Evolution and effects of renewables in Germany

Dr. Hans Wolf von Koeller, STEAG GmbH, Energy Policy

26th September 2019

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& dismantling

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Wind power

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USA

Cormetech

Manufacture and regeneration of SCR

catalysts

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Compania Electrica de Sochagota

Operation of a hard coal-fired power

plant

Brazil

STEAG Energy Services do Brasil

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and photovoltaic systems

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STEAG New Energies

Operation of wind farms

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power (CSP) plant

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Management of power plant by-

products

Netherlands

Euroment BV

Management of power plant by-products

Poland

STEAG New Energies

STEAG Energo Mineral SP. z o. o.

SFW Energia Sp.z o.o.

• Operation of several wind farms

• Management of power plant by-products

• District heating supply

Romania

STEAG Energie Romania S.R.L.

Operation of a wind farm

Switzerland

SES Schweiz GmbH

Services related to the

dismantling of nuclear power

plants

Qatar

Hawar Power Minerals

Philippines

STEAG State Power

Operation of a hard coal-fired power plant

India

STEAG Energy Services (India)

Full range of energy services including

Q&M

Saudi Arabia

O&M support of a refinery

power plant

Turkey

Several companies

• Full range of energy services

• Marketing of electricity

• Operation of power plant and wind farm

Singapore

Asia Power Development Platform (APDP)

Botswana

STEAG Energy Services (Botswana)

O&M of a coal-fired power plant

Bangladesh

Modernization and optimization of

power plants

Zimbabwe

Simulators for Zimbabwe Power

Company

Ghana

Owner‘s Engineer for combined cycle gas

turbine plant

The outer appearance of the so-called “Energiewende”…

5

Statistics and

percentagesClimate

ambitions

Export of

German wind

technology

Renewable

kWh/year

The outer appearance of the so-called Energiewende is very different

to the inner appearance!

6

Stable legal

framework

Balanced

electricity systemCommercial

viability

Sufficient and

reliable supply

The success of Renewable Energy is impressing - regarding the

growing percentages

7

Shares of renewable energies in the

electricity, heat and transport sectors

Source: AGEE-Stat (Icons von Freepik/flaticon.com und Sabathius/openclipart.org) – from www.umweltbundesamt.de 09.2019

This is mainly based on the increase in wind generation

8

© BMWi based on Working Group on Renewable Energy-Statistics (AGEE-Stat); as at February 2018; all figures provisional

But: Installed capacity and power generation from wind and solar

energy are imbalanced – regarding Germany in total

9

The electricity mix in

Germany 2018

Half of the generation

capacity is accounted

for by the energy

sources wind and solar,

which only contribute

around 24% to gross

electricity generation

Net bottleneck capacity – general supply

(total 207 GW)1

gross electricity generation(total 649 bn kWh)2

Water 3%[19.5 bn kWh]

Gas 13%[84.4 bn kWh]

Nuclear 12%[78 bn kWh]

Lignite 22%[143 bn kWh]

Hard Coal 13%[84.4 bn kWh]

Wind 17%[110 bn kWh]

Solar 7%[45.4 bn kWh]

Other 12%[84.4 bn kWh]

1: Source: Fraunhofer-Institut für Solare Energiesysteme ISE; www.energy-charts.de 15.02.2019

[Data source: AGEE, BMWi, Bundesnetzagentur; last update: 31st Jan 2019 10:16]

Gas

14%[29.6 GW]

Wind

29%[59 GW]

Solar

22%[46 GW]

Nuclear

4%[9.5 GW]

Lignite

10%[21 GW]

Hard coal

12%[24 GW]

Water

3%[5.5 GW]

Other

6%[12 GW]

2: provisional, partly estimated - Source: BDEW; [Data source:

BDEW-Schnellstatistikerhebung, Stat. Bundesamt, EEX, VGB,

ZSW; Stand: 12/2018]

Without the Columbian water resources: In Germany conventional

production is essential

10

Source: Bundesnetzagentur, Online-Strommarktplatform SMARD, https://www.smard.de/home/marktdaten/.

