Frederik vom Scheidt, PhD Student at Karlsruhe Institute of Technology

We here at Isaac’s Science Blog are pleased to be hosting our third interview with Frederik vom Scheidt! Frederik is a PhD Student at the Karlsruhe Institute of Technology working on renewable energy economics issues. Frederik holds a Master’s degree in Industrial Engineering and Management with an emphasis on Energy Technologies and Economics and has done research at MIT on how to improve electricity tariffs to support economically efficient electricity consumption, as well as efficient installations of solar and battery storage while ensuring distributional equity e.g. for lower-income households.

1. Tell us about yourself.

My background is in 2 major fields. Business administration and different kinds of engineering disciplines (called industrial studies in my field). This allows me to think about energy in a multidisciplinary setting

2. What inspired you to work in energy?

I really started getting interested in the energy sector during my Bachelor’s thesis on optimizing charging procedures for electric vehicles to shift electricity use to a low-CO2 footprint (charging EVs when it is cheap/sustainable).

3. Tell us about your professional background

During my graduate studies I worked part-time as a student research assistant at KIT for a year in the field of distributed electricity grids. I then also started working at the research center for informatics with a group working in energy informatics on topics like smart grids. There I worked for a half-year on EV-integration as well as data scraping/analysis on Germany’s energy center. Then I worked in industry at E.ON, one of Europe’s largest utilities. I worked in their offshore wind projects in Sweden supporting the organization on offshore wind-turbine blades. Blades there have to deal with corrosion, wind gusts, sea water and we were interested in using different materials to keep a blade alive for longer and conducted some lab and field trial tests to compare different types of so-called leading edge protection materials. We looked at companies all over the world to see what would be the best fit. Afterward I came back to study while working part-time as a technology transfer consultant to get technology from universities to the real-world. After I had done all of these things I was sure that I wanted to work on improving regulatory aspects in energy and therefore came to MIT for my Master’s thesis to work on energy tariffs with Scott Burger.

4. Tell us about your work at MIT

For my master’s thesis I worked with Scott Burger on evaluating the impacts of electricity tariffs on low-income customers. For this, we analyzed the bill impacts of alternative rate plans using interval metering data for more than 100,000 customers in the Chicago, Illinois area. We combined these data with granular Census data to assess the incidence of bill changes across different socioeconomic groups. We found that low-income customers would face bill increases on average in a transition to more economically efficient electricity tariffs. However, we also demonstrated that simple changes to fixed charges in two-part tariffs can mitigate these disparities while preserving all, or the vast majority, of the efficiency gains. These designs rely exclusively on observable information and could be replicated by utilities in many geographies across the U.S. We recently released a working paper which can be found here: https://www.nber.org/papers/w25570

Now, one of the very interesting next steps is that we are adding some DERs into that analysis, i.e. simulating PV adoption and residential battery adoption and how that is affecting our results. Our preliminary results indicate that as we add more and more residential PV then under the current real-world tariffs you will see more and more cost shifts from higher to lower income households. This supports our call for more efficient tariffs.

5. What do you do for Grad School?

I conduct data analysis, market mechanism engineering, and behavioral experiments in order to assess the effects of electricity tariffs regarding economics, the environment, and equity. This way I aim to put together a dissertation with a holistic view on important tariff issues.

6. Why did you decide to research policies for lower-income communities in solar?

The main goal is to do research that helps us mitigate CO2 emissions. Tariffs can contribute to this by adequately representing the real costs, including environmental costs, that people cause. Moreover, efficient electricity tariffs can help us significantly reduce system costs. Both of those benefits can facilitate progress to mitigating climate change. In order to implement such welfare improving tariffs we need to consider societal aspects. In the U.S. in the second quarter of 2018, state electricity regulators rejected over 80% of utility requests to increase fixed

charges, frequently citing the potential impacts on low-income customers.

7. Why did you pick the Karlsruhe Institute of Technology?

I picked it for the Industrial Engineering program which teaches economics, business and engineering courses while allowing you to put a focus on fields of your interests early on. This way I was able to learn about the energy sector from different perspectives which I felt is very useful in order to address current issues.

8. What caused you to shift from engineering to policy?

I think the obvious answer is that in a field like energy it simply does not suffice to engineer a beautiful technological solution if you can’t convince people in power to implement adequate policies.

9. New sites/podcasts you listen to?

I sometimes listen to The Energy Gang to stay up to date about US related energy matters. For the European/German energy scene I rely on the German magazine Energie und Management. Besides energy-related media and academic papers I read newspapers (New York Times, Der Spiegel, etc.) to see how current energy topics are discussed in general media.

10. Favorite thing about working in energy?

It gives me the feeling that I am working on one of the most urgent and biggest problems that humanity is facing that is the same time one of the most complex ones. I feel that I am making good use of my time and brainpower to create solutions for that problem.

11. Least favorite things about this space or would like to see improved?

I think that in a lot of cases we do not use potential technical solutions in the best way because of political and societal reasons. Understanding those reasons and finding solutions for the hurdles they create can be complex and require a lot of patience.

12. What should someone do to work in this space?

It’s a very broad question. You should have an interest in technology and economics/policy/behavioral science as well as patience (the energy sector commonly doesn’t move too quickly) and the ability to work on complex issues.

13. What is the benefit of a Ph.D. over a Masters?

In Germany, Masters studies are more similar to undergrad studies as you mainly take courses and do little research. Also you do not get paid. As a Ph.D. student, I am free to do the research I want to do. At the same time I am a paid employee of my professor with teaching responsibilities, paid holidays, etc. The best thing in my opinion is the freedom to research on something in a very focused manner for three years.

14. If you were to go back and change one thing in your career what would you do?

I can’t think of anything right now that I would like to change.

15. What is your five-year plan?

Finishing my Ph.D., and then use my research that I am doing now to set up a startup out of the university for data analytics in the energy sector. I’m a huge believer in research bringing value when you bring it into practice. If that project fails (like most startups do after all) I will work to bring good tariff design and implementation practice to utilities and regulators!

Conclusion

So there you have it! Frederik, it was a great pleasure to talk with you, and we all wish you the best of luck on your journey to finishing your Ph.D. We all want governments and utility companies to pick up on your tariff research and make things more equitable for everyone. If you would like to connect with Frederik, his LinkedIn can be found here.