|Alpha Ventus, Germany’s first fully commissioned offshore wind farm, has 12 turbines with a combined capacity of 60 MW Source: Alpha Ventus/Matthias Ibeler|
à‚ A new goal of phasing out coal and nuclear to gain 80 per cent of its electricity from wind, solar and other renewable sources by 2050 could prove challenging even for a renewables pioneer like Germany.
In the autumn, the German government unveiled Energy Concept 2050, a statement of intent to put the country on the path to a renewables-based power economy unmatched by any other major nation.
By mid century, the Energy Concept aims to boost renewables’ share of total final energy consumption to 60 per cent, up from the 18 per cent targeted for 2020. It wants no less than 80 per cent of electricity production to be renewably generated, turning on its head the 2008 situation, where more or less the same percentage came from a combination of coal, gas and nuclear sources.
The plan calls for a revolution in energy-efficient buildings and millions of electric vehicles on the road. It pledges funds for clean energy R&D and renewables-friendly planning legislation. It is a recipe for what is little short of a green energy paradise on Earth in one of the world’s biggest economies.
CROSSING THE NUCLEAR ‘BRIDGE’
The launch of the Energy Concept was controversial, not because of its renewable aspirations but because it extended the life of Germany’s nuclear fleet as a way to ease the transition, labelling nuclear the ‘bridge’ to a greener future.
This has naturally prompted the question: a bridge to what exactly? The size of the proposed ramp-up in renewables penetration, the scale of infrastructure needed to support it, and ” sadly but inevitably ” the vast costs involved, make it anything but a foregone conclusion that the country will meet its goals.
E.ON and Germany’s other main utilities have backed the plan, but they have warned the country and its consumers that there will be a heavy price to pay.
Marianne Boust, senior analyst at IHS Emerging Energy Research, believes that, while Energy Concept 2050 will be challenging, it would be a brave person who ruled out Germany achieving it.
“Technically, yes, Germany could do this,” said Boust, who named a major contribution from wind generation and a wider roll out of increasingly sophisticated photovoltaic (PV) technologies as among the key elements of a future German renewable generation infrastructure. Factors in Germany’s favour include its strong clean-tech industrial base, she added.
“Germany is in good shape to take advantage of any clean energy investments, because a lot of the players are German themselves. Through these very ambitious targets, the German government is going to serve its own industry.”
Germany also benefits from its position at the centre of Europe and its interconnections with many countries, giving more options for dealing with the type of supply fluctuations more prevalent in a renewables-led generation scenario, she said. “Germany is in a unique position in Europe in that it can perhaps do this,” said Boust. “Of course, it’s a challenge and financially very difficult to support, but the population seems willing to accept it. At what point that would change is impossible to say.”
HUGE OFFSHORE EXPANSION
Maintaining the goodwill of the German consumer is just one of the obstacles in the path to 2050. Boust believes the drive for huge offshore expansion invites comparisons with the UK, which has its own ambitious targets for North Sea wind generation.
“The UK looked at the potential and set very high targets. But then they started to realize they needed the vessels, the shipyards, the grid,” she said.
“Germany is in a similar situation, but with the difference that it does not even have so much of an available supply chain. The UK has its big offshore oil and gas industry. Germany doesn’t have that, which is another hurdle for its offshore market.”
Germany’s unique demands offshore are acknowledged by the industry itself. The German Wind Association (BWE) pointed out that its offshore farms will be located up to 100 km from the shore in challenging depths of between 30 and 40 metres.
The German government is expecting offshore wind to have already grown to 10 GW installed capacity by 2020, a trend the BWE said is perceived as optimistic. And, whatever the wind sector’s ability to build out its capacity onshore or offshore, the BWE joins every other commentator in pointing to the pivotal role of the grid.
“As more renewable electricity is fed into the network, the fluctuating nature of many renewable energy sources imposes new challenges for network operation and planning, as well as investments in additional network capacity,” said the BWE.
“The decentralized nature of renewable electricity installations, along with increasing integration of European electricity markets, calls for a change of paradigm in network infrastructure and operation.”
TACKLING NETWORK DEFICIENCIES
At the end of November, DENA, Germany’s energy agency, warned about network deficiencies.
“The missing power grid must not become a bottleneck that slows the expansion of renewable energies,” said Stephan Kohler, the president of DENA, as the agency unveiled an action plan for upgrading the system. DENA looked at various scenarios that could support 39 per cent renewables integration into the system. It identified the need for 3600 km of new ultra-high voltage (HVDC) power lines by 2025.
