Just a year or two ago, LichtBlick, a Hamburg based supplier of environmentally friendly sources of electricity, was seen as a niche player in the energy sector, hardly known to the country’s conventional energy suppliers. Recently, however, representatives from large power groups such as E.On, RWE and EnBW have been flocking the company’s headquarters to see what the future holds for the power industry.

LichtBlick CEO Heiko von Tschischwitz is convinced that in just a few years’ time the conventional energy market will have ceased to exist in its current form. Since the German Federal Government adopted its new non-nuclear energy policy, under which solar and wind power is being pushed into the market, the conventional energy suppliers’ business model has been faltering. Many power stations are now operating at below capacity utilisation and must be taken off line.

At the same time, a growing volume of power is being produced on a decentralised basis and also increasingly stored on a local basis in a myriad of small units. “Consumers will be turning into producers and customers into people who are actively shaping the energy market”, predicts Tschischwitz, who is convinced that this trend can no longer be halted. “In just a few years’ time”, he says, “the entire system will be effectively placed on its head”.

“With our software, we are able to integrate and control entirely disparate systems of any number to create virtual power stations”, explains LichtBlick director Gero Lücking. Large companies such as Deutsche Telekom and Google are also working on similar solutions. However, they have not been exposed to the complicated German electricity market and are consequently a long way behind.

LichtBlick is in an entirely different situation with its SchwarmDirigent or mini-swarm software system, and the platform arose from the company’s greatest tragedy. Originally, LichtBlick had wanted to unroll the German energy market together with VW. However, the spectacular plan of selling thousands of VW-built combined heat and power stations to private households in order to replace large power stations failed.

From the outset, the systems suffered from teething issues, and when a reliable version of the power station was ready to be launched after five years of development, VW was no longer interested in working solely with LichtBlick. An exclusive agreement was not honoured, prompting LichtBlick to initiate multi-million euro court proceedings.

However, LichtBlick soon realised that the software they had designed for controlling combined heat and power stations held huge potential. After a few adjustments, they found, the software could be applied to the entire decentralised energy market. This prompted LichtBlick to invest millions of euros in new IT systems and additional software developers.

A preliminary version of the platform is now ready and in newly constructed smart buildings in Hamburg, LichtBlick is currently exploring how a non-centralised energy market could work for average families of the future. Eleven families are now part of a multi-year study, which LichtBlick is conducting in conjunction with the German Federal Ministry for the Environment.

Unlike conventional buildings, the entire energy requirement of this smart buildings in Hamburg is based on the availability of sun and wind power as well as real-time electricity exchange prices. If sufficient regenerative electricity is available, massive power and heat storage units are filled with energy produced by the building itself or with inexpensive ecologically produced electricity from the grid.

If, on the other hand, electricity prices are high because the sun is not shining and the wind is not blowing, large quantities are automatically extracted from the storage units and fed into the public grid, where they are sold at top prices.

The entire installation comprises three main components; firstly, a rooftop photovoltaic (PV) system capable of supplying the entire house with energy when the sun shines. At the same time, the PV system feeds three modern, cabinet-sized lithium batteries, which are capacity sufficient to cover the house’s energy requirements for one day even when there is no sun. Secondly, a small combined heat and power station in the basement produces electricity for the public grid and the battery, simultaneously generating all the heat required, which is preserved in two large hot-water tanks.

Thirdly, outside the house, charging stations for two BMW i3 electric cars have been installed. The inhabitants of the house are allowed to use the cars free of charge provided they enter their planned routes early enough in a smartphone app. If the cars are not being used, their batteries are also available to cover any shortfalls in the public grid.

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Total investments are expected to be recouped within a few years. In fact, the electricity required to power the cars could possibly even be provided free of charge according to current projections. The project also makes good economic sense both at a macro and a micro level.

With the right technology and software, it is possible to combine thousands of such decentralised systems across an entire region to create “virtual power stations”. This would essentially remove the need for large back-up power stations to bridge days on which there is insufficient wind or sun.

The potential is incredible, and not just with wind farms and combined heat and power stations. In a recent study, investment bank UBS predicts that over the next few years Germany and other European countries will see a veritable boom in combined systems comprising PV modules and large storage batteries. The bank goes on to say that the current exorbitant price of batteries will drop by half once volume production commences.

Award winning, LichtBlick, now Germany's largest independent provider of genuine green electricity and green gas. It has announced a global energy collaboration with Tesla to intelligently integrate Powerwall Home Batteries into the energy market. While BMW and VW, in addition to several major conventional power providers, have also approached the firm. What a difference a few years can make.