Also after the Paris climate change agreement, people still are interested in the question which options we have to erect a climate friendly energy system. As an introduction to this field, MACROSKOP presents a longer interview in two parts with the renewable energy expert Gregor Czisch as starting point of a series of articles dealing with the changes that are needed in a principally market-orientated system in order not to exceed the limits imposed by nature and our planet’s finite resources in the widest possible sense. The questions were posed by Richard Senner and Stefan Dudey This interview has now been translated from German to English language in order to make the holistic approach available for a broader international audience.
Preface to this translated version of the interviews with Gregor Czisch:
The interviewee, Gregor Czisch, has contributed on a few passages of the translation by comments in footnotes – only one in Part 2 – in order to place in the context major developments since the publication of the German version and update the interview where it seems to be expedient. This translation has proudly been sponsored by Intrenex, the world’s first renewable energy grid operator. www.intrenex.com
Interview: The supply from renewable energies in Germany, Europe and beyond
As lay persons in the field of high-voltage technology, we have tried to get a little familiar with the subject and came across the Swiss company ABB. In 2012 this company announced and presented a new circuit breaker for HVDC networks. The principle sounded simple, but it was not. Would you say that this development will help us to create a network in which large quantities of energy can be transported across Europe using DC electricity?
Proven circuit breakers of the conventional type were already available in the 1980s for high-voltage direct-current transmission systems (HVDC systems) (For those interested in technology: this conventional type is thyristor technology.), which enable a HVDC network suitable for a completely renewable supply to be realized. This also applies to all other hardware and software components required. The possibilities were also examined on behalf of the EU and classified as being sufficient, even for the complex and high-performance networks required. Today, there is a new HVDC technology which has some advantages over the old technology (For the technology-oriented: the newer technology is the so-called “voltage source converter”.). In particular, it can be regulated very well and is suitable for offshore applications, since the voltage source inverter stations only need relatively small and thus cost-effective platforms on the high seas. One problem with this technology is that it requires extremely fast circuit breakers, since in the event of a fault the short-circuit currents rise very quickly and must therefore be switched off quickly. Circuit breakers for this technology have now been developed by ABB, but these circuit breakers are comparatively complex and expensive. However, there are new concepts aimed at making fast circuit breakers which are also significantly more cost-effective. Unfortunately there seems to be no overriding interest in bringing such concepts to a breakthrough. In this particular case, the State was requested, as an independent entity, to act as a contracting authority. Unfortunately, despite sufficient recommendation the German government did not agree to take on this task. However, the new HVDC technology also has the not negligible disadvantage that it has higher losses than the conventional one has. As long as these problems persist, there is little reason not to use the conventional HVDC technology. However, with sufficient engagement satisfactory solutions should also be found before too long for the new technology.
When generating electricity by photovoltaics and in particular by wind, one encounters the problem that sometimes too much and sometimes too little electricity is produced. This would not be a problem if one could store electricity cost-effectively, but so far there are no convincing solutions for this challenge of storing large amounts of electricity. How do you see that? Do you expect important innovations concerning this point in the next ten years? For example, in 1921 the Canadian researcher Frederick Banting discovered at the age of 30 years that patients with Type 1 Diabetes survive when they are injected with insulin. This milestone in medicine impressively demonstrates the impact that the right idea can have at the right time. If a cost-effective and low-loss form of centralized or decentralized electricity storage would be developed, do you think that this would change the questions in the energy debate in quite different and completely new directions?
Already in the first part of the interview, we have looked at electrical storage and have shown that the currently developed electrochemical systems can not satisfy large and in particular long-term storage requirements. The electrochemical storage in accumulators is relatively well developed. The difference between the theoretical and achievable storage capacities no longer lie in the range of an order of magnitude, but only in a small to medium single-digit factor. However, this technology can never mature to the point of being economically viable and ecologically sustainable for long-term storage and this seems to be common knowledge in the energy sector. This is the only way to explain the fact that the inefficient “power to gas technology” in the form of using hydrogen or methane as storage mediums is once again greeted so euphorically. Only at an extremely high ecological and economic price, can it be used to compensate for all – especially long term – mismatch of demand and renewable supply, which is why this idea should be abandoned.
The smaller the production and consumption area is, the more effort needed.Are small area solutions therefore more demanding?
Considering a large-scale network with growing spatial dimensions the short-term fluctuations of renewable production are smoothed out first, then the hourly, the daily, and finally, utilizing a suitable selection of the production areas over a relatively huge range, even the seasonal production pattern. Micro-grids can only achieve very short-term compensation effects when left to themselves.
Accordingly, the smaller the scale of the supply and production areas are the more efforts must be made to adapt production to demand. This means the increased use of immediately and independently deployable resources.
