Interview with Philipp Richard, Team Leader Energy Systems and Digitization, German Energy Agency (dena)
Philipp Richard is Team Leader Energy Systems and Digitization at the German Energy Agency (dena). dena sees itself as an independent driver and pioneer of the energy revolution and has launched more than 650 projects since its foundation in 2000. Philipp Richard explains the role start-ups play and the extent to which the energy sector poses special challenges for new companies in the run-up to solutions.hamburg.
Editor: What are dena’s goals?
Philipp Richard: We see ourselves as a company that tries to push ahead with the integrated transformation of energy systems at the interface between politics and business. Our major goal is to achieve our climate targets by reducing CO2 emissions and promoting the expansion of renewables. We at dena support this with different formats. In the policy area, we often take on an advisory role and help to bring political messages to the market. In the market itself, we work very implementation-oriented, for example we draw up studies and try to redefine with actors concrete framework conditions for the energy system of tomorrow and in doing so take society, politics and economy equally with us.
Editor: How does digitalisation create new value creation potential for the energy sector and how can it be used?
Philipp Richard: Basically, we believe that it is no longer possible to achieve climate goals without digitization for various reasons. The ongoing expansion of renewable energies and the increasingly integrated approach to energy system transformation are leading to a dramatic increase in the complexity of the energy system. We are no longer dealing with a few central producers who will provide the energy in the future, but we have millions of assets. Whether it’s small solar systems, wind turbines or, in the future, an increasing number of consumption units such as electric vehicles or storage units: all of this means that more and more players and devices will have to communicate with each other in order to set up a secure supply system. And this exchange can no longer take place exclusively analogously. Digitisation will be a necessary component to ensure communication between these devices.
Editor: That sounds like a very large and also very confusing task.
Philipp Richard: You already get a hierarchy into it. In principle, the principle of security of supply must remain at the forefront. Therefore, when we talk about digitization, we first focus on this aspect. In addition, we are considering the extent to which digitization increases complexity in terms of security of supply. Then we talk about the need for data security and data protection.
The second aspect is cost-effectiveness: it will continue to be important for all players to operate successfully in the future. The first step is process optimization. But digitisation also offers many opportunities to create added value, develop new business models and give companies the chance to reinvent themselves and set up completely new opportunities.
Editing: How are new ideas and business areas concretely developed?
Philipp Richard: We have to move away from the traditional value chain in the energy industry. Until now, the energy industry has been able to think relatively one-dimensionally: from energy generation to distribution to trade and finally to distribution. Digitisation and decentralisation have basically created a larger space. In the future, we also see business areas that combine different stages of the value chain. A good and prominent example is certainly prosuming: a combination of the generation of energy and one’s own consumption or sale of energy. From our point of view, it is a rather consistent and analytical approach if one first simply looks at the space in future market fields that will open up through decentralization and digitization. Against the background of digitization, these market segments themselves offer a wide variety of opportunities to identify new business fields: new opportunities to think about platforms, develop software, but also to completely rethink business processes.
Editor: How do start-ups find their place in your market? Are they more people who come from the energy sector and are familiar with the market, or are they also career changers?
Philipp Richard: Both. There are start-ups that have a great deal of background knowledge about the energy industry and also know the framework of the energy industry very well. These start-ups are more cautious. They are a bit more limited in their approach to developing business models, because the frameworks of the energy industry are simply highly complex. This limits the development and implementation of ideas to a certain extent: to know that there are laws and legal situations that cannot be ignored.
But there are also start-ups that come from other industries and are trying to knit an analogy for the energy industry. We’ve already been able to provide a lot of help here, because we explain to these start-ups where their business models are not so easily transferable. For example, there was the idea of building the Airbnb for the energy industry in order to simply exchange the neighborhood electricity locally. Some start-ups have noticed that this is not quite so easy, because behind the whole commercial handling of electricity transactions via the market in the energy sector, of course, physics also has to be taken into consideration. These current flows actually have to be delivered and not only kept for accounting purposes. You just have to look at both worlds.
Editor: Is the complexity in the energy sector higher than in other areas due to digitalisation? And can start-ups possibly bring more clarity into this?
Philipp Richard: I can’t judge that that way. However, I suspect that the urgency of action is greater. The achievement of climate targets is urgent and the decentralisation of the energy system is already taking place in many parts. As I said, there are already two million assets on the market in Germany alone, and the climate issue is a global issue.
Start-ups are simply a bit differently structured from the point of view of thinking. The term “Digital Natives” always seems a bit like a buzzword, but there is something to it. Digital natives deal fundamentally differently with the fact that the collection, exploitation and further processing of data will play an incredibly important role in the future. The challenge is to strike the fine line in order to also consider aspects such as data protection and data security and to do justice to the needs of the energy system. Start-ups are very important because they are more risk-averse in the way they approach such future models and introduce new ideas and thought structures. The fact that they don’t work immediately, just as the framework conditions or physics provide for it – that’s just the way it is. This is a normal process. The exchange about this is now taking place more and more intensively. I think we’re on the right track.
This interview was first published on www.innovation-implemented.com.