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Germany:100% renewables- but less PV?

The German Advisory Council on the Environment (SRU) has produced a very detailed report setting out pathways for a transition to renewable electricity. It concludes that is possible to get to 100% by 2050, as against the current German government target of only 80% by then.

The SRU comments ‘In our view, the prospects for this transition are far brighter than the government would have us believe; and we are far less persuaded than the government appears to be concerning the compatibility of nuclear power and renewables. But many of the recommendations and concepts in the present report are relevant regardless of whether the goal is to achieve 80 or 100% renewable electricity’.

However, rather than going it alone, it suggest that an alliance with Denmark and Norway could be the best arrangement for generation, grid balancing and storage, for example integrating in the regions hydro for pumped storage. That was seen as possibly preferable to reliance on importing power (e.g. from Concentrating Solar Power projects) from North Africa.

Some of the scenarios rely heavily on wind power, both offshore and on-land, and also on solar photovoltaics (PV), which, on one scenario, make up a large proportion of the 2050 mix (with around 100GW of PV installed by then). However SRU claims that this is not the only option and that if demand could be reduced from 700TWh by 2050 to 500TWh, then much less PV would be needed.

It sees this as a preferable option and is critical of the way PV has been supported so far in Germany, arguing that it was expanding too rapidly and imposing unsustainable costs. The current high rate of expansion ‘would result in half the capacity that is needed for a wholly renewable electricity supply in 2050 in the high electricity demand scenarios to be already installed in 2020. This means that unnecessary capacity would be installed prematurely, which in turn would increase long-term renewable electricity costs and jeopardise acceptance of a wholly renewable electricity supply’. Consequently, it says that ‘Photovoltaic support should be drastically reduced so as to rectify mismanagement in this domain, whose current expansion rate far exceeds that deemed necessary’.

Exit from PV?

Why the change of heart on PV? Germany has been at the forefront of PV with around 19GW now in place. That, SRU says, is the problem- it’s boomed too fast, partly due to cost reductions, so that the high FiT tariffs impose too much cost on consumers. This same argument has been heard across the EU- in Spain, Italy, France, and now in the UK, all of whom, like Germany, have imposed Feed In Tariff (FiT) cut backs or capacity caps for PV. The latest German cuts range from 3-15%. Some see this as just a failure of political nerve- they say we should leave FITs alone, since PV prices will then fall, as the market builds, and the cost pass through to consumers can also then be reduced.

SRU evidently doesn’t agree and also has more fundamental problems with PV. While they note that some think PV ‘will be competitive once grid parity is achieved, with solar electricity generation costs on a par with household electricity rates, they say that ‘this assumption fails to reckon with the fact that household electricity demand and solar energy production are highly asynchronous. Households with solar panels need to be able to draw energy from the grid at times, which would significantly reduce the economic benefit of home PV installations in the (likely) event that some household electricity needs to be drawn from the grid during high rate periods. Hence the achievement of electricity generation costs that can compete with the prices charged by power companies by no means indicates that photovoltaics deserve a place in the future energy mix’.

Some might see throwing PV out of the mix as an odd idea. Economically it’s almost certain to get very much cheaper. And SRU’s technical case against PV is not that strong- PV can make a lot of sense for day-time occupancy buildings, for summer air-conditioning and for topping up night time storage heaters. More generally, although load factors are low, we are going to have to get used to balancing variable supplies, as we have more renewables on the grid. SRU may be right that PV will make it harder, but it’s a huge resource well suited to access via roof tops, easy to install and run-with no moving parts to go wrong. It may have been unwise to try to use FiTs to get its initial very high price down rapidly, but that doesn’t means the technology is rubbish. Or that FiTs are no use, if well designed, with effective price degression mechanisms.

However, it is true that, in the worsening economic climate, the FiT for PV have been seen as provocatively high and hard to defend. SRU says that further support in Germany is ‘no longer justifiable on the grounds of learning curve effects, for the market for PV installations has grown considerably and is now international in scope. Even if Germany stopped promoting photovoltaic energy, the remaining PV installation market would be large enough to allow for further cost reductions’. So, in effect, SRU is saying that, although it has cost a lot, the FiT has done its job and no more support is needed. More pragmatically they say that since the national alternative energy programme cost apportionment ‘cannot be increased without meeting political opposition, perpetuating the current photovoltaic support framework would deprive renewables of funding that have the capacity to produce electricity far more efficiently’.

In fact through, SRU doesn’t suggest abandoning PV entirely. They say that ‘in the interest of political credibility and preserving the relevant technical skills and know-how, PV capacity expansion should not be discontinued altogether’. Instead it suggests that ‘the scope of PV expansion should be kept at a low level that however still ensures that installed capacity can be adjusted to potential changes in demand. Only if a rise in electricity demand appears highly probable, PV capacity expansion should be promoted accordingly.’

So PV should in effect be kept in reserve. SRU says ‘The planning period for such a capacity expansion - which ideally would be realised as late as possible -should be keyed to the relationship between the capacity needed and the possible annual expansion rate.’ It adds ‘If projections of large decreases in PV installation manufacturing costs are accurate, this would be yet another reason to rein in photovoltaic energy support. The later PV installations are installed the lower their social cost will be’.

Some might see SRUs conclusion that ‘PV support urgently needs to be reined in’ as a capitulation to right-wing free-market enthusiasts, equally it might be seen as a sensible recognition of the limits of PV and FiTs in the current context. Most observer now agree that FiT tariff levels for PV need cutting, but the debate over how much continues- in the UK, focusing on the proposed very drastic 50% cut, with the resistance campaign’s slogan being ‘Cut don’t Kill’.

• ‘Pathways towards a 100 % renewable electricity system’, SRU www.umweltrat.de/SharedDocs/Downloads/EN/02SpecialReports/201110SpecialReportPathways_renewables.html

www.umweltrat.de/SharedDocs/Downloads/EN/02SpecialReports/201110SpecialReportPathways_renewables.html

Posted by Dave Elliott on November 12, 2011 4:24 PM | Permalink