The Electrical Worker online
May 2015

Germany: Learning the Hard Way
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In the last decade, Germany has spent nearly $140 billion on green energy in a policy known as "Energiewende."

Under it, Germany has seen a much larger and faster move to renewable and distributed generation than any country in the world and there are worrisome signs that integrating it into the existing grid is much more difficult than anyone foresaw.

The result has been unquestionable renewable energy growth. Solar alone has gone from 1/50th of national capacity to 1/5th and renewable energy met a record 25 percent of annual demand in the country. Almost half of that capacity is owned by farmers and homeowners, said Bloomberg News.

However, energy prices have nearly doubled since 2000, reported the news magazine Der Spiegel, from $0.18 cents per kilowatt-hour to $0.37.

In the U.S., the average cost is only $0.10 per kilowatt.

Some of that cost has come because 1,000 megawatts of nuclear power cannot be replaced by 1,000 megawatts of solar (what happens at night?) or wind (what happens when the wind doesn't blow?). Germany has tried to ensure reliability by building hundreds of megawatts of redundant renewable capacity over a wide area, planning nearly $40 billion of new transmission lines to bring it online.

German utility officials have been forced to intermittently fire up dozens of coal plants, which run most efficiently and cleanly as baseload producers always on the burn. The result has been a 68 percent increase in coal consumption since 2010 and carbon production nearly flat despite the increase of carbon-free energy production.

But even as consumers are paying more, utilities are losing billions of dollars as the wholesale cost has been bid down nearly 60 percent since 1998, the Institute for Energy Research found. Renewable energy installations have been so heavily subsidized and cost so little to run, they are out-competing many other energy sources.

There are also important services provided by base-load, always-available power plants that keep voltage levels constant across the grid that are not provided by solar and wind power.

The result has been a reduction in reliability and quality across the grid. A 2013 story in the Economist magazine found that private German companies have spent billions building small-scale power generation and on-site blackout protection to get the reliability they can no longer count on.

In 2013, the European Union energy commissioner, Gunther Noettinger, said that development of distributed solar generation in Germany was "getting out of hand."

"The problem isn't renewables," said Utility Department Director Jim Hunter. "The problem is failing to make the investment in the grid and the rules that govern it."

Hunter said Germany's experience underscores the need to make holistic decisions on transitioning from fossil fuels to renewables. It also makes clear another potential cost of the permanent shutdown of hundreds of U.S. coal plants.

"As bad as it has been for Germany, if they didn't have the option of using those coal plants, things would have been a whole lot worse," Hunter said.


U.S. PV Capacity as a Percentage of Total Capacity Compared with Germany at the Beginning of Its "Energy Transformation"