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PRESS RELEASE: The EU must look to Virtual Power Plants to help avoid electricity grid collapse


Brussels, May 16, 2022. As EU and national governments rightfully drive a shift to electrification, urgent policy measures are needed to reduce the resulting pressure on electricity grids. One solution is for policy, including the EU’s REPowerEU action plan on May 18, to support the creation of Virtual Power Plants fuelled by massive amounts of untapped energy in homes across Europe.


To phase out Europe's dependence on fossil fuels from Russia by 2030, the European Commission has proposed rolling out 30 million heat pumps in houses across Europe by the end of 2030. The shift to heat pumps will make electricity demand skyrocket. An analysis by Knauf Energy Solutions for Germany alone shows that matching the annual levels of electricity needed will require renewable sources to deliver 2,167 TWh per year: almost five times more than the current electricity supply.


To safeguard electricity grids, EU and government policy must help to create virtual power plants from new alternative sources of energy. Today 97% of homes leak energy. Smartly renovated homes could be transformed from passive assets at the edge of our energy system to active contributors to energy security. If 400,000 homes were renovated, this would save the need for a 1 GigaWatt power station at a fraction of the cost.  In effect, energy efficiency can become a “virtual fuel” and linked together, homes will become “Virtual Power Plants”.


However, renovation policy “as usual” will not deliver. Despite new breakthrough technologies for smart retrofits, current policies are not tackling the market failure that dominates smart renovations.  The market fails because it neither meters nor rewards the energy saved through renovations. Instead, it rewards the number of windows replaced or the number of lofts insulated. The resulting energy efficiency is fictitious and has led to a market where no one can be sure that they are getting what they pay for. The EU’s annual renovation rate is stuck at 0,3% when it should be at 3%. 


“There’s an unmissable opportunity for Europe to show a new vision for sourcing energy. Governments can now choose to invest in low carbon renovated homes creating Virtual Energy Infrastructure – that is metered energy savings removed from the energy system through the deployment of energy efficiency infrastructure – rather than building a new carbon intensive power plant. 49,000 Terrawatt hours of heating and cooling can be effectively identified, curtailed and shifted. That’s 20% more than the proven reserves of the largest shale gas play in the US – a €1tn opportunity in Europe alone” says Mark Fell, Co-Managing Director of Knauf Energy Solutions.


“It’s crucial that actions such as the REPowerEU plan replace the current failing renovation policies with an approach that rewards measured, accurate performance of renovations” says Barry Lynham, Co-Managing Director of Knauf Energy Solutions. “For the first time, there is precise measurement technology to properly manage houses as an active part of the energy system. The REPowerEU plan should capitalize on such innovation by motivating EU Member States to launch "Pay for Performance" pilots that pay for the real and accurate number of kWh saved through renovating.”


Press contact: Anita Kelly: Tel +32 498 11 21 48


About Knauf Energy Solutions

May 16 Press Release
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