The future of photovoltaics in Germany

Krughütte_Luftaufnahme_Parabel

Krughütte, PV park

I just came across a recent report on the state of photovoltaics in Germany, written by Harry Wirth from Fraunhofer ISE. What are the main takeaway points? The points in italics are my own.

By the way: There is this Stanford University report proposing that the world can go 100% renewable by 2050. This stands in contrast to the results in this Fraunhofer ISE report, suggesting that 100% renewables in Germany by 2050 is simply too expensive. The reason for this discrepancy has been taken up by the energiewende blog. Basically, the Stanford Report suggests that the 100% renewable scenario is achievable and requires 1080 GW of installed PV capacity. We will see below whether this is realistic or not.

  • Chapter 17 of the Renewable Energy Act 2014 requires 200 GW installed PV capacity by 2050 to achieve 80% renewable energy.
    • Germany is currently at 40 GW capacity
    • PV covers 7% of annual electricity demand
    • requires 4-5 GW of PV must be installed annually PLUS 6-7 GW replacements for old PVs
    • in 2015, Germany is expected to have installed about 1 GW PV (down from 7 GW annually during 2010-2012 due to lower feed-in tariffs)
    • Lesson 1: Without strong policy interventions Germany is going to miss its PV target. The 100% renewables target by the Stanford Report, requiring 1080 GW installed PV capacity by 2050, is highly unlikely to be possible.
  • The installation of offshore wind, the transmission link to the mainland and the expansion of the power lines are behind schedule. The EEG-Novelle 2014 reduced the 2020 installed off-shore wind target from its original target of 10 GW down to 6.5 GW.
    • Lesson 2: Hence, in order to reach the renewable energy target, Germany either need to strongly increase PVs or find ways to speed up the energiewende of other renewables.
  • Is PV cheaper than other means of producing electricity?
    • In Germany, the internal costs of generating PV electricity are higher than for electricity generated from conventional power plants.
    • This is not necessarily true if one includes the external costs
    • While prices for PV has been decreasing during the past years, the price for nuclear has been increasing!
    • Lesson 3: Germany is, in contrast to the UK with its nuclear plants, following the right path by betting on the technology with a decreasing price and energy independence!
  • Up to now subsidies for the renewable energies have amounted to 54 billion euros. To compare, from 1970 to 2012 subsidies for hard coal amounted to 177 billion euros, for brown coal at 65 billion euros and for nuclear energy at 187 billion euros respectively.
    • Lesson 4: Thus, there is still some way to go for phasing out German subsidies to non-renewables and nuclear. Nevertheless, since 2000 the subsidies to fossils is a small proportion of overall subsidies, while renewables are subsidized on par with nuclear (Figure 25).
  • Is Germany exporting electricity from renewables? NO – the increased export surplus comes primarily from new coal power plants. In 2013, the export of surplus electricity in Germany amounted to 32 TWh.
    • Lesson 5: That’s really not good… I always thought the exports came primarily from the overproduction of the renewables, but the report shows that this is not really the case. The question is: What should be done about this? When do these exports occur and why?
  • Is there grid overloading?
    • Solar electricity takes place predominantly in a decentralized manner and hardly makes any demands on an expansion of the German national transmission network.
    • Reliable national weather forecasts mean that the generation of solar power can now accurately be predicted.
    • Solar and wind energy complement each other
    • Lesson 6: Nevertheless, there are times during which electricity production is too high and electricity needs to be exported at even negative prices (i.e. Germany pays to get rid of the electricity so that the grid is not overloaded). It would be interesting to know how precisely these overloads arise and what to do about them, especially in the light of the previous result that electricity exports tend to be mostly due to fossil energy.
  • Storage discussion:
    • EU commissioner Guenther Oettinger said: “We must limit the escalating PV capacity in Germany… until we have sufficient storage capacity and an energy grid that can intelligently distribute the electricity.”
    • In fact, the situation is the opposite. Investing in storage is first profitable when large differences in the electricity price frequently occur, either on the electricity exchange market EEX or at the consumer level. Currently investments in storage, specifically pumped storage, are even being deferred because cost-effective operation is not possible.
    • If the price difference is passed on to the final customer through a tariff structure, then storage also becomes an interesting alternative for them.
    • Lesson 7: Nice point! So who is right? Is storage demand-driven or supply-driven? Both most likely, so one has to work on all fronts.
  • Are PV systems capable of replacing fossil fuel and nuclear power plants?
    • No, at least not in the near future… and until considerable storage capacities… are available in the grid.
    • Lesson 8: Storage, storage, storage… 
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