Is a more integrated energy system the answer to the challenge of decarbonising Europe’s cities?

Speakers: Strachinescu Andreea, Nowak Thomas, Wagner Ingo, Remmen Peter, Rosenqvist Fredrik
Moderator: Belin Hughes

On the 5th of June PubAffairs Bruxelles hosted a debate about whether a more integrated energy system is the answer to the challenge of decarbonising Europe’s cities. Ms Andreea Strachinescu, Head of Unit, New Energy Technologies, Innovation and Clean coal, DG Energy, European Commission, Mr Thomas Nowak, Secretary General, EHPA, Mr Ingo Wagner, Policy Manager, Euroheat & Power, Mr Peter Remmen, Institute for Energy Efficient Buildings and Indoor Climate, Aachen University and Mr Fredrik Rosenqvist, Director Innovation E.ON participated as speakers. The debate was moderated by Hughes Belin, freelance Journalist.

After introducing the speakers and the topic of the debate, Mr Belin gave the floor respectively to Mr Remmen and Mr Rosenqvist to hold their keynote speeches.

Mr Remmen focused his intervention on energy systems from a research perspective and on the reasons why it is necessary to connect buildings together to create energy flows which are integrated in order to reduce consumption and foster a low-carbon economy. The speaker started by elaborating on the data and the example of Germany which has notably set a plan for the building sector in order to reach the energy and climate goals for 2050. Within this context, he explained how and to which extent the renovation rate should reduce the primary energy consumption. Consequently, Mr Remmen elaborated on the fundamental question of integrated energy systems, namely, how it is possible to shift from passive buildings, which are not connected to each other, to active buildings, which are interconnected to each other. This shift, the speaker added, will not only allow to reduce energy consumption by making the system more efficient, but will also give the opportunity for final consumers to interact with each other and with the grid itself. This setting should also allow customers to decrease the cost of energy and to interact with the energy network, hence increasing efficiency. By contrast, Mr Remmen also elaborated on the challenges which lay ahead the set-up of fully-fledged integrated energy systems. Indeed, according to the speaker, there is a need  for further integration with renewable energy sources to create the opportunities to finalise an evermore-interconnected system, which can provide both electricity and heating and cooling services. In order to implement this vision of future energy networks, Mr Remmen remarked that there are the fundamental necessities to develop new ways of managing energy by fostering the use of thermoelectric convertors, to increase the capacity of storage energy systems and to actively involve costumers. Mr Remmen concluded by explaining how the complexity of the integrated energy systems management also calls for an innovative and dynamic consideration of the resources available by creating new evaluation methods and data service platforms, as well as new business models.

Mr Rosenqvist focused his intervention on the innovation presented by ectogrid, a technology developed by E.ON, which is based on the principle of connecting buildings with different needs and balancing residual thermal energy flows between them in order to use and reuse all available thermal energy. The speaker remarked that E.ON aims to create an energy system  that completely eliminates emission. He also explained that, in the various ectogrid projects which were implemented, the company had the opportunity to deal with and satisfy a variety of customers. Mr Rosenqvist stated that ectogrid was created in order to reconcile sustainability and efficiency for urban areas and their communities by combining the most innovative ideas on how to reduce emissions and energy consumption, such as the ones coming from district heating and cooling technologies, local energy networks, as well as from the digitalisation of the energy sector. Consequently, the speaker explained how the innovation life cycle brought about by ectogrid is most likely to be implemented through the various phases of its set-up, in a given city, district, quarter or single-sited building. In order to better explain the new technology, Mr Rosenqvist also showed a video that set the context and further described the principles upon which the ectogrid technology originated. This clarified how populated cities need a large amount of energy for transport, heating and cooling and that energy is created by combustion often using fossil fuels that pollute the air. Consequently, urbanisation has become a major cause of pollution, with cities responsible for almost 70% of greenhouse gases released into the atmosphere. Since urban areas have become more populated, the speaker explained how combustion needs to be taken out of the equation and how the approach to energy creation, distribution and re-use needed to be re-thought. Mr Rosenqvist continued by elaborating on the importance of the ectogrid’s characteristic of flexibility which allows to better integrate power systems with renewables sources and to reduce energy consumption. Consequently, he highlighted the importance of ectocloud which uses algorithms about typical demands over time of users, data, weather, seasons and energy trading prices in order to optimise energy flows and storage and help fight climate change. He concluded by underlying that ectogrid is the most innovative integrated energy solution, which grants energy consumption reduction and, at the same time, affordable solutions to costumers.

