Our new series of blog posts introduces this year’s participants of Japan Energy Challenge. In this edition, we speak with Jochen Schwill, Founder & CEO of Next Kraftwerke, where he discusses the role his company can play in the future of Japan’s energy market.
Next Kraftwerke allows its clients to aggregate, monitor and manage their decentralized energy resources via a Virtual Power Plant. Considering the scale of the energy system’s transition to renewables, and its impact on stability and un-interruptibility of supply, there is a significant amount of interest surrounding so-called energy management technologies that can help mitigate these effects. In this article we’ll try to shed some light into what makes Next Kraftwerke stand out from the rest.
Hi Jochen, can you tell us a bit about the company and its founders?
Us founders Hendrik Sämisch and Jochen Schwill were working on our PhD theses at the Cologne Institute of Energy Economics (EWI) when we started thinking about flexibility and how it would be possible to quickly balance out the volatile influx of renewable energy in the future. This was the start of the idea to build a Virtual Power Plant (VPP). That was back in 2009.
Today, we digitally connect about 7,700 small and medium-sized energy consumers, producers and storage systems in our Next Pool, aggregating their capacity. Electricity producers include biogas plants, cogeneration systems, photovoltaic installations, and hydropower and wind power plants. We use the aggregated capacity to supply transmission system operators with control reserve for stabilizing the grid. We also directly market the regular electricity generated by all of these systems via the energy exchange, and we optimize plant production by regulating it in response to the energy exchange’s price signals.
How does your solution fit within the wider trends of Digitalisation and Decarbonisation in the energy sector?
Today, we have aggregated an overall capacity of around 6,900 MW. In doing so, we replace the equivalent of about four coal-fired power stations. We develop the algorithms that optimize and dispatch decentralised and green power producers as well as flexible power consumers bringing together the technology and energy industries. Using the means of digitalization, we were able to build the Virtual Power Plant just by connecting assets that are already there. Consequently, we do not own one single unit that we connect, but with our technology and the consent of the owners, we can ramp the units up and down as if we were a real power plant.
Are there milestones you are particularly proud to have achieved as a company?
We are a very fast growing business, so there have been several milestones over the past 10 years. Let me just pick some: The first two big milestones were back in 2011 when we delivered control reserve to the TSO for the first time and in 2012 when the EEG changed and we became an energy trader overnight. In 2014 we opened our first international offices in Belgium and Austria and in 2017 we introduced our trading-portal Nextra and our software as-a-service solution NEMOCS, which enables third parties to build their own VPP.
Let’s look at Japan Energy Challenge’s scope: what specifically attracted you about the prospect of expanding to the Japanese market?
From our experience, Japan’s energy sector is strongly interested in the European model of energy transition and the concept of DER management. It seems that the European energy market design is going to be a role model for Japanese regulation, in particular regarding the control reserve markets. Currently there are many VPP pilot projects in operation and we started first collaborative projects with Japanese partners. The Japanese market, therefore, is very promising for our VPP software-as-a-service solution NEMOCS. Building on our first experiences we want to expand our activities in Japan. JEC is the ideal platform for us to build up sustainable, reliable business relations with Japanese partners.
And finally, how will your solution promote the expansion and modernisation of the Japanese energy sector?
Our VPP software-as-a-service solution NEMOCS is a control system software, which provides an advanced IT infrastructure for VPP operations. It enables our clients to aggregate, monitor and manage thousands of decentralized energy resources in a very performant, reliable and beneficial way. It is developed based on 10 years of experience in VPP operations in Europe and combines standard IT technology with profound energy market knowledge. Having a ready-to-market VPP solution in place, NEMOCS can be deployed very quickly in Japan, which helps Japanese partners to become frontrunner in the energy sector. VPP technology contributes to reduce overall system costs, helps to integrate renewable energies into the system and enables DER to take part.
Next Kraftwerke will be taking part in Japan Energy Challenge in London this year, you can read about the other companies taking part in this year’s edition here. You can also find out more about the program, ventures and sponsors by clicking the links.