This group brings together the best thinkers on energy and climate. Join us for smart, insightful posts and conversations about where the energy industry is and where it is going.

Post

The End of the Energiewende?

Energy Post's picture

Energy Post (www.energypost.eu) is an independent, open-access energy publication started in June 2013 by Karel Beckman from Amsterdam, the Netherlands. We publish a mixture of original articles...

  • Member since 2018
  • 215 items added with 110,672 views
  • Jan 10, 2017 3:00 pm GMT
  • 2959 views

Your access to Member Features is limited.

Energiewende demonstration in 2014 (photo Bundjugend)

Energiewende demonstration in 2014. (Photo: Bundjugend)

The prominent German economist Heiner Flassbeck has challenged fundamental assumptions of the Energiewende at his blog site makroskop.eu. According to Flassbeck, the former Director of Macroeconomics and Development at the UNCTAD in Geneva and a former State Secretary of Finance, a recent period of extremely low solar and wind power generation shows that Germany will never be able to rely on renewable energy, regardless of  how much new capacity will be built.

Stable high-pressure winter weather has resulted in a confrontation. An Energiewende that relies mainly on wind and solar energy will not work in the long run. One cannot forgo nuclear power, eliminate fossil fuels, and tell people that electricity supplies will remain secure all the same.

We have attempted unsuccessfully to find Energiewende advocates willing to explain that inconsistency. Their silence is not easy to fathom. But maybe the events themselves have made the outcome inevitable.

With nuclear power no longer available, a capacity of at least 50 gigawatts is required by other means, despite an enormously expanded network of wind turbines and solar systems

This winter could go down in history as the event that proved the German energy transition to be unsubstantiated and incapable of becoming a success story. Electricity from wind and solar generation has been catastrophically low for several weeks. December brought new declines. A persistent winter high-pressure system with dense fog throughout Central Europe has been sufficient to unmask the fairy tale of a successful energy transition, even for me as a lay person.

This is a setback, because many people had placed high hopes in the Energiewende. I likewise never expected to see large-scale solar arrays and wind turbines, including those offshore, motionless for days on end. The data compiled by Agora Energiewende on the individual types of electricity generation have recorded the appalling results for sun and wind at the beginning of December and from the 12th to 14th:

AgoraGermanElectricity01-19December2016

Of power demand totaling 69.0 gigawatts (GW) at 3 pm on the 12th, for instance, just 0.7 GW was provided by solar energy, 1.0 by onshore wind power and 0.4 offshore. At noontime on the 14th of December, 70 GW were consumed, with 4 GW solar, 1 GW onshore and somewhat over 0.3 offshore wind. The Agora graphs make apparent that such wide-ranging doldrums may persist for several days.

You do not need to be a technician, an energy expert, or a scientist to perceive the underlying futility of this basic situation. You simply need common sense, shelving expectations and prognoses for a moment, while extrapolating the current result to future developments. Let us suppose that today’s wind and solar potential could be tripled by 2030, allowing almost all of the required energy to be obtained from these two sources under normal weather conditions. This is an extremely optimistic scenario and certainly not to be expected, because current policy is slowing down the expansion of renewable energy sources rather than accelerating it.

One cannot simultaneously rely on massive amounts of wind and sunshine, dispense with nuclear power plants (for very good reasons), significantly lower the supply of fossil energy, and nevertheless tell people that electricity will definitely be available in the future

If a comparable lull occurred in 2030 (stable winter high systems that recur every few years), then three times the number of solar panels and wind turbines (assuming current technologies) could logically produce only three times the amount of electricity. The deficiency of prevailing winds and sunshine will affect all of these installations, no matter how many there are. Even threefold wind and solar generation would then fulfill just 20% of requirements – again very optimistically – assuming that demand had not increased by 2030.