As a first focal point of discussion, the moderator asked the speakers about the challenges for a widespread implementation of integrated energy systems, or sector coupling, as the vast majority of Europe’s consumption is still relying on high-carbon technologies.

Ms Strachinescu started her intervention by stressing the fact that the European Commission has dealt for a fairly long time with the effort of “breaking the silos” between policy sectors. She mentioned a project of the EU-funded Horizon 2020 Programme which made an analysis of a possible integrated energy plan at city level. This was done by primarily considering the available data on possible couplings between electricity, gas, heating and cooling-related consumption. She then outlined that this project especially focused on cities that were interested in heat recuperation and that could afford an innovation of this sort. However, she also highlighted that there is a gap in some areas of Europe where cities are still very polluted and innovation processes are very difficult to be implemented. The speaker then stressed another challenge to the process of decarbonisation, namely the synergies with transport and ICT technologies, since the first results obtained did not show enough integration. For these reasons, the Commission Horizon 2020 Programme has also looked into the question of integrated energy systems together with other Directorate Generals whose competencies are more specifically in the domains of transport and ICT. Ms Strachinescu concluded her intervention by stating that sector coupling is a process which must be built over time, and, as a result, there is still great room for improvement.

Mr Wagner replied to the question by underlying the fact that the core of the problem for a widespread implementation of integrated energy systems is not technological, but rather technical. The speaker explained that regardless of which solutions you wish to adopt, there is a need to adjust the system in use in order to reach a higher level of efficiency. Mr Nowak also remarked that there are various technological solutions which have been standing out for some time, but have not been widely adopted although they constitute valuable steps towards decarbonisation. The speaker added that, although disruptions are always a positive development, technological advancements must first of all be researched, legitimised and accepted as they should be adopted by customers, whether individuals or businesses, who are willing and able to embrace these innovations. Mr Wagner insisted on the question of legitimisation and willingness as, according to his experience, the business agreement among the actors involved is not always easily found.
Mr Remmen added to the discussion that, from a data perspective there are two challenges: the first one consists of the ease with which to collect data and the difficulty to interpret it. He outlined the importance of data on energy demand and the need to have proper algorithms. Additionally, the speaker explained that accurate data are also necessary to understand how to interpret data correctly and use them for energy systems. The second challenge concerns privacy as he explained that, with special regard to the residential sector, collecting data on energy demand often leads to the recognition of personal data.

Mr Nowak highlighted the benefits of heat pumps as an available and reliable technology in line with Europe’s climate and energy goals. The main obstacle for faster deployment – according to the speaker – is the comparatively low price of fossil energy carriers that guide end-user decision into a more polluting heating solution then necessary. Acknowledging that the energy transition will not be successful, if it has to be financed by government budgets, Mr. Nowak suggested the immanent need to guide end consumer decisions in the direction of low or no emission solutions. This could be facilitated by adding a price on carbon or by reviewing the energy taxation on fossil energy vs. electricity, but also by introducing new offerings like Ectogrid. Solutions that make most efficient use of energy by de facto providing a thermal battery will significantly reduce operations cost and thus be very competitive to the incumbents. Other new business models that are build on the value of demand side flexibility will have a similar effect. Mr. Nowak expects that providing such flexibility may be of a high enough value to even cover the investment cost of the necessary technology and offer heating/cooling to end users for a flat fee, which would certainly drive demand. The speaker used heat pump technology and their integrated deployment in a system such as ectogrid to underline his argument. Mr Nowak also focused on the data collection part of the question by stating that good data on the use characteristics of heating and cooling is essential to make it work – yet privacy concerns of users must be kept in mind. Based on this data, the system can be appropriately designed serving as a huge battery and work in the most efficient manner by reducing the extra energy input to a bare minimum. Connecting electricity and thermal energy systems is closing the energy cycle.. Although this setting seems an easy solution to implement, the speaker added that there is still a long way ahead as there is firstly the need to find partners who bring credibility to the table – and this could even be a new business model for established utilities – as well as operators who are able to balance supply and demand in order to have a proper use and discharge of energy. Mr Nowak concluded by adding to Mr Remmen’s statement on privacy that technical and legal ways of anonymising data can be found.

A second focal point of the panel discussion consisted on how to involve customers as the centre of the integrated energy system process, or sector coupling, in the decarbonisation of European cities.

