This is part of a series of interviews and stories that will run over the next few weeks looking at Germany’s Energiewende, and the transition of Germany’s energy grid to one dominated by renewable energy. You can find them all in our Insight section.

You don’t have to go far inside the headquarters of German battery storage company Younicos, or even its website for that matter, to find out what it is about. “Let the fossils rest in peace,” the logo says. Another sign at the company's technology center east of Berlin proclaims: “You are now leaving the CO2-producing sector of the world.”

This sign is designed to mimic those which adorned the checkpoints that separated the various sectors of east and west Berlin before the wall was torn down. Younicos believes it has a technology that is equally disruptive, and can break down one of the last barriers to 100 percent renewable energy: the need to run fossil-fuel generation to control the “frequency” of the grid, and the other system services such as voltage control.

The company, based in Berlin Adlershof on the eastern outskirts of the capital, is developing ten 1-megawatt battery parks, using battery systems that it says can stabilize the grid faster, cheaper and with greater precision that conventional generation.

It says that these systems can substitute ten times the capacity from conventional generation -- coal, nuclear and gas -- and at a fraction of the cost. According to Younicos spokesperson Philip Hiersemenzel, each battery park can be installed at around €15 million, which means that for an investment of €3 billion, conventional generation in Germany’s 80 gigawatts would no longer be needed -- at least for frequency and stability purposes.

This is critical in Germany. The sheer scale of the country's solar PV installations (it has more than 35 gigawatts) means that on some days it already produces more than half the country’s electricity needs. But baseload generators have to keep running for the sake of frequency control and system stability, and this has caused spot prices to plunge far below zero.

An 80-gigawatt grid needs about 20 gigawatts to 25 gigawatts of “must-run” balancing to maintain frequency and keep the grid stable. Younicos says 2 gigawatts of its battery parks would render this need redundant. Around 200 of its battery parks could be installed around the country at a total cost of around €3 billion.

Younicos’ claims may be bold, but they are not coming from out of the blue. The company was founded in 2006 by executives at German solar manufacturer Solon, who were frustrated that the company could not raise financing for battery storage, which they saw as the next key development.

The founders have taken a long-term view. Hiersemenzel said that while other companies had legacy systems and struggled to develop new ideas without thinking about those, Younicos did not have the same inhibitions.

It saw the sweet spot in the market to be in developing software, and has spent the past six years quietly conducting the research, testing various battery storage technologies, and developing the proprietary software to make smart inverters to tackle this market.

The battery storage test center at Younicos

In 2009, Younicos started operating a 1-megawatt testing facility at its headquarters (pictured), using office space abandoned by Solon. It is the first of its size in Europe. It features a 1-megawatt/6-megawatt-hour sodium-sulfur battery, and last year it added a 200-kilowatt/200 kilowatt-hour lithium-ion battery array, and integrated it into the German frequency regulation market.

The €15 million technology center uses weather data to simulate wind and solar output anywhere in the world. And it uses real power flows to test the systems, to test loads, and to test transmission and distribution issues. He said it serves as a training facility, as well as an education facility for journalists, politicians and bankers.

Younicos is privately held, although Samsung is at least one shareholder, having invested in the company when it took up its lithium-ion batteries. Another shareholder is Gildemeister, which manufactures the Cellstrom Vanadium-Redox Flow batteries.

The company is installing a more conventional battery storage system on the island of Graciosa in the Azores, in the Atlantic Ocean. Using the same combination of battery technologies as at the test center, but at a scale of 2.7 megawatts and 10 megawatt-hours, it will be combined with 5.4 megawatts of wind turbines and 1 megawatt of solar PV.

This means that 100 percent of the output from the solar and wind can be used. The island can be up to 70 percent renewables by 2018 and save €18 million from avoiding the purchase of some of the diesel that needs to be shipped in by tanker on a weekly basis. The next step is to use “excess energy” to turn local biowaste into synthetic diesel from a backup system. That will mean that the island could become 100 percent renewable and fuel-independent.

But the truly unique aspect of Younicos' technology is in the battery park. It is currently building a 5-megawatt/5-megawatt-hour lithium-ion battery park in Schwerin, north of Berlin, for a local distributor. It will be the largest commercial battery in Europe.

It is also providing its software for a 6-megawatt/10-megawatt-hour lithium-ion battery park in England, which will be used for peak shaving as well as other system services such as frequency control and balancing. Both of these projects will be commissioned in 2014, and the company is currently in talks about its first commercial 10-megawatt battery park.

“The conventional generators will fight us on this, but they will lose,” Hiersemenzel said. “They will say they need to be running, need capacity market. But we have to choose between systems. Either you have one system optimized for nuclear and coal, or one for renewables. This is a choice that should be made now. Just tacking on a renewables system onto an old one just makes it more expensive.”

Hiersemenzel compares the network operators to penguins on an ice shelf. Most are huddling together, waiting for a few individuals to jump into the ocean first, and see that they don’t get eaten by killer whales. Once the coast is clear, they will all jump in at the same time.

Hiersemenzel doesn’t think much of smart grids. “I don’t have a problem with smart grids; I just don’t see their business case. I don’t think we will use electric vehicles, smartphones or washing machines to stabilize the grid. We don’t need duplication of communications with the normal grid. We should not let IT people get too much further into the grid; we should leave it as simple as possible.”

This graph below shows how the company's remote storage system works. The purple area is the key. When it is above the line, it is charging from excess wind and solar generation; when it is below the line, it is discharging to make up for the lack of renewables. Notice in the bottom graph how it smoothes out the frequency issues for the local grid, which should operate at or close to 50 hertz.

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Editor's note: This article is reposted in its original form from RenewEconomy. Author credit goes to Giles Parkinson.