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A Snapshot of Germany's Electricity Mix: Solar Capacity Reigns, but Coal Generation Sustains

Stephen Lacey's picture
Greentech Media

Stephen Lacey is a Senior Editor at Greentech Media, where he focuses primarily on energy efficiency. He has extensive experience reporting on the business and politics of cleantech. He was...

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  • Dec 26, 2014

Until recently, Germany was known as the undisputed leader in clean energy. But the country’s legacy may be shifting.

Germany was one of the few countries in the world to take a no-excuses approach to developing renewable energy by creating a highly ambitious set of policies to promote localized, distributed generation. In many ways, the policies were a resounding success: the country sparked the modern solar industry; half of all renewables are locally owned; and traditional utilities are now transforming themselves into energy service companies focused on distributed generation and divesting from centralized fossil fuels.

But Germany is also facing some hard realities. Mounting legacy costs of feed-in tariffs, increasing electricity rates and rising CO2 emissions are raising a debate about the effectiveness of the country’s energy transition.

Earlier this month, Dr. Bruno Burger of the Fraunhofer Institute released the latest data on Germany’s electricity mix. It features 250 charts that illustrate every relevant yearly, monthly and daily statistic on the country’s energy production for 2014.

What do the numbers tell us? There’s something for both optimists and pessimists to rally around.

1. Net installed capacity numbers show just how much solar and wind Germany has on its grid.

2. But when considering yearly electricity production, coal is still winning out over everything.

3. Coal generation did decrease in 2014. In order to accommodate wind and solar on the grid, nuclear plants reduced baseload production by 10 percent, and lignite plants reduced generation by 30 percent.

4. Hard coal plants saw radical variation in utilization rates, contributing to the strong decline in revenue among power-plant operators.

5. On June 6, 2014, Germany saw a record-breaking 212 gigawatt-hours of solar production — around 18 percent of total generation that day.

6. On December 12, 2014, wind hit a new record of 562 gigawatt-hours — producing around one-third of total electricity that day.

7. Despite those impressive records, solar and wind still followed biomass, coal and nuclear in monthly generation totals.

Optimists about Germany’s situation would say these graphs are proof that renewables are wreaking havoc on the utilization and economics of fossil fuels, thus stimulating a business transition for large power companies.

Pessimists would point to the increase in yearly coal generation as proof that large amounts of solar and wind aren’t enough to quickly derail entrenched fossil fuels, nor to make up for a phase-out of nuclear power.

However, realists would likely see both sides and agree with an energy expert like Vaclav Smil, who argues that true energy transitions do not happen in a decade.

“The historical verdict is unassailable: because of the requisite technical and infrastructural imperatives and because of numerous (and often entirely unforeseen) socioeconomic adjustments, energy transitions in large economies and on a global scale are inherently protracted affairs,” writes Smil.

Germany might be moving faster than other countries. But it’s also proving that energy transitions don’t happen quickly, no matter how aggressive the policies.

“A world without fossil fuel combustion is highly desirable and, to be optimistic, our collective determination, commitment, and persistence could accelerate its arrival — but getting there will demand not only high cost, but also considerable patience: coming energy transitions will unfold across decades, not years,” Smil argues.

You can view the rest of Dr. Burger’s charts here.

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Keith Pickering's picture
Keith Pickering on Dec 26, 2014

>”The historical verdict is unassailable … energy transitions in large economies and on a global scale are inherently protracted affairs.”

Mr. Smil is wrong about the historical record. After the oil shocks of the 1970’s, France embarked on an energy transition of its own, from fossil fuels to nuclear power. Fifteen years later, by 1985, France was generating over 220 TWh of nuclear energy annually, representing 65% of its total generation. 

Germany’s Energiewende has been policy since 2000, a comparable time period, and we see the solar/wind/biomass troika is generating less than half that amount. It’s not the transition per se that is the problem, it’s the technology that they’re transitioning to.

The graphs posted here reveal the underlying issue: non-sunny, non-windy Germany is spending huge amounts on solar energy (with a 9% capacity factor) and wind (with a 12% capacity factor) while at the same time trying to phase out the most reliable non-fossil energy source they have, nuclear. In the process they’ve been doing a good job of driving coal plants out of business, and while I won’t shed a tear for their loss, it’s clear that Germany’s most rapid energy transition is not from coal and nuclear to renewables, it’s from being a net electricity exporter to being a net electricity importer. 

