The innovative core of Germany's energy sector

Several hundred start-ups are developing innovations for Germany's energy transition - a new hub is providing these start-ups with even more support.

Man in a suit with rockets.© Adobe Stock/Romolo Tavani

The power plant developed by Hendrik Sämisch and Jochen Schwill cannot be touched, seen or smelt. It has no specific location. And yet, it can call on 7,560 megawatts of power, making it one of Europe's largest virtual power plants. In 2009, Sämisch and Schwill created the start-up Next Kraftwerke, where they also serve as managing directors. It is a central platform linking up electricity producers such as biogas plants, wind farms and solar installations with commercial and industrial electricity consumers and storage units. The result is a reliable network that helps participants increase their revenues and provides everyone with a stable electricity supply.

'We are convinced that by 2050 it will be possible to cover 100% of Germany's electricity supply by renewables. In order to meet this goal, we are focusing on every bit and watt, because even the smallest quantity counts when you set up an economically efficient energy landscape', the founders explain.

New business models and considerable digital expertise

There are many German energy start-ups like Next Kraftwerke that are providing key innovations for the energy transition – several hundred at least. These start-ups are designing new business models and feeding their digital expertise into their partnerships with established companies. Many energy start-ups have a high level of digital expertise and access to key new energy technologies. Developing this kind of expertise requires a perfect business environment and time to play around and think outside the box. However, start-ups often face considerable obstacles such as the structural rules governing the energy sector and a complex set of energy policies.

New hub for energy start-ups pools advisory services and information

In order to make life easier for start-ups working in the energy sector and provide these with better support, the Federal Ministry for Economic Affairs and Energy has joined with the German Energy Agency (dena) to create the start-up Energy Transition Hub (SET Hub) – a point of contact and hub for energy start-ups. The hub provides information and advisory services for both start-ups and established companies. It also helps young companies to properly assess what it required from them under the regulatory and energy-policy framework. The SET Hub also features the SET Academies. These regional workshops are held in cooperation with research institutes and universities and provide basic knowledge on the energy system and specialist knowledge on specific issues that are relevant for energy start-ups. Each year, twelve start-ups are selected for SET Mentoring – a personalised coaching programme provided by dena over a period of several months. The Hub also seeks to promote the dialogue between start-ups and established energy companies. The first regional workshop is to be held in Berlin on 14 and 15 May this year.

Innovative energy ideas reach the market more quickly

'We want to make sure that as many new business ideas as possible are moved from the lab to the market and that these help speed up the innovation cycle in the energy sector. This serves to bolster the energy transition and helps start-ups to optimally adapt their business models to the complex rules of the energy market', Andreas Kuhlmann, Chief Executive of the German Energy Agency (dena) says.

Many of the ideas developed by German energy start-ups are so promising that they feature among the submissions for the SET Awards – a prize awarded by dena each year at the international TechFestival to start-ups from around the world. For the 2020 award, 570 applications from a total of 90 countries were received. However, in light of the coronavirus (COVID-19) outbreak in Germany, the event which had been scheduled for March 2020 had to be cancelled.

Many energy start-ups firmly established on the energy market

Many German energy start-ups have become firmly established on the energy market. Whilst Next Kraftwerke has developed into one of the leading virtual power plant operators, start-up Thermondo (which was founded at the end of 2013) has secured a leading position on the heating technology market by placing a key focus on digital customer access and the employment of in-house technicians. Sonnen – a company specialising in battery storage set up in 2010 – is now a leading provider of smart distributed electricity storage units. Its success is based on highly customer-oriented innovations.

Ground-breaking ideas – from artificial intelligence all the way to carbon free building modernisation

Many of the key energy transition technologies that have been developed in the last few years are owed to start-ups from the energy sector; these include smart energy management systems, digital platforms for new forms of electricity trading and for interconnecting many small installations, and cloud architectures similar to those used by large energy providers for managing business contacts and daily business activities.

Start-ups also play an important role in the field of artificial intelligence. Envelio – which was set up only in the middle of 2017 – specialises in the AI-controlled planning and optimisation of distribution grids. This is important because, as the energy transition picks up speed, millions of new solar PV installations, wind farms and charging stations need to be integrated into the distribution grids. The energy transition is making these planning and management procedures ever more difficult.

The founders of ENIT Systems met at the lab of Fraunhofer Institute for Solar Energy Systems (ISE). Their scientific findings yielded a powerful idea: developing a new monitoring and control system that identifies potential for reducing energy consumption in manufacturing and that is geared towards the needs of SMEs.

EcoWorks focuses on carbon-free building modernisation. The start-up can be considered both a construction company and an energy supplier. It modernises apartment blocks with up to four storeys which were built before 1978. It also supplies the building and its tenants with carbon-free heat and electricity from solar panels installed on the buildings' roofs. In Germany, industrial-scale approaches to building modernisation are not that widespread. The German Energy Agency (dena) has launched a project entitled 'serial modernisation of apartment blocks' in order to help develop the market for full-scale modernisation from a single source. EcoWorks' approach is to transfer the Dutch Energiesprong (in German only) concept to Germany.

The SET Hub pools advisory and information services for innovative start-ups, thereby allowing an insight into the innovative core of the German energy sector.