Germany's Coming Energy Revolution

From vast wind farms and solar arrays to smart grids and distributed power generation, Germany is moving fast into the new age of green electricity

By Stefan Schultz

The power grid of the future is one of humanity's boldest visions. Gigantic wind farms in the sea and enormous solar fields in the desert are to generate the bulk of our power in the years to come. But consumers and companies are also producing energy with mini-power plants in their own basements and solar panels on the roof. And intelligent appliances are saving energy in our homes: washers, dryers and refrigerators that communicate with each other wash, dry or cool when electricity is cheapest. The information age is arriving at a new level: It's becoming the electricity age.

The electricity age is imminent in six German regions: The technology of the future for smart energy management is going to be developed and tested, under the label E-Energy, in several cities. A number of projects will kick into high gear this month. Tens of thousands of homes and hundreds of companies are expected to participate in the field tests. Research will be conducted into the possibility, for example, of homes that can largely produce all the electricity required by a household, as well as energy exchanges that enable consumers to sell any excess, self-produced and environmentally friendly electricity at a profit back to the energy grid.

Together with firms like Siemens (SI), SAP (SAP), IBM (IBM) and energy giants like EnBW, RWE (RWEG.DE) and Vattenfall, Germany's economics and environment ministries have already mobilized €140 million for the development of the associated technologies and the tests. The government has provided €60 million and the industrial partners are raising the rest together with public utilities and smaller, innovative technology partners. According to Ludwig Karg, one of the researchers working together with scientists and communication experts in the model regions, E-Energy is intended to jump-start a greater energy revolution in Germany. "We are providing German companies with future access to markets worth billions," he said.

Companies Create New Super Sector

The project actually does have the potential to speed things up. It could help to explain the new technologies to consumers. Indeed, a number of recent developments suggest the energy revolution is already taking shape. In recent months, numerous spectacular future-oriented projects have been launched:

• In mid-September, the German federal government agreed to the massive expansion of power generation through large offshore windparks.

• Companies like Munich Re (MUVGn.DE), Siemens, Deutsche Bank (DB), E.on (EONGn.DE) and RWE, working together under the name Desertec, want to build giant solar power plants in Africa's Sahara desert to feed the European power grid.

• Carmaker Volkswagen (VOWG.DE), together with ecologically friendly energy utility Lichtblick, wants to install 100,000 mini power plants directly in consumers' homes. Demand for the system has been strong from day one.

• Car parts maker Bosch acquired solar cell manufacturer Ersol in 2008 and, rumors suggest, is currently working to design a solar-powered car.

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