Why energy storage is more important than moving to Switzerland

There is a dominating topic this year which will drive much of our business life in the coming months: cost of living adjustment - or in short COLA. … and here is where it will lead us to.?

Cost of living and how to deal with it will be the dominating topic every business will need to find a solution for.?

• It will will push up our production costs: for restaurants, supermarkets, telecommunication, automotive, consulting, IT workers, travel industries - just everybody.?
• Following this it will hike up demand for higher loans, increase of minimal wage, higher social support e.g. retirement levels and - if not given as expected - more strikes will happen in every industry?
• Because the hike in production costs businesses can’t scope with those developments prices will increase which will lower sales and revenues
• As a consequence businesses will start to reduce their workforce and unemployment rates across all levels will increase - from low level income across large corporations with various salary levels
• So economy as a whole will take a hit over a longer period with low chances of a quick recovery?

Sounds understandable for everyone I guess. The underlaying driver of this COLA trend is high energy cost mainly driven by the Russian invasion into Ukraine and the following impact on the approach energy was sourced over the last decade: take the cheapest supplier and don’t think about avoiding energy consumption hence its affordable.?

But there are two ways we can look forward on this COLA trend:

First route we could take: the highly productive people and companies will leave the powerhouse Germany in the coming months and years. Businesses and their main contributors will not accept higher costs of living and induced higher taxations to fund the steady increase of the supporting mechanisms. With this loss of productivity and revenues the German powerhouse will see a decline in a larger perspective across all parts of our daily life. Less funding for public transportation, education, social care, health care, and many more. Basically Germany will look much like Great Britain today after they lost their main driving force with the position of the city of London following banking crisis in 2007 and Brexit in 2016. Many of those business people and entrepreneurs will leave the country and the most attractive target will be Switzerland. It’s close by, people speak German, they are open for successful business people and like to manage the funds those groups will bring and create to their country. Nothin bad in this attitudes.?

The second route we could take is something different: start to takle the COLA crisis at the root cause and start to drive down energy consumption fueled by external sources - e.g. like gas or oil or importing nuclear energy from our neighbors. In case someone will bring forward the argument we can’t live without those kind of energy I would put the attention to the following graph:?

German 1 day ahead power price plunged to minus €53.87/MWh, the lowest level since 2012 thanks to strong winds & sunshine. The negative price for electricity makes it clear once again that we need more energy storage in order to successfully achieve the energy transition.

Germany can create low cost energy even at a negative price but not all days in a year. So we need to store energy when it is created at lowest price and consume it from those storages when the prices increased again. Sounds simple - but people will ask how this will look like: a giant battery pack??

It is far more simple than many think.?

1. Create a water reservoir at a geographical higher level, pump up water in low pricing times and let it stream downwards through turbines to create energy when you need it.?
2. Create hydrogen through electricity from water and use the hydrogen to create energy from this resource when you need it?
3. Store energy in many smaller cells distributed in offices, data centers, production plants and use it with the machines and power racks when needed. It’s the power of many instead of a centralized system?

There are additional activities we should implement to support this strategy like make it easier to create distributed energy in our households. There is a system called “Balkonkraftwerk” in German. Those a smaller Photovoltaic systems which are mounted in the garden, on the roof or on the balcony and will be plugged in to your electric socket in your home. This will feed electricity into your home appliances to reduce your power consumption from the outside of your home. If the usage of those systems will increase in a densed populated area like Germany this will have a larger impact on our energy balance in the long run.?

This will not make the reduction of our energy consumption unnecessary - we still need to increase the insulation to avoid energy is wasted through the roofs and walls of houses. We still need to exchange our heating systems over time to lower consumption in winter. But this will take time and money which needs to be earned by home owners - and we can’t afford them to pay higher cost of living instead investing in our future.?

As the alternative, those who have the financial means to do so, can move to Switzerland. It’s a nice country and with friendly people. A lot to see, hike, travel to and enjoy. I lived there for three months last year and had a wonderful time. But honestly is it that what we want at the end of the day? Investing our time and work into a more sustainable solution is far more valuable from a long term perspective.?