Volkswagen car engines purr in the basement of German green power company Lichtblick’s test site in a church across the street from Berlin’s Jewish Museum.



The VW motors sit inside metal boxes adorned with meters, including one reading “how much CO2 you’ve not released by using this unit.”



It’s not the VW engines that are special – but the software that manipulates them from afar.

Lichtblick controls each of its 1,500 Volkswagen “home power plants” from its Hamburg headquarters. The utility – which says it wants to become "the Google of electricity" – has created an algorithm that automatically starts and stops each VW engine connected to the network based on the usage data it collects.



The system has the backing of the German government, which is pushing Lichtblick’s model – and a similar venture between Honda and meter maker Valliant – because it thinks switching to decentralised power units will make it possible to shut down its nuclear reactors by 2022.



“We are building an IT platform that connects every kind of decentralised power station – be it solar, wind, or these VW combined heat and power units (CHPs) – with every kind of market,” Nick Schalock of Lichtblick said on a recent tour.



Lichtblick’s adoption of CHP generators is not unique – CHP units have long been used in industry and niche operations like university campuses. But Lichtblick’s idea to partner with Germany’s most popular carmaker, and then heavily market the boilers’ green credentials at organic farmers markets nationwide, has made it the most recognisable mini-CHP option in the country.

Like much larger CHP systems, Lichtblick’s engines burn natural gas to create electricity. The waste heat from the engines is captured and used to warm water. By capturing excess heat – rather than simply releasing it through smokestacks into the environment, as do nuclear, coal, or natural gas plants – the system achieves 90% efficiency (as opposed to about 30-40% efficiency for large-scale power plants).

Lichtblick installed the first 1,000 VW units free of charge in commercial and residential dwellings in 2010. When gifting sceptical Germans new boilers wasn’t enough, the company sweetened the deal by giving users a small cut of any electricity generated in their basements.

Four years later, the business has matured to the point where Lichtblick says it can now charge users for the new systems. A three-engine system – suitable for a medium-sized hotel – costs around €50,000 (£40,000) with installation, and can be paid off in three years.

The German utility’s smart grid technology allows it to anticipate demand on the network and generate power when the price for gas is low relative to the price of electricity. One common usage scenario: your neighbour turns on their Xbox and runs their microwave every Monday, Wednesday, and Friday at 7pm. Lichtblick’s algorithm will pick up on this trend and automatically turn on the nearest micro-CHP at 6:59 pm so it can sell power to the gamer – if, that is, the algorithm thinks Lichtblick can make a profit doing this.

But can this model work outside Germany? It is working in markets where energy prices are high, like Japan, the world’s largest micro-CHP market with some 100,000 units. But in markets like the US, where fracking and wind energy have driven down the price of power, the case for adoption is harder (though states like California are pushing micro-CHP through a subsidies programme).

The idea might make sense in the UK, though, said Ilias Vazaios, who authored a study about the potential of micro-CHP units in the UK at the UK-based energy consulting company Ecuity. Vazaios said 1.6m boilers are changed every year in the UK. As a result, the business case for micro-CHP boilers is becoming more attractive.

“In the UK, there’s interest, including from German players,” Vazaios said. “But so far, the deployment in the UK hasn’t been significant.”

But this could soon change. One solution tailored to the UK market is the FlowBoiler made by Ipswich-based Flow Energy. Flow units capture their own waste heat and generate electricity for the home. Some 100 of the Scottish-made units have been installed in a pilot programme near Chester. Flow says it plans to begin selling its innovative boilers to the public by end of the year.

Unlike Lichtblick’s units, however, Flow units and similar systems in the UK don’t sell power back to the grid – yet.

“There’s a discussion about commercialising micro-CHP in the UK to aggregate these units like Lichtblick is doing in Germany,” Vazaios said. “National Grid’s short term operating reserve programme is an example. So, there may eventually be an opportunity for aggregators in the UK to generate electricity in basements the way some German providers are now doing.”