,

New Policy Paper | Shaping the German power plant strategy

German power plant strategy needs adjustment

On February 5th, the governing German coalition announced key points of its future power plant strategy (“Kraftwerksstrategie”). The strategy addresses how to increase the flexible generating capacity in Germany needed when wind, solar, water and other renewables do not generate enough to meet the electricity demand due to weather conditions (low solar and wind input). The key points are

  • the German government going out to tender for construction of four new natural gas power plants at a capacity of 2.5 GW each. These power plants are then to be converted to green hydrogen fuel in the timeframe 2035-2040.
  • establishing a “market based, technology-neutral capacity mechanism” for buil­ding further flexible capacity, which is to be designed by summer 2024.

Germany needs flexible, CO2-free power capacity to offset variability in wind and solar power generation. But to first build large new natural gas plants and then convert them to green hydrogen is economically and ecologically the wrong path. It

  • is the most expensive option. Much cheaper, faster and more reliable options include directly converting the existing natural gas plants to green hydrogen fuel (35 GW capacity), converting the existing biogas power plants from baseload to flexible load operation (12-24 GW capacity) and expanding the use of electricity storage for short term flexible load (currently 1-2 GW).
  • extends fossil fuel burning and adds to global warming without compelling reason.

Pursuing this path serves the fossil fuel industry, large utilities and large power plant suppliers. It does not serve German citizens, businesses or climate goals.

That is why the design of flexible capacity procurement should be changed to

  • require the power plants to be CO2-free from the start and
  • allow proposals from power plants of all sizes (not only 2.5 GW and more) and fuel stocks (not only green hydrogen) and from power storage operators

in these coming months and before a tender is put out.

Regarding the “capacity mechanism” details were not provided in the press statement and may yet need to be defined. It is the EWG-position that this should include:

  • differentiating electricity prices by time in order to shift demand towards peaks and away from lulls in wind and solar power generation – thereby narrowing gaps between renewable power supply and demand
  • procuring flexible capacity for the remaining gaps in long-term contracts via the mechanisms fixed prices or utility tenders for capacity. These should allow all types of power capacity (e.g. green hydrogen, biogas, geothermal, battery and other storage) and providers (from large to fairly small including citizens’ energy cooperatives) to compete.

In Germany, the mechanisms exchange (“Strombörse”) and state tenders have proven less than effective in terms of best price for electricity customer and of quickly growing supply of renewable power.

The Energy Watch Group has developed a briefing on these key points, including recommendations on tender and mechanism design in the coming months.

, ,

New Short Study on the Relevance of Bioenergy and small Hydropower

New EWG study: Parts of the German federal government plan to abolish domestic renewable energies amounting up to 50% of Russian energy supplies

Bioenergy and small hydropower are currently under enormous political pressure and partially even threatened in their existence. Yet they already generate energy amounting up to 51% of Russia’s energy supplies and their potential is far from exhausted. This is shown by the latest EWG study published on 29 June 2022.
 
Biogas plants and small hydropower are thus not only irreplaceable for a renewable energy system, but also for energy independence from Russia. Talked down as “niche technologies” for a long time, the current government draft of the German federal governments “Easter package”, among others, contains further deteriorations of the framework conditions, which are partly tantamount to abolition.
 
“The study reveals the absurdity of the current debate on the reduction of bioenergy and hydropower. On the one hand, reliable and system-serving domestic renewable energies are to be throttled. On the other hand, the German government is trying very hard to replace Russian energy with fossil energy from other countries with a fossil diversification strategy, thereby accepting new geopolitical distortions and a further overheating of the earth,” says Hans-Josef Fell, President of the Energy Watch Group.
 