Mr Wagner answered that the difference between customers and consumers is that, in the speaker’s opinion, the former have a choice, while the latter do not have a choice if they are not customers as well. Indeed, the speaker explained, this is the very difference between community (or local) energy systems, implemented in whatever form possible, by any actor able to do so, and the current system. In this connection, Mr Wagner explained that the positive aspect of integrated energy systems and community involvement is that these processes benefit and add choices to costumers and not only to the consumers who merely contribute financially. Mr Wagner also stated that European legislation has already made some advancement on putting the customer centre stage, while adding that fossil-based solutions often are still incentivised by EU member states, fact that hinders the virtuous circle of integrated energy system to spread.

Mr Nowak highlighted that the European heat pump markets are developing fast and that this shows that customers have accepted the technology as reliable and efficient. He stated that still, customer involvement could even be bigger, if the low carbon technologies would not only beneficial to the environment, but also to the end consumers pockets. From a legislation perspective customer engagement can also be achieved my obliging efficiency in buildings and industrial processes – as done by the currently discussed directives on buildings and energy efficiency. Movement in this direction is ongoing, but not up to speed to trigger a large scale transformation in the sector. Additional momentum could come from the currently negotiated electricity market directive which will enable new business models. Mr Nowak stated that the issue of consumer engagement was taken up in the “clean energy for all Europeans”-package and stressed his optimism on the successful intervention of the different measures – once implemented in the Member states.  Mr Nowak concluded by stating a correction of the energy prices, in particular one that creates transparency on the polluting effect of fossil energy use will be essential to facilitate private investments and to make energy transition a full success.

Mr Rosenqvist replied to this question by stating that, while building a more sustainable society, customers constitute a primary driving force as they are willing to consume cleaner energy and they become more demanding. The speaker continued by stating that ectogrid is breaking away from the classical utility model to a business model in which the costumer takes an active role and invests in a more sustainable society. Indeed, integrated energy systems allow the costumer to choose to rely on big companies to implement innovative power systems or to do so themselves as it already is the case for the heat-pump model. Mr Rosenqvist added that costumers will be also allowed to buy a portion of the grid instead of relying on innovative utilities. As a result new forms of more flexible business model are emerging by empowering and offering more choice to costumers.

Ms Strachinescu firstly explained that involving citizens in the energy transition is one of the main goals of the EU’s “Clean Energy Package”, while adding that giving the right value for the services citizens are receiving is a factor that must be considered, if there is the willingness to use sector coupling to implement integrated energy systems. The speaker also explained the importance of societal involvement by stating that several EU-funded project analysed the consumer reaction to integrated systems, while adding that it has been observed that some parts of the projects were not implementable for a period of time as citizens could not be actively part of the planned actions. Indeed, Ms Strachinescu said that some projects have encountered obstacles in explaining to citizens the reasons and the rational behind the actions. This feature, she stated, must be taken into higher account despite the evidence of the advantages for the citizens themselves. Furthermore, Ms Strachinescu added that in some of the EU-funded project implementation there have been mixed reactions at a country and city level, while underlining that it must also be taken into account that, for example, there could be an area which suffers from energy poverty. Therefore, the question of which service the citizens value the most must also be asked. Ms Strachinescu concluded by stating that the answer to citizens engagement is naturally complex and that the Commission is working on a report in order to better cope with this issue.

The other parts of the debate and the Q&A session covered the following issues: Estimation of ectogrid’s costs; future national and international implementation of ectogrid; ectogrid’s competitive advantage of ectogrid; energy saver capacity of the system; the challenge of regulating this system; selling an energy system; the challenge of innovation; the problem of funding; heat pumps as part of energy integrated systems; the need for further research; competitive advantages; customer involvement strategies; algorithms as a competitive advantage; national and international regulation of the system; politics as a challenge

Do you want to go further into the issues discussed in our debate? Check our list of selected sources, which we have provided for you!

Energy Efficiency, European Commission

Renewable energy: Council confirms deal reached with the European Parliament, European Council

Sector coupling – Shaping an integrated renewable energy system, Clean Energy Wire

Sector Coupling – How far is Germany?, Energy Brain Blog

Sector coupling is key to energy storage’s role in Germany’s Energiewende Phase 2, Energy Storage News

German coal trounced by renewables for first time, Euractiv

E.ON presents clean, digital and decentralized energy solutions during the energy trade fair E-world in Essen, E.ON

E.ON ectogrid, Shared energy for a sustainable city

The keys to decarbonising Europe’s heating and cooling, Euractiv

Cities & communities, Euroheat & Power

The Energy Transition: An Investment Opportunity for Cities and Regions, Energy Central

EU member states must encourage cities and regions in their energy transition plans, EU Parliament Magazine

The power of collaboration for the digital innovations of Smart Cities, GreeBiz