Building a Smarter Planet. A Smarter Planet Blog.

By Martina Koederitz, IBM Germany Country General Manager

At the United Nations’ climate summit in Rio, the German minister of environmental development, Peter Altmaier, created a new word for the English speaking world: Energy-Wende.

Energy-Wende is the shift away from nuclear power toward alternative energy sources like solar energy, wind power and other renewable energies. After the nuclear disaster in Fukushima in March 2011, the German government under Chancellor Angela Merkel decided to phase out nuclear power, which is being followed with great interest by the whole world. “If we succeed in converting the energy revolution, and still remain competitive, then we become a model for the world,” Altmaier added.

Large power networks are required for the nuclear phase-out and conversion to renewable energy. Wind is currently the most important source among renewable energy. Unfortunately, wind power is generated not where the need is greatest, but where the wind blows most – in front of the North and Baltic Sea coast.

This electricity has to be transported from the north to the south. That was different in the past, when conventional power plants were built near large cities and industrial centers. In addition, the supply varies with wind and solar power, depending on the weather. The electricity networks must be able to efficiently absorb it and move it to the point of consumption. The network expansion is therefore a fundamental part of energy policy, just as Smart Grids should be.  Smart Grids use IT to gather and act on information in an automated way to improve the efficiency, reliability, economics, and sustainability of the production and distribution of electricity.

IBM Germany calls for the extension of intelligent networks to support the “Energy-Wende” in Germany
Smart Grids: Nervous system of the energy transition

By 2020, renewable energy sources should supply at least 35 percent of the required electricity in Germany. This conversion will cost about 200 billion Euros, though reliable estimates are difficult. Apart from investments in new power plants, transmission lines and energy storage, power grids must be equipped with additional intelligence. Without “smart grids” the green rebuilding of the energy supply is inefficient and the stability of the networks is at risk. Therefore the technology industry and leaders like IBM must partner with energy suppliers and governments to help accelerate smart grid activity.

Economist and policy advisor Jeremy Rifkin noted that it will be the computer scientists who will develop the nervous system for this new infrastructure, but there is no finalized plan for the necessary funding of the reconstruction yet. With the German chancellor’s announcement to manage the expansion by law by the end of the year, an essential step was taken.

When considering the safety and sustainability of the energy supply of tomorrow, not only should building new power plants be in the foreground and the major electricity suppliers should not be the only ones being consulted. The IT industry and smart grids should also play a role.

Without a comprehensive plan, Germany will miss a unique opportunity to become the European pioneer regarding the needs of power supplies in the 21^st century. Which challenges do we face, actually? The energy supply will become more diverse; variable energy will play a bigger role, large power plants will lose importance and will be replaced by innovative and decentralized structures. Politicians must recognize this and combine resources in order to manage the challenge. It will be necessary to not only invest in copper – the physical network expansion – but also in the modernization of required intelligent network equipment. Intelligent networks are one of the keys to reliably meeting peak loads.

For this, one needs an integrated approach. It has to include all areas, not only centralized power generation, but also distributed generation, possibly energy storage and the intelligent involvement of the consumer. The IT industry is ready to implement the vision of intelligent networks into practice. From a technical perspective, this is already feasible today, but the costs for innovations will be in the billions of Euros. In return, intelligent networks can reduce power consumption dramatically and make the supply more efficient.

Currently, our industry is still investing – researching, testing and developing these intelligent network solutions, together with the energy industry or public utilities. However, our breath is limited and our resources are too. The politicians should be in close consultation with the industries affected to agree on a framework so that the necessary investments can be made.

However, there is a current government requirement that the costs of smart grid expansion may not be recovered. This is counterproductive and prevents much-needed investments in a safe and sustainable energy infrastructure. In addition, uncertain and partially paralyzed anti-competitive conditions as well as unconcluded discussions of the Federal Office for Information Security (BSI) regarding protection profiles for smart meters, reduce the willingness to invest. Much is tested, but no comprehensive transformation has taken place.

One has to act quickly: Only if this revolution can be supported by a viable business model, companies will be willing to make the appropriate investments.

We now need an intermediate sprint and then a long breath to get closer to the goal: To make Germany a leader of intelligent power supply “made in Germany.”

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