Kraken VPP project to unlock potential of German smart grid

An energy company and a global operating system for energy are to develop a new virtual power plant (VPP) in Germany, with the project looking to optimise energy usage and deliver enhanced grid reliability.

The aim of the collaboration between enercity and Kraken is to digitally connect decentralised generation assets, grid-scale batteries and controllable loads, and optimise them as a single, coordinated system and enable seamless participation in wholesale energy markets.

For its part, enercity contributes a broad portfolio of electricity and heat generation assets, while Kraken provides the technological infrastructure and expertise in aggregating decentralised assets and delivering seamless market access across Europe.

As renewable energy continues to expand across the electricity and heating sectors, the number of decentralised generation assets is steadily increasing, driving up the complexity of market participation.

At present, however, trading options for decentralised assets remain limited in Germany.

Fragmented IT landscape

This is due in part to fragmented IT landscapes and the absence of end-to-end digital processes among market participants. As a result, smaller generation assets in particular are frequently excluded from flexibility markets and short-term trading opportunities.

“In a dynamic and multifunctional energy landscape, efficient control mechanisms are essential. Without digital processes, real-time data, automated forecasting, and intelligent algorithms, this level of complexity cannot be managed.

“Anyone aiming to succeed in the energy market must combine digital expertise with deep energy industry expertise. VPPs are therefore not only a technical tool, but a central element of the transformation toward a resilient and efficient energy system,” said Jean-Baptiste Cornefert, Head of Trading & Energy Markets at enercity.

A more flexible system

An energy system built on decentralised solutions must operate as safely and efficiently as a single large-scale power plant.

The two entities said that in this context, the VPP becomes the central nervous system of the energy transition, combining the capacities of diverse assets into a critical mass, capable of participating effectively in electricity markets.

At the core of the solution is a holistic optimisation approach, said enercity and Kraken.

“As renewable build-out picks up pace across Europe, the challenge facing us today is one of coordination, not capacity. By orchestrating distributed assets as a single, intelligent system, Kraken balances the grid and enables better use of cheap, abundant, clean energy. Together with enercity, we’re building a smarter, more flexible energy system for Germany,” said Charlotte Johnson, General Manager of Flexibility at Kraken. 

Cornerfert said a modern virtual power plant seamlessly integrates electricity and heat.

“It decides in real time whether electricity should be marketed directly, stored temporarily in batteries, or converted into thermal energy via power-to-heat. This addresses the core challenge posed by volatility: making energy available when the market needs it. The virtual power plant is therefore at the heart of sector coupling.”

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New business models 

Going forward, the VPP will cover the entire value chain: from the highly automated onboarding of assets to their real-time optimisation and continuous monitoring of individual asset profitability, through to seamless market access.

It thus creates the foundation for a range of saleable business models.

These include direct access to wholesale energy markets, the optimisation and flexibility trading of battery storage systems, participation in the balancing mechanism, and the intelligent integration of electricity and heat generation, such as in the optimisation of combined heat and power (CHP) systems for district heating.

“The energy transition requires scalable digital solutions that make complexity manageable,” said Johnson.