Redistribution effects

However, precisely the opposite can be expected, namely a massive increase in consumption due to the substitution of fossil fuels by electrically powered automobiles that require increased generation. The possibility of saving so much energy in this short time, enabling overall consumption to be decreased despite abandoning fossil fuels, can be confidently ignored. For that to happen, the price of fossil energy would have to rise dramatically, which is not to be expected, and one would have to compensate for the resulting redistribution effects that are politically even less likely.

Accordingly, Germany would end up with a catastrophic result 30 years after the start of the Energiewende. With nuclear power no longer available, a capacity of at least 50 gigawatts is required by other means, despite an enormously expanded network of wind turbines and solar systems under comparable weather conditions. Those other means according to current knowledge will be provided by coal, oil and gas.

In other words, one cannot simultaneously rely on massive amounts of wind and sunshine, dispense with nuclear power plants (for very good reasons), significantly lower the supply of fossil energy, and nevertheless tell people that electricity will definitely be available in the future. Exactly that, however, is what politics largely does almost every day. It is quite irresponsible to persuade citizens that from 2030 onwards only electrically-powered new cars may be allowed, as has recently been propagated in the highest political circles.

You can wish for a lot and always hope for a good outcome. But as important as wishes and hopes are, they are not yet solutions

The example of Energiewende once again demonstrates that the traditional political approaches of our democracies are ill-equipped to solve such complex problems. Consequently, they pursue what I have recently called symbolic politics: democracies do something that is supposed to point in the right direction without thinking it through and without even taking note of the system-related consequences. If it goes wrong, the political predecessors were guilty and nobody feels responsible.

That is why citizens need to remain vigilant and critical. You can wish for a lot and always hope for a good outcome. But as important as wishes and hopes are, they are not yet solutions. We likewise have to use our minds when we would prefer to turn them off because the conclusions are so depressing.

by

This article was first published on the German-language website www.makroskop.eu on 20 December 2016 and has been translated for Energy Post by Hamburg-based independent energy consultant Jeffrey Michel (jeffrey.michel@gmx.net).

Original Post

Energy Post's picture
Thank Energy for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member
Discussions
Spell checking: Press the CTRL or COMMAND key then click on the underlined misspelled word.
Jesper Antonsson's picture
Jesper Antonsson on Jan 14, 2017

If you consistently choose high-cost outliers for nuclear, exaggerate and misrepresent, and then compare with low-cost subsidised outliers for RE, that is tantamount to lying, yes. Please prove that Hinkley grid is separate.

For German costs, I go by concluded and accepted average bids in German tenders, thankyouverymuch. And that’s 7.2 cents for a build in 2018, and that’s what your link says.

Mark Heslep's picture
Mark Heslep on Jan 14, 2017

Astute observation of German coal production, also from December:

https://twitter.com/energybants/status/807013674388885504

Helmut Frik's picture
Helmut Frik on Jan 14, 2017

In Danmark they could use any land, in germany only land on landfills, along highways or railroads, or land with some poisoning in ground which does not allow agriculture, which resticts available land extremely and provides probelms to build anything on it.

Helmut Frik's picture
Helmut Frik on Jan 14, 2017

Here is the link to the project of NAtional Grid. http://www2.nationalgrid.com/UK/In-your-area/Projects/Hinkley-Point-C/ Its not built by EDF as you wanted us to think.

Jesper Antonsson's picture
Jesper Antonsson on Jan 15, 2017

You miss the target. Who is building the grid connection is one thing. If Hinkley has to pay for it is another thing. I’ve had it explained to me that one reason for the high British strike prices (for all power sources) is that operators have to pay grid costs/fees. I may have been mislead, and I’ll be happy to change my mind if you can provide real evidence. Btw, as far as I can google offshore wind strike price is still around £120, whereas Hinkley was £93. On-shore wind is cheaper at £80 and solar is uncertain (I heard the £50 bid was withdrawn).

