(Editors note: 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 their website for that matter, to find out what they are about. “Let the fossils rest in peace,” the logo suggests. Another sign at their technology centre 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 believe they have a technology that is equally disruptive, and can break down one of the last barriers to 100 per cent 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 10MW-sized battery parks, using battery systems that it says can stabilise the grid faster, cheaper and with greater precision that conventional generation.

It says that these systems can substitute 10 times the capacity from conventional generation – coal, nuclear and gas – and at a fraction of the cost. According to Younicos spokesman 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 80GW would no longer be needed – at least for frequency and stability purposes.

This is critical is Germany. The sheer scale of their solar PV installations – it has more than 35GW – 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, this has caused spot prices to plunge well below zero.

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

(Of course, that is not the only impediment to 100 per cent renewables – enough solar and wind power needs to be built, and other storage is needed, battery storage to respond to variations in load on a minute by minute and hour by hour basis, and longer-term or “seasonal” storage, which can take excess production and store it – synthetic diesel, hydrogen etc.).

Younicos’ claims are bold, but they are not impulsive. The company was founded in 2006 by executives at German solar manufacturer Solon, who were frustrated that the company could not raise finance for battery storage, which they saw as the next key development.

They have taken a long-term view. Hiersemenzel says 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 in developing software, and has spent the past six years quietly going about the research, testing various battery storage technologies, and developing the proprietary software to make smart inverters to tackle this market.

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

The €15 million technology centre 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 says 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.

It 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 their test centre, but at a scale of 2.7MW/10MWh, it will combine with 5.4MW of wind turbines, and 1MW of solar PV.

This means that 100 per cent of the output from solar and wind can be used, the island can be up to 70 per cent renewable by 2018, and save €18 million of diesel that needs to be shipped in by tanker on a weekly basis. The next step is to use “excess energy” to turn local bio waste into synthetic diesel from a back up system. That will mean that the island becomes 100% renewable and 100 fuel independent.

But the truly unique aspect of Younicos technology is in the battery park. It is currently building a 5MW/5MWh 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 6MW/10MWh 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 these projects will be commissioned in 2014, and the company is currently in talks about its first commercial 10MW battery park.

“The conventional generators will fight us on this , but they will lose.” Hiersemenzel says.

“They will say they need to be running, need capacity market. But we have to choose between systems. Either you have one system optimised 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, smart phones or washing machines to stabilize the grid.

“We don’t need duplication of communications with 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 their 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 smooths out the frequency issues for the local grid, which should operate at or close to 50 hertz.