Hello, and welcome back to ‘Watt's up with energy?’. I'm your host, Georgia Knapp. And let's just dive right back into the topic of 14a.

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I am still joined by our own Nicolai Stickler, gridX’s Innovation and Partner Sales Manager.

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Nicolai:

Hi, Georgia.

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Georgia:

Hi. So our last episode was full of a lot of information about paragraph 14a. Now, I kind of want to talk a little bit more about what exactly 14a is doing in the German market, how it's impacting the energy landscape.

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I guess to start us off, if 14a were to play a role in the story of the German energy market, which would it be?

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Would it be the hero, the villain, the plucky little sidekick that moves the story forward?

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Nicolai:

Yeah. The hero, obviously, at least at the end. So maybe it's at the beginning of the movie, you're not quite sure, right?

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It's a little bumpy, and maybe he's the anti-hero, whatever. But at the end, he's the hero, right?

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Saving the world, or at least the German infrastructure.

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Yeah, and why? So I guess to implement 14a, which we touched on in the first episode, there's just a lot that must be done.

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We were talking about different market roles, right?

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We were saying there is like the DSOs and metering operator, and also there's companies we didn't talk in detail about, but those companies, they are actually producing the hardware, the smart meters, the gateways and also these other special devices, Steuereinheiten in German, steering devices you need for 14a.

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So I skipped that in the first part to not make it more complicated. But all of these hardware manufacturers, right, they are producing this very secure stuff, and they have to license that, right?

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So there is German government bodies, they are saying what you have to fulfill from security perspective.

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And these hardware manufacturers, they have to do certifications, and they are also part of this whole chain.

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So looking at that, you could say, it's really like, it's a long story, it's a little bit bumpy, there's a lot of players.

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Yeah, but at the end, 14a is coming out of the, as a hero, together with all the others, I guess.

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Georgia:

Nice.

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And one question that I've actually had around the office now is, so for all of 2024, like when it was January 1st, 2024, we produced our blogs about 14a, social media posts, being like, 14a it’s here, it's here.

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But then as we got further into 2024, for some reason, I felt like I was hearing that 14a wouldn't actually go into effect until 2025?

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Nicolai:

Yeah.

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Georgia:

Can you clarify, like, am I just completely mishearing, or did something happen as soon it was January 1st, 2025?

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Nicolai:

Yeah, so I have to admit, I heard that also several times from different people. And every time I was checking again if something was, you know, something changed, but it didn't.

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At least I didn't find any change, right?

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It started to become into effect 1st of January 2024.

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What I can imagine is that...I mean, in the last episode, I explained that the legislature, when they finalized this section, the amendment, I think it was October or November 2023.

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So all the industry just had, like, four or eight or whatever weeks, you know, like, to, okay, now it's in effect. And obviously, that doesn't make any sense, right? Because it really takes a lot of time to adapt what I just said, right?

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You need new hardware, right? You need new processes, IT, backends, communication. There is a lot of communication just between different players that has to be standardized and adapted.

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So there's a lot of stuff you have to take into consideration. So, I cannot speak from the experience, but I would assume that it was just, you know, the legislator said, OK, let's do it.

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So it's done and everyone has a security that it's there. And then all the players would start actually doing what I had to do. But as of today, right, it's not like everyone is ready, right?

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We touched the topic before with the smart meters, they are still rolling out or actually rolling out, but they have to increase the speed.

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So I would just say it's maybe – it was important to start it.

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And now 2025, I think it just sounds for a lot of people, you know, like, okay, there has to happen something.

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But with regards to 14a, like the legislation itself, it's already live for a year, so.

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Georgia:

OK.

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Nicolai:

What is really coming in 2025, which is then new, is we touched it in the first episode. There is different, like, when you get the reduced grid fees, right?

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I was talking about €150, but I said it could be more.

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How much you get really depends on your, like, on your consumption, but all they call it modules, right?

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You can select between different modules, three of them, and depending on which module you take, you have to, you just get more or less money, right?

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Like, the first module, which is the standard one, it just gives you, like, a lump sum money, 150 bucks on average.

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And like, the other two modules, they're a little bit more complicated, and what is coming in 2025 into effect is module three. So that's really new in 2025.

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Georgia:

Yeah. And what is module three?

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Nicolai:

Okay. So I said what module one is, right? Module two, let's talk about that, is like, that depends on how much you consume, the more money you get back, right?

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It's a percentage, a part of, like, total consumption, meaning the more you consume, the higher are your normal grid fees.

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But it also means if you take module two, right, they will just take a bigger portion of that away.

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So that means if you have, let's just say, a heat pump and an EV, it might be more lucrative for you to take module two.

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If you just have a, whatever, only a car, only an EV, you just take module one.

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That depends, right?

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It's a little bit more complicated.