If non-fossil energies are to be used, then storage technologies must be applied. In large-scale networks, storage facilities could be used in the form of existing hydroelectric storage power plants causing no additional storage losses. Then furthermore shared large-scale pumped-storage power plants with efficiencies of roughly 80 percent could also be used for this purpose.
Other renewable energy power plants, such as biomass power stations, could also be used for these purposes even if they are sited far away but within the common network. All these possibilities are eliminated in the case of small-scale micro-grids, where the entire required reserve power and reserve energy must be made available on site. With decreasing size of the supply system the proportion of installed peak power and thus also its cost increase.
If the reserve energy is then to be generated and maintained locally, then local storage facilities must take over this task. Short-term storage is feasible via electrochemical means, and although being relatively expensive and suffering losses it can be economical and technically feasible for relatively small volumes.
But particularly the share of longer-term storage requirements grows as the size of the area decreases. However, to date no economically viable option has been found for electrochemical long-tem storage and it is more than questionable whether it will ever be.
On the whole the relative storage requirement – for all storage periods – grows with shrinking supply areas, and this has repercussions on the cost and efficiency of the supply system.
In Germany much is now talked about methane generation…
Storage techniques for longer periods could be based on the electrochemical production of hydrogen or methane and its storage. Yes, methane production is currently being discussed in detail in Germany. A total efficiency of less than 60 percent is cited for the steps of methane gas generation by electrochemical means, compression to pressures with which efficient storage is possible, as well as the storage and transport of the gas.
Reconversion to electricity is possible in small units with efficiencies of about 40 percent and in the case of the most efficient large gas power plants with efficiencies of up to 60 percent.
Thus, with these already very generous estimates, the overall efficiency – from electricity to gas and back to electricity – is in small systems around 24 percent (and 36 percent when using the most efficient large power plants). This corresponds to an overall loss of some 76 percent.
How high would the additional economic costs be?
For the same quantity of electricity used by the end user, then in the case of utilizing the previously mentioned storage methods almost four times the primary production and thus also approximately fourfold production potential – fourfold material expenditure, and fourfold land consumption etc. – are required. This naturally incurs a corresponding additional economic and ecological cost. By the way, in the few electricity-to-gas-to-electricity systems realized so far, the achieved efficiencies of electricity via gas and storage back to electricity are once again significantly lower and the expenditure for the resulting necessary primary production is correspondingly higher. The additional technical equipment in the chain also entails additional costs which we did not consider yet in this discussion.
As shown above, even in the case of the above-mentioned optimistic assumptions for large-scale plants, the expenditure would be around three times that needed for the direct use of the electrical energy without intermediate storage plus the costs of the equipment. The use of these large scale facilities would, however, lead to a significant break in the logic of decentralization, which has gained so many supporters happily ignoring many crucial aspects.
The considerations just pointed out exemplarily show how important the avoidance of storage steps is and what importance should be given to it in the system design.
May we take up the item of cost again: energy issues are not just about financial aspects, but also about “energy costs”. The EROEI (Energy Return over Energy Invested) is often used here and must be greater than one. What about this coefficient for your Super Grid? After what period will we really be in the “green” range? The losses in transport and storage are certainly not insignificant, and some solar plants, for example, reach an EROEI of more than one only after ten years.
In principle, different renewable production techniques have different EROEIs or harvesting factors. Very large hydropower plants have the shortest energy payback times and the longest lifetime, which is why they have the highest energy yields. Wind energy is the number two after hydropower. In Germany one can assume a harvesting factor of about 40 ie that “windmills” generate about 40 times more electrical energy over their lifetime than the total energy required for the wind power plants. For photovoltaics in our latitudes, this harvesting factor is around one tenth of that of wind turbines and up to a maximum of one-fifth for very efficient systems, and thus solar production technology is significantly poorer in comparison.
However, according to the figures known to me concerning the time needed to achieve energetic amortization for photovoltaics it is clearly less than the ten years mentioned in your question. At a good location in Africa, and particularly in the deserts we can find sites which are considerably better than those usually found here in central Europe and energy yields can well double for solar power as well as for wind power. This is also true for wind power in many areas in the steppe, coastal and tundra areas of Eurasia. The electrical transmission via high-performance HVDC systems has only a small negative influence, since very large amounts of energy can be transported with a relatively small amount of material. According to the results of my scenarios even transport losses in the order of roughly 10% for distances of several thousand kilometers only insignificantly deteriorate the overall balance. On the other hand, in the case of poor storage design in a decentralized system using an energy source in our latitudes such as photovoltaics, it can quickly become difficult to achieve energy amortization when we consider the energy expenditure for the storage system and its storage losses.
