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Clean Power solar pv and wind power complementary

Published on November 7th, 2013 | by Zachary Shahan

27

Germany Solar PV Report — A Must-Read For Any Energy Reporter

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November 7th, 2013 by Zachary Shahan
 
One of our Dutch readers, Remco van der Horst of Better Energy, recently passed along an excellent report on various aspects of Germany’s solar power boom. The report actually reads more like a fact-checking of common claims (in media and politics) regarding Germany’s rapid energy transition. It is easy to read, organized by common questions/claims, and full of interesting facts. I actually learned a few things from this one that have been itching at my mind for awhile.

I definitely recommend checking out every question and at least the short answer for it. However, I’m pulling out a few of the key ones and sharing them below. Have a look!

2. Does PV contribute significantly to the electric power supply?

Yes.

As estimated on the basis of figures from [BDEW3] and [BDEW4], PV generated 28 TWh [BDEW4] of power in 2012, covering approximately 5.3 percent of Germany’s net power consumption (compare section 20.8). Taken as a whole, renewable energy (RE) ac- counted for around 25.8 percent of net power consumption, while the proportion of Germany’s gross power consumption covered by PV and RE stood at 4.7 percent and 23 percent respectively.

On sunny days, PV power can cover at times 30 – 40 percent of the current power consumption. According to the German Federal Network Agency, PV modules with a rated power of 32.4 GW had been installed across a total of around 1.3 million plants in Germany by the end of 2012, meaning the installed capacity of PV has exceeded that of all other types of power plants in Germany. See Figure 1.

renewable energy germany

Solar PV Prices Will Continue To Fall

“The price of PV modules is responsible for more than half of a PV power plant’s investment costs. The price development of PV modules follows a so-called price learning curve, in which doubling the total capacity installed causes prices to always fall by the same factor. Provided that significant efforts continue to be made to develop products and manufacturing processes in the future, prices are expected to continue to fall in accordance with this rule.”

Solar PV Lowers The Price Of Electricity & Cuts Into Utility Profits

“The feed-in of PV power has legal priority, meaning that it is found at the start of the price scale of power being offered. With fictitious marginal costs of zero, PV power is always sold when available. It is, however, predominantly generated during the middle of the day when power consumption experiences its midday peak and during these periods, it displaces mainly electricity from expensive power plants (especially gas-fired and pumped-storage power plants). This displacement lowers the overall electricity price and, in turn, the profits made by utilities generating power from fossil fuel and nuclear sources (Figure 8). It also lowers the utilization and profitability of traditional peak-load power plants.”

Here’s a conundrum that I think doesn’t get enough attention: “The feed-in of PV electricity reduces the stock market price through the merit order effect and paradoxically increases the calculated differential costs. According to this method, the more PV that is installed, the more expensive the kWh price of PV appears to be.”

“The cheaper the electricity price becomes on the Leipzig European Energy Exchange (EEX), the more the EEG levy increases and thus the more expensive electricity becomes for private households and small consumers.”

Fossil Fuel & Nuclear Subsidies

3.8 Are the fossil fuel and nuclear energy production subsidized?

Yes.

A study from the Forum Green Budget Germany [FÖS2] states: ‘For decades, the conventional energy sources of nuclear, hard coal and brown coal have profited on a large scale from government subsidies in the form of financial assistance, tax concessions and other beneficial boundary conditions. In contrast to the renewable energies, a large portion of these costs is not accounted and paid for in a transparent manner. Rather, funds are appropriated from the national budget. If these costs were also to be added to the electricity price as a “conventional energy tariff,” they would amount to 10.2 ct/kWh, which is almost three times the value of the Renewable Energy Tariff in 2012. Up to now subsidies for the renewable energies have amounted to 54 billion euro. To com- pare, from 1970 to 2012 subsidies for hard coal amounted to 177 billion euro, for brown coal at 65 billion euro and for nuclear energy at 187 billion euro respectively.

conventional energy subsidies higher

Nuclear energy is simply far too expensive and risky to warrant investment. “The risks of nuclear power predicted by experts are so severe, however, that insurance and reinsurance companies the world over are not willing to offer policies for plants generating energy of this kind. A study conducted by the Versicherungsforen Leipzig sets the limit of liability for the risk of the most serious type of nuclear meltdown at 6 trillion euros, which, depending on the time period over which this sum is built up, would increase the electricity price per kilowatt hour to between 0.14 and 67.30 euros [VFL]. As a result, it is essentially the tax payers who act as the nuclear industry’s insurers.”

