Decentralized energy solutions could deliver between €185 billion and €255 billion in economic benefits for Germany by 2045, according to an Enpal-commissioned study by the global consulting firm Roland Berger. Broken down annually, this entails up to €13 billion/year until 2045.
According to the researchers, these benefits can come from lower system costs, more local jobs, and cheaper energy for consumers and small businesses, thus making these solutions a necessary upgrade, not just an option to consider.
Decentralized solutions are described as an energy ecosystem that generates energy close to the point of consumption or the end consumer and/or stores. This comprises solar PV systems, battery energy storage solutions (BESS), heat pumps, and electromobility solutions.
Such solutions bring direct benefits to consumers by saving money compared to buying electricity from central utilities and by encouraging private investments from households and small businesses. Altogether, this could generate €120 billion to €160 billion in value by 2045, reads the study.
About €40 billion to €60 billion could come from reducing overall system costs, and around €25 billion to €35 billion through lower investment costs, thus taking the total to up to €255 billion.
At the end consumer level, decentralized solutions are also helping evolve prosumers into ‘flexumers’ who not only generate and consume their own electricity, but also adjust its use based on price signals. This helps protect the grid from fluctuations.
Endorsed by an alliance of companies operating in this space, the study sees the growth of decentralized energy as essential to Germany’s electrification, which the writers believe urgently requires flexible and cost-effective solutions. Meeting future energy demand solely with renewables or fossil fuels is not feasible, so it recommends a combination of centralized and decentralized systems.
Decentralized energy can serve as a strong alternative to gas-fired generation in Germany, argue the writers, helping with energy security as it can reduce dependence on fossil fuels and the geopolitical risks tied to them.
“Decentralized solutions and new energy massively reduce infrastructure costs and our geopolitical dependence. It is crucial that generation and consumption are intelligently combined. For gas, this means: First, activate all flexibility! Anyone planning a rigid power grid today, without flexibility and intelligent control, will need more residual load and drive up grid expansion. The costs for this are borne by the general public,” according to the CEO and Co-Founder of 1KOMMA5°, Philipp Schröder.
He adds, “If, on the other hand, we use flexibility, the electricity price will immediately drop for everyone. The solutions are there – now we need to implement them.”
To feed the growing demand, Germany can become a global market leader for the production of solar panels, home batteries, and energy management systems, creating €20 billion to €28 billion in value by 2045. Startups in energy tech, smart grids, and sustainable mobility could add 100,000 jobs (around 5,000 jobs annually), compared to approximately 280,000 jobs in renewable energies by 2023.
“The study clearly shows: The debate about an either/or approach misses the mark. What matters is which solutions deliver the greatest benefit with the least effort,” said Enpal’s Head of Strategy and CPO, Benjamin Merle-Oberheide. “Decentralized approaches are the ‘low-hanging fruit’ – we should finally integrate them better into our energy system.”
The study was recently released by an alliance of energy companies active in the space, comprising Enpal, 1Komma5°, LichtBlick, Octopus Energy, Thermondo and Volkswagen Group Charging (Elli), Bosch, E3DC, Enercity, Energy Partners, GridX, Maxx Solar, Metiundo, Ostrom, Polarstern, Rabot Energy, Solar Manager, Sonnen, Spine, Techem, The Mobility House Energy, Tibber, and Vonovia.
The alliance demands a political and regulatory framework to unlock the savings potential of these decentralized solutions. It advocates for flexibility, fair compensation, cost-effective and dynamic grid fees, smart meter rollout, a gradual and predictable phase-out of subsidies, and for Germany to officially quantify its non-fossil flexibility needs as a national target by 2026.
Titled Die Rolle der Dezentralen Lösungen im gesamtkosteneffizienten Energiesystem, the complete study in German is available for free download on the alliance’s website.
It follows the publication of the country’s Energy Transition Monitoring report, which proposes an end to subsidies for solar PV (see Germany Releases Energy Transition Monitoring Report).