Solar thermal power plants in good African locations have similar good harvesting factors to that of wind turbines located in Germany. At African top wind power plant locations harvesting factors close to 100 are achieved which clearly surpass that of the solar thermal power plants.
How realistic do you think it is that countries in North Africa will export their wind energy to us, when their domestic energy demand is growing rapidly?
This is an important question, since it is often assumed that African countries will be deprived of their natural wealth if one is to promote renewable energy exports. This idea is also often exploited by “decentralists”; however this fear is without foundation. The wind energy potentials in the North African deserts are so large that it is practically impossible to even come close to exhausting them. Eight of the North African Sahara countries have each a wind potential that is more than sufficient to produce the amount of electric energy that the entire EU and the whole of Africa require. One of them can even offer a potential of almost four times this on its own. However, since a large-scale international electricity supply should have a redundant and diversified structure, which is also the result of the optimization for the scenarios, only a modest fraction of the local potentials would be needed to meet the totally renewable international electricity supply. This does not have anything to do with an energy theft that would endanger the domestic supply. Much more, the consumption in these countries today is still so small that the investment in the exploitation of the potentials in a larger context than that which is feasible for a self-supply is much more economic. Therefore, the international electricity supply could be doubly advantageous: firstly as a source of income with an employment effect and secondly an impetus towards a renewable self-supply. In addition, the possibility of exporting excess renewable electricity allows a much higher share of renewable production also locally, since surpluses then are not lost but consumed elsewhere after export.
Moreover, with the help of the electricity transmission system for the export, transport in the opposite direction enables bottlenecks in the supply to be managed better and with less expensive, power reserves. It is therefore a classic win-win situation that could be created with international cooperation and energy export.
From this point of view, it is not surprising that there are offers from at least two North African countries – namely Morocco and Egypt – to provide land for European partner countries so that they can produce renewable energy there for their needs in Europe. Unfortunately, these offers have found virtually no response in our policy.
You have already pointed out in an essay in 2001 that the unavoidable fluctuations in electricity generation, for example by wind, are much less pronounced when one encompasses larger areas. We understand that if the wind does not blow in a particular region, then it is very likely that it is blowing enough somewhere else. To use this balancing effect over large regions, one needs a corresponding network, which transports the power from the currently windy region to the consumer. Or how do you see that?
It is exactly like that. In an interconnected system, where different resources are utilized, it is not necessary to size production from wind energy alone to cover all fluctuations in consumption, but the larger the area is and the more skilful the sites are chosen, the easier it is to use less energy and power from other sources in order to balance the supply against the needs.
The systematic relations in connection with the use of wind energy are that the short-term fluctuations over periods of minutes can largely be compensated in a network covering about a dozen kilometers. To compensate for periods of several hours, the necessary catchment area must grow to more than 100 kilometers. Compensation for over half a day requires a catchment area that extends over several hundred kilometers and that is thus approaching national dimensions. If one wants to balance fluctuations with time horizons of days, weeks or seasonal temporal scale, then one has to extend the electrically cross-linked area over many hundreds or even up to a few thousand kilometers. It is particularly favourable if there are areas in the supply system that are systematically anticorrelated, such as winter winds in Europe and summer winds in North Africa. Then even the most difficult, i. e. long-term seasonal fluctuations can be mastered. The electrical transport technology available today makes this possible at very low cost.
The study of the stochastics of wind energy and its distributed use already provides very promising results and indications on how to go towards a full supply utilizing renewable energies. However, in the case of energy supply one must also take into account the costs, the interaction of different technologies and consumer behaviour. This systemic approach has been chosen in the scenarios I worked out for the future electricity supply for Europe and its neighbours.
Therefore, operating and investment-related costs of all available renewable generation technologies, as well as the transport technology and all spatial and temporal properties of the renewable sources and consumption are combined in a numerical optimization approach aimed at finding the most cost-effective supply arrangement for each scenario. The optimization selects the techniques for the generation in such a way that the stochastics of renewable generation and consumption are optimally taken into account in order to minimize the costs of the supply.
The result is a cost-optimal compromise between maximization of production by the selection of sites with the highest possible productivity at locations economically favourable to develop and the balancing of the production behaviour with regard to the temporal behavior of the consumption in all the various consumption regions. The North African wind farms are used extensively, as they together with wind farms located in Europe and to the east of Europe provide a good and very cost-effective basis for the totally renewable supply. On the other hand, if the exchange between Africa and Europe is prohibited for other scenarios during the optimization process, then it will become more expensive for both remaining sides north and south of the Mediterranean sea, because more complex measures must be taken to harmonize production and demand.