Some of that imported energy might come from wind turbines in Denmark, but realistically when the wind isn’t blowing in Germany it usually won’t be blowing the doors off in Denmark either. The most likely sources for those imports will be the reliable grids in France, Switzerland, Slovakia, and Sweden — all of which are heavily nuclear nations.

Germany has spent billions (and will continue to spend billions more) to achieve an electric grid that has double the CO2 emissions of France. And the sad fact is that they’re going to be satisfied with that, and will continue to give themselves pats on the back for being “green”.


Bill Hannahan's picture
Bill Hannahan on Dec 27, 2014

Stephen, thanks for pointing out this great data set from Fraunhofer.

The most interesting thing I learned (page 180 of the pdf)  is that when solar production is high, Germany is forced to export its most expensive solar kwhs, presumably at firesale prices.

If all of Europe followed Germany’s example, who would they sell them to and at what price?

Josh Nilsen's picture
Josh Nilsen on Dec 26, 2014

Germany’s records are the best in the world.  Anyone who wants to get the feed in tariff from their solar has to register their installation, no matter how big, with the utility entity.  Because the government has to track the money for the FiT, they keep much more accurate records.

The US utilities actually have a legitimate reason to ‘juice’ the numbers.  By only showing installations above a certain threshold like you mentioned, you can make it seem much smaller than it actually is.  In order to really see every installation for the US you’d have to get access to people’s personal tax records which is obviously private.

Tracking solar pv in countries without large centralized grids is *really* hard.  Like Bangladesh, India, Indonesia.  These countries are actually exploding with solar pv but it’s hard to tell from public utility numbers because most of the installations are less than 10 panels.

Schalk Cloete's picture
Schalk Cloete on Dec 27, 2014

Bill, I did some mining of the Fraunhofer data some time ago in this TEC article and estimated that Germany uses the grids of its neighbors to balance out about half of its solar generation (each 1% increase in solar penetration resulted in a 0.46% increase in electricity exports). 

Ultimately, the data showed that, if current trends hold, wind/solar energy will have zero value in weeks where these sources generate about 30% of total electricity in a thermal dominated electricity system such as Germany. 

Schalk Cloete's picture
Schalk Cloete on Dec 27, 2014

It is good that dr. Burger now also includes biomass in his work. Biomass gets much less press than wind/solar, but, as the data shows, it generates more electricity than either of these sources (and is baseload instead of intermittent).

The large jump in biomass production this year is quite surprising. Without this jump, brown coal production would probably have stayed constant despite significant declines in overall electricity generation as economic stagnation continues. It will be interesting to see how much further Germany can increase its biomass production. 

Regarding wind/solar, it is worrying to see the stagnation of wind generation in Germany. Total generation in 2014 may well come in below the 49 GWh achieved in 2011. Wind is much better than solar in Germany as it is well aligned with seasonal demand and can at least have some capacity value. Solar PV, on the other hand, can only be a fuel saver (displacing only fuel and emissions) in most of Europe. 

Bas Gresnigt's picture
Bas Gresnigt on Dec 27, 2014

This summer it was decided to rearrange the FiT’s for biomass such that the capacity increase would become only <700MW/a. Main reasons:
– despite creating a volume market, little cost price decrease; so
– high cost prices.

No stagnation. Nothing to worry about.
Production of those is weather dependent. And the weather / wind changes from year to year substantially. So the year on year producton fluctuates substantially.
You should compare installed capacity as the grow of that tells the real story.

Compare the CO2 story. In the past years increase (except for electricity) as much colder weather in Germany (heating is by gas and sometimes oil). This year warmer so much less CO2.

Schalk Cloete's picture
Schalk Cloete on Dec 27, 2014

I saw previously that the subsidy for biomass is actually surprisingly high, implying that this rapid biomass expansion is probably quite expensive. For perspective, 700 MW of biomass capacity will produce about as much electricity as 5 GW of solar, so even this rate is still quite rapid. It will be interesting to see how far this biomass expansion goes. 

Bas Gresnigt's picture
Bas Gresnigt on Dec 27, 2014

I checked the summarizing document.

Sorry for my misinformation.
That 700MW/a is wrong.

Target biomass increase is 100MW/a!

Thank you for your correcting remark!

Bas Gresnigt's picture
Bas Gresnigt on Dec 27, 2014

Germany is not forced to export. The low price makes it attractive for entities from other countries to buy as that is cheaper.

If the price becomes lower. Then:
– power plants and hydro will minimize production;
– (grid) batteries and pumped storage facilities will load;
– power-to-gas/fuel plants will run at full production.
– wind and solar owners that ran out of the guarantee period will cut production if price <$1/MWh.

