How would you explain the concept of your Virtual Power Plant to someone who never heard of it?
We digitally connect small- and medium-sized power producing as well as power consuming units and, in doing so, aggregate their performance. We then sell the power at the electricity markets and feed it into the energy system to stabilise the grid. To be clear, we do not own one single unit, but with our technology and the consent of the owners, we can ramp the units up and down as if we were a real power plant. To put it into perspective, we have aggregated an overall capacity of 3,400MW. This is the capacity of two large coal-fired power stations. However, we are almost 100% renewable.
Now, let’s dig in a bit deeper into the flexibility issue. Roughly 1,000MW of our capacity are flexible and we provide this flexibility to the energy system — just like a huge battery would do. That means, with our technology we can very quickly feed in power, let’s say if a shortage of wind and solar power occurs, but also, if there is too much power, for example when a storm brings in heavy winds, and the system needs to be relieved. We can do that, because we connect units that have flexibility. For example, every Combined Heat and Power unit (CHP) has flexibility, even the backup capacity unit in the local supermarket; most run-of-river hydropower stations have flexibility. Also, many power consumers can provide flexibility to the system if they are flexible when to consume power. In all of those cases flexibility is a byproduct. The units were not built to provide flexibility to the market. They primarily serve others purposes, producing power or heat or whatever. And this is where Next Kraftwerke steps in. We tap flexibility potentials for and with our clients, because they are usually too small to provide flexibility to larger systems like the grid on their own. Shifting production or consumption into times when flexibility is needed makes economic sense and contributes to more efficiency in the system.
How optimistic are you about meeting the demand for electricity using renewable energy by 2050 in Europe?
We are optimistic it is going to work out. Photovoltaics and wind are already the cheapest producers of energy. Why should anyone in 2050 think about other options? We also try to do our share. Since batteries are, still, very costly and thus, storing power is not yet an affordable option in many cases, we keep focusing on providing flexibility and shifting electricity to keep the grid stable. This way we want to support the feed-in of renewables, fuel their expansion and thus, contribute to a greener future in energy.
What would you say is unique about your business?
It is not cheap to build new power plants. And it costs millions of Euros to build battery storage. STEAG, a German utility, invests 100 million Euros into six battery systems amounting to 90MW. In contrast, we provide a very cost-efficient way to provide flexible power. We were able to aggregate hundreds of megawatts of flexibility for less than 10 million euros.
What were the biggest initial hurdles to building Next Kraftwerke and how did you overcome them?
Legislation was a huge hurdle in the beginning. When we started, there was no legislation regulating what Virtual Power Plants were allowed to do and what not. Luckily, in Germany, legislation changed in our favour with Germany’s 2012 Renewable Energy Source Act (EEG), since then renewables were allowed to participate in the market and offer their flexibility for the first time. This is also why legislation is always a key factor for us when thinking about expanding to other countries.
What do you attribute your success to?
To our team! When the EEG changed in 2012, we became an energy trader overnight. We figured out a way to do it and now we are experts in short term trading. We were able to do it, because we are not afraid of change. We actually like it. We constantly work on further establishing the flow of electricity, data, and ideas to find the best solutions for our clients, a sustainable business and 100% green energy in the future.