Relevance of bioenergy and hydropower for a renewable energy system
 
Already today, bioenergy and small hydropower make a significant contribution to the German energy supply. For a sustainable renewable energy system based predominantly on sun and wind, however, they are indispensable
 
“Due to their reliability even during dark winter periods, bioenergy and small hydropower avoid the costly provision and use of stored energy, e.g. in the form of green hydrogen, and reduce the need to expand the grid. In the transition to a sustainable energy system, these technologies therefore have a cost-reducing effect. Our study shows that the currently discussed abandonment of small hydropower of up to 1000 kW installed capacity alone would mean a loss of up to 2.8 billion euros annually,” says Dr. Thure Traber, author of the model calculations of the study.
 
No energy independence from Russia without “small renewables”
 
The study shows that the reduction of the use of bioenergy and small hydropower planned by the German traffic light coalition would make the necessary independence from Russian energy supplies much more difficult, if not impossible. A further massive increase in energy prices would be the consequence. Instead of the current discussions about banning these technologies – fuelled particularly by nature conservation associations – we finally need suitable political framework conditions for their nature-friendly expansion.
 
Download the study (in German) here.

, ,

Statement on the revision of Switzerland’s Energy Act

Today, the Energy Watch Group published a statement on the currently ongoing revision of the Swiss Energy Act and the Electricity Supply Act.

The result: The draft presented by Switzerland’s Federal Council is neither compatible with the Paris Climate Agreement, nor does it enable the long overdue nuclear phase-out or energy independence from from autocratic states such as Russia.

The Federal Council’s current draft’s goal of a climate-neutral Switzerland by 2050 is inadequate – not only in terms of compliance with the 1.5°C limit agreed on in Paris, but even for limiting global warming to 2°C. Moreover, the war in Ukraine illustrates that additionally the European dependence on the fossil-nuclear energy system is untenable due to its security risks.

In order to ensure Paris compatibility and to end the untenable dependence on the fossil-nuclear energy system, the target must be adjusted towards 100% renewables for all energy sectors by 2030.

Read the full policy paper (in German) here.

,

New Policy Paper on Bioenergy

New policy paper by the Energy Watch Group (EWG) and the Network Flexperten finds:  Expansion of biogas storage power plants is indispensable for 100% Renewable Energy

In collaboration with the Network Flexperten we published our first policy paper of the year: “Securing the energy transition with local storage power plants and sustainable biomass for structural change and climate protection in agriculture”. The paper states that biogas has the potential to contribute to the energy transition with up to 30 GW peak power quickly, sustainably and cost-effectively.

Key findings are: 

  • Biogas can support the energy transition on a larger scale than today and replace fossil
    power plants and (expensive) natural gas
  • Flexible, decentralized storage power plants lower energy prices, secure energy supply and support the heat transition
  • Biogas production can secure income in rural areas and has the potential to replace value creation from livestock farming
  • The systematic shift of decomposition processes to fermenters reduces GHG emissions from agriculture
  • Cultivation and use of wild plant crops and permanent pastures ensures carbon capture and humus build-up
“Today, biogas is vastly derived from planted crop, associated with the food-or-fuel dilemma. But biodegradation is part of every natural circular flow. Using existing residual materials from agriculture for biogas digesters instead, we avoid dangerous GHG emissions, we preserve the organic matter as a natural fertiliser and we gain a huge energy resource: renewable methane”, underlines Uwe Welteke-Fabricius, one of the authors of the study.       

Political implications 

Hans-Josef Fell, EWG-president and second author of the paper emphasizes: “It is often claimed that since solar, wind and storage will provide the lion’s share of a future energy supply with 100% renewables, there is little need to care about the “niche technologies” such as bioenergy, hydropower or geothermal energy. This perception is wrong and jeopardizes the goal of achieving 100% renewable energy in all sectors by 2030. Bioenergy as well as hydropower or geothermal energy aren’t just niche technologies, but will and have to contribute substantially to a functioning 100% renewable energy supply. Their strengths lie in their storage capacity, their flexibility and the resulting year-round availability”.

In order for existing and newly built biogas plants to be able to develop their potential for climate and species protection and a secure energy supply in Germany, it is extremely important that the traffic light coalition now sets the right course with the upcoming amendment of the EEG.