In addition grid, management may curtail the production of units. They can do that direct (remote control) with wind & solar. Fair compensation for missed revenue will be paid.

As wind+solar increases with ~5GW/a (=~1.5%/a more renewable in the mix), low price periods become gradually longer. So power plants, especially the less flexible plants, will close as they make losses.
In the end near all non-renewable generators will be competed out of the market.

Germany’s biggest utility, E.ON, concluded that the era of centralized power plants is over, and decided:
– to dispose of all FF and nuclear power plants
– to become a 100% renewable utility concentrating on services.

Bas Gresnigt's picture
Bas Gresnigt on Dec 27, 2014

Doubt whether that 52GW target for solar in 2050 still stands. In the revision this summer they decided to continue to expand with 2.5GW/a.

At that rate they will have 52GW in 2020 and >125GW solar in 2050.
Assume that they underestimated in 2000 when the original Energiewende was composed, the size of the price decrease due to their creation of a volume market.
Thanks to the lower prices it becomes affordable to install much more solar. So they will do that..

Bas Gresnigt's picture
Bas Gresnigt on Dec 28, 2014

Ultimately wind+solar together with other renewable, will compete all regular central power plants (nuclear and all fossil fuel) out of the market. Roughly in line with the targets of the Energiewende.

Apparently E.ON concluded similar, so they dispose of all fossil fuel and nuclear plants.

Regarding your simulation. Denmark is ~15years more advanced than Germany.
In Denmark wind produces now ~40% of all electricity (some days >100%), renewable ~55%.
Denmark targets >50% of all electricity to be produced by wind in 2020.

Suggest you simulate with the Danish figures.
So you can then test your simulation results with Danish reality.
As your results seem not to fit well with other studies.



Rick Engebretson's picture
Rick Engebretson on Dec 28, 2014

It seems common sense for a northern temperate region to combine biomass and coal for low emission baseload energy. The long, dark, cold winter nights have a baseload energy demand of lighting and heating. A nation without natural gas to waste has no better options.

The long, sunny, warm days of summer, when solar PVs kick in, finds most Germans under a shade tree or at the beach.

The Germans wisely see the world will continue burning coal and few people have the money to buy indulgences. Selling clean, useful, low emissions energy technology is a largely untapped global market.

Basically, we have people who produce nothing deciding how everybody in the world is supposed to live using other people’s money, regardless if it makes any sense or not.

Given your many thoughtful posts, may I suggest you consider the word “biomass” is about as descriptive as the word “food.” A lot of possibilities are being ignored in TEC discussions.

Willem Post's picture
Willem Post on Dec 28, 2014


The legacy cost of solar subsidy is about 33 eurocent/kWh. That energy is sold at wholesale to the French at about 5 eurocent/kWh, or less, sometimes near zero! 

France is looking forward to more of such energy.

Bas Gresnigt's picture
Bas Gresnigt on Dec 28, 2014

A year ago I biked along a German power plant burning wood. The wood was chipped and then fed into the plant by a belt. No coal.

A mixture with coal is not economic, as it implies that the electricity produced cannot be sold as 100% renewable. 

Anyway, coal will be replaced by renewable after all nuclear is out (nuclear is considered far more dangerous).

Bas Gresnigt's picture
Bas Gresnigt on Dec 28, 2014

Their utilities decided in the 2003-2008 period to replace all old coal plants by these flexible high efficient new coal plants. As it was predicted that baseload plants cannot compete in an high renewable electricity market.

Those new plants may endure rather long as they reach 80% renewable in 2050. So even then still 20% left for fossil fuel.
And those new plants can curtail deep and uprate production fast dependent on the electricity price they get. Hence adapt to production changes of solar and wind  (as well as demand changes of course).

Bas Gresnigt's picture
Bas Gresnigt on Dec 28, 2014

That 33cnt is the price for creating a volume market for solar in the 2000-2010 period. Thanks to that, solar is now much cheaper for the whole world.
Nowadays the subsidy for PV-solar is between 5 and 9cnt/KWh (12.5cnt (rooftop) – 3.5cnt whole sale price).


Bas Gresnigt's picture
Bas Gresnigt on Dec 28, 2014

When France started, nuclear generated electricity was cheaper than all other. Also because security was not an issue back then.

When Germany started in 2000. Solar electricity was ~$1/KWh, etc.
So they first had to create a mass market in order to bring prices down. And such technology improvements take time.