Two pillars of the energy industry are being

removed at the same time

• Germany is withdrawing from nuclear power and

coal

• Gas last essential controllable energy

• Renewables continue to advance, but security of

supply remains an unsolved problem

• Suitable electricity storage technologies are

unfortunately not in sight

Friday 8th February 1pm Thursday 24th January 9 pm

Generation from

renewable energies

Generation from

renewable energies

Conventional

generation

Conventional

generation

Net electricity production in Germany – very intermittend and

balanced by fossil power plants

11

Low wind: high conventional

feed-in

Strong wind and solar feed-in, reduced

conventional feed-in, but stand-by

necessary

Easter

-35

GW

Nuclear Power Lignite Hard coal Gas Wind Solar

Basis: Destatis, EEX-Transparenzplattform, BDEW, Thomson Reuters, own calculations, 09.05.2019

Fuel switch is already on-going due to the price constellation (Gas –

Hard Coal – CO2 – Electricity)

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Erdgas Steinkohle

[GWh/h] German netto power production, June 2019

Basis: Destatis, EEX-

Transparenzplattform, BDEW,

Thomson Reuters, own

calculations, 09.07.2019

Natural gas is mainly leading the merit-

order compared to hard coal,

consequences: higher volatility of hard

coal plants

Hard coalGas

The Payments für the Renewable Feed-in are increasing significantly

13

Electricity prices for residential customers, quantitatively weighted

across all tariffs, assuming they consume 3,500 kWh per year

14

© Monitoring Report 2017 of Bundesnetzagentur and Bundeskartellamt; https://www.bmwi.de/Redaktion/EN/Infografiken/Energie/energiedaten-energietraeger-34.html

Top rank in

Europe

Emission of greenhouse gases covered by the UN Framework

Convention on Climate are decreasing in the Energy industry but not

in Transport and other

15Source: German Environment Agency, 09.2019; https://www.umweltbundesamt.de/en/indicator-greenhouse-gas-emissions

One of the most important jobs to do: To keep the grid, the

consumption and the power production regionally balanced

Source: Bundesnetzagentur, Netzentwicklungsplan 2030

today2030

Capacity deficit Capacity oversupply

Grid reserve: Overview of Redispatch calls from Weiher III and Bexbach

since grid reserve entry at the end of April 2017 - massive increase in 2019

17

2017

2018

2019

Parallel request of Weiher III and Bexbach!

grid reserve

entry (Weiher

& Bexbach)

MW

Continous balancing of energy system: It is decisive to combine

demand and supply in a timely and local manner

18

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En

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on

-

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law

/ET

S

tec

hn

.

sp

ec

ific

s

Supply

- Capacity

- Grid connection

- …

- Reactive power

- Frequency control

- Rehabilitation

- Shortcircuit proof

…

- kWh + kW

- Temperature / weather dependent

- Decentral / central

- Black start capability

- Reliability

- Flexibility

Prognosis deviationE

ne

rgy

ca

rrie

r

ac

ce

ss

Demand

Ta

xe

s/

levie

sPolitical

contribution:

- kWh + kW

- Temperature / weather dependent

- Decentral / central

- Flexibility

- Prognosis deviation

-

…

?

System stability.