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There is calculators and internet you can use, but that's different.

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And if you take module three, then there is another factor coming into, like another part of it, which is then like dynamic, I lost the word, dynamic grid fees.

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So that's like an additional part, and then you have the possibility to save even more, but it's even more complicated.

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Let's put it that way.

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Georgia:

In your opinion, I think you were just starting to touch upon it a few minutes ago. How has paragraph 14a been received by energy companies or other stakeholders since its implementation?

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Nicolai:

So as I said, it's a lot of different roles, right? As I talk to different people, especially last week on this Congress, MeteringDays, I would say for the companies that are responsible for grid stability, so the DSOs, TSOs, that's an important tool, right?

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As always, there might be people saying, there could be improvements, whatever, but it's an important tool for them. So that's how I understood them.

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Then the metering operators, so the companies rolling out the smart meters, there's differences between them, right?

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But let's just say, they have their challenges in rolling out these smart meters. But as I said, 14a is really pushing the topic.

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And I also assume that it just gives, the largest gives stability to them, that it has to really happen now, and be fast. So I believe that's also a good one, right?

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So maybe with challenges, but still good.

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And the hardware manufacturers, I guess they're super happy, because there's only a few of them. And as I said, they have to do these certifications, which are already complicated.

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And if you produce something everyone needs, and there are not so many, I guess they're happy, because they're contributing an important part, but also, I guess, they're making okayish money from it.

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So I guess they're also happy.

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To be honest, the end customers...I just talked to my father-in-law and some other people, having their own home, right? For them, it would be relevant. He had no clue. He talked to an installer, but he had no clue.

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So it's not like the majority of people, I would assume. It's one example, right? But I also talked to some other people.

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I'm not sure they're really aware of it.

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Georgia:

That 14a is a topic?

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Nicolai:

That is a topic. What it means for them, right? The good and the bad parts. Bad parts not, but what it really is for them.

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I'm pretty sure the majority, let's just say 95% of people, they don't really know about it.

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And then there's also a very important part, like the installers, right?

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So, from my understanding is they also have like these two sides, right? On the one side, they have the challenge, right?

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To explain maybe more to people when they install stuff, right?

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They just have, there's more explanation to be done because they are the first touch point, right? So there's someone just in your house doing his thing, and then you can talk to him.

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But they are, I mean, it's a hard job, and they have a lot to do, and maybe they just don't have the time, or sometimes the means to explain in detail this stuff.

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At the same time, obviously, they also see that if you then sell additional hardware, like an EMS, for example, taking care of all this 14a stuff is also for them an opportunity to upsell something and give their end customers more value, which is in a good part, so I guess they have like these both sides in their role.

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Yeah, I would say those are the most important roles in how they could feel about 14a. My interpretation at least.

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Georgia:

And how does an energy management system fit into all of this?

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Nicolai:

Yeah, so we touched it in the last episode, right? I can go into detail again.

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So it's really an important puzzle piece. So the 14a and all of what it's doing, right, or what I said is needed to 14a to work is really digitizing everything, right?

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And as I said, there's different ways of connecting these assets to the smart meter or the steering device, what it's called.

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But this, like, connecting everything directly, right? Let's just say it's an old way of doing it. It works, right, and people, like, know how to implement it, but it's really not, you could say it's not really future proof, right? It's what an EMS is, right?

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Because you just, you can just update it, right? So if there's new use cases coming up, you can just, I mean, it's software based, right?

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You can just say, okay, there's new functionality to it.

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Georgia:

Sorry, you say the EMS is not future proof or 14a is not future proof?

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Nicolai:

No, I'm sorry. What I said is, like I was explaining last time, that there's different ways of connecting the assets to the smart meter infrastructure, right?

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And one way is like connecting them directly, just like with a wire. And a wire you can update, right? So it's just there, and it's, let's say, let's say it's stupid, right?

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So in a way. And like an EMS just has a lot of intelligence, and it's also getting smarter. Let's put it that way. So that is what I mean by future proof.

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Georgia:

Got it.

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Nicolai:

Making it an important puzzle piece.

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Georgia:

Okay. And then from a regulation standpoint, because Germany is the only country in Europe doing something like 14a with the controlled dimming.

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Nicolai:

Last time I checked, it is currently the only one doing it that way. So what I know is, I think there is in Slovenia, and also in the Netherlands, there is discussions ongoing, right, regarding, but I have to admit, like, all the different countries and the legislative processes, it's hard to follow everything at the same time.

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So maybe while we talk, there is already something going on, but last time I checked, it's really like 14a is currently a very specific thing for Germany, but we foresee that this is going to come, or might come into effect in maybe comparable ways in other countries, when the countries see that it's working, because the topic of grid congestion is just in several countries a thing, at least, as I said, also in the Netherlands, because there's just a lot of people having PV and stuff, and electric vehicles, and so on.