If solar and wind cost 2cnt/KWh and batteries costs are also very low, then migration will occur much faster than France did.

Bill Hannahan's picture
Bill Hannahan on Dec 28, 2014

This reminds me of the drunk driver who complained after a collision that the sober driver did not get out of his way fast enough!

Bill Hannahan's picture
Bill Hannahan on Dec 28, 2014

Schalk, excellent essay in January. I agree that the limitations of wind and solar are becoming more clear and this puts a spotlight on Bio. Have you come across a detailed unbiased reference? I have many questions.

–   How large can it scale?

–   Is it permanently sustainable, that is, does it use up limited consumables like topsoil and potash as with our corn ethanol boondoggle?

–   Any impact on food production and cost?

–   What are the fossil carbon emissions / kwh due to transportation, cultivation fertilizer production etc.?

–   Cost / kwh?

–   Water consumption / kwh?

–   Land area per kw?


Willem Post's picture
Willem Post on Dec 29, 2014


You are a Delft engineer. Act logically, please.

The LEGACY solar costs/kWh will be declining very slowly, as relatively few new solar systems, compensated at lower costs/kWh, are added.

Just 1,682.997 MW were added in the first 10 months of 2014.

The total solar in Germany is 38,018.877 MW, as of end Oct 2014.

A grocery clerk can see it would take a long time, many years, if ever, for the legacy cost curve to reach grid wholesale price parity.

Here is a reality check on some of your illogical statements:

Rick Engebretson's picture
Rick Engebretson on Dec 28, 2014

Bas, I don’t speak with the force of certainty most others do. But I am certain yesterday morning I was showing an MIT scientist from Silicon Valley with family in India a book about Molecular Vibrations. We discussed chemical properties of cellulose as we watched infrared photons vaporize it.

I really enjoyed spending time with someone who doesn’t think he has all the answers and believes new ideas and opportunities yet exist.

Bas Gresnigt's picture
Bas Gresnigt on Dec 28, 2014

Their high flexibility is the major reason the big German utilities started building the new generation of coal/lignite plants in the 2003-2008 period (some are not ready yet).
They replace the old plants, as those (being baseload plants) cannot compete in an environment with substantial share of wind+solar.

Other advantages of the new plants:
– Great efficiency increase; from ~34% for the old, towards ~44% for the new plants. So lower cost price due to ~25% less fuel; and
– ~25% less CO2;
– less toxics such as NOx’s generated, so less filtering costs (thanks to the low burning temperature);
– less maintenance, partially due to the low burning temperature.

Most will close in the 2023-2050 period, but some may survive some years longer due to the very low cost price of the electricity they produce.

Bas Gresnigt's picture
Bas Gresnigt on Dec 28, 2014

Consider that as investment depreciation. That German investment (to create a volume market) delivered the great price decreases of solar (thanks to which the poor without grid now have light)!

Now they try to do the same with their new succesfull household solar battery program.
And indeed the first special inverter-battery sets entered the market already!

The expectation is that their subsidy will create such price decrease that installing a battery in combination with rooftop solar will become economic viable before 2020 in Germany.
Hence households can use their own solar electricity during the evening.

I expect it will take another decade or two before solar will be so cheap that households over-size their installation so much that they don’t need electricity from the grid in winter.

donough shanahan's picture
donough shanahan on Dec 28, 2014

@bas bomb

You have not thought this through at all have you?If a solar power merchant is selling electricity on the export marker, cthen that electricity has already qualified for the fit. Thus Germans are paying subsidies for electricity they are not using! Now a senor guy in the ukerc put this solar export at 40%. Looking at the numbers above, I see no reason to doubt this.

Nathan Wilson's picture
Nathan Wilson on Dec 28, 2014

I think if you look back at the history, you’ll see that before the 1970s, there weren’t many natural gas pipelines, and no “aviation-derived” gas turbines; therefore coal plants (along a few hydro and slow-throttling gas-fired boilers) were the dominant source of grid electricity as well as grid frequency regulation, and the grids worked fine.  This is still the case today in many areas including much of China.

Regarding frequency regulation and load following, as this article by ANS’s Will Davis describes,  nuclear plants can be designed to load-follow just fine, but they have also been deployed at high penetration using energy storage (pumped hydro).

