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German mini power stations augur change for big firms

FRANKFURT (Reuters) - Energy conscientious Germans taking power production into their own hands may give a wake-up call to established utility firms, as innovators roll out new competition on the clean energy front to grab market share.

A daring plan by alternative power firm LichtBlick and carmaker Volkswagen to put mini power stations into people’s basements from next spring shows big generators that their fossil-fuel-based power stations could become replaceable faster than they thought.

Germany faces elections this month and the country’s four big suppliers have been banking on a conservative win that would give them time to adapt slowly to the low carbon emission future that is so dear to consumers in Europe’s biggest energy market.

“The big power companies are still earning good money with the old structures but it is essential that the top managers can think up ways to put money from the generation business into investment areas closer to the customers,” said Holger Krawinkel, energy expert at German consumer organization VZBV.

“That could be decentralized power and heat units in basements or solar panels on the roofs,” he added.

Upstart green technologies have a mountain to move, though, as the big guns defend the status quo.

“The structural change of the current generation mix has to be both long-term and flexible,” Rolf Martin Schmitz, a board member at coal-biased group RWE, flatly told a conference earlier this month.

RWE, sector peers and parties across the spectrum do support targets for renewables such as solar and wind power to provide at least 30 percent of the power mix, double the current 15, and have made efforts to tap into the potential.

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But environmentalists want a quicker pace and warn that Germany’s green-minded consumers will vote with their feet once alternatives become widely available.

“Renewables will become price competitive within 10 years and customers will leave the big companies in droves,” said Hans-Josef Fell, parliamentary energy spokesman for the country’s Greens, which could well be in the next government.

As retail markets are open to choice, consumers will turn their back on the operators of nuclear and fossil-fuel-based power plants, which burden the environment and face expiring feedstock resources as fossil fuels dwindle, Fell argued.

“Big utilities still cling to these options because they have not abandoned their old ways of thinking, but they will be proven wrong,” said Fell, who founded the Berlin research body the Energy Watch Group.

These remarks chime well with a population keen to adapt anything “green” from wood pellets-to-power to electric bikes and one which could well take to energy generators in their basements.

On a day-to-day basis, the power industry is still ruled by E.ON, RWE, EnBW and Vattenfall whose large centralized power stations provide over 80 percent of German power via layers of transmission grids they operate.

CHANGING ZEITGEIST

If still in its infancy, the Volkswagen/LichtBlick project challenges this 30 billion euros ($44.1 billion) industry.

The new units, of which they aim to install 100,000, would run on natural gas piped to consumers and produce power plus heat at higher efficiency rates than generation plants.

If carbon-free biogas from renewable crops was used to fire them later on, the sector would become carbon neutral.

Engineers plan a further step whereby the users could turn producers by feeding power back into the grid, triggered by data connections, on days of low usage.

Some 2,000 megawatts could be produced initially, which is the size of two nuclear blocks and enough to power a metropolis.

Plenty of opposition has been expressed toward the energy industry in election debates by lobbies demanding more energy savings, increased efficiency drives, and a renaissance of local utilities away from the control of the big groups.

All fuel sources have come under attack. Campaigners dislike coal for its high carbon emissions, nuclear for security risks, and gas for its dependency on Russia and oil-linked costs.

Industry association BDI has already warned the population’s sensitivities could lead to “creeping de-industrialization.”

But once the election produces new political constellations, time will be devoted to a more sober review of Germany’s energy options, said Matthias Heck, analyst at Sal Oppenheim.

“For example, several nuclear plants are scheduled to be phased out, so the next government will have to take the responsibility for nuclear plants’ lifetimes and bear the consequences,” he said..

Reporting by Vera Eckert; Editing by Keiron Henderson

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