The existing hydropower, in particular the storage power plants in the precipitous mountain regions with their huge water reservoirs, contribute a major part of the remaining compensation task. They are integrated into the interconnecting transmission system and play the most important “sweeper” role. If it is allowed to optimize – enlarge – the rated power of the hydroelectric storage power plants, which is often achieved relatively inexpensively at existing power plants by constructing a further tunnel for the water from the reservoir leading to a new powerhouse with further turbines and generators, then the optimization will take effect. The higher installed rated power at the existing storage hydropower plants allows the optimization to go for a system, with the wind energy being used less to compensate, but more towards the maximization of the energy yields at the sites used which pays attention to the production costs.
Storages have an important role to play; but on the one hand the costs per unit of energy stored must be lower by several orders of magnitude than with electrochemical storage; on the other hand the losses must be low. In fact, there are no losses in the storage hydropower plants. They are fed by the natural water inflows and the decision as to when it is used for the generation of electricity has no major effect on the efficiency with which the stored energy is used. The situation is different in the case of pumped-storage power plants. The optimization largely aims at avoiding their use, not least because of their lower storage efficiency of approximately 80%, which means losses of 20%. It is always better to directly use the electrical energy produced without intermediate storage. For this purpose, a large-scale international supply system offers the best possibilities.
If one thinks of the import of solar or wind energy from distant countries, Desertec may come to mind. In this project, solar power from the Sahara was to be brought to Europe to cover 20% of the energy demand. However, in 2013, the project was cancelled as being “too expensive and utopian” . What mistakes were made and what could be learned from this project?
Desertec is a sad example of missed opportunities. After completing my doctorate thesis in 2005 based on my scenarios, some of which I had already published in 2001, the scenarios were scientifically validated and comprehensible for everyone and I wondered who would be able to implement such a large-scale electricity supply. Financial capacity, energy-related know-how, insurance of investments abroad and commitment to climate change would be an appropriate profile for a supporter and this is exactly what Munich Re had to offer. The re-insurer has been active in the area of climate protection for decades and has been able to feel and measure the climate-induced changes via worldwide claims for damages they had to handle. From its business activities Munich Re also has political weight and contacts with the insurance industry, financial industry and manufacturing industry. Against this backdrop I contacted the company in 2005 and confronted them with my research results. Unfortunately, at the beginning of 2006, in addition to some “patting on the back” I received only the following very sobering answer:
“Munich Re’s focus on its core business is, in addition to the fundamental advocacy and support for the expansion of renewable energies in European and ultimately global energy supply, the risk aspects of the affected technologies in relation to the insured risk. Concerning the concrete support of individual initiatives, we must limit ourselves – not least because of the large number – and attach particular importance to a very close relationship with our core business. Here we ask for your understanding and please do not understand our refusal in the sense of a rejection of your model. Rather, we wish that you continue to receive attention for your approach and that implementation paths open up.
Years later in 2009, Munich Re seemed to remember about this after being approached by the Trans-Mediterranean Renewable Energy Cooperation (TREC) or its “successor” Desertec Foundation, and they founded the Desertec Industry Initiative (Dii). The involved companies combined turnover was in the double-digit percentage range of the German gross domestic product. Even before the founding of Dii, I was invited to Munich Re – for the first time and despite other meaningless promises from Munich Re and later Dii the last time. In the meeting referencing to my scientific work I pointed out that if they were looking for a fast, efficient and cost-effective implementation of the fully renewable electricity supply they had to concentrate on wind energy. This was probably heard and understood, but the Dii continued to focus on solar thermal energy, which – as I had not forgotten to mention – must cause a time delay of at least one and a half decades, since solar thermal energy was still in its infancy and its costs were and are still comparatively high. This concentration on solar thermal energy on the part of the Dii is not least due to the influence of TREC, an organization which I co-founded in 2003, or the influence of its successor the Desertec Foundation. I left TREC after an major dispute because of the one-sided focus on solar thermal energy. With wind energy, one could have immediately begun to build power plants in Africa and plan the transport of electricity, however this opportunity was missed. In the middle of 2012, Dii presented the study “Desert Power – Perspectives on a Sustainable Power System for EUMENA”. In this study they came – unfortunately too late – to practically the same result as I had presented to the public already 11 years earlier, namely that wind energy would be the top performer for the future electricity generation. Not least because of the partly very problematic development of the Arab Spring, the initiative and momentum that it had so urgently needed for its success was lost.
The favorable window of opportunity had now closed and today one must hope that a new one will soon open again. It did not take long for a disagreement to break out between Desertec Foundation and Dii, since the foundation obviously could not support a departure from solar thermal energy. Since the end of the Dii as a large consortium, the Desertec Foundation has not tired of boasting the success of the project because it would have fostered solar thermal energy. I see this as a confession that they have deliberately sacrificed the pioneering and extremely important idea of international cooperation to the promotion of a technology – the solar thermal electricity generation – which is not really needed for the renewable energy revolution. The self-interest of some of the parties involved has unfortunately, as is often the case, succeeded over the common good. However, this cannot be solely blamed on the Desertec Foundation.
