Hamburg subsidizes Demand Side Flexibility

HamburgerhafenThe City of Hamburg plans an innovative subsidy to promote Demand Side Flexibility.  The subsidy will support industries that invest in making their energy usage more flexible and more adaptive to the available supply of energy. As the e-harbours project has demonstrated, Demand Side Flexibility is urgently needed to help electricity grids accommodate a lot of renewable energy (solar, wind), while maintaining their stability. The urgency has been felt especially in Germany, since the turnaround towards renewable sources ( ‘Energiewende’) is progressing much faster than expected. The city of Hamburg is the first public authority that actively supports the provision of flexibility on the demand  side of the energy market. The subsidy scheme, backed by the European Fund for Regional Development, will bring about investments of more than € 120 million euros in flexible energy systems, on the basis of € 24 million in subsidies.

December 9th 2014, in a futuristic meeting room at the Hamburg Department of City Development and Environment, a dozen energy experts gather to discuss the planned subsidy. Among them consultants that advise the biggest industries in the Hamburg harbour on energy solutions. Hans Schäfers from the Hamburg University for Applied Sciences (HAW Hamburg) presents the facts about the German Energiewende, the backdrop to this subsidy plan. He shows that the share of renewables in the German energy mix is rising fast, much faster than projected only a few years ago. The yearly addition of solar installations and wind turbines to the energy system is restricted (to 2.5 GW a year) but even then the total installed capacity of renewables will reach 50% of total power consumption years ahead of predictions. This  challenges the electricity system.

“If we do not find more balancing instruments to keep the grid stable,” says Hans Schäfers, “we will end up in the situation where we have to shut down wind turbines temporarily, throwing the renewable energy away.” The need for stability in the system could easily give a new lease of life to ‘old fashioned’ power units burning natural gas, coal, or even lignite coal (‘Braunkohle’). In that case, the Energiewende would not succeed in lowering the CO2-emissions in Germany. “Within a few years”, Hans Schäfers states, “We will need a large percentage of all flexibility available in industries in this country to reach the goals of the Energiewende.  Then the financial value of flexibility will undoubtedly be much higher than today. We have to start now to make more companies aware of the chances.”

The subsidy scheme will be available for companies investing in installations that are able to provide demand side flexibility, increasing the consumption of electricity when there is a surplus in the grid, and reducing the uptake in times of great demand. Such an installation could be a combined heating and power unit (used by many industries that need heat in their processes) equipped with additional electrical heaters, the so-called ‘dual fuel usage’. The subsidy takes into account the type of technology used, and the amount of CO2-emissions that can be prevented (since no fossil fuels have to be burned to keep the grid stable).

The details of the subsidy are not published yet. we will keep you posted! For readers familiar with the German language, some more information can be found in a brochure of the City of Hamburg (see pages 18/19).

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