Industry Exemptions Raise Electricity Prices For Normal People

“Policy makers determine who finances the transition to renewable energy. They have decided to release the majority of energy-intensive industrial enterprises which spend a high proportion of their costs on electricity from the EEG levy, and are planning to ex- tend this level of exemption in the future. It has been estimated that more than half of the power consumed by industry shall be largely freed from the levy in 2013 (Figure 19) with the level of exemption totaling 6.7 billion euros. This increases the burden on other electricity customers and in particular householders who account for almost 30 percent of the overall amount of power consumed.”

Coal Production Increased Because of Broader Market Dynamics (Beyond Germany) & Because It Takes A Long Time To Shut Down & Start Up Coal Power Plants

“Electricity is exported during the day, because it is hard to throttle back coal-fired plants (lignite) due to their inertia or because it is simply lucrative to produce power in Germany and to sell it in other countries (bituminous coal). In countries other than Germany, gas-fired plants also became unprofitable. The statistics convey a clear message: Compared to the first quarter 2012, electricity exports in the first quarter 2013 increased by ca. 7 billion kWh. During the same period, the electricity production from RE (Figure 21:) decreased by 2 billion because of weather conditions [ISE4].”

electricity exports Germany


Solar PV & Wind Power Are Complementary

“Due to the country’s climate, high solar irradiance and high wind strength have a nega- tive correlation in Germany. With an installed capacity of 30 GW of PV and around 30 GW of wind power in 2012, the amount of solar and wind power fed into the grid by September 30 of that year rarely exceeded the 30 GW mark (Figure 29: ). Therefore, limiting feed-in from solar and wind at a threshold value of nearly half the sum of their nominal powers does not lead to substantial losses. A balanced mix of solar and wind power generation capacities is markedly superior to the one-sided expansion that would be brought about through the introduction of a competitive incentive model (e.g. the quota model).”

solar pv and wind power complementary

Increasing Solar Power Is Needed For Storage To Make Sense

The common talking point is that energy storage is needed for solar power to dominate the grid. However, Fraunhofer points at that more solar power is actually needed in order for energy storage to make sense.

10.6 Does the expansion of PV have to wait for more storage?

No.

Although the EU commissioner Guenther Oettinger in an interview with the newspaper FAZ (2 April 2013) said: “We must limit the escalating PV capacity in Germany. In the first place, we need to set a tempo limit for renewable energy expansion 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 price differences for electricity frequently occur, either on the electricity exchange mar- ket EEX or on the consumer level. Currently investments in storage, specifically pumped storage, are even being deferred because cost-effective operation is not possible.

First, a continued, further expansion in PV and wind capacity will cause prices on the electricity exchange EEX to sink more often and more drastically. On the other side, the reduced amount of nuclear electricity due to the planned phase out and more expensive electricity from coal-fired plants due to CO2-certificates or taxes will cause price increases on the EEX at other times. This price spread creates the basis for a profitable storage operation. If the price difference is passed on to the final customer through a tariff structure, then storage also becomes an interesting alternative for them.

A study from the German Institute for Economic Research (DIW) comes to the conclusion that surpluses from renewable energies are a problem that can be solved [DIW]. By making the electricity system more flexible, especially by eliminating the “must-run” basis of conventional power plants which is presently at ca. 20 GW and establishing a more flexible system of biomass generated electricity, the electricity surplus from wind and solar energy can be reduced to less than 2 % by 2032. The DIW takes the grid development plan 2013 as its basis [NEP] with an installed PV capacity of 65 GW, onshore wind capacity of 66 GW and offshore wind of 25 GW respectively.