Anyway, now it is necessary to start again.
Desertec also had great problems collecting sufficient funding. How do you see the financing of your project? Is it able to support itself?
The Dii had an annual budget of about 5 million €, which is quite sufficient. It may of course be asked whether or not it has made a good use of it, for example by producing a study that did not conclude anything important which was not already known well in advance. Even though the Dii initially attracted a great deal of attention with a projected investment sum of € 400 billion, it is clear to everyone who has been concerned with it even marginally that the industry assembled in Dii does not see itself as a charitable enterprise which has to finance such a project at its own expense. It is clear that there is a need for suitable financial instruments and a legal framework to enable such an undertaking to be successful. At first the situation did not look so bad. As I said in my EurActiv interview “The vision of the Super Grid” (German original title, Die Vision vom Super Grid), a European or international feed-in tariff (EEG, abbreviation for the German Renewable Energy Sources Act including the tariffs for the different renewable energies) which regulates the remuneration of imported renewable electricity, would be a good financing basis in order to build up the large-scale renewable supply. The interview was also presented to the then EU Energy Commissioner Oettinger. Oettinger also took up this matter and called for a European EEG. Unfortunately, he concentrated mainly on the harmonization of the existing European funding instruments. This in turn prompted the German and European Greens to fear the whole project and instead of discussing the design with Oettinger, they demonized the whole project and combated any serious discussion with Oettinger. It is to be assumed that the Greens also saw themselves as the protectors of the “decentralists” and their industries, who feared that they would lose the initiative if it was arranged and known to be possible to build a much cheaper renewable supply system. Of course, this fear could also have been countered by a clever design of the new European EEG. Anyway, the responsible persons should already have ask themselves the question of why the expensive solution is being developed further when more economical solutions are available. However, to a certain extent it would have been possible to provide answers acceptable to all parties. In any case, it is clear that a large-scale fully renewable supply requires much lower investments and involves much less costs than a purely national or even small-scale decentralized supply.
The opposition of the Greens alone would hardly have been able to bring down the project of the European EEG with a reasonable remuneration for imported renewable electricity. Unfortunately, and presumably for various opportunistic reasons, the Merkel government deprived its support for its CDU party colleague in Europe, Oettinger, and the support of the Social Democrats was obviously also denied. The fact that the Dii still mainly thought about expensive electricity from solar thermal energy and promoted this in public was certainly not particularly helpful, since thus the advantages of international cooperation were not easily visible. Ultimately, the large-scale renewable energy supply was denied the necessary financing basis. Thus the financing failed due to a total political failure, which surely also had various self interest orientated backgrounds.
Also here one has to count on a more constructive new start.
Which political course would have to be set / co-operations formed to implement such a project? What role must Germany play in it?
The European Union has so far not been entirely idle. For example it was regulated a few years ago that Member States are able to meet their obligations to raise the renewable share of their electrical supply by importing renewable energies. There are provisions that allow production to begin abroad and then at a later stage to realize electricity importation which has to be planned from the outset of the envisaged projects. These provisions are well suited, but not sufficient to trigger the process of designing the renewable super grid. Unfortunately, the all-important financial basis is missing and up till now has not been provided as a whole by the EU or partially by any Member States.
An international Renewable Energy EEG would be ideally suited for this, and it is not important whether this be put into force by the EU or perhaps even by the United Nations who could also provide the necessary financial base in other world regions. Of course, individual countries like Germany could also set a good example. Relatively simple would be bilateral cooperation between neighboring countries, such as Italy – Tunisia / Algeria or Spain – Morocco or even Russia – Germany if this is could be considered in view of the smoldering Ukraine crisis. Such country unions could be small steps in the right direction, which would perhaps develop the necessary pulling effect.
The establishment of new industrial consortia would also be welcomed if they could agree on pragmatic implementation strategies and would not allow themselves to be led by too much conflicting self interests.
Can we rely on a friction-free energy revolution, for example via implementing the Super Grid, or do we have to consider alternative scenarios with economic adjustment paths on the basis of “tightening our belts”?
I would like to simply answer that we can rely on the Super Grid. Unfortunately, however, the politics are so disappointingly bad and unambitious that we cannot trust any scenario, or any alternative scenario. The much too expensive energy revolution is miserably managed in Germany and is leading it into an expensive blind alley.