Jesper Antonsson's picture
Jesper Antonsson on Jan 15, 2017

Btw, dear Helmut Coal, you’re a German and should be in the know. Perhaps you’ll accept the wager about solar additions in 2017 that Bas seems to have silently turned down? Please let me know!

Helmut Frik's picture
Helmut Frik on Jan 15, 2017

We were discussing Project costs, not strike prices. Caught with telling wrong you try to change topic. Very bad discussion style.

Helmut Frik's picture
Helmut Frik on Jan 15, 2017

With you? No. Installation rates are rising, so with a trustworthy person as counterpart a positve result would be expected from my side.

Jesper Antonsson's picture
Jesper Antonsson on Jan 15, 2017

Hey, Helmut Coal. You have not caught me “telling wrong”. Read again. I thought the strike prices were an interesting aside. As bad as you when it comes to changing topics, I’m definitely not.

Helmut Frik's picture
Helmut Frik on Jan 15, 2017

Just read what I did write. I would bet against a trustworthy person. But I would not expect you to hand out a penny even if germany would build 20 GW next year. Suddenly the 1,5 GW would need to be without feed in tarif, or below 2kW size, or island systems with grid connection, or what ever else comes to your mind not to confess that you were wrong.
Although I do not estimate how high construction next year will really be, not due to the relation of cost and return of money, but due to psychological effects.
If you want to bet you can participate e.g. here : https://www.photovoltaikforum.com/energiepolitik-energiewende-f90/wette-...

Jesper Antonsson's picture
Jesper Antonsson on Jan 15, 2017

Unlike you and Bas, I always discuss honestly with balanced views to the very best of my ability, so I don’t know why you would consider me untrustworthy. Of course, 1.5 GW is 1.5 GW, no ifs or buts.

I do note that your complaints when I “insulted” Bas doesn’t prevent you from insulting me.

Darius Bentvels's picture
Darius Bentvels on Jan 15, 2017

Thanks.
As ~50% of its roof space is enough to produce all electricity Germany needs, it’s a decent policy.
No need to waste nice farmland, woods, etc.

Darius Bentvels's picture
Darius Bentvels on Jan 15, 2017

Grid operator, Tennet, installs and operate the Borssele offshore concentration platform (concentrates the ~780MW power from the ~96 wind turbines) and connect to the coast (~30km away) and the national grid for €14/MWh.

As grid connection for Hinkley C is far easier, it will cost substantial less; £6/MWh?

UK’s strike price of £120/MWh for offshore wind seems windfall profits.
Dutch ~780MW offshore wind (~30km off the coast, ~30m deep water) was tendered for €55/MWh during 15years. The 15yrs thereafter whole sale (~€30/MWh).

Notes:
– I assume UK govt needs high offshore wind strike prices as otherwise the high strike prices for Hinkley generate a lot of resistance. They also made onshore wind & solar much more difficult.

– Strike price for Hinkley is now (2017): £101.
With 1.5%/a inflation it will be £114/MWh in 2025 when the NPP starts. And £147 in 2042, halfway the 35yrs guarantee period.

Jesper Antonsson's picture
Jesper Antonsson on Jan 15, 2017

UK’s strike price of £120/MWh for offshore wind seems windfall profits.

Not really, since it is determined by auction which tends to give prices close to cost (sometimes probably below cost). But the learning should be that prices/costs for different countries with different systems, incentive structures aren’t easily compared.

That means we can’t choose best costs or worst costs, but need to look at averages. Of course, you’ll never accept that. You’ll always choose best cost for RE and worst costs for nuclear and pretend that’s representative.

Darius Bentvels's picture
Darius Bentvels on Jan 15, 2017

So my grid connection cost estimation of £6/MWh for Hinkley C is reasonable.

High UK offshore wind costs
Agree. Those high costs are also due to their bad handling of the tendering process. So bidders have little info and take a major risk surcharge.
Dutch and Danish govt deliver rather detailed info about the circumstances, so bidders have little risks. Which pays off as it generates more bids and competition.

