By Roy L Hales
Germany’s renewable sector (RE) is flexing its muscles, with solar production up 28% and wind up 19% during the first half of 2014. As a result, the renewable sector accounted for 31% of the nation’s electricity. If this trend continues, this may be the third year in a row that Germany sets a record for energy exports. The increase in renewables has also been accompanied by a decrease in fossil fuel usage. Gas-fired power plant production is down 25%, compared to last year, and hard coal production fell 11%. Only lignite power usage rose. So what does solar energy mean to Germany’s utilities?
Typical Solar Installation (in Germany) – Courtesy Tim Fuller, the Timchannel, CC by SA 2.0
In the video Birthing a Solar Age, Jerry Rifkin points out that so much renewable energy was fed into the grid one day last month that the price of electricity fell below zero. He predicted there will be more days like this, and in the future Germany’s utilities will not want to sell electricity, as they lose too much money!
Max Hildebrandt, renewables expert at Germany Trade & Invest, points out that it is important to distinguish between the wholesale spot market price and the consumer market price, and to note that utilities in the EU have seen gradual unbundling into grid-side and generation and supply operations.
“Negative prices on the EPEX spot exchange are a relatively rare but not unusual phenomenon,” he said. “They occur only during short peak periods – usually around noon when solar radiation is highest – and not for entire days. They are merely a signal for the large-scale spot market participants and do not have an immediate effect on the more rigid prices in the consumer market.”
When spot prices are negative, power generators can choose whether to cut production or briefly accept negative prices for their electricity. Although there is a general tendency for greater fluctuations in demand and supply with an increased share of renewables, Hildebrandt notes that this can be countered “by expanding the grid so that it is more flexible geographically, by increasing energy storage capacity to increase flexibility in terms of time, and by employing demand response approaches. Germany does all of the above and there are large business opportunities in these areas.”
There are more than 1.4 million PV systems in Germany, according to figures from Germany Trade and Invest. The transformation of the German energy market, now known as the Energiewende, began with the first EEG legislation and has seen PV prices drop from over EUR 0.50/kWh in 2006 to around EUR 0.15/kWh in 2014. PV systems have nearly no operational costs meaning that once the initial capital investment has been paid back they produce power extremely cheaply. German legislators and regulators are currently revising their approaches toward the energy market as new business models evolve.
“Some utilities have entered the renewables business themselves, especially in capital-intensive offshore wind, which benefits from near constant and stronger wind than onshore systems thus providing a more stable supply,” Hildebrandt noted.
In his book Sun Above the Horizon, Meteoric Rise of the Solar Industry (pp. 452-57), Peter Varadi suggests that the corporate culture of Germany’s four big utilities is much more amenable to wind than solar energy.
They have only recently come to terms with solar energy’s existence, and Varadi suggests this is because the utilities are both centralized and largely reliant on fossil fuel plants. As of 2011, they had not contributed a penny of the $80 billion invested in Germany’s solar sector. Now they have all launched solar arms that encourage customers to install solar plus battery.
Hildebrandt said, “a lot of industry players expect a boom in solar storage system sales as modern and cheaper battery technology becomes available. Additionally, virtual power plant business models are already generating and storing electricity in Germany. Under this model, owners of small-scale storage systems allow a certain percentage of their storage capacity to be controlled remotely and bundled with capacity from other systems. This combined capacity can then be auctioned on the primary control market and is used to provide balancing energy as required.”
“Promising grid-scale solutions are being experimented with by leading German SMEs. Younicos, for example, is focusing on lithium-ion, sodium-sulfur and vanadium-redox-flow storage systems. Biogas and wind-to-gas applications, for example RH2-WKA in Mecklenburg-Vorpommern, also show great potential. Compressed air is another area being investigated.”
Vauban Solar Garage in Freiburg – Courtesy Jute Marketing, CC by SA 2.0
Varadi suggests the utilities may have mixed motives for promoting battery storage for rooftop solar. One of RWE HomePower solar’s ads (Varadi, p 475) points out that most home owners are not getting the full benefit of this technology. It is produced during the day, when most of the family is at work or school, and most of this electricity is fed directly into the grid!
“What you should have is a solar electricity storage that makes it possible to utilize the solar electricity exactly when you need it. This Independence offer you as of now the RWE HomePower Solar.”
Is this an attempt to move Germany’s solar users off the grid, where they will be less disruptive?
Those coal and gas fired power plants would not have taken such a hit during the first half of 2014 if homeowners had stored their surplus energy rather than feeding it to the grid.
Varadi suggests there will soon be 3 million German solar owners, but notes (p 457) that none of the big four utilities have expressed plans to be among them.
Mirrored from CleanTechnica