So today’s frequency regulation problem really is because of attempts to integrate large amounts of energy from sources which provide no frequency regulation or demand following (e.g. renewables from operators who presume that someone else will provide this important service). 

it is really the design of the grid system and the main power sources that are terrible at frequency regulation…

Your langage betrays an implicit (and fundamentally correct) assumption that renewables aren’t and won’t soon be the “main power sources” for the grid.

Bas Gresnigt's picture
Bas Gresnigt on Dec 28, 2014

Thank you for the link to the new EEG (didn’t have that)!

Agree that solar produces bad in our winters (in NL too).

If they really want to restrict to 52GW, then it seems logical to adjust the target to e.g. 1GW/a new solar and not keep the 2.5GW/a. With 1GW/a they will reach the 52GW in 2029. Still 20years earlier.

Logical because such move implies a lower Energiewende levy as:
– the cost price of solar is decreasing. So installing later implies lower FiT’s.
– only 1GW/a implies that the return / yield can be lower as the more sceptic don’t have to be convinced (which you otherwise need to reach the 2.5GW/a). That also implies lower FiT’s.

But let’s see what happens at the next revision (remember vaguely at 2018).

Schalk Cloete's picture
Schalk Cloete on Dec 28, 2014

As Bas pointed out towards the top of this thread, the biomass expansion is expected to slow dramatically in coming years to only 100 MW/year (equivalent to about 700 MW of solar per year). This is the result of high costs, implying that the market is signalling that biomass is already close to saturation. In terms of heat and transportation fuels, German bioenergy has already been in stagnation for many years (see this German document for example). 

Germany is therefore no exception to the conventional wisdom that biomass can sustainably supply maximum 10% of the energy needs of an industrialized country. To push past this point, breakthroughs will be required along the lines of genetically engineered organisms that excrete biofuels as waste and thrive in a saltwater environment. 

As for your other questions I unfortunately don’t have good answers at this time.

Mark Heslep's picture
Mark Heslep on Dec 29, 2014

Apparently E.ON concluded similar, so they dispose of all fossil fuel and nuclear plants.”

Regardless of who owns them, you understand from the data presented above that Germany is not in 2014 disposing of (net) coal or nuclear plants, and in fact continues to build more new coal?  That all of Germany’s solar and wind capacity together can and do drop to insignificant levels for a days or a week at a time, so that such intermittent sources can never retire dispatchable power? 

The consequence of such action is observable from the reduction in nuclear output in 2014.  Shipping less nuclear output does not reduce the total nuclear cost, of which nuclear fuel consumption is insignificant. Thus consumers of fewer nuclear kWh’s must pay the same price they paid for the prior higher kWh figure, because the German grid can not do without that nuclear resource, or at least not without some other dispatchable power source. 

Nathan Wilson's picture
Nathan Wilson on Dec 29, 2014

solar subsidies in Germany cease … German electricity retail rates are set to rise to over 30 eurocents/kWh (0.36 US$) so self-consumption will drive future installations.”

Don’t forget that self-consumption with net-metering is also a form of subsidy.  The variable cost of grid power is only 1.2-5¢/kWh once the plant is built, the rest of the retail rate is taxes and charges for fixed costs that are not really a function of energy consumption.  So at 33¢/kWh, net metering “incentive” is the biggest subsidy there is, and a huge amount of money that is disappearing out of the German economy.

Therefore in the near term, residential solar and “self-consumption” will continue to grow like a juggernaut, draining money from the power companies and electricity consumers who don’t own their own PV (this is especially hard on poor people).

In the long term, reality will have to set in, and all nations, including Germany will have to force PV system owners to have different electricity billing plans that include high fixed charges and low per-kWh charges.  The enthusiasts’ vision of a PV system on every house, a grid connect for time-shifting of energy, and zero electricity bills is not possible, no matter how low the cost of PV and batteries falls.

Mark Heslep's picture
Mark Heslep on Dec 29, 2014

“Most will close in the 2023-2050 period, but some may survive some years longer due to the very low cost price of the electricity they produce.”

Most of all German coal plants will close?  And be replaced with what?

Browse the Fraunhofer data and see all the points where conventional power provides nearly 100% of German load.   This occurs frequently for hours and sometimes for days, such as the 4th week of 2014 in Januar.  The plants the provide such last resort power, even if used infrequently, can charge whatever they want during these periods. because there’s no alternative. 

Bas Gresnigt's picture
Bas Gresnigt on Dec 29, 2014

Nathan,You show why the Energiewende goes along an accurate path of ~1.5%/a increase.
So everybody knew in ~2000 that renewable share will be ~35% in 2020, ~50% in 2030, etc.
Hence they adapted. Installing flexible plants and peakers, closing baseload, etc.

