The Orchestration of Flexibility: How enercity and Kraken are Redefining the Virtual Power Plant

In the heart of Lower Saxony, a quiet revolution is taking place on a commercial parking lot. In late May 2024, a fleet of twelve Volkswagen ID. Buzz electric vans stood stationary at their charging stations in Hannover. To the casual observer, they were simply parked vehicles. In reality, they were functioning as a distributed power plant, feeding electricity back into the grid and earning money on the energy exchange.

This pilot project was the prelude to a much larger announcement. On June 5, 2026, the Hannover-based energy provider enercity and Kraken, the technology arm of the British energy giant Octopus Energy, announced a strategic partnership to build a massive virtual power plant (VPP). This collaboration signals a fundamental shift in the European energy landscape: the transition from a system defined by generation capacity to one defined by the orchestration of flexibility.

Main Facts: The Digital Heart of the Energy Transition

The partnership between enercity and Kraken is more than a simple software integration; it is a blueprint for the "Energiewende" (energy transition) 2.0. While the first phase of the transition focused on installing hardware—wind turbines and solar panels—the current phase is about intelligence.

Key Components of the Announcement:

• The Partnership: enercity will utilize Kraken’s AI-driven platform to manage and optimize its decentralized energy assets.
• The Technology: Kraken already coordinates over 500,000 devices globally, representing approximately 2 gigawatts (GW) of capacity. It is considered one of the world’s most advanced platforms for residential and commercial energy flexibility.
• The Fleet Test: A successful trial involving twelve VW ID. Buzz vehicles demonstrated the commercial viability of Vehicle-to-Grid (V2G) technology. Over 53 hours, the fleet bundled 0.1 megawatts (MW) of power, executed 145 trades on the energy exchange, and generated a profit.
• Strategic Goal: To integrate electric vehicles, heat pumps, and home battery systems into a single, cohesive "virtual" entity that can respond to market signals in real-time.

Chronology: From Pilot Test to Strategic Alliance

The path to this partnership has been paved by both technological milestones and regulatory shifts in Germany.

2016 – The Foundation

enercity begins operating its own virtual power plant. With 25 years of experience in energy trading, the utility was an early adopter of the VPP concept, though early iterations focused primarily on larger industrial loads and biomass plants.

March 2024 – The Mobility Partnership

enercity and Volkswagen Commercial Vehicles sign a cooperation agreement. The goal is to integrate 75 electric ID. Buzz Cargo vans into the energy market via bidirectional wallboxes. This marks the beginning of treating mobile batteries as grid assets.

May 2024 – The Proof of Concept

The "Exchange Run": For 53 hours, the ID. Buzz fleet is used as a "wandering storage" system. The trial proves that small, decentralized units can be bundled to participate in professional energy trading, proving the technical feasibility of V2G in a real-world market environment.

June 5, 2026 – The Kraken Alliance

enercity announces it will layer Kraken’s digital platform over its existing infrastructure. This move is designed to accelerate the digitalization of their services and scale the VPP to include hundreds of thousands of household devices.

Looking Ahead: January 1, 2026, and Beyond

A pivotal regulatory change in Germany—the exemption of grid fees for electricity fed back into the grid (Vehicle-to-Grid)—is set to take effect on January 1, 2026. By April 2026, simplified process rules will allow bidirectional charging without the need for a second electricity meter, removing the final administrative barriers to mass adoption.

Supporting Data: The Value of "Wandering Storage"

To understand why a major utility like enercity is betting on V2G, one must look at the economic and technical potential of decentralized flexibility.

The Economic Case for V2G

A study by the Fraunhofer Institute suggests that households combining photovoltaics (PV), stationary battery storage, and bidirectional EV charging could save up to 700 Euros per year. These savings come from "arbitrage"—charging the car when prices are negative or low (due to high wind/solar supply) and selling it back when prices peak.

Scaling the Impact

While the 0.1 MW managed during the Hannover pilot seems negligible compared to a coal-fired plant, the scaling potential is astronomical:

• Kraken’s Global Reach: Currently manages 2 GW of flexible load.
• Hannover’s Advantage: The city boasts the best EV-to-charger ratio among German cities, with only 8.6 electric cars per public charging point.
• Dynamic Pricing: enercity has already implemented dynamic ad-hoc pricing at twelve fast-charging stations. Prices fluctuate between 37 and 67 cents per kWh based on Day-Ahead exchange rates, encouraging users to charge when the grid is under-utilized.