The “Alternative” belt tightening policy is economically very questionable and is also not necessary when considering the huge renewable energy resources, even though increased energy efficiency and resource protection should definitely be part of our efforts. According to the results of my scenarios, a change to a full supply with electricity from renewable energies would be technically and economically feasible in 20 years’ time. This would require an annual investment of only approx. 0.6% of the gross domestic product. Comparing this with the gross fixed capital formation (GFCF) of our economies, we immediately see that the expenditure for the necessary investments in the Super Grid, including all necessary generating facilities, is only a one-digit percentage of the usual investments. Investment in photovoltaics alone in Germany has already in some years reached higher values than this. From this point of view, the transition is easy to handle. Moreover, one can conclude that the economic burden would be marginal when one takes into account the fact that maintenance investments in the fossil fuel / nuclear electricity supply systems would be no longer needed and gradually the fuel costs of these systems would decrease. It would also be possible to achieve significantly shorter implementation horizons.
If one had started in 2001 (i.e. the year I published my first scenarios), then we could already be finished today. Frighteningly little has happened since then. And it is to be feared that we are not being energetic enough and already not making enough progress in going forward, since even the more ambitious policy drafts want to delay the date we should more or less be finished with the energy revolution until the year 2050. This is of course not nearly compatible with the 2 degree climate goal, but it seems that the majority of those responsible want to ignore this fact. Overall, an international totally renewable supply would in any case not be more expensive than the current fossil fuel / nuclear one, and with falling prices for the renewable power plants it could become significantly cheaper even without waiting too long. Thus, most of the CO2 emissions from fossil fuels could be saved in a climate neutral, cost-effective and time-saving manner, and the electrification of the other energy consumption sectors would make it possible to further reduce emissions.
But no matter what scenario you now adhere to, we can rely so little on our current politics that we cannot hope for a timely and problem-oriented implementation. Vigilance, commitment and political pressure are required by all private and legal persons.
The funding logic of the Renewable Energy Sources Act (EEG) has led to the fact that installation of photovoltaics became economically attractive for many house owners having a roof facing in the south direction. At the same time, one often notices many larger photovoltaic plants along motorways for which apparently agricultural land is used. Here two things seem to happen at the same time: on the one hand, it requires a relatively simple calculation to establish if the assembly of such cells is “worth it” or not. On the other hand, this trend seems to be popular because one feels individually “self-sufficient”. You could describe the thinking as being: If everything goes wrong, I can produce my own electricity. How much rationality or irrationality do you think is behind this?
The small-scale self-sufficiency is an illusion at the moment and is also not realistic in the long term due mainly to the seasonal supply changes of solar energy in our latitudes. In most cases, the systems are designed in such a way that the supply of missing power can at any time be obtained from the grid and any excess power can be provided to the grid. The surplus is remunerated according to the EEG, thus generating revenue for the producer. The part fed into the grid already increasingly requires the expansion of the expensive distribution networks as the proportion of photovoltaic production increases. This trend will continue to amplify with the further expansion of photovoltaics. However, the costs for this distribution grid expansion are not charged to the solar electricity producers, who thus benefits from a service whose costs are passed on to the general public. In principle, this would not necessarily be wrong if there were no other much more cost-effective approaches to a renewable supply available that would save the others’ money better. With falling PV prices, it becomes more attractive for the producer to consume a portion of the self-generated electricity himself. However, since the cost of the external infrastructure persists and is even rising, the solar electricity producers are creeping away from the co-financing of the common property. If the share of self-consumption is further increased through the use of batteries, the irrational feeling of self-sufficiency increases even further. It is now twofoldly uneconomic, since the storage systems are usually also not cost effective for the PV system owner. Storage entails considerable direct costs – and of course external costs – as well as storage losses which of course indirectly also cause costs. The perceived self-sufficiency thus creates additional costs for the general public as well as the alleged profiteer, namely the storage and PV system owner. Even today the distribution of electricity to small consumers is the most expensive network component. It accounts for between 5 and 6 cents per kilowatt hour for small consumers in Germany and already represents about half the production costs of solar electricity. The simultaneous production of many photovoltaic systems in a small catchment area – for example, in an estate of single-family dwellings – and the high rated output per PV plant, which is higher than the usual reference power consumption of the consumers there, overburdens the existing distribution networks from a certain extension of PV plant installations onwards.
This then requires considerable distribution grid expansion measures to be implemented at high costs, which – divided among the electricity consumers according to their energy consumption – increases the costs of electricity. This process is further amplified by the reduced electricity purchase of the solar electricity producers themselves leaving the others alone with the bill. Thus it is foreseeable that these additional costs will soon reach the level of the solar power itself.