Though mis-estimations were made, such as with the 35 pumped storage facilities built. Those make losses. May be they become profitable around 2030 (=50% renewable), however in 2030 (flow-)batteries may outcompete them.

“In the long term, reality will … force PV system owners to have … high fixed charges and low per-kWh charges.”
Don’t think so for NL and Germany:
1. The grid charge is grid cost based. Rooftop PV owners use less grid resources as they deliver to others nearby, if at all. So they should have some discount.

2. If an utility increases the fix charge, users will:
– run-off to one of the other (often 100% renewable) utilities; or
– go off grid. German poll; may be ~25% in next decade.
So Germany’s biggest utility, E.ON changes to 100% renewable decentral generation and spins off all centralized (FF and nuclear) power plants.

Rick Engebretson's picture
Rick Engebretson on Dec 29, 2014

Sean, perhaps there are 2 ways to consider improving biomass use.

In the simplest approach, we know fresh cut biomass does not burn. In the case of wood, we cut it into small pieces and put in in the sun to pre-treat the fuel. Similarly, hay is dried in the sun before bailing. Simply extending this solar biomass processing to concentrated solar thermal temperatures, and you will either start a fire in the presence of O2, or you will vaporize the biomass as done in destructive distillation.

In greater detail, material phase transformations follow quantum mechanical harmonic oscillator (QMHO) generalities. The QMHO model stipulates every molecule has a “zero point energy,” it vibrates in all modes derived according to dimensions, symmetry, and elasticity. Cellulosics are huge, symmetric molecules, they have extremely low frequency vibrational modes, so the solid material is at a very low energy state, it is stable for hundreds of years at normal temperatures. This is where the photon discussion begins.

By either approach, you have to add a lot of energy to first vaporize the biomass material before it will burn, if that is your goal. Solar processing will do that for you. Perhaps double the fuel value (Kcal/mole), oxygen enhanced fuel injection combustion efficiency, etc. Anyway, I don’t propose burning wood chips.

Bas Gresnigt's picture
Bas Gresnigt on Dec 29, 2014

I think they simply store the tree-trunks somewhere in open air under some roof for some years. So it will dry. Preferable near the place where they harvested the wood as dry wood weights less, so cheaper to transport.

Willem Post's picture
Willem Post on Dec 29, 2014


The points you make are in my article, which I think you should read.

It shows I am in FAVOR of solar, just as you. The TEC article is relatively new, but has had thousands of views.

However, you leave out an important point.

Buildings would have to be designed for very high energy efficiency, i.e., Passivhaus level, to make off-grid buildings viable.

What Germany did with the ENERGIEWENDE is to help reduce PV solar panels in a very expensive manner (China also helped out), as is clear from this article:

The ENERGIEWENDE should have been concurrent with a nationwide, Passivhaus level residential building program to make a more rational impact.

Bill Hannahan's picture
Bill Hannahan on Dec 29, 2014

Wow! If 25% of customers go off the grid in 10 years that will be a staggering change. Are you talking large and small or just residential?

Their first major purchase after going off the grid will be a gasoline or diesel generator. Noise levels, air pollution and CO2 emissions will skyrocket.

It will be interesting to watch if you are right.

Nathan Wilson's picture
Nathan Wilson on Dec 29, 2014

When we refer to grid cost, it sounds like in the Netherlands this means only the transmission and distribution;   in the US, we still have regulated monopoly utilities, so grid costs also generally include generation.  Your market design lets you ignore the flexible generation assets that are always needed to provide the load following which makes electricity supply and demand match.  Solar and wind are not part of that flexible generation, so if you buy from a utility that supplies 100% solar and wind, you are effectively free-loading off of other users who are buying electricity that provides enough excess load-following to cover your needs.  As solar and wind penetration rise, you’ll no longer be able to get this load following free (likely your utility will have to buy the service from a pumped-hydro company).

The cost of the electrical distribution system, as well the cost of pumped-hydro, flow-batteries or any other conceiveable energy storage does not depend on the amount of electricity which is delivered.  The cost of the distribution system only depends on the peak simultaneous demand;  storage cost depend on that plus the total energy storage capacity.  Since peak simultaneous demand in northern regions occurs on winter evenings (after sunset), owners of solar PV systems use just as much grid service as everyone else! No discount is warranted.  Obviously, distributed PV is more advantageous in warm climates with a summer demand peak, but even that effect disappears as solar penetration  exceeds 20% or so.

