricity demand will continue to grow
Post COVID-19 Nies predicts that demand for electricity will recover to pre-coronavirus levels. Electricity demand fell by about 15% in Germany and conventional power generation units were being stopped while renewables continued to grow. We don’t yet know when we will really start to see recovery in an economic sense, but a clear trend can be seen in electricity growth in the energy mix and this trend will not stop,” thinks Nies.
Nies said that “it is more likely that there will be changes in terms of fossil fuels, as well as changes in how people behave post COVID-19 (for example, less travel), while there is also a question mark over what this will mean for e-mobility”. Nies noted that the low oil price is not helpful in this regard. There has also been “a lot of lobbying going on to get the hard-hit car industry back on track. I really think that governments need to be very strong on keeping the momentum on e-mobility at this time.”
“But I have no doubt that electricity demand will return and will even exceed pre-crisis levels,” noted Nies.
She also stressed that “now is not the time for the internal market to be dismantled by strong State aid using the crisis as an advantage” and that the emphasis should be put on measures not on helping individual companies.
More infrastructure needed going forward
As renewables expand even more, going forward there is a question over whether more grids need to be built or whether we can make do with what we have and use them more efficiently.
According to Nies, there has been a clear rise in the attention on infrastructure in recent years, as it is “a kind of decisive element in the energy system transition. There are bottlenecks and huge costs in redispatch and containment in countries such as Germany – such costs extend beyond EUR 1 billion per year. So, the answer is: yes, more infrastructure is needed to ensure networks can operate flexibly with increasing renewables.”
However, Nies also stressed “that the existing networks are currently not being used to their full extent.” This was also the reason for the introduction of the EU provision that states that 70% of the capacity of interconnectors should be made available to the market. Today, however, not even 30% of the capacity of interconnectors is available to the market in many cases, noted Nies.
“This needs to change and the technologies are there,” said Nies, adding that the regulation and ministries need “to bet much more on new solutions so as to enable this.
One such solution is Smart Wires technology that precisely optimises power networks.
“The costs of the energy transition for the system in Germany are huge, since it has the most neighbours in the EU (nine) so it is also responsible for avoiding loop flows and the impact on the neighbouring systems. Using Smart Wires devices in Germany would mean that we could swap from what is used today - a more conventional technology called ‘phase shifting technology’ - to our technology that is a hybrid which has combined hardware and software, and is modular (so it can be moved which is not the case for phase shifters),” explained Nies, adding that Smart Wires technology also enables a “huge amount of money” to be saved.
“We don’t know exactly how the energy transition is going to play out. Extremely flexible solutions are needed that do not lead to huge investments being stranded,” added Nies.
The whole podcast can be found HERE.
This article is available also in Slovene.