Solar, Wind Power

Grid Expansion Delays Won’t Derail Germany’s Energy Transition, Analysis Finds

Expanding Germany’s transmission grid in order to accommodate increasing amounts of renewable energy will be a crucial element of the nation’s effort to meet its 2020 climate targets. But new analysis suggests that even if grid updates are heavily delayed, the nation could still successfully add large amounts of renewables, albeit with slightly higher costs.

Germany’s grid expansion plans are ambitious, involving four new HVDC cables from the north to the south of the country according to the national grid development plan, and some analysts believe they may not happen on schedule. A new report from renewables consultancy Ecofys, commissioned by the Smart Energy for Europe Platform (SEFEP), looked at Germany’s options if grid expansion is delayed, concluding that even in this case the nation can stay on its current renewable energy deployment track.

“There are a number of reasons why there are concerns,” said Raffaele Piria, SEFEP’s programme director. “Some say grid expansion cannot or might not happen at the speed assumed by the official grid development plans, and the risk of delays has been used as a motivation to propose a slowdown in renewable energy deployment in Germany. Our study shows that even if there is a delay, it is no reason to slow down renewable deployment in general.”

EU energy commissioner Günther Oettinger has said he favours speed controls on further German renewable depoloyment and a focus on grid expansion first, with energy storage as a parallel development, and only lastly the addition of further renewable capacity. Piria said Oettinger’s call for a “speed limit” and his claims that the grid would be unable to accommodate large amounts of new capacity were some of the reasons SEFEP decided to commission the study.

Ecofys’s research undertook to debunk what SEFEP called two persistent myths regarding the Energiewende. The first is the belief that if Germany’s grid expansion plans are delayed, a slowdown in renewable energy investment will happen in the coming years.

However, the study found that Germany can even surpass its target, drawing 72 percent of its electricity from renewable sources by 2030 even if grid expansion is limited to projects that were already under construction by December 2012. Importantly, the costs of this limited grid expansion would be manageable: according to the study, total power system costs would only increase by 0.8 to 3 percent depending on the geographical distribution and generation profile of the nation’s renewable energy sources.

Regarding geographical distribution, “If grid expansion is delayed, about €800 million [in total power system costs] can be saved per year if we spread wind and photovoltaic installations more evenly across the country,” said Christian Nabe, electricity market specialist at Ecofys.

In addition, the study found that increased amounts of PV and onshore wind, with a decreased but still consistent share (15 GW) of offshore wind, would create a system that was more robust against grid expansion delays. If more offshore wind (25 GW) is added, then grid expansion becomes more urgent as offshore wind power generated in the northern part of the country needs to be transported to southern consumption centres. According to the study, replacing 10 GW of offshore wind with PV and onshore wind would not disadvantage the total system cost, create more emissions or require increased curtailment, where a wind farm must be shut down. (The study predicted that restricted grid development would create a need for 1 to 4 percent, or around 15 TWh, in wind curtailment in 2030.)

System flexibility will be key to Germany’s energy future. If grid expansion as a source of flexibility is limited, the study found, other options such as compressed air energy storage, gas back-up plants and load shifting will be the most cost-effective means. Battery storage was not assumed to be a cost-optimal technology before 2030.

The second myth is that “wind should be built where it’s windy, and solar should be built where it’s sunny.” The report called this idea “simplistic” in that it reduces the complexities of the Energiewende to a question of wind and solar resources. But other economic and non-economic factors also need to be considered, SEFEP said, including the costs of land, capital and project development, the availability of skilled labour, policy certainty, social acceptance, the need for regional and national self-sufficiency and regional development concerns.

Surprisingly, the study also found that delayed grid expansion could result in slightly lower CO2 emissions in 2030, compared to full grid expansion. SEFEP said this is because grid expansion creates favourable conditions not only for the integration of wind and solar, but also for the steady operation of inflexible, low marginal cost power plants such as those that burn lignite, or nuclear power other countries. But still, in all scenarios modeled by the study, 2030 emissions are reduced to about one third of 2011 levels due to increasing shares of renewables in the mix. SEFEP recommended that policies designed to reduce power sector emissions will be especially necessary if grid expansion takes place on schedule, in order to counterbalance the favourable market environment for lignite-burning plants.

The authors cautioned that these results should not be interpreted to mean that grid expansion is not important for the Energiewende. Grid expansion will increase the stability and resilience of the Germany’s power system and reduce the total power system costs; and a strong grid is a good investment toward the expansion of renewables over the coming decades, they said.

And, ultimately, grid expansion is necessary for Germany’s future energy mix, as it is the cheapest way to integrate high amounts of renewables, SEFEP said.

“The study shows that rapid expansion of renewable energies can continue,” said Piria. “If grid expansion is delayed, we need to manage the geographical distribution of renewables wisely. With rapid grid expansion, effective measures to reduce emissions from lignite become even more important.”

Lead image: Energy supply via Shutterstock