Quo Vadis, Energy Transition? - Ideas for achieving renewable-based energy sovereignty in Europe


Seveso, forest dieback, Chernobyl, and the contamination of the Rhine: the 1980s were marked by major environmental debates. In 1987, Klaus Töpfer became the first environment minister as a result. And with the slogan "show your colors," the Greens achieved 8.3 percent in the Bundestag elections - despite or perhaps because of the conservative defamation as "ecological ayatollahs." As an environmental party in the broadest sense, with anti-nuclear, anti-industry and anti-progress resolutions and a "get out and get away with it" program, it challenged the fundamental values of the Bonn Republic such as economic growth, the market economy, and NATO. 

 Toward the end of the decade, the issue of CO2-free energy production was added to the agenda. This was because the findings of climate researchers had become so validated that they could no longer be ignored. We had recognized that alternatives to coal, gas and oil urgently needed to be found. But we had not yet found the right words to express this and win over the middle of society. "Alternative energies" sounded neither high-tech nor progressive, but like cereal, wool socks, and Birkenstock sandals. Not connectable for the bourgeois mainstream, only for nature freaks like me and leftist hippie dropouts.

In the 1990s, there was finally a breath of fresh air for renewables! Young, activist entrepreneurs like the engineers in the collective "Wuseltronik", at "Wind und Solar Elektronik" as well as courageous politicians took up wind and solar energy. Even if the localization in the "left-alternative" milieu remained pronounced. 

With our IPO of SOLON AG in 1998 came the first real breakthrough - far before the hype of the New Market. Suddenly, the energy monopoly market, which had been almost completely sealed off until then, was accessible to financial investors. 

 Then came the 1998 federal election and the Red-Green victory. In addition to unemployment and the economy, the election campaign focused on one issue in particular: the phase-out of nuclear power. As a result, one topic received special attention in the leading media for the first time: renewable energy from wind and solar. 

 Like us, the financial investors were betting that the electricity from their own solar panels would soon match the tariff price of the energy suppliers ("grid parity"). And although the huge difference in generation costs persisted and renewables remained expensive, the Greens insisted that the energy transition was feasible, advocating the narrative that persists to this day: "efficiency first." In other words, first do everything possible to reduce energy consumption - and then use wind and solar power to meet the remaining demand. 

In the early 2000s, the Renewable Energy Sources Act (EEG) created a rapidly growing niche market for photovoltaics. With each larger factory, costs fell. And because the share of renewables was growing so rapidly, even faster than expected, we began to solicit support for integration technologies needed to smooth the generation profiles of renewables. However, we did not achieve the desired effect. 

German politicians did not take the technology seriously, instead continuing to rely on cheap gas from Russia and "clean coal power plants" that were to become an export hit. China, on the other hand, had long since made plans to overtake the USA as an energy player as the world market leader in renewables.  And what did we do? We split into camps: the new and the old energy industry, David against Goliath. 

 The Greens used the sharp drop in costs to create a new narrative that took the place of "efficiency first": "all electric". As far as possible, everything was to be powered by cheap green electrons: from cars to heating systems - except for a few industrial processes. Technological feasibility was irrelevant - everything seemed still so far ahead in the future... 

 The new battle cry was "all electric - efficiency first" when we developed the prototype with Younicos AG that led to the commissioning of the first battery plant to provide grid control in Berlin in 2008. Yet, in Germany, integration technologies were still not recognized as systemically necessary, still not promoted - indeed: still not wanted. And still the movers and shakers were perceived by the vast majority of the political system as "crackpots" and "subsidy bloodsuckers." 

With the Lehman crisis, which particularly hurt the renewable sector, the solar industry's fight for survival finally began. Chinese manufacturers moved their way to the front, became world market leaders, and took over the entire solar industry. Germany reacted with a "wind and solar cap," which was supposed to ensure that the "solar horror," as a SPIEGEL title put it, would stop. The solar industry went bankrupt and ten lost years went by - until 2021. 

 In the meantime, the climate-minded green NGOs molded hundreds of young people in their "think tanks" according to the principle of their narrative "all electric - efficiency first" to fight climate change "in good faith." The pressure to finally decarbonize is due to accelerated global warming as well as the perceived accumulation of extreme weather. But it is also due to the fact that the topic of renewable energies has arrived in the mainstream as the real future of energy supply.  