Infrastructure(Gas/Power/Heat)

?

full-load hours : ≤ 7,500

full-load hours : 800 to 1,300

full supply ≙ 8.760 h

full supply ≙ 8.760 h

full-load hours : 2,500 to 3,500

50 Hz

50 Hz

Graph according to: VDE (2010)

Smart Appliances

Home Solar

Demand Management

Smart Meter

Rearrange responsibility, allocate costs according to cause, merge

generation and consumption spatially and temporally

Energy industry innovations (flexibility, storage, IT...) require uniform rules of the game for renewable and conventional plants:

Balancing group loyalty an essential building block for cost-effective back up

Position

STEAG

Grid: Calculate / procure

connection, capacity +

system services

Designing CHP and

self-consumption for grid and

system use

Reward flexibility, make

Redispatch more

transparent and pay for it

RES integration without

exceptions + 24/7, no subsidy for

negative prices, allocation of

balancing / grid costs

Power plant

Industry

City

STEAG GmbH

Rüttenscheider Str. 1–3

45128 Essen

Telefon +49 201 801-00

Telefax +49 201 801-6388

www.steag.com

REN developmentabsolute in MW

Power Grids

must (actually) follow

Conv. generationhas to take over

the consequences

Interventions + reserve demand increase

Undiversification of generation structure

„Energiewende“ communication and political mechanismin Germany

„Target

architecture“ (Climate targets + REN-

development goals

in D and EU)

Will this mechanism be changed?

(Role of TSOs and markets, COGEN, utilization of grids… to be discussed)

Priority: discharge of REN (~Dumping) → System costs not part of REN subsidies

Distributive effects (due to EEG)

Volatil feed-in, market devaluation...

REN development unsynchronised

Pressure on common bidding zone

System need for ancillary services changed

In any case: grid costs are rising

Take over of transformation costs

Financial burden on heat from COGEN

Trend: transfer plants to grid? („Re-Bundling“ of storage and power plants?)

Mechanism

… impacts of this mechanism

Acceptance problems, grid expansion lags

Transfer to regulated reserves

Betriebsstunden

Load shift by storage

Lo

ad

in

GW

flexible,

steerable generation

Generation

Excess

power

Residual load

Storage

Sector

crossing

utilization

Sector crossing utilization

Sector coupling is on the agenda: not because of demand for

hydrogen but due to RENs electricity production at „wrong“ time and

in „wrong“ place

Power from solar and wind in 2017 = about 1,6 x 2012

Quelle

: G

örn

er

2017

24

• Power supply at „wrong“ time, in

„wrong“ place

• Expansion of REN leads to

mismatch of generation and

demand

• Essential: Synchronization of

generation and demand

Grid neutrality is increasingly being questioned due to increasing complexity(„How else should it go?“)

25

Generation

Transmission

Distribution

Supply

Past:

Vertical Integration

Present: Unbundling as

market basis

Generation

Transmission

Distribution

Supply

Tra

din

g

Future on two „intelligent“

grid level?

Generation

Transmission

Supply

Reserves

Storage

Load management

Decentralized

Reserves +

Storage Generation

Distribution

SchaltungLastflussmgt

Beschaffung

v.Regelenerg.

RedispatchEnergy conversion /

Integrated Energy

P2X +

Abschaltung

MessungAnschluss

Customer

Lieferung

Struktur

Netzbereitstellung +-führung

Only "trade-like

exchange"?

What kind of "market simulation" is it when regulated DSOs / TSOs take over the construction and use of reserves and other system services,

operate load management and in the future supply synthetic gas and heat and determine the relevant algorithms for digitization?

Integrated Energy

Customer

Customer

Load management

„higher utilization of

the grid“

Efficient Common Market needs a Common Energy Market and

harmonized Climate Policy

Common European approach can deliver a stable, technological neutral framework for

innovations and a secure industrial energy supply

Nationalization

increases costs and

risks for security of

supply and Unbundling

Common Market

Common

Market f.

Energy

Climatepolicy

Indirect subsidies (up to 10 Bn€)

via ETS (3rd period → 4th period

much more?)

Industrial protection

against cost increase

affects competition

26

STEAG and sector coupling: CHP, Power2Heat, Power2Methanol and

Hydrogen

Power-to-Methanol-Plattform at site Herne

CHP Herne: highly efficient OGCT under permissionPower-to-Heat-Project: Electrodes boiler at site Fenne

Field test: HydroHub Fenne