Sean OM's picture
Sean OM on Jan 15, 2017

The result is merely that instead of better houses, new cars, better health care and so on, a lot of GDP is sunk into shiny black equipment on roofs, more power lines and huge turbines on towers in the sea. This choice of GDP use (that very few would make with their own money) makes them equally rich on paper, but rich in things that doesn’t really improve their standard of living.

It does if the investment pays off. IE you install solar panels and they pay back in say 10 years, then you get a net economic benefit for years 10-25. The same can be said for just insulating your house.

The benefit to the GDP is immediate with the material cost and installation, but then after the payback period, it gives an additional GDP boost because you are actually making or saving money which can be spent elsewhere.

The bigger economic benefit is actually price protection against rising FF prices which tanked the world economy. In otherwords, you have a pretty good idea that you can get x amount of energy over a 20-30 year period for a fixed price.

The last benefit, is there was no pressure against rising fossil fuel prices, except fossil fuels. Now in the states you can install an unsubsidized, turn key, fixed panel utility sized solar system for about $1.25/w, which is still higher then the $1/w we want, but an -awful- lot closer then the $6/w it was like 10 years ago.

Jesper Antonsson's picture
Jesper Antonsson on Jan 15, 2017

It does if the investment pays off.

Remember we talked about Germany. As an investment, German solar probably posts a 90% loss.

IE you install solar panels and they pay back in say 10 years

Let’s not confuse GDP effects with private pay-back time. Usually, behind the meter solar is subsidised and cost-shirking in many ways. For society, we need to compare alternative production costs with actual levelized cost of solar, and usually solar doesn’t compare well.

The benefit to the GDP is immediate with the material cost and installation

It becomes part of GDP, not a “benefit”. Costs are bad. Substitution effects apply. If you install shiny stuff on your roof, you may have less shiny stuff in your garage.

The bigger economic benefit is actually price protection against rising FF prices which tanked the world economy.

Hardly worth it in Germany. They should have kept nuclear instead for far larger benefits of that kind. Also, the downside of saving fuel by using intermittent RE is that you lock in the balancing fossil generation for the lifetime of the RE installation. Nuclear replace fossils without that lock-in.

Now in the states you can install an unsubsidized, turn key, fixed panel utility sized solar system for about $1.25/w

That’s certainly a good thing, although I think one should go for tracking installations to maximize CF.

Helmut Frik's picture
Helmut Frik on Jan 15, 2017

I have enough expeience with you if your numbers are not correct. And I have rarely met someone with a more biased view, and someone more persuaded by himself.
And please read sometimes what insults you throw at others.

Jesper Antonsson's picture
Jesper Antonsson on Jan 15, 2017

As usual, your German accent makes you a little bit hard to understand, but anyway. I don’t think were going any further with this. I’ll get back to you guys in early 2017 to point out that once again, Germany failed to install significant solar capacity, and that you would have lost the bet had you dared to accept it.

Mark Heslep's picture
Mark Heslep on Jan 16, 2017

Now in the states you can install an unsubsidized, turn key, fixed panel utility sized solar system for about $1.25/w, which is still higher then the $1/w ….

‘Turn key’ costs implies what for solar, ready-to-be-installed, but not installed? Installation costs, land cost and taxes for utility scale, are all large contributors, especially in some of the better US solar insolation areas.

I’m aware the like of NREL has modeled costs for US utility solar under $2/W, but so far I can not find actual project costs supporting the claim. Topaz in California, started in 2012 I believe but completed over a year ago, nonetheless has cost $2.5B for 550M. Topaz reportedly covers some 3K acres in S. California. The land costs and property taxes alone would seem to make a total project cost at sub $2 price unlikely.