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Georgia:

And then, so looking ahead, in your opinion, what are the next steps in the evolution of energy market regulations in Germany and in Europe as a whole in light of paragraph 14a?

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Nicolai:

Yeah, let's start in Germany.

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So, there is currently ongoing an amendment, a novella, of EnWG, EEG, and MSBG, so different laws touching all of these parts which are important.

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And they are currently, let's say, on hold, right? Because the German government just has fallen into pieces, and we're looking for a new vote next year.

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And until then, it's not really clear of – if these amendments are passing, right?

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And coming into effect already this year, or maybe then next year, hopefully, latest next year, which is still not good because it costs a lot of time.

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Yeah, but just let's say the new legislature will then pass it finally.

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And let's just pick some important things out of these new amendments.

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So one part is, as I said, for 14a, right, to make the whole process work, you need these smart meters and special devices, and the company is installing them, right? And some of these companies are regulated.

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They can only ask for a specific amount of money if you install it.

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So let's just say there is coming someone to your home, right, installing, and he can only charge, let's say, €60, whatever.

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And that makes it, let's say, there is a lot of cost pressure on these companies, which is then a potential blocker for rolling out this hardware, but we need it.

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And so this new law is actually saying, basically, they get more money.

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Not maybe like what I wanted, but a little bit more, which is, I would say, a good thing from looking at the bigger picture, right? There's also gridX, but that's a part of it.

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So it's like price caps, what I mean, they increase the price caps.

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And then also something which is important is they...So in Germany, we have a lot of PV, right? Installed on rooftops. And we also have PV on just on like, on a field, right?

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Bigger ones.

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Georgia:

Yes.

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Nicolai:

And the bigger ones and the smaller ones, they, let's say, have different, there's different things they have to comply to, right?

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And the, like, this new laws, some of them, they are touching a very specific point.

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They say every PV bigger than two kilowatt peaks, so really like everything that is not a balcony, right? PV, everything that's bigger, so basically everything, right? Has also, must also be, like, in German you say, sichtbar and steuerbar, meaning the DSO must be able to steer this, right? So they must be able to switch it off.

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Why is that important? Because we have so much of installed capacity that if there is a, like, sunny and windy day, like next, say, next year in summer, for example, where people are not working, right?

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Like, their Easter holidays are the prime example for that.

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We have so much installed capacity that all these PV, right? And the biggest part of the PV, I think two-thirds of it or something like that, they are, as of today, not steerable. They will just produce energy and push it into the grid. And if you don't draw this from the grid, right?

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Well, then you destabilize it, which is a problem. And there is things we can do against it, but all the levers we have, they cost a lot of money, right?

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So there is things the DSOs and TSO can do, but it costs a lot of money.

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And so you could ask if it makes sense that all of these devices, right, the PV is just producing without anyone using it.

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And that's why this law is also touching that point and saying all of these new installed PVs bigger than 2 kilowatt peak should also be steerable, which from my point of view makes absolutely sense, right?

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And there's also other big players in the market, like NPAL, 1.5, or flexibility providers, like Flexpower, they are all pushing into this direction, as the legislator is doing, and they are looking forward to this, right?

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And if I could remember correctly, someone from the Bundesnetagentur, they are also pushing into the same direction, which makes sense.

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So I guess that's a very big, important part.

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And yeah, that's something that might come up soon.

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Georgia:

And then how do you think this might evolve the European energy market?

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Nicolai:

Yeah, now it gets complicated.

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So, I mean, I can't really say what I imagine is that, you know, like the different European players, they, hopefully, right, they look at comparable, like countries have different parameters, right?

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So, like, for example, in France, they have a lot of nuclear power, right?

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It's just things are working a little bit differently there from a, yeah, for some parameters.

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I hope that they try to learn from each other and that maybe one country that is more progressive in a way, right, can then maybe adapt something from another one.

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But if, really, on a European level, something like that is regulated, I mean, there is things like the EU Data Act or stuff, which is also influencing us as an energy industry.

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But something like what I just said about the PV feed-in and how that is legislated, I'm not sure if that is something that just countries do by themselves, right?

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I have to admit, I mean, we have a lawyer for that, right?

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So maybe we can ask her next time.

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Georgia:

Maybe that should be the next podcast season.

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Nicolai:

Yeah, why not?

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Georgia:

Just interviewing our lawyer.

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I mean, I think this kind of wraps up the season of 14a, at least between you and myself. I'll be talking with someone from PPC for the next episode.

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But I guess before we get into my next round of rapid fire questions, what, if you could summarize the one takeaway you would want a listener to get from this season, what would that be, about paragraph 14a specifically?

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Nicolai:

So I would want him to take away that 14a is a good thing, right?