The Smart Meter Hurdle

Despite the technological readiness, Germany faces a bottleneck: the Smart Meter rollout. Currently, only a small single-digit percentage of German households have the necessary intelligent measuring systems. In contrast, countries like the Netherlands and Denmark have nearly 100% coverage.

Official Responses: A Vision of "Coordination over Capacity"

Key leaders involved in the project emphasize that the energy system’s future is not about building more "stuff," but about managing what we already have more intelligently.

Aurélie Alemany, CEO of enercity:
Alemany, who previously led the storage manufacturer Senec, is blunt about the industry’s failings. "The energy industry is particularly not good at digitalization," she stated in a recent podcast. For her, the word of the hour is flexibility. She argues that by leveraging flexibility, the expensive over-expansion of the physical grid can be limited, thereby lowering total system costs for consumers. "The money will be earned differently in the future, and I want to shape that now, not later."

Charlotte Johnson, Head of Flexibility at Kraken:
Johnson highlights that the modern grid’s challenge is no longer a lack of capacity. Instead, the difficulty lies in coordination. With millions of solar panels and EVs, the grid becomes too complex for manual management. Kraken’s AI acts as the "operating system," making split-second decisions on whether to store, sell, or consume energy.

Jean Baptiste Cornefert, Head of Trading at enercity:
Cornefert describes the VPP as the "heart of sector coupling." He notes that the system must decide in real-time whether to market electricity directly, store it in batteries, or convert it into heat (Power-to-Heat). The partnership with Kraken provides the "digital layer" necessary to automate these complex decisions at scale.

Implications: The New Power Brokers

The rise of virtual power plants is creating a new hierarchy in the energy sector. As flexibility becomes the primary currency, three distinct business models have emerged:

1. The Portfolio Players (The Asset Buyers)

Large fossil fuel companies are buying their way into the flexibility market. A prime example is Shell, which acquired the Cologne-based Next Kraftwerke in 2021. Next Kraftwerke manages over 13,000 units with a total capacity of 10,000 MW. By owning these assets, Shell transforms flexibility into a portfolio value, offsetting its traditional carbon-heavy business.

2. The Platform Providers (The Software Licensors)

Kraken represents this model. Rather than owning the power plants or the customers, they license their "operating system" to utilities like E.ON, EDF, and now enercity. They provide the brain, while the local brands provide the muscle and the customer relationships.

3. The Pure Service Providers (The Translators)

Companies like The Mobility House act as intermediaries. They own no plants and no end-customers; instead, they translate market signals into charging commands. They have partnered with Renault, Mercedes-Benz, and Toyota to offer V2G services, acting as the bridge between the automotive and energy worlds.

The enercity Hybrid Model

enercity occupies a unique space. As a traditional municipal utility (Stadtwerk), it owns the generation assets and the customer relationships. However, by adopting Kraken’s platform, it is also becoming a high-tech aggregator. This "hybrid" approach allows them to maintain the trust of a local provider while operating with the agility of a global tech firm.

Conclusion: The End of the Chimney Era

The twelve ID. Buzz vans in Hannover are a small but potent symbol of the future. They represent a move away from "secured capacity"—the idea that we need massive, always-on coal or gas plants—toward "orchestrated flexibility."

In the face of the "Dunkelflaute" (the period when wind and solar production are low), the traditional response was to build more backup gas plants. The new response, pioneered by enercity and Kraken, is to mobilize the millions of batteries already sitting in our garages and the heat pumps in our basements.

By treating every electric vehicle as a part of a collective, virtual battery, Hannover is providing a masterclass in modern urban energy management. The partnership proves that the power plant of the future won’t have a chimney; it will have an algorithm. As Aurélie Alemany suggests, the goal is to stop overbuilding the grid and start thinking it through. For the residents of Hannover, this means a more resilient grid, lower costs, and a front-row seat to the digital rebirth of the energy industry.