Sean OM's picture
Sean OM on Jan 16, 2017

You are actually missing the point. It is an investment so you buy shiny stuff for your roof, it pays for itself over a period of time ie you recoup your money, and after that period of time, you are still producing energy, which saves you money in utility bills, and you are free to spend that money on other things which does bolster the GDP. So you get a long term economic benefit which will show up in the GDP because people will have fewer expenses.

In the US, the LCOE for solar is quickly becoming competitive especially in the regulation market coupled with storage.
https://cleantechnica.com/2016/12/29/solar-power-not-merely-least-expens...

Jesper Antonsson's picture
Jesper Antonsson on Jan 16, 2017

buy shiny stuff for your roof, it pays for itself over a period of time ie you recoup your money

Again, we talk about Germany, so you don’t recoup the money, ever. Of course, the private citizen could recoup his money, given the feed-in-tariffs, but from a societal perspective, they have an enormous loss on their hands.

Actually, societably profitable rooftop probably isn’t currently a thing anywhere. However, in California/Arizona, that has world-class solar resources, it’s becoming plausible that utility-scale solar can save society money. At least if losses in China isn’t counted.

In the US, the LCOE for solar is quickly becoming competitive especially in the regulation market coupled with storage.

If you couple it with storage, it’s an extremely sure societal loss. Again, it’s important to understand that the fact that the system is often rigged so that the owner can make money doesn’t mean it’s profitable for society.

Mark Heslep's picture
Mark Heslep on Jan 16, 2017

Land cost in the Central Valley per google varies $3000 to $90000 an acre. San Luis Obismo County property tax, not just land, is 1%.

Sean OM's picture
Sean OM on Jan 16, 2017

Again, we talk about Germany, so you don’t recoup the money, ever. Of course, the private citizen could recoup his money, given the feed-in-tariffs, but from a societal perspective, they have an enormous loss on their hands.

When they -started-, this was true. Now that prices have dropped considerably, I don’t think it is true. They get 4-5 hours of sun a day on average. There is a good chance you can payback the system with 4 hours of sun a day now especially with high prices.

If you couple it with storage, it’s an extremely sure societal loss. Again, it’s important to understand that the fact that the system is often rigged so that the owner can make money doesn’t mean it’s profitable for society.

No quite the opposite. Solar + storage is competitive in the frequency regulation market in the US. Peaker plants are far more expensive and have higher contract prices then what the “baseload” generation has.

The cost of solar and the cost of batteries has dropped considerably, and batteries especially will continue to drop in the next 5-10 years. solar prices are decreasing as well so you can expect this trend to continue.

Is it to the point where solar + storage is competing with “baseload” sources on price? no. Is there potential for it in the future? maybe.

In Mexico which granted gets more sun, but you are looking at avg contract prices of 33/mwh (USD) for mainly wind and solar. It makes it really hard to justify building other sources of energy.

Engineer- Poet's picture
Engineer- Poet on Jan 16, 2017

No quite the opposite. Solar + storage is competitive in the frequency regulation market in the US.

And what happens when the storage is full and can’t pull frequency down when it’s needed?

I note that solar + storage is no better at that job than electric vehicles, and saves less money and cuts less pollution and less carbon.

In Mexico which granted gets more sun, but you are looking at avg contract prices of 33/mwh (USD) for mainly wind and solar. It makes it really hard to justify building other sources of energy.

You mean, except for having the lights come on when you flip the switch after dark.

You don’t seem to realize that your “cheap” solar still requires the rest of the grid, while the rest of the grid does not need “cheap” solar.  What solar is doing is displacing some fuel, which may cost less than $33/MWh.  Since the efficiency of fuel displacement falls with variability, those savings can disappear entirely and become negative.

You’re using LCOE when you should be using LACE:  Levelized Avoided Cost of Energy.  When you still need the gas wells and pipelines and turbines, and even more power transmission lines to shift power around because it can’t be generated where it’s needed, you’re keeping a lot of costs and creating a bunch of new ones.  Not adding them up is fraudulent accounting.