As a thought experiment, imagine all electricity users (residential, commerical, and industrial) all had PV systems for 100% self-generation (“net zero energy”).  The utilities would have a business model built around maintaining the electrical distribution system and providing energy storage, and perhaps thermal or fuel cell backup power plants.  How can the electric bills in this scenario be netted to zero?  In fact, how can the bills be reduced from current bills by any more than the 1.2-6 ¢/kWh production cost of today’s electricity?  (e.g. the average German consumer who pays 3¢/kWh for grid power including taxes and fixed costs, would have their total bill drop by only 17% if everyone had 100% self-generation).  

Note that moving the energy storage to the customer side of the meter will not change the total cost of the system.  Going off-grid also does not reduce the cost, since grid-connected consumers can share batteries and backup equipment, and consolidation lowers maintenance costs.

The claimed/assumed scalability of net metering is a big lie that can’t be maintained much longer.

Bas Gresnigt's picture
Bas Gresnigt on Dec 29, 2014

I only read the headline in a German paper this spring or so. Realize that these people had to predict their behavior ~5years ahead. So it tells what they are dreaming about.

Assume the boards of E.ON and RWE knew that already. It adds some explanation to their decision to migrate away from central power plants, towards a service company.

No diesel generators or so. Germany has already farmers, small areas and villages that are ‘off-grid’. Those have their own grid and generation mix. Most solar + wind + biogas/biomass/waste (from farmers) + some storage.

Think these citizens assume the price decreases for solar, batteries and wind will continue.
So they consider buying over-sized rooftop solar + big battery (may be also a share in a local wind turbine). They will only go completely off grid if experience show they don’t need it anymore.

Bas Gresnigt's picture
Bas Gresnigt on Dec 29, 2014

“…reduce PV solar panels in a very expensive manner …”
Apart from creating a vulume market, they also invested in research. E.g. Fraunhofer ISE which recently announced a world record for PV efficiency of 46%.
I found it difficult to estimate whether they would have had more price decrease if they had invested more money in research.

In NL and Germany isolation, etc demands for (new) houses are increased every ~10years.
In Germany few months ago again, as Merkel wants to reach -40% CO2 in 2020 (compared to 1990 Kyoto level).

A nationwide Passivhaus building program won’t happen. It would change the Energiewende from a marginal low cost item into a burden. That makes it impossible as no politician wants to take the risk loosing support for the Energiewende.

– The priorities of the Energiewende: 1.nuclear out; 2.democratize; 3.renewable; 4.affordable costs (=low); 5.less GHG.
– That the av. German household pays a lower percentage of its income for electricity than the av. US household. So the costs of the Energiewende are marginal / low.


Mark Heslep's picture
Mark Heslep on Dec 30, 2014

Their first major purchase after going off the grid will be a gasoline or diesel generator.”

Indeed, at Germany’s 52 degrees north the gas/diesel generator should be the only purchase if the goal is to go off-grid for the lowest cost. 

Mark Heslep's picture
Mark Heslep on Jan 9, 2015

2. If an utility increases the fix charge, users will:

… – go off grid. German poll; may be ~25% in next decade.”

Bas – Could you explain how a private residence might commonly go off grid at 52 degrees North, in a way that escapes the utility’s higher fixed charges?  A solar installation with capacity six times average consumption plus 14 hours of batteries plus a peak power rated combustion generator is not it. 

Bas Gresnigt's picture
Bas Gresnigt on Dec 31, 2014

Pessimists would point to the increase in yearly coal generation…

The opposite is true! Check the official production figures at AGEB:
year     Coal (TWh)
1990 : 313
2003 : 305
2013 : 283
2014 : 266 (expected)
– export of electricity increased greatly;
– generation now with more efficient plants (~34% vs 44% => 25% less CO2 per KWh produced).

This is one of the most spread misunderstandings in the English-speaking parts of the world!

Math Geurts's picture
Math Geurts on Jan 2, 2015

Who’s afraid for climate change? Germany’s power production from lignite:

1999 : 136 TWh

2004 : 158 TWh

2009 : 146 TWh

2011 : 150 TWh

2012 : 161 TWh

2013 : 161 TWh



Nathan Wilson's picture
Nathan Wilson on Jan 2, 2015

Yes, reports about the Germany are confusing since they use two kinds of coal:

Braunkohle (which we call lignite, or dirty brown coal), which we try not to use, but the Germans seem to love.