Read our concrete policy recommendations and the full paper (in German) here:

, , , , ,

Key points of a legislative initiative for reliable and adequate renewable energy supply

Stimulating investments in sector coupling and innovation: Energy Watch Group proposes new law for reliable and adequate renewable energy systems

Berlin (May 14, 2020) – On the occasion of this year’s 20th anniversary of the German Renewable Energy Sources Act (EEG), the Berlin-based Think-and-Do Tank Energy Watch Group (EWG) presents a legislative proposal to stimulate the system integration of renewable energy. The underlying purpose of the policy proposal is to allow renewable energy sources to finally assume responsibility for the system security of the power supply – i.e. to cover the required energy demand at every hour of the year. With a so-called combined power plant tariff, the instrument intends to stimulate investments for full demand coverage by 100% renewable energy. Based on own techno-economic cost estimates and a legal examination of EU regulations, the EWG proposes a fixed-feed-in-tariff of 8 cents/kWh, supported by a sliding market premium.

While renewables keep setting records in terms of their shares of national electricity mixes – Germany has recently hit the 50% mark –, a full transformation to an entirely renewable-based energy system is not yet widely regarded to be a tangible reality. One of the main reasons is the prevailing mistrust of the ability of renewables to provide year-round supply. Many scientific studies have already shown that a complete conversion to renewables is not only critical for reasons of climate protection, but also that it is technologically feasible (in combination with storage technologies and digital control technology) at any hour of the year and at cost-effective prices. What is still missing, however, is a legal basis to enable the market penetration of reliable and adequate 100% renewable energy systems.

“The newly proposed Sector Coupling and Innovation Act for Renewable Energy is intended to become a major impetus to overcome the current challenges of the coronavirus recession and the climate crisis. More than ever, it is necessary to find solutions that both stimulate the economy and protect our climate,” said Hans-Josef Fell, who, as President of the EWG and author of the draft law EEG 2000, was responsible for drafting the new legislative initiative.

Stefan Gsänger, Secretary General of the World Wind Energy Association, emphasized: “Renewable energy ultimately can, must and will assume responsibility for system security. Today, wind and solar power have become the cheapest forms of energy. As a next step, the investments in the optimised integration of all renewable energy sources must be massively increased. The EWG’s new policy proposal shows how this can be achieved effectively and deserves wide attention.”

The law would create a market for the very large number of start-ups and established companies that are in the starting blocks with innovative system developments for storage, digital controls, green power generation and sector coupling, but do not yet have a viable market environment to generate large-scale privately financed investments.

“The advantages of low, decentralised and transparent energy production costs can now be shared with those of climate protection and security of supply, especially since integration comes also from the regional level in support of the transmission network. Further innovations and growth markets can certainly develop if technologies such as batteries, hydrogen, heat pumps and heat storage in combination with solar and wind energy are dynamically developed towards decentral system responsibility.”, states Thure Traber, Chief Research Officer at the EWG and author of the legislative proposal.

A legal examination of the proposal has shown the compatibility with EU regulations. A distinction is made between a fixed feed-in tariff per kWh fed into the grid for small plants and a floating market premium for larger plants that participate in electricity competition via direct marketing. Similar options for policy implementation are expected at international level. With political majorities in national parliaments, the proposal can help to realise effective climate protection and, after the end of the coronavirus pandemic, a rapid recovery of the economy together with the phasing-out of fossil and nuclear energy in favour of clean renewable energy sources.

The full policy paper is available here.

Media contact: Charlotte Hornung / +49 30 609898815 / hornung@energywatchgroup.org

About Energy Watch Group  

Energy Watch Group (EWG) is an independent, non-profit, non-partisan global network of scientists and parliamentarians. EWG conducts research and publishes independent studies and analyses on global energy developments. The mission of the organisation is to provide energy policy with objective information. For more information, please visit www.energywatchgroup.org.
Contact: office@energywatchgroup.org, +49 30 609898815