DENA also looks at a scenario for deployment of 3400 km of new HVDC underground transmission capacity, which would cost between €22 billion and €29 billion ($29″38 billion).
Faced with such a challenge, the organization urges a heavy concentration of German national effort on grid issues, by supporting development of new transmission technologies and increasing public support for network expansion.
The latter issue is exercising the minds of the highest in the land. Chancellor Angela Merkel recently publicly bemoaned the snail’s pace at which energy infrastructure projects proceed and her government is launching an information campaign in a bid to boost public acceptance of grid expansion projects.
DENA has warned that the rapid expansion of solar capacity is already putting strains on the grid, and that continued rapid growth of solar energy could lead to serious network congestion.
BSW, the German Solar Energy Association, hit back with research of its own that concludes the grid is perfectly well equipped to deal with PV expansion to 52 GW by 2020. In addition, new technologies, such as inverters capable of reactive power control, will soon allow more effective use of existing networks, claimed the association.
OPTIMISM IN the RENEWABLE ENERGY COMMUNITY
BSW’s confidence mirrors the general optimism within the German renewable energy community that its best is yet to come.
The SRU, the German Advisory Council on the Environment, was unambiguous earlier this year when it told the Bundestag that 100 per cent of Germany’s electricity could come from renewable sources by 2050. “The bridge towards renewable energy is already in place,it claimed.
Using scenarios based on data modelled by the German Aerospace Centre (DLR), the SRU claimed a fully renewable Germany of 2050 could enjoy power generation costs in the range of €0.06″0.07/kWh ($0.079″0.092/kWh), provided energy efficiency and grid development measures, including those at the European level, are sufficient.
The SRU’s report assumes that German electricity demand by 2050 will be about 509 TWh per annum, potentially rising to 700 TWh/year if energy efficiency efforts fail to fully deliver on their promise and Germany’s electric car fleet increases dramatically. This compares to an estimated gross electricity generation of around 580 TWh in 2010.
The SRU claims renewable sources could in theory expand to meet both the higher and lower demand levels. Of the scenarios examined by the SRU, the one rated as least likely is a fully renewable German electricity supply system satisfied entirely by German-generated power, especially if the higher 700 TWh/year demand figure is reached.
To be completely self-sustaining at that level, the study says Germany would need to rely on expensive options such as geothermal electricity generation, a further expansion in PV capacity up to about 110 GW, the use of more solid biomass and a massive increase in storage capacity.
GETTING ON WITH THE NEIGHBOURS
The scenario that finds most favour is a fully renewable supply for Germany as part of a German”Danish”Norwegian system, under which each state can import up to 15 per cent of total output from the other two partners.
This Scando”Germanic arrangement appeals on several fronts, both technically and politically. The efficiencies enabled by Norway’s vast pumped storage capacity enter the equation, while the German power economy’s closest relationship would be with neighbours who will almost certainly remain friends.
The contributions of the various technologies and the projected costs involved in this scenario are shown in Figure 1. The SRU’s scenario listed as 2.2.a assumes German demand of 509 TWh/year, while 2.2.b is for the higher 700 TWh/year figure.
Figure 1: The SRU’s 2.2.a and 2.2.b scenarios forecast Germany’s energy mix in 2050 with total demand at 509 TWh/year and 700 TWh/year, respectively Source: SRU
The end result of the SRU’s scenario is that, as the last conventional power plants begin their decommissioning in the 2040s, Germans could look forward to a completely ‘green’ energy supply with the help of their friendly neighbours at costs that compare favourably with conventional generation. But, as always when looking so far ahead, the SRU acknowledges many ‘ifs’ and ‘buts’. The best-case scenario relies on energy efficiency targets being met. Like everyone else, it cites the need for grid expansion. The Scandinavian option would also require a significant upgrade to Germany’s international interconnections.
The report also notes that Germany may well not be the only nation eyeing Norwegian pumped storage capacity and calls for German domestic storage options to be explored.
In this respect, it is interesting to see reference made to compressed air energy storage (CAES), for many years the Cinderella of storage technologies but now being talked about again as an option for dealing with fluctuating renewables.
CAES uses the energy to be stored to drive air compressors that accumulate air in underground tanks. When released, this air powers a turbine that runs with 40 per cent less gas than it would otherwise.
