Safe access to energy has always been key to the development of modern man. The domestication of fire was the first step. In the course of the Industrial Revolution, hydropower, the steam engine and finally the use of electric current gradually turned energy into a widely available commodity, which we take for granted nowadays.
Germany is one of the most successful economic locations in the world. That strength derives from our ability to develop and produce products that are in global demand. Industrial production as the foundation of our economy requires a safe and affordable energy supply. It is one of our most essential resources and the driving force of modern civilisation. In order for Germany to be able to extend that success into the future, E.ON is intensively working at further developing the energy supply. The new central challenge in that endeavour is the principle of sustainability, which coincidentally has gained in significance during the past decade. For us, it comes down to reducing CO2 emissions derived from power supply and conserving the finite resources of our planet. The main task in coming years will consist in making the entire power supply system cleaner and more efficient: from power production in efficient plants to efficient grids to innovative products for our customers.
In order to further reduce CO2 emissions derived from power supply, we focus on a committed extension of renewable energies as well as investments in highly efficient classic power plants. In Germany, the potential for renewable energies is great, particularly in the field of offshore wind energy. The more favourable wind conditions on the high seas deliver a more constant power output than on-land installations. E.ON is a participating partner in the first German offshore wind farm Alpha Ventus, which has been delivering power to the mainland since 2010. Further projects include, for instance, the second German offshore wind farm Amrum Bank West. Here, about 80 wind turbines will generate approximately 300 megawatts, which is almost as much as a smaller gas-fired power plant.
However, conventional power plants have by far not yet served their time as energy producers. We are, for example, building a state-of-the-art coal-fired power plant with a conversion efficiency above 45 per cent in Datteln, North Rhine-Westphalia. The ratio between output energy and input energy continues to improve.
Consequently, several considerably more inefficient, older plants in the Ruhr area can be replaced, reducing CO2 emissions per kilowatt of power produced by about 20 per cent.
Furthermore, there is a new gas and steam power plant at the Irsching site in Upper Bavaria, which is setting new standards with a conversion efficiency of nearly 60 per cent and is to be expanded by an additional, even more efficient gas-fired power plant in coming years. The strengths of those plants are not limited to an outstanding utilisation of the fuel. They are also very flexible in that they can be started up quickly and their output adjusted. Such plants are ideal partners for renewable energies because they can, for example, make up for weather-related fluctuations in solar energy production – an increasingly important function in view of the rising proportion of renewable energies. However, highly flexible power plants alone will not suffice to ensure the present high level of supply security, especially with the last German nuclear power station coming off the grid in 2022. Nowadays already, there are quite a few days when our grids in some areas exclusively carry power from renewable sources. Due to tens of thousands of solar arrays, distribution grids, in particular, are reaching maximum capacity in some areas on sunny days. For, those low-voltage lines were designed for power distribution, not feed-ins on such a scale. It is, thus, under high pressure, that we are further expanding our grids, investing 900 million euros in Germany in 2011.
Nevertheless, German power grids require entirely novel controllability in the medium term. We are working, under the heading “Smart Grids”, at transmitting data in addition to power. That would, for example, enable small, grid-tied, natural-gas-fired power plants installed in basements to kick in whenever wind and sun falter. Or the batteries of electric vehicles would be charged whenever wind energy is plentiful during low-consumption nights. Setting up such smart grids is a challenge that will cost Germany approximately 20 billion euros in this decade. To that effect, policy makers are required to create the necessary structural conditions. For, the notion of “innovation” is absent from the current regulatory reality. Smart grids open up brand-new perspectives. Today already, smart meters are capable of monitoring power consumption in near-real time, allowing hidden energy hogs to be detected.
With flexible rates, fixed kilowatt hour prices will someday become a thing of the past for residential customers as well. Today already, there are rates combining a smart meter with a time-based kilowatt hour price. That incentivises customers to shift less time-critical consumption such as laundry washing to lower-consumption, lower-priced times. That opens up the possibility to bring the demand for power considerably closer in line with supply in order to prevent peak loads.
Demand flexibility is already routine for large customers. For instance, energy-intensive companies such as steel mills are willing to forego power supply at times of low capacity in exchange for lower rates at times of high capacity. As an experienced project developer, E.ON further supports companies on the way to supplying themselves with energy. For example, we have built a gas and steam power plant in Plattling for two paper mills, which delivers power as well as process heat required for the production of paper. As a result, an energy efficiency over 85 per cent could be achieved. We build such plants, assume their operational management and sell the power surplus. Another example is a major airport under construction: Berlin-Brandenburg International. Here, E.ON is designing and building four highly efficient cogeneration power plants to provide the airport with power, heating and cooling. With a fuel efficiency of about 90 per cent, those plants also set new standards in terms of efficiency.
We intend to continue applying our know-how accumulated over decades of numerous projects towards securing the economic location of Germany – and beyond. The development and expansion of renewable energies will considerably affect economic and social development in Germany. Biomass, wind and solar energy not only make us more independent of energy imports but also generate new jobs and help preserve our environment for future
The author studied law in Freiburg and Munich and obtained a doctorate in 1989. After working as an adviser for Frankona AG, amongst others, he assumed positions at Avacon AG of company development manager from 1999 to 2001 and of CFO until 2005. From 2006 to 2010, he was chairman of the executive board of E.ON Kraftwerke GmbH. Since 2010, Dr. Luge has been CEO of E.ON Energie AG.