In other words, what’s really needed is to cut slow, inflexible, “baseload” power from coal and nuclear power plants in order to move.

Keep up with the latest Germany cleantech news by keeping an eye on or subscribing to those archives.

Also see:

  1. 3 Reasons Germans Are Kicking Ass & Taking Names With Renewable
  2. Next Year Renewable Market Share In German Estimated As 28.7%
  3. German Solar Installations Priced at $2.24 per Watt (US Solar at $4.44 per Watt)

Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.

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About the Author

spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.



  • Mike in VA
    • Bob_Wallace

      Thanks for the laugh.

      That’s a record setter for Forbes. One of their biggest POS articles yet.

      • Mike in VA

        The POS article is the one we’re commenting on.

        • Bob_Wallace

          Got your retirement money tied up in coal, Mike?

          • Mike in VA

            You hate coal? Coal is used to generate electricity and is used in the “steel, paper, cement and plastics industries; to produce activated carbon which purifies water and carbon fiber components for fuel cells and electronics.”
            So stfu, keep your blinders on and your snarky comments to yourself.

          • A Real Libertarian

            You could have just said yes, Mike.

            It’d have been a hell of a lot less verbose.

          • Mike in VA

            but No would be the answer.

          • Bob_Wallace

            Yeah. I have a great dislike of coal.

            The sooner we quit using the stuff the better off we will be. It’s ruining our climate.

          • Mike in VA

            so is 6 billion people exhaling

          • Bob_Wallace

            That’s an ignorant reply, Mike.

            It indicates that you might not understand the carbon cycle.

          • A Real Libertarian

            Oh my god…

            6 billion people exhale mercury? And dioxins? And particulates?

            How did I not know this? HOOOOWWWWWW?!!!!

          • Mike in VA

            you two crack me up.

          • A Real Libertarian

            So, since my arguments are so ridiculous then you must have a decisive refutation, right?

          • Mike in VA

            looking for yours. make me believe, oh green one.

          • A Real Libertarian

            I’ll provide a refutation when you provide an argument.

            Deal?

          • Mike in VA

            Just as i thought, ‘you got nothing’
            you should stop burning up the electricity on here

          • A Real Libertarian

            “you got nothing”

            That’s you.

            First rule of science. You provide an argument and supporting evidence and then you demand a refutation.

            You don’t provide nothing and then demand everyone refute that.

          • Mike in VA

            Oh, so you’re a scientist huh? Then read the article I posted smartypants.

          • A Real Libertarian

            I did read it.

            It’s bullshit.

            The article we are commenting on blows that crap out of the water.

          • Bob_Wallace

            I read that article Mike.

            It’s another of Forbes POS articles in which they just plain lie. Can’t put it any plainer than that, Mike.

            “I was shocked to find out how useless, costly, and counter-productive their world-renowned energy policy has turned out.”

            Bullshit. The wholesale price of electricity has dropped by 50% in Germany in the last four years. Industrial electricity price peaked in 2009 and have been falling since. The industrial price is now below the EU27 average.

            What the Caryle doesn’t report is that the high price of residential electricity in Germany is due to taxes. Not the cost of generating and distributing electricity.

            “Here’s the truly dismaying part: the latest numbers show *Germany’s carbon output and global warming impact are actually increasing*
            *”*
            Caryle fails to report that the price of natural gas rose sharply in Europe and that caused an uptick in coal use.

            *”*because German solar is just awful”

            Germany saved 5 billion euros in 2012 because solar let them avoid fossil fuel purchases.

            Solar has greatly cut the cost of electricity in Germany. Again, the wholesale price of electricity has dropped by 50% in the last 4 years.
            Don’t try to push crap off on us Mike.

          • Mike in VA

            You didn’t read it.

            “To summarize: Energiewende is the worst possible example of how to implement an energy transition. The overzealous push for the wrong generation technology has hurt citizens, businesses, and the environment all at
            the same time. I want to make it clear that I’m not saying we should abandon solar. It should definitely be part of our generation mix. Due a mix of bad climate and bad policy, Germany ran into problems at a very low
            solar penetration, and other countries will be able to reach higher penetrations.
            But even if we ignore cost, there is still a maximum practical limit to solar power based on the realities of grid management.

            You can’t build more PV solar than the rest of the grid can ramp up/down to accept. The necessary grid storage for large-scale solar power is a
            “maybe someday” technology, not something viable today. Calls for 50% of power to come from solar in our lifetimes are a fantasy, and we need to be realistic
            about that. You can’t force utilities to buy unneeded power just because it’s renewable. The energy and materials to build the excess capacity just goes to
            waste. That is the opposite of green.

            We have to learn those lessons. We can’t sweep this failure under the rug.

            Every time a renewables advocate holds Germany up as a shining beacon, they set back the credibility of the environmental movement. It’s unsupported by reality and I think even gives ammunition to the enemy. We have
            to stop praising Germany’s Energiesheiße and
            figure out better ways to implement renewables. Other models should work better. They have to — the future of the world depends on it.”

          • Bob_Wallace

            I read it Mike.

            It’s wrong, false, a POS.

            Energiewende is clearly not the worst possible example of how to implement an energy transition.

            Energiewende has moved Germany, which doesn’t actually have great renewable resources, to a 25% renewable grid very rapidly. No other country/approach has been as successful.

            There could easily be a better model than Energiewende. It hasn’t appeared yet, but if it does I’ll bet it takes the best from Energiewende and improves on Energiewende’s shortcomings.

            That’s how progress happens.

            “The necessary grid storage for large-scale solar power is a “maybe someday” technology, not something viable today. ”

            We’ve been using pump-up hydro for over 100 years. It works just fine. Most likely we’ll settle in on large scale storage solutions which are even better.

  • de

    Up to now subsidies for the renewable energies have amounted to 54 billion euro. To com- pare, from 1970 to 2012 subsidies for hard coal amounted to 177 billion euro, for brown coal at 65 billion euro and for nuclear energy at 187 billion euro respectively.

    lol how long has Germany had renewable energies for ? 12 years ?

    Nuclear ? 42 years.

    Keep deceiving yourself with that kinda bullshit

    • Bob_Wallace

      So what you’re saying is that for 42 years Germany has used taxpayer money to help nuclear to become an affordable source of electricity while accepting the danger it brings. 187 billion euros spent to help nuclear to get on its feet and be self-supporting. But the price has only risen.

      On the other hand Germany has spent far less, about 30% as much as on nuclear, and in only 12 years they’ve been able to bring the cost of wind and solar down to very affordable levels.

      Sounds to me like the money invested in renewables was wisely spent and the money invested in nuclear was wasted.

    • A Real Libertarian

      So Germany spent 4.5 billion euros per year promoting renewable energy and 4.45 billion euros per year promoting nuclear energy?

      “Keep deceiving yourself with that kinda bullshit”

      And the award for lack of self-awareness goes to…

  • forseti boston

    Fun with statistics 101.

  • JamesWimberley

    “The cheaper the electricity price becomes on the Leipzig European Energy
    Exchange (EEX), the more the EEG levy increases and thus the more
    expensive electricity becomes for private households and small consumers.”
    Not quite. The distribution company buys most of its electricity on the wholesale market. As renewables increase, the surcharge goes up but the wholesale price goes down – it went negative on July 16. There’s no law or market process that translates increases in the EEG surcharge into additions to the standard retail rate. In fact, at least one large German distributor, EnBW, is holding its retail price steady.

    “A balanced mix of solar and wind power generation capacities is markedly superior to the one-sided expansion that would be brought about through the introduction of a competitive incentive model (e.g. the quota model).”
    Initially the quotas and the auctions beloved of Brussels could lead to too much wind, but in a few years to the reverse, as solar’s learning curve is much steeper. Looking ahead, a balanced renewable supply will need a permanent tilt in favour of wind – the opposite of the situation prevailing in most of the world till now.

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