Steinkohle (which includes what we call hardcoal/anthracite and black-coal/bituminous, as described here) which burns cleaner than lignite, producing less ash and less CO2 per unit energy.  The Germans are reducing their use of this more expensive grade of coal.

We should also notice that boasting of improvements to the German grid from 1990 is a trick used to take credit for the low-hanging fruit of upgrading comically bad East German plants after the re-unification in 1990.  These improvements make coal use more sustainable, and are not really part of a coal phase-out; that difficult job lays completely in the future.

Math Geurts's picture
Math Geurts on Jan 2, 2015

Germany also picked the (from an integration point of view) low hanging photovoltaic fruit when PV was immature and expensive. 

“At low penetration rates (<2–5%) solar power’s market value turns out to be higher than the average wholesale electricity price – mainly, because the sun tends to shine when electricity demand is high. With increasing penetration, the market value declines – the solar premium turns into a solar penalty. In Germany, the value of solar power has fallen from 133% of the average electricity price to 98% as solar penetration increased from zero to 4.7%. This value drop is steeper than wind power’s value drop, because solar generation is more concentrated in time. As a consequence, large-scale solar deployment without subsidies will be more difficult to accomplish than many observers have anticipated”

Today PV is not as expensive as it was, but the German governement appears quite reluctant in further expanding.


Willem Post's picture
Willem Post on Jan 2, 2015


Excellent comment with which I completely agree. It is like replacing an old Trabant with a new Audi.

Germany exports, because it has to use neighbors’ grids to balance its own, when excess wind and solar energy are produced. The more such production, the more such exports.

Nothing for RE folks to crow about, as the exports often are at near-zero wholesale prices, after having a subsidized LEGACY cost of about 34 eurocent/kWh, in case of solar, which is very sloooowly declining, because of the little addition of more MW of solar/month.

Had Germany STARTED building north-south HVDC transmission about 10 years ago, when folks like me and others said it would be needed, the “excess problem” would have been mitigated, i.e., a larger domestic grid to spread excess energy.

Those transmission lines were held up by NIMBY, and are STILL being held up by NIMBY, because people finally are starting to see the adverse visual impact of it all.

If major parts of the lines have to be buried, costs/mile will go up by about a factor of 2 – 3, depending on the soil conditions.

RE apologizers need to keep a stiff upper lip, and obfuscate, and dissemble.

Willem Post's picture
Willem Post on Jan 2, 2015


Wind and solar energy are wholesale price depressers, causing all sorts of stranded-cost problems for the traditional power industry, and they are household price increasers, causing all sorts of problems for millions households trying to keep up their standard of living without too much skimping.

Bas Gresnigt's picture
Bas Gresnigt on Jan 2, 2015

Today PV is not as expensive as it was, but the German governement appears quite reluctant in further expanding.
The official expansion rate was 2.5-3.0GW/a. Now it’s 2.5GW/a, also because the expansion got out of hand in 2010-2011 with 7GW/a (due to large cost price falls).

While that high expansion rate is great, it also made the Energiewende more expensive than budgetted. So now correction.

Note also the solar Energiewende target for 2050: only 52GW (since 2000). With the current expansion rate that target will be reached in ~2020. So I’m curious to see what they will decide in the next revision round in 2016.


Mark Heslep's picture
Mark Heslep on Jan 3, 2015

Batteries are getting to be dirt cheap anyway. “

Perhaps for a backup period of one night, a couple hours.  For a period of weeks, a month, then a capacity of something like 600 kWh is needed, i.e. tens of tons filling the basement, requiring at least some minimam temperature control.   Batteries are thus an order of magnitude or two short of the volume and mass density required for viability, as well as short of the cost point, to support the idea posited here about a residence going off grid through a German winter with solar plus batteries alone.

Nathan Wilson's picture
Nathan Wilson on Jan 3, 2015

“..that is what we are seeing in the states. The Storage is actually coming from utilities…”

Everything I have read in the past says transmission was cheaper than storage, and that the existing battery storage installations are all proof-of-concept pilot projects, not money-saving full-scale production plants.

Do you have some new information?

Nathan Wilson's picture
Nathan Wilson on Jan 3, 2015

Those transmission lines were held up by NIMBY…”

Are you sure that’s the only holdup?  NIMBY is an individual opinion, but big projects tend to be held up by organized opposition, and organizations tend to require money.  

The lack of domestic transmission in Germany supports the hypothesis that Energiewende is designed to prolong use of fossil fuel in the face of growing pressure for cleaner energy.


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