Load management as a way of covering peak demand in Southern Germany (intermediate findings)

Without timely course corrections, in just a few years Southern Germany’s power system reliability could be under significant stress in certain times of the day/ year. Contributing factors include the reduction in generation capacity as a result of the nuclear phase-out, the fluctuating output from renewable generation, and the current design of the power market. To reduce the risk of power shortfalls, the focus at present is on expanding the grid and building additional generation capacity; in addition, contracts are being signed for backup capacity (“cold reserve”). In contrast, little attention is being paid to actively controlling electricity demand. Yet, load management could be a clean, low-cost way of reducing peak demand and optimizing the capacity utilization of conventional power plants. Unlike the theoretical economic estimates in the studies of potential conducted so far, this project specifically investigated whether and to what extent load management in industrial and commercial processes can increase supply security/ reliability in southern Germany, particularly in terms of temporary regional demand bottlenecks. Above all, this study aimed to discover what obstacles exist and what incentives are needed for the targeted steering of electricity consumption. From these insights, we present recommendations for structuring meaningful economic incentives to tap this potential, in the context of designing the future energy market.