Sean OM's picture
Sean OM on Jan 16, 2017

It is located on previous marginal farmland, a ranch. The property tax revenue is listed as up to $400,000 per year. I couldn’t figure out whether it was a lease or they bought the property, but it is far closer to the 3000/acre range or less.

According to wikipedia it generated 1,301,337MWh last year. The PPA was signed way back in ’11 so I doubt it has a super competitive price compared with a system today.

Sean OM's picture
Sean OM on Jan 16, 2017

You don’t seem to realize that your “cheap” solar still requires the rest of the grid, while the rest of the grid does not need “cheap” solar. What solar is doing is displacing some fuel, which may cost less than $33/MWh. Since the efficiency of fuel displacement falls with variability, those savings can disappear entirely and become negative.

It may be replacing some fuel that costs more then 33/MWh too like all the NG they import from the US, which is already starting to climb in price at a rate of 33% over the last 6 months.

Jesper Antonsson's picture
Jesper Antonsson on Jan 16, 2017

When they -started-, this was true. Now that prices have dropped considerably, I don’t think it is true.

It is still true.

There is a good chance you can payback the system with 4 hours of sun a day now especially with high prices.

They have 10-12% solar CF, which is lousy. They have low wholesale prices on average. The value in the spot markets was 27 euros/MWh (see slide 15) while the latest German solar auctions landed at 72 euros/MWh. So currently, in Germany, new utility solar cost almost 3 times more than it is worth.

Solar + storage is competitive in the frequency regulation market in the US.

I’ll take your word for it, but then I’m wondering why naked storage + grid power wouldn’t be even more competitive?

Sean OM's picture
Sean OM on Jan 16, 2017

They have 10-12% solar CF, which is lousy. They have low wholesale prices on average. The value in the spot markets was 27 euros/MWh (see slide 15) while the latest German solar auctions landed at 72 euros/MWh.

That is a lot higher then in the US, but even at 72 they are approaching the cost of new coal capacity in the US. I am guessing the reason for the lower spot prices is because they are still running their coal plants full throttle which eats up a lot of the regulation market.

I’ll take your word for it, but then I’m wondering why naked storage + grid power wouldn’t be even more competitive?

They are doing that too especially in area’s where they are at max line capacity during peak times. You can put batteries anywhere on the grid unlike peaker plants, and alleviate the need to upgrade substations and lines.

The solar + storage gets around some utilities requirements for having the energy actually available a day ahead when they make the contract. Solar is starting to approach 40/mwh so filling up the batteries with extra capacity, or just being able to supplement solar capacity during say clouds fetches a better price. IE we can deliver this vs variable output.

Mark Heslep's picture
Mark Heslep on Jan 16, 2017

Both of these systems will need subsidies. Wind and solar generate only 20% of German electricity and already the situation is such that no-one will build unsubsidized generation capacity. The backup system needs subsidies because its running hours will be more and more limited as renewables are added. “

In an open energy market investors in fossil power built as backup can charge whatever rate is necessary, whether they run 1 GWh/yr or 1000 GWh/yr, and get paid, because the dispatchable fossil plant is necessary for the grid. Solar and wind displace fossile fuel (not plants), and they are not necessary because they are not sufficient. Thus it is only solar and wind that require subsidies.

Jarmo Mikkonen's picture
Jarmo Mikkonen on Jan 17, 2017

Despite all the hype, Energiewende is not delivering up to expectations. Preliminary data from Germany suggests that in 2016, greenhouse gas emissions increased by almost 1% from 2015. Solar power generation actually went down compared to 2015.

Germany will miss its 2020 greenhouse gas emission goals.

Jarmo Mikkonen's picture
Jarmo Mikkonen on Jan 17, 2017

For those who say this is an anomaly: German GHG emissions also rose in 2015 by 1.1% from the previous year.

2015 was the year when renewable electricity generation in Germany grew more than ever in a single year.

Pages

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »