Clean Power Typical Solar Installation (in Germany, click on image to expand) – Courtesy Tim Fuller, the Timchannel, CC by SA 2.0

Published on July 18th, 2014 | by Roy L Hales


What Does Solar Energy Mean To Germany’s Big Utilities?

July 18th, 2014 by  

Originally Published on the ECOreport


Solar parking (in Germany) – Courtesy Tim Fuller, the Timchannel, CC by SA 2.0

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

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.”

Solar-powered parking meter in Berlin – Courtesy Thomas Quine, CC by SA 2.0

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

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 among them.

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About the Author

is the President of Cortes Community Radio , CKTZ 89.5 FM, where he has hosted a half hour program since 2014, and editor of the the ECOreport, a website dedicated to exploring how our lifestyle choices and technologies affect the West Coast of North America. He writes for both writes for both Clean Technica and PlanetSave on Important Media. He is a research junkie who has written over 1,600 since he was first published in 1982. Roy lives on Cortes Island, BC, Canada.

  • Hans

    Since original German utilities have been split up in production, transmission, distribution and retail, using the term “utilities” in the current situation is a bit unclear and confusing for the reader who will interpret this word from the U.S. context.

  • Doug Mac

    Welcome to the future of energy production…..
    You gotta love the Germans. Way to go.

  • UncleB

    We win! nuclear gone! Yes we can!

    • matthew Adams

      I honestly don’t know why that’s a win? Isn’t the goal to reduce carbon emissions?

      • JamesWimberley

        Germany took a (poor but popular) decision to accelerate the phaseout of nuclear power. As a result, the initial impact of renewables was to replace nuclear, not fossil energy. The win is that in spite of this, renewables and efficiency have at last started to cut into the coal and lignite burn. Gas was cut earlier.

        I suggest we stop grumbling about the German nuclear phaseout. It only brought forward something that is happening worldwide, the sunsetting of a good-try but ultimately failed technology. San Onofre in California is typical, not an outlier. Charts here (link).

        • JimBouton

          Those new coal power plants were going to be built regardless of whether Germany kept their nuclear power running. The new coal replaced the old coal. Having nuclear reactor still on line weren’t stopping that from occurring.

          Ultimately, the renewables would most likely have pushed out the nuclear energy, since it has the higher costs. I don’t think it was a poor decision at all, since it would have been a much more difficult fight to shut down the nuclear reactors.

  • sault

    I debate pro-pollution types on other sites sometimes and they always cherry-pick Germany’s 2012 CO2 emissions and coal consumption in an attempt to show how renewable energy is counterproductive. This new data showing that gas and coal consumption is down year-over-year is good news and I’ll refer them back to this article whenever they bring up the zombie canard about Germany’s fossil fuel consumption. I don’t expect facts to get in the way of their agenda, but this article will still be a very useful tool for making them look silly at least.

  • Joe Ferguson

    Germany already has one of the largest “pumped hydro storage” facilities in the world, and the terrain in the southern portion is favorable for development of more. Lots of chemical methods for energy storage are mentioned in the article, but pumped hydro can operate on a large scale, can be designed modular,is fairly responsive to load changes, and given appropriate sites, scales well. And its end-to-end efficiency often exceeds 90%.

    • nakedChimp

      Nature protection rules wont allow further hydro storage.. way too much damage to the remaining places.

      • Bob_Wallace

        There will be no problem finding plenty acceptable places for PuHS if that’s the storage solution we decide to use.

        • nakedChimp

          Afaik your from the US, right?
          Well.. I’m from the area in question and I can tell you that you might find plenty of places that would work for PuHS, but where some rare flora or fauna or some other environmental reason (heritage, etc.) will cause this to end in tears.
          Don’t forget, over there it’s not huge empty space that you’re used to from other places on Earth.. not for centuries, they’ve got the ‘Kulturlandschaft’ word for a reason. The last free places which aren’t being used by Agriculture or Humans is really reserved and needed for Nature to ‘hang on’ to.

          • Bob_Wallace

            As you are from the area in question then you might enjoy reading this piece of research which identifies a few thousand places in Europe where either both reservoirs already exist or where one reservoir and an appropriate place for a second can be found.

            Even Germany has 804 T2 realizable sites. Common belief is none.


            And Germany has a lot of abandoned sub-surface mines. Another good place to build closed-loop PuHS. And one largely free of flora and fauna.

  • spec9

    You know what Germany really needs now . . . grid-aware EVs that are plugged in when not in use which will suck up all extra electricity when there are low prices. Instead of paying for gasoline, how about GETTING PAID to charge up your EV?

  • spec9

    I doubt that is a ‘typical’ solar PV installation . . . that is a pretty huge one. If that one was on my roof, I could service 3 houses . . . but I get better sun (California).

    • GCO

      With early feed-in tariffs of 25 or 30 eurocent/kW*h, I bet that’s typical!

      For sure I’d have done the same, covering even the mostly-shaded part of my roof…

  • jburt56

    One way for utilities to cope is to use bitcoin mining. Bitcoin mines guzzle huge amount of power so why not fire up your mine during surplus production?

  • JamesWimberley

    Roy: “Is this an attempt to move Germany’s solar users off the grid, where they will be less disruptive?” Far more likely, it’s an attempt to deal with the duck curve (the evening peak), and/or an attempt to get behind the consumers’ meter and co-manage their whole household usage. The latter is dangerous. IMHO, utilities should be banned fro owing sophisticated home controllers. These janitroids should be devoted slaves of the householder alone. The utilities do have a stake in designing the protocols for communication with the grid.

  • tipper

    there is a typo in the last sentence: “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.”

  • TedKidd

    “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!”

    I think future utilities will be like toll roads. Toll roads don’t sell cars, they sell miles. They don’t care what direction you travel…

    • spec9

      I think governments may eventually have to take over some utilities and run them as subsidized entities that maintain the grid and provide peaker services to supplemented distributed generation.

      • GCO

        I also think that utilities (like roads and other public services e.g. libraries) are better run by the city or county. Distributing a basic necessity should not be left to any profit-driven entity, and especially not in a position of monopoly.

        I’m fortunate enough to live in an area serviced by such a “municipal utility”, and I see first-hand the benefits: cheaper and better service than the investor-owned behemoth right next door.
        Not having to turn in quarterly profits, having to show growth etc, results in much smarter, longer-term policies, including actively supporting energy conservation. Distributed generation like solar is welcomed instead of being seen as a threat. And so on.

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