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Takeways from E-world trade fair in Essen, Germany

The German federal government’s decision for a nuclear withdrawal until 2022 and the resulting topic of “energy revolution” dominates the energy industry agenda in Germany, as was clear from my visit at the E-world energy & water trade fair held last week at Messe Essen on February 5-7.  The fair had more than 600 exhibitors from the fields of the electricity, gas and water industries, energy technology and energy efficiency.

As I would have expected, energy trading, renewable energies and energy efficiency were all very visible themes at the fair, with many companies promoting their products and services in these areas.  But some of my main takeaways from E-world include:

Virtual Power Plants (VPPs) attracting lots of interest and activity:
  • I heard there were 9 companies at the fair promoting their VPP technology, and talked with several of them.  Some companies are clearly at an earlier stage of development than others, but many (including Delta-ee) believe VPPs will play an increasingly important role in the new energy economy.  Vattenfall’s VPP project is one of the most advanced.  It is now moving into a second phase with the intention of including new technologies into the VPP such as cooling, hydrogen production, storage heaters and batteries.  An announcement is planned this week regarding the addition of a 2MW battery to the VPP in Berlin.  The company clearly has some ambitious aims for its VPP technology and project, not least giving it a route to grow nationwide in Germany away from its core Berlin and Hamburg markets.  It has also launched its own “Virtual Heat & Power” VHP label as a new technical standard for heat pumps and CHP - follow this link VHP for more details.  Whether the VHP label will be able to gain traction with manufacturers and be attractive for customers remains to be seen - especially given other labelling initiatives, such as the "Smart Grid Ready" label recently agreed by heat pump manufacturers (see this link Smart Grid Ready).

CHP is on the upswing:
  • The market trend in Germany is definitely positive and improving.  The revisions to the CHP law last year have had a positive impact on the market – although it seems that some customers are still reluctant to invest even though the economics look increasingly attractive.  Perhaps this reflects the weak economic outlook, or customer fears of new technology.  Tax regulations are a concern for suppliers developing contracting and financing models.  If the end-user owns the plant then EEG tax is not applied to his consumption.  However, if the plant is owned by a third party (eg an ESCO), the end-user becomes liable to pay the EEG contribution.  As the EEG contribution is now €5.3c/kWh this can have a significant negative impact on heat contracting business models.  Lawyers specialising in this field, and with contract models that can avoid this issue, are very much in demand.

Data services and smart home is already a crowded space:
  • There are lots of what look like “me too” vendors – variations on the same theme of home hub, sub-metering and website/smart phone interfaces.  Many vendors are positioning themselves as software companies that are essentially service providers to a customer facing organisation – ie the energy supplier.  I am mystified (along with many others I suspect) why some large energy suppliers are trying to develop their own proprietary smart home propositions.  The utility propositions I saw appear over-engineered and expensive in comparison to smaller, nimble players that are innovating quickly.  After all even a two year smart home contract for €25/month (and say €5/month thereafter) will be a tough sell for many customers – so making money is not going to be easy for anyone in this space, especially if you have a high cost base.

Delta-ee will be attending ISH in March and Hannover Messe in April and we’ll be sharing our thoughts in due course – and if you would like to meet up at either event please do get in touch.

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Comments 4

Administrator (website) on Wednesday, 13 February 2013 12:02

I like the idea of the VHP (Virtual Power Plant Ready) badge. Almost like a GTI badge on a car - or a 4G enabled badge on a mobile phone! Customers will instinctively look for it and seek it. Wonder how long until we see it on a smaller residential micro-CHP units...

I like the idea of the VHP (Virtual Power Plant Ready) badge. Almost like a GTI badge on a car - or a 4G enabled badge on a mobile phone! Customers will instinctively look for it and seek it. Wonder how long until we see it on a smaller residential micro-CHP units...
Guest - Andy on Wednesday, 13 February 2013 12:25

The problem with with any new label is that manufacturers will hate having to meet different labels and different standards - they want the minumum number of (ideally universal) standards to meet. So manufacturers will be always be reluctant to adopt a new label unless, for example, customers are demanding it or there's clearly money to be made.

The problem with with any new label is that manufacturers will hate having to meet different labels and different standards - they want the minumum number of (ideally universal) standards to meet. So manufacturers will be always be reluctant to adopt a new label unless, for example, customers are demanding it or there's clearly money to be made.
Guest - Tako on Wednesday, 27 February 2013 21:12

Hi Andy, I've read your articles about data services and smart homes. Very interesting views. I think there is a potential role for energy suppliers in this space. Wonder if you have a view on the strategy and model that Eneco is currently pursuing in the Netherlands with the introduction of a smart thermostat with energy insights, Toon.

Hi Andy, I've read your articles about data services and smart homes. Very interesting views. I think there is a potential role for energy suppliers in this space. Wonder if you have a view on the strategy and model that Eneco is currently pursuing in the Netherlands with the introduction of a smart thermostat with energy insights, Toon.
Andy Bradley (website) on Thursday, 28 February 2013 09:26

Hi Toon. Thanks for the comment. In our recent HEM heating study (see elsewhere on our website for details of this) we did a gloabl scan of HEMh products and also looked at a few partnerships including the Essent and Nuon partnerships with Greenwave Reality / Honeywell and ICY. Essent approach has been more successful in near-term, but Nuon model looks better to build long term value. Could have a look at Eneco approach in relation to these and discuss with you. Rgds, Andy

Hi Toon. Thanks for the comment. In our recent HEM heating study (see elsewhere on our website for details of this) we did a gloabl scan of HEMh products and also looked at a few partnerships including the Essent and Nuon partnerships with Greenwave Reality / Honeywell and ICY. Essent approach has been more successful in near-term, but Nuon model looks better to build long term value. Could have a look at Eneco approach in relation to these and discuss with you. Rgds, Andy
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