In the case of large-scale solar power plants, the situation looks somewhat different. From a certain size onwards, they no longer feed into the distribution network, but into the much cheaper medium-voltage network. In this case, additional costs for network expansion are largely avoided. Large plants also benefit from economies of scale. The power related – specific – installation costs are significantly reducing with the size of the solar power plant and the purchase of large quantities of solar modules helps to lower their unit price. Also fewer, but larger and specifically cheaper inverters are needed. The scale effects make the most impact on PV installations on open spaces
Comment by Gregor Czisch 2017:
“Therefore it is no wonder that world record suspect low electricity costs from PV systems below 3 US$ cent per kWh are reported for a PV power plant of huge utility dimension with 120 MW planned to be installed in Chile according to an offer by tender for the year 2019. Time will show if this goal will be reached and not prove to be a false promise and if it can be sustained. Anyway the exceptional high solar irradiation at the site in the Atacama Desert – good for roughly two and a half times the production at German sites – helps a lot to allow for energy prices in this range. Furthermore favourable investment conditions such as low interest rates might help – and, worth mentioning, always can be reached by the right politics if the will is there – to allow for quite considerable cost reductions, adding to the scale effects of huge installations and extraordinary solar radiation and eventually the price reducing influence of tremendous temporary overcapacities of production facilities for PV modules as they are reported recently. However, this project in an empty desert far from the consumers and of quite big dimensions and others with similarly low electricity costs reported from other countries with extremely high solar radiation do not support the dreams of decentralists but show what might be possible when ideological constraints are thrown overboard and cooperation over far distances as well as industrial sized power plants are allowed and implemented where it is adequate.”
Therefore the establishment of PV plants on agricultural land is particularly attractive, as long as the EEG remuneration is “right”. A price you pay for this is the change in the look of the landscape, which does not please everyone.
If there was no alternative that was more cost-effective and also more ecological, all this would probably be the price that we have to pay for a sustainable energy supply. However, since such alternatives exist, one should ask the question whether one should not better concentrate on these. In this case, one would then also have to actually fight for these alternatives and not to exploit their mere theoretical existence for the all too popular NIMBYism. But sadly the latter behavior could be seen quite often in the past.
To tackle this question differently and also to emphasis the point: one could probably from a purely technical view grow large quantities of bananas in Germany, if one absolutely wanted to. However, it is evidently economically more sensible to import them, and thus consumers seem to be quite satisfied. If we view the production and import of electricity in the same economic terms, then what leads to the fact that this “electricity” will be perceived quite differently from the “banana” case?
This exaggeration has some element of truth. In fact, in a country such as Germany, which produces about half of its gross domestic product for foreign business, and in return receives services from abroad of the same magnitude – but unfortunately permanently lower – it is not easy to understand why “suddenly”, especially in the energy sector the benefits of energy autonomy are praised. In the energy sector, Germany already relies on four-fifths of its needs on imports from abroad. With declining consumption of domestic hard coal in favour of growing hard coal imports, import shares were even increased voluntarily in the past, without a discussion on energy autonomy. In other energy sectors the trend is not very different. Considering this, the suspicion is that the idea of energy self-sufficiency is instrumentalized as a kind of propaganda rather than really being striven for.
A part of the instrumentalization is the deliberate, willful suggestion that an internationally cooperative electricity supply automatically means that one has to give up one’s own electricity production in favour of pure electricity imports. Even in my basic scenario where no provision was made with regard to the proportion of electricity produced within each consumer area, as a result of the optimization, only two-fifths of the electricity production is transported via the HVDC transmission network – the Supergrid, i.e. imported and exported. Naturally there are regions with less favorable production sites and so their import share is quite high, but there are no regions – a region in the scenarios in most cases comprises several countries – in which not at least a part of the electricity demand is self-produced. In addition, other of my scenarios for which a minimum share of self-production in the regions is set show that costs do not have to rise significantly due to such restrictions. Up to a minimum self-production share of 50% in each region, such a requirement increases the overall costs only insignificantly. Thus, unlike in the case of bananas one can make demands for a certain level of production inland, and even a relatively high level of self-production without putting-up completely utopian goals.
Also the demand for a national backup for the protection against unexpected extreme situations does not lead to a particularly high additional economic burden when reasonably arranged.
We have asked ourselves whether the popularity of decentralized electricity generation can be explained by a growing aversion to the large energy corporations such as E.ON, RWE, EnBW and Vattenfall. The perception could be that these large conglomerates lead a life of their own and as monopolists in certain regions that they demand too high prices. On the other hand, the self-production of electricity, or at least the contractual relationship with the local community electricity supplier which produces electricity itself appears to be much more attractive. Especially since the local electricity supplier generally does not operate coal or nuclear power plants and therefore appears to be more ecological.
