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Post Interview Crowd balancing November 21, 2023

Harald Köhler – Head of System Management at Austrian Power Grid

Short CV

Harald Köhler has his educational background in electrical engineering, studied at the technical university of Vienna and specialized in the field of energy technologies and energy economics. In 2007 he started his career at Austrian Power Grid (APG) and took responsibility in various functions since then. From 2010 to 2014 he was heading the Strategic Network Development team and then took over responsibility for the Operational Management department. Since 2022 he is Head of System Management, which is dedicated to creating an optimal energy system and designs key market and operational mechanisms and tools to manage the energy future. This includes especially ones aimed at flexibility needs like balancing, congestion management, re-dispatching, wholesale market integration and cross-border capacity management.
On European Level he is Member of the ENTSO-E Market Committee, the Steering Committees of the Capacity Calculations Region of Core and Italy North, while he is currently chairing the latter one.
Besides his new engagement in the supervisory board of Equigy, he is as well member of the supervisory board of APCS Power Clearing and Settlement in Austria.

Harald Köhler is Head of System Management at Austrian Power Grid (APG), the backbone of Austrian power supply. His department is dedicated to creating an optimal electricity system and designs the mechnisms and tools to manage the energy future, especially ones aimed at flexibility needs like balancing, congestion management, re-dispatching, wholesale market integration and cross-border capacity management.

What is the ambition for your organisation in relation to the energy transition and the need for flexibility?

Austria is at the very heart of the continental European power system. The energy transition is taking place in our country and all around us. All countries are facing the same challenges and setting targets to help achieve them.
Austria’s goals are to have fully renewable electricity supply by 2030 and a fully renewable total energy consumption by 2040. To achieve our 2030 goal, we will have to double the installed renewable energy production capacities. Effectively, this means about 15 GW new renewable energy generation must be implemented in our system in the next seven years.
Additionally, the decarbonization of Austria’s energy consumption will lead to a massive increase in the demand for electricity.
This poses a huge challenge for us as a TSO. Our calculations show that we will need to substantially expand the grid, not just extend it, and do so very quickly. Factually the infrastructure we have constructed over the past 60 years will have to be doubled in the coming 16 years. Flexible generation, storage and demand will be especially essential to bridge that time gap.To complicate matters further, conventional flexible generation capacities – like gas fired power plants – are not any more financially viable and therefore tending to shut down. Hence there is a clear east-west divide in Austria. Most of our industry is concentrated in the east, around cities like Vienna, Linz and Graz. However, almost all flexible power generation – mostly hydro energy – is situated in the mountainous west. In short, we will need more sources of flexibility to be operationally secure.

How can the industry prepare for the energy transition?

We have already seen consumers switch from fossile fuel-fired heating to other sources such as full-electric heat pumps. Now the industry is developing and started executing plans for decarbonisation. One of the steel manufacturers based in Linz plans to switch stepwise to electricity. They are working on 300-600 megawatt installations from 2027 to 2030 and aim to achieve full decarbonisation in 2050. This could lead to an additional electricity load in Austria of some 20-30 terawatt-hours, which is nearly a 50% increase. And this is just for one of many major companies based here.

Can energy flexibility help the industry to decarbonise?

The gas-crisis caused some movement, but there are currently not sufficient incentives for European industry to move to energy flexibility. Historically industrial processes are rooted in optimizing production, warehousing and logistic processes based on cheap baseload energy prices. Hence companies today operate on models that are rather inflexible and so is their resulting energy usage.. The companies of tomorrow will have flexible processes in place to deal with and benefit from flexible energy prices and their participation in flexibility markets – this can be a success factor for their business models.

Can residential sources of flexibility play a role in the future energy landscape?

Two-thirds of the total energy consumption in Austria is related to industry and commerce, making it the biggest lever for change. However, there are huge installations of residential PV, local electricity storages and heat pumps ongoing, which are interesting in terms of downward and upward flexibility. Unfortunately, we cannot influence them on broader scale at present. That is why we want to create a level playing field with incentives for both industry and residential parties to participate.

What are the biggest challenges we need to overcome?

We need to work on three areas: awareness, access and action. The gas crisis – as unfortunate as it was – has helped to create awareness for the energy transition. But as prices drop, I fear that the awareness and urgency will ebb away. As system operators of the future, we need to keep awareness levels high among a broad group of consumers, industrial companies and politicians. To create a level playing field, we need a system that is easy to access, secure and enables as many kinds of units as possible to participate in a flexible energy market and system services. There are still enormous technical and organisation challenges in front of us. Standardization is crucial here. As a TSO we are pushing for this, too, as we realise that a stable future electricity system requires multiple sources of flexibility.
Last but certainly not least, we need to create incentives to get everyone on board. The costumer is at the heart of a future system, but like the human heart, he needs to be active – preferably even proactive! We need action and we need it now, not tomorrow.

If we look at 2035, what is the biggest change we will have accomplished?

I am convinced that Austria will be 100% renewable in terms of electricity and that we will be well on our way to achieving our 2040 goals. Throughout Europe, it will require an awareness that there is more to the energy transition than simply implementing renewables in the current network: a future-proof energy system requires a strong infrastructure and a new system of market design, with the consumer and prosumer at its heart.
Together, we will make it happen. It will, however, require a clear focus and continued engagement from all parties involved. No single party can do it alone.

What does the energy transition mean to you personally?

What I do here at APG is more than just a job to me. We are working on the future of Europe and the world. The energy transition is one of the biggest challenges to our society right now. I am happy to be able to play a role in making it happen.

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