Germany is the country with the most photovoltaics installed worldwide. A new study now says that solar in combination with batteries would allow a lot more PV to be installed. Craig Morris says the investigation confirms his worst fears.
Back in 2012, German solar campaigners launched a campaign calling for 200 GW of PV in Germany. That year, Germany installed around 7.5 GW, with product warranties of 25 years. That number produces around 200 GW, so the sector was calling for continued growth at that level. This year, that number will probably fall below 1.5 GW of new solar installations. With 39.4 GW built at the end of September 2015 (source in German), it seems that the old target that some solar proponents wanted is out of reach for good.
Or is it? Some market watchers believe that the current low in the German market is the calm before the storm – everyone is waiting for storage to get cheap. At that point, they say, there will be no turning back.
Now, a new study published by Berlin-based think tank Agora Energiewende investigates the impact of 150 to 200 GW of PV. The main finding is that it would be “technically and economically possible.” But scratch deeper, and you find something disconcerting.
First, Agora confirms that these storage units cannot simply continue to ignore what is happening on the grid. The result would be an incredibly steep ramp. However, the study does not call for utility control of grid-attached storage units; Germans are generally skeptical of smart meters, especially in households – utilities knowing what your battery’s state of charge is raises privacy issues. Instead, the paper calls for a blunter instrument. At present, new solar arrays are only allowed to export 70 percent of their rated capacity to the grid at a time; that level could be lowered to 50 or 40 percent, the authors argue. The result would indeed be a limit on the height of the spike, but still it would come around the same time (when the battery storage systems are full around noon), and not when the grid needs it (during peak demand in the evening).
The study mentions the option of orienting “battery operation to electricity market prices,” which would be a step forward – but even spot market prices do not reflect local grid bottlenecks. What Germany needs is local signals. But as the study puts it, “the real obstacle to Information Communications Technology (ICT) control of household battery units is less cost than the wish for independence” – German households don’t want their utilities poking their noses into their homes.
In the chart above, the load ranges from 60-80 GW, but PV, wind, and hydropower peak above that level. In other words, we will not only need to store solar (or export) power at that point, but also wind and hydro. Note that biomass is not even considered but would also need to be stored.
One good piece of news is that not all of the new transmission power lines currently planned would be needed, which would save costs. The study says that the renewable energy surcharge would increase by around one cent, as would grid fees. Two cents does not sound like much, but what about the cost of backup power? There would be no demand for conventional electricity 10 hours at a time, but then conventional generators would need to kick in at 50 GW within just a few hours. When these plants run less often, they won’t be profitable and may require more capacity payments. This could get expensive.
Overall, this arrangement seems undesirable. In the summer of 2014, I wrote, “Germans will go for PV plus storage in the 2020s when the combination costs 30 cents per kilowatt-hour, and there is little anyone can do to stop them. This option is bad in terms of the overall cost of the energy transition; onshore wind power is a much better option at 5-9 cents per kilowatt-hour, but then people don’t get to say they make their own energy at home.”
Back in 2010, I wrote that such an arrangement is also “a terrible idea because it produces windfall profits at least in the amount of your power bill.” Today, I would propose a different solution. If you want to stay hooked up to the grid, the utility controls your battery storage, and you get a feed-in tariff (currently around 10 cents) with a target six-percent return, which is fairer than offsetting a much higher 25 cent retail rate.