Many a propagandist of decentralized electricity supplies maintains a very simple view of the world, in which the large electricity suppliers are the source of almost all the evils of the world. Such a simple point of view protects against the toil of having to analyze the actual situation and can be well instrumentalized. However, things are actually more complicated than that and this starts with the fact that it is often overlooked that the energy suppliers are to a large part in public hands. In our case in Germany EnBW is almost wholly owned by the state and municipalities; Tennet is a Dutch state enterprise; Vattenfall is a public Swedish company; and RWE is largely owned by local authorities. If one does not take this into consideration, then one neglects possibilities of political influence. Thus, while some politicians criticize energy suppliers, it would often be better as majority owners to regulate their behaviour via the power of the public hand. It is also a fact that one does not understand the economic situation of the energy supply if one does not deal with their business-economic situation. What you do not understand, can easily make you afraid. However, colloquial wisdom says that “Fear is not a good counselor”. So the circle closes and you face a mysterious enemy. All his reactions are then interpreted as malicious, instead of finding their roots and developing ideas for a by and large consensual control of the energy companies for the benefit of all.
The energy suppliers represent their business interests. To this end, they coordinate themselves, for example by jointly appearing at political hearings and as a result of assumed prior agreement then acting in an apparently coordinated manner. What they do not find useful for their purposes is “dropped under the table” and they emphasize what seems useful to them. This does not appeal to everyone, but the defense of one’s own interests even with these means is not a justiciable crime. In order to fight for other – common – interests, it helps to prepare well and analyze things independently, which requires that independent competence is established and maintained. With a careful analysis, it will also be noticed that many a provider also represents the economic interests of its owners, for example the local authorities.
On the basis of a better understanding one can begin to look for ways to open up opportunities for the energy industry in the conversion of the energy supply and thus gain their competence for the joint project. Like all well-established economic enterprises, these energy companies tend to defend the status quo, since any change could be to their detriment. In fact, they were sometimes progressive and constructive in earlier times. For example, Preussen-Elektra , before the merger to the biggest German utility Eon together with other European electricity companies, performed pioneering studies on the use of techniques for a international electricity supply. However, those who hoped to build on it were quickly confronted with the fact that around the turn of the century the intellectual capacities of the energy suppliers were working to their capacity with the so-called liberalization of the energy market. Proposals for joint studies aiming at the large-scale renewable energy supply were partly rejected with precisely this argument.
With the politically initiated separation of production and transport of electricity into independent enterprises, the suppliers were robbed of the possibilities of coordinated planning of the physically inseparable system. During this time the suppliers had to stop the common optimization of production and transport since the market was supposed to regulate best alone. However, the fact that physics can only be “tricked” with great contortions and not without additional costs has not found the will to be considered on the political side. This is not the responsibility of the suppliers, but of the politics and their naive belief in the forces of the free market.
The fact that the municipalities partly are portrayed as the goodies has not least also to do with ignorance. Of course there are municipal utilities which are involved in the operation of nuclear power plants and other public utilities also operate coal-fired power plants.
We also have the exaggerated idea that the monopolistic organized energy suppliers plunder us. The thesis contradicts not least the economic difficulties in which the energy suppliers are presently finding themselves. Of the 25 cents we now pay for every kilowatt hour of our household electricity, the stock exchange price for electricity generated by the big players is only around 4 cents. Nevertheless, the electricity price for German household customers has doubled since the electricity market liberalization initiated under the black / yellow (CDU / FDP) government and implemented by red / green (SPD / Green Party) political coalition. The EEG compensation for the fifth of our electricity, which today comes from renewable energies, contributes around 6 cents per kWh to the bill which is a higher proportion of the electricity costs than the revenues of the energy utilities from the entire electricity production.
All these and other contexts and facts are gladly overlooked. If one divides the world as easily as possible into good and evil, then it seems that this serves better for ease and comfort than the arduous occupation of dealing with reality. However, in order to organize a real energy turnaround towards a sustainable economy, it is not enough to think good thoughts or to just feel good. It needs an unbiased understanding of the physical, as well as the political and economic aspects and last but not least the political nexus. All of this is achievable but needs to be taken on seriously. Then we can realize an affordable and sustainable electricity supply climate-compatibly fast. The scientific foundations for this project already exist and the know-how is vibrant and accessible. There is a lack of coordination and implementation throughout politics and business and this must change urgently and quickly.
Dr.-Ing. Dipl.-Phys. Gregor Czisch is the managing director of the consulting company Transnational Renewables Consulting in Kassel, Germany. He specializes in consulting in the field of renewable energy, energy supply and energy policy.
Selected publications on the topic
Doctoral thesis: Scenarios for a Future Electricity Supply: cost-optimized variations on supplying Europe and its neighbours with electricity from renewable energies translated into English and published 2011, IET, London, UK, ISBN: 978-1-84919-156-2, http://www.theiet.org/resources/books/pow-en/scenarios.cfm
German original, Feb. 2005