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So, not only on a countrywide level, but also on an individual personal level, because it is nothing to be afraid of, but rather embrace it.

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It's not going to influence anything, what you were saying, like your lights or whatever, but it's actually only relevant for specific devices.

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And to make this as easy for the end customer as possible, there's companies offering a good offering, covering that.

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And they should also always look at the benefits to have. They are allowed to install what I wanted to install, and they get reduced grid fees.

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So I guess that's from an end customer perspective, to very positive aspects.

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Georgia:

So yeah, that's what I would want them to take with them. Ah, it sounds like that there's nothing but benefits from 14a?

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Nicolai:

So?

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Georgia:

Just need to spread the word, though, because like you said, you've talked to people who don't, haven't heard of 14a. I have also talked to my friend group about this for about a year and a half, and no one knows what I'm talking about.

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Nicolai:

Yeah, maybe it's also because it's, I mean, if you live in an apartment, right, it's maybe less, you have more touch points if you live in your own house, maybe.

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Georgia:

Yeah.

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Nicolai:

To be honest, I don't have one, so maybe my friends don't, so that's maybe also why my feedback was they were not so much aware, so that can be different, obviously, for us.

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Georgia:

Yeah, same. All right, are you ready for your next round of rapid fire questions?

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Nicolai:

Absolutely not.

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Georgia:

These are a little bit more, a few are more 14a specific. Just keep that in your mind.

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If 14a were a character in a movie, who would it be?

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Nicolai:

The hero.

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Georgia:

But I guess I meant who, like, Iron Man. Mr.Darcy.

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Nicolai:

Thor.

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Georgia:

Thor?

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Nicolai:

Yeah.

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Georgia:

Thor, all right.

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Controlled charging: love it or hate it?

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Nicolai:

Love it.

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Georgia:

What's one unexpected industry that could benefit from 14a?

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Nicolai:

Hardware manufacturers of these assets.

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Georgia:

Weisswurst or Bratwurst?

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Nicolai:

Say again?

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Georgia:

Weisswurst or Bratwurst? 

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Nicolai:

Weisswurst or Bratwurst? What do you mean?

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Georgia:

Aren't they two different sausages?

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Producer:

Weisswurst or Bratwurst, yeah.

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Nicolai:

Ach, wow, sorry.

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Georgia:

Come on, that is what I said.

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Nicolai:

I'm sorry, I understood Weisswurser or Bratwurst? Weisswurst or Bratwurst.

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Georgia:

The white sausage or the normal one?

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Nicolai:

The normal one.

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Georgia:

The normal one?

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Nicolai:

I'm not from Bavaria, I can say it.

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Georgia:

Okay. Should we prioritize residential flexibility or grid stability?

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Nicolai:

That has to work together.

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Georgia:

Okay. When you want to know what's going on in the energy industry, where do you go?

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Nicolai:

LinkedIn.

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Georgia:

Amazing.

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What is the most energy efficient thing in your home?

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Nicolai:

My feet.

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Georgia:

What energy problem would you solve if you had unlimited funding?

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Nicolai:

Yeah, I mean, production in the end. Ah, no, you can't say it. It's a system.

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Let's just say it's the production, right?

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Georgia:

And then if 14A had a theme song, what would it be?

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Nicolai:

Do you know, like, I can't do it, but do you know, like, Pauchen Panther?

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Georgia:

Who?

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Nicolai:

Yeah, maybe it's, it's not German.

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Georgia:

Pink Panther?

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Nicolai:

Pink Panther, sorry.

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Georgia:

Yeah, yeah, yeah, yeah.

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Nicolai:

Because I have to think of that situation where the Panther and the other guy are like painting a column, right?

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Georgia:

Yeah.

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But they're like doing it in this way.

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Georgia:

Oh, they're doing it, they're like kinda, ah, they're both painting the column, and they're, yeah, painting over.

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Nicolai:

Yeah, and it just reminds me of, because, as I said, there's so many people involved in this, right? It just, like, sometimes it felt like someone was waiting for the other one, and that's like a whatever, like one of these circles.

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But I don't know, it's the theme song, so.

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Georgia:

I like that.

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Nicolai:

Yeah.

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Georgia:

No, the one that came to my mind was, “You Can't Stop the Beat” from Hairspray.

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Nicolai:

Ooh, damn it. That's better, way better. Let's take your answer, please. Cut mine way.

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Georgia:

No, I like yours. All right, well, thanks so much, Nicolai. This has been, honestly, a more lively topic than I expected when talking about German regulation.

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Nicolai:

Yeah, me too. That was a lot of fun. Thank you very much.

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Georgia:

If you'd like to learn more about the world of renewable energy or energy management systems, be sure to check out our website, gridx.ai, where we produce regular blogs and glossaries about the subject.

You can also follow us on LinkedIn, or on Twitter and Instagram @getgridX.