The energy supply system in Germany is becoming less centralized. 25.8 percent of power consumption in Germany was covered by renewable energy sources in 2014 according to the Federal Association of the Power and Water Industry (BDEW). Biomass, wind energy and photovoltaic plants with smaller outputs are distributed across the country.

However, even conventional power plant technology is becoming more decentralized. Today, block heat and power plants that can produce electricity and heat at the same time are available in such small modular sizes that they can be employed to heat single buildings. The sector calls this technology "electricity generating heaters”". Its development could be impelled further once fuel cell heating, which manufacturers have been working on for several years, is ready for larger scale serial production.

The use of decentralized power plants brings technical changes to power generation and to the power industry; power is increasing being fed into the distribution network and not high voltage level grids. However, the network was not designed for this use – it was constructed to distribute electricity coming from high voltage grids – and needs to be technically reequipped with, for example, controllable local network transformers.

BKWK Managing Director Wulf Binde also attaches great importance to virtual power plants.

"When electricity is needed on the grid and heat from CPH installations can be used or stored, these systems can be called on jointly to generate electricity." If too much electricity is being fed into the system, the installations can be restricted or shut down and heat consumers can be provided with energy from the accumulation.

Virtual power plants and storage are among the trend topic at Energy 2015. The leading international trade fair for energy and environmental technology at HANNOVER MESSE presents new products and services to transform energy systems. With over 40 manufacturers of CPH and CCHP plants, the joint pavilion “Decentralized Energy Generation” is a highlight at Energy. Daily panel discussions will shed light on the economic potential of decentralized energy generation and the basic political parameters.

Contracting providers are also present at the exhibition and forum. Service providers will set up and operate virtual power plants, electric storage, and block heat and power plant modules on behalf of companies and housing societies. In addition, they run technical operations, market power surpluses and buy energy when there is a shortfall.

Decentralized power generation not only relieves national grids but also increases the efficiency of the entire system if electricity and heat are produced by combined heat and power. Here the energy that is found in fuel is utilized in the best possible manner. Depending on the size of the installation, energy efficiency of 43 percent and an overall efficiency of up to 96 percent is possible. This is based on an exact plan of the overall energy system so that public utility use is adjusted as closely as possible to the customer’s need for heat and electricity.

According to Sabine Gores of Öko-Institut, sales of fossil CHP plants have been rising "continuously, but not explosively" for years. In part, the trend has slowed down due to the partial taxation of self-generated electricity since the 2014 amendment to the German renewable energy act (EEG). A recent Prognos survey for the German government sees untapped CHP potential in the industrial sector in particular. For plants supplying property and industry, profitability depends strongly on the proportion of self-produced electricity and electricity procurement costs. The cost of electricity for energy-intensive companies, often exempt from electricity and energy tax and the EEG assessment charge, is so low that investments in larger cogeneration facilities are hardly worth it, according to Prognos.

Heinz Ullrich Brosziewski, Vice President of B.KWK, calls for a change of attitude in industry. "A two-year return on investment is practically impossible in this domain. As a rule you need four to seven years for conventional static amortization of a reasonably priced, highly efficient CHP plant."