Outlook - The triad of region, nation state and Europe

The thought patterns and regulations from the fossil energy age cannot be the basis for a decarbonized, cost-effective energy supply for Europe. This is because decentralized energy generation can only guarantee a stable supply in conjunction with storage and system integration. Physical and geographical facts, not habits, must be the basis of this new supply structure.

A decarbonized European energy economy will have to take place in three hierarchical levels, which will be subject to different and laws. A local level that thinks in terms of neighborhoods and community structures, a national level that provides supra-regional contexts between large-scale generation in the hundreds of megawatts peak in wind and solar farms and industrial centers - in conjunction with integration technologies, and a European level that provides seasonal and national balancing of electricity and hydrogen and operates the transnational infrastructure.

While Energy Communities at the local level shaped the market, the national level is characterized by regulation and integration of energy generation that is spatially separated from (mainly industrial) consumption in a real-time market. In contrast, the European level will be characterized by transnational energy exchange with once again independent infrastructure, regulation, and future power plants.

Specifically - Subsidiary generation at the local level

At the regional or local level, Energy Communities up to municipal utility size will take over the generation, integration as well as distribution and sales of electricity, heating, and cooling within their own framework - primarily for residential customers. They interact with the rest of the system only through a grid connection point for electricity and hydrogen to fill coverage gaps, offer surpluses, and provide system services. This level thrives on local, civic engagement and achieves a high level of "locally generated and consumed" - across all sectors such as electricity, heating and cooling, and mobility.

Through this, consumers are protected by regulated tariff structures that may be competitively undercut but not exceeded. Thus, affordable energy can be guaranteed for citizens and purchasing power can be tied down locally.

Specifically - The European level as an indispensable mainstay

This "third, European third" forms "the balancing market" for electricity and chemical energy carriers such as green hydrogen or ammonia, as well as other carrier substances, which can be imported across borders and then integrated into wholesale markets.

As a community effort, approximately 30 future power plants are being built at the new transmission grid interfaces and hydrogen backbones across the European Union (EU). By building them on brownfield sites, the "lost places" of the industrial age will become the gardens of Europe's future.

On an area of approximately 25 by 25 kilometers, plant biomass cultivation, agriculture and agrophotovoltaics with active water management, CO2 reduction, humus formation, or biogenic raw materials for industry and energy can be realized. Thus, with approximately three gigawatts of stable power output, approximately 20 terawatt hours could be fed into the transmission grid in a stable and controllable manner and 20 million tons of green hydrogen could be released into the hydrogen backbone. In addition, steam could be supplied locally to a large chemical park to refine biogenic raw materials produced on site. Building this European energy infrastructure of future power plants, pipelines and transmission networks, and the associated investment and innovation, is the core of the new EU. Under this umbrella, the digital technology industry of the renewable era is being developed and built. Sun and hydrogen are taking the place of the old Coal and Steel Union as the foundations of the EU.

Between the European and regional levels, in the "second third", lies the "national market", where generation and industrial consumption are brought together through wholesale markets and integrators.

Specifically - Energy supply at the national level

Here, in a separate market segment, the addition of wind and PV capacity takes place, which is needed on a national scale to supply industry and interregional demand up to a self-sufficiency of approximately two-thirds of demand. It is estimated that 800 gigawatts of PV and 200 gigawatts of onshore wind will need to be added by the time the reduction targets are met.

Depending on the buyer, purchase type, qualification, and volume, direct purchases of electricity in this wholesale market are subject to different levies and taxes. High value added is rewarded with lower levies and taxes.

Different access criteria such as existing physical settlement capacities, financial creditworthiness, qualifications, and others determine access on the digital trading markets to individual product groups and to trading volumes. In addition to the existing markets, a digital real-time market with its own regulation for highly flexible customers will be established for this purpose and will gradually take over the lead function.

Shaping the national transformation

In order to develop the necessary market dynamics for the expansion of renewables in the time available, the necessary value-added steps of land selection and leasing, planning and approval, and construction and technical operation will each be structured individually and independently in a controllable manner.

An annual expansion rate of between 20 and 60 gigawatts must be achieved quickly, which is then reduced again in a timely and planned manner toward the end of the expansion effort in order to avoid shocks in the corporate development of the companies involved.

This structuring and market control function will be performed by the soon-to-be-created digital expansion agency for renewable energies (EE-Ausbauagentur; EEAA).