Technical innovations may soon remove the need for gas in the process, making CAES a genuinely ‘green’ technology. In existence since the 1970s, CAES has failed to take off as a storage option, partly due to the large physical sites needed. There are just two commercial CAES facilities in the world, one of which happens to be run by E.ON in Huntorf, Germany. Many, including the SRU, suggest that Huntorf and CAES could enjoy a more prominent role in the future.
The SRU and others are convinced, then, that given an adequate infrastructure and underpinned by key technical advances, Germany could ” with a little help from some friendly neighbours ” not just meet, but exceed the goals of the 2050 Energy Concept.
EEG TARIFFS COME UNDER ATTACK
Pointers to future progress may come from looking back. Germany has come a long way in the past decade and is racing towards a 20 per cent share of renewables consumption. The engine of this growth has been the German Renewable Energy Act ” known as the EEG ” with its generous feed-in tariffs (FiTs) and 20-year guarantees, which have helped the PV sector in particular to boom.
If its supporters are right, the EEG has already proven its worth as an effective launch pad for the future. With so much achieved in one decade, surely a combination of continued promotion of renewables, technical innovation and strong political will could deliver so much more over the next four?
However, another school of thought sees German success over the last ten years as a castle built on the sand of vast, poorly targeted state subsidies. In particular, the unintended consequence of the FiTs is an energy policy that rewards uncompetitive technologies that show no sign of being able to stand on their own two feet economically, according to this alternative point of view. If that interpretation is correct, trouble lies ahead.
Professor Colin Vance, a senior researcher at the Essen-based research institute RWI, is the co-author of a study that describes Germany’s renewables policy as “a cautionary tale of massively expensive environmental and energy policy that is devoid of economic and environmental benefits”.
Vance said RWI’s study ” Economic Impacts from the Promotion of Renewable Energy Technologies: The German Experience ” does not question the need for a prominent role for renewables, but rather the outcomes of the current approach.
“We don’t think the FiTs really comprise an instrument that is incentive compatible. Effectively, what this instrument does is to reward energy sources for their lack of competitiveness,” he said.
Vance pointed to the requirement placed on grid operators by the EEG to give priority to subsidized, renewably generated power in whatever quantities it is generated.
In the case of PV, labelled the worst culprit, he claimed this has led to “astronomical” costs, aggravated by guarantee for 20 years. RWI’s study estimates the real net cost of promoting PV between 2000 and 2010 at €85.5 billion.
Wind power is rated as a generally less wasteful option by RWI, with its promotion estimated as costing about €20 billion over the decade, though Vance and his colleagues still express grave reservations about wind’s effectiveness under the FiTs regime.
TESTING CONSUMERS’ PATIENCE
While welcoming the recent downward trend in solar FiTs, Vance is sceptical about Germany’s ability to reach its hugely ambitious goals by pursuing the current policy path. “In the absence of some huge unforeseen technical breakthrough, we don’t see how that’s going to happen without a whole lot more money being thrown at this issue.”
According to Vance, it is hard to see any alternative to steadily rising energy bills for German consumers. “Germans are pretty supportive of renewables and there’s generally a lot of hostility to nuclear energy. It will be interesting to see what happens as people are increasingly confronted with the cost.”
The RWI authors support more emphasis on the European Trading Scheme for carbon certificates as a route to carbon reduction, with state support directed to technical innovation. Vance argued that FiTs ” rather than backing early-stage innovation ” have the perverse effect of creating a stampede to subsidized technologies to “get on board while the going’s good”.
Unsurprisingly, given the criticism of its flagship policy, the German environment ministry (BMU) rejected the conclusions of the RWI paper, labelling it a minority view that is rejected by most major commentators in Germany and abroad. It is a debate that is likely to continue.
Here then is Germany’s goal and the hurdles in its path. To its government and mostly renewable-friendly citizens, the prize is an energy economy that would be the envy of Europe. The barriers are several: the vast investments needed in offshore wind infrastructure and grid improvements; further testing, maybe to the limit, of the patience of the German consumer; the great unknowns of the general economic climate. Last, and maybe not least, it is worth noting that while the German government can set objectives, it is the European Union that sets policies and legally binding targets.
The future of German renewables will remain inextricably linked with the wider priorities of the EU. If these shift away from a planned rise in green energy, Berlin may have to rethink, whether it wants to or not.
Andrew Lee is a freelance journalist who writes on energy, and in particular renewable energy, issues.
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