The solar and wind RE expansion agency

As a privately organized digital structure with authority-like functions, the EEAA orchestrates the transformation of the national energy market. For a successful transformation, the establishment of a "digital twin" of Germany's entire energy landscape is a prerequisite: all properties, weather and consumption situations, grids as well as generation assets are integrated here into an energy industry data analysis and data simulation and planning tool.

The modeling is done in an open source environment that allows universities, scientific institutions, market participants, and impacted citizens to have non-discriminatory access. All power plants or projects are included in the simulation with a planned start-up date, regardless of the concrete phase of their realization. In this way, even long-term, high-investment measures can be thought through and structured on a solid planning basis.

Incentive control along the value chain

The EEAA will initially break down and coordinate the national expansion targets to the federal states. At this level, the states will then take control through counties and municipalities.

The basic idea is to guide all players through the transformation process in a way that makes sense in terms of energy, landscape planning, and economics.

The entire development of this phase will be financed by an intergenerational fund set up by KfW and open to both private individuals and investors.

Each participant will receive an appropriate return:

  • Property owners:
    Land and roofs are leased for 25 years, at amounts that do not displace agricultural use but allow dual use. Short-term speculation is to be prevented, long-term incentive created with takeover of asset at residual value after lease term.
  • Planning and Permitting:
    EEAA will bid out and contract for the design and permitting of facilities on contracted lands. This creates an independent area of engineering services that can be managed separately from the investment side, in a predictable and plannable manner.

  • Construction and erection:
    Construction and erection are also put out to tender transparently, publicly and digitally. The cheapest and most expensive bids are not taken into account in the awarding process. As an innovation incentive, the ecological footprint and efficiency are converted into an innovation factor that promotes superior technologies.

  • Maintenance and Operations:
    Maintenance and operation of assets is also put out to tender and remunerated based on success.

Market integration

The plants are able to produce energy at the lowest possible cost through competitive bidding at all levels of the construction value chain and low-interest financing. The expected generation volume over 25 years of the assets are pooled nationally to reduce risk and auctioned in lots of, for example, 500 megawatts to large trading houses.

The minimum price is defined by what is needed to fully refinance the pool. The trading houses have to transfer this fixed but very cheap cost for the energy on a monthly basis in a "take or pay" logic.

The traders split this global certificate into tradable products and auction them on the market. Residual volumes may need to be settled.

The trading margins that accrue during market integration are the revenue generators for the major players. The trading houses then handle market integration into the existing wholesale market and the new real-time digital market for sector coupling and industry. The Energy Communities have access here as well.

Trading takes place digitally and essentially driven by algorithms and AI.

Additions are dynamically adjusted transparently along the price trends of the coming years to prevent excessive margins for traders.

On the customer side, a differentiated levy and taxation model based on national economic value added will be used. For example, an electrolyzer will pay different levies and taxes than a car wash.

Communicative preparation - a new framing is needed!

The communicatively in the last years tattered image of the renewables must be overcome by us socially!

A discussion about the cultural landscape of the 22nd century is needed, which combines biodiversity, ecological food production, CO2 binding in soils and energy production.
A desire for the technology can certainly be generated.

As a first step, EEAA will put the whole-of-society dialogue about what is desirable and what is to be avoided at all costs on a fact-based footing. Events, along the lines of the "Biennale" or state garden shows, will demonstrate what is possible in terms of systems technology.

International invitations to architects and designers to compete can identify the best landscape-integrated solutions for different regions and tastes, which can then be presented to the public and discussed. The results will form the framework of the system concepts that will then be put out to tender later.

Almost 40 years after the turbulent environmental debates of the 80s, it is more than time to dare the adventure of a European energy sovereignty on a renewable basis. Let's fight together for a symbiosis of digitalization, technology and biosphere, in which participation overcomes the whining of the fossil era.

AuthorAlexander Voigt

Dipl.-Phys. Alexander Voigt was born in Frankfurt am Main in 1965 and went to school in Darmstadt. He studied physics, math and meteorology and received a degree in physics from the Free University in Berlin. Alexander Voigt is one of the best known "serial entrepreneurs" in the field of renewable energies in Germany. The goal of his companies is to increase the share of renewable energy and to develop a competitive CO2-free energy supply. In the course of his entrepreneurial career, he has held a number of supervisory board and executive board positions in listed and unlisted companies such as SOLON AG, Global Solar, GILDEMEISTER energy solutions, Blue Chip Energy AG and Younicos AG.

Alexander Voigt is founder and CEO of HH2E AG since 2021.