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Paving the Way for Germany’s
“Energiewende”
The Bundesnetzagentur is Germany’s regulatory authority for the energy,
telecom, post, and railway markets. It is charged with ensuring equal market access and approving usage fees for electricity and gas networks owned
by transmission system operators. Its work has become even more important since the government’s decision to remodel the country’s entire energy
system – the so-called “Energiewende” (“energy turnaround”). Writing exclusively for Living Energy, the agency’s head Matthias Kurth analyzes the
state of play in Germany.
Text: Matthias Kurth, President of the Bundesnetzagentur (Federal Network Agency, Germany), Illustration: Burkhard Neie
In September 2010, Germany adopted
a CO2 reduction target of minus 40
percent by 2020 and 80–95 percent by
2050 (baseline 2020). As this requires
the decarbonization of almost the entire power sector, a number of energyrelated targets have been adopted:
Power consumption is to be reduced
by 10 percent in 2020 and 25 percent
in 2050; under these plans, renewable
energy will account for 35 percent of
the power mix by 2020 and 80 percent
by 2050. Last year, in the wake of the
Fukushima nuclear disaster, the government decided to additionally phase
out nuclear power by 2022, which
means an increasing amount of new
generation capacity will be required
to avoid energy shortfalls.
There is a broad consensus in Germany
about continuing our pioneering role
in the use of renewable power generation (renewables), and soon being
able to meet our demand, for the most
part, from these energy sources by
Living Energy · Issue 6/February 2012
ourselves. For a better understanding
of energy supply in Germany both
now and in future, it is important to
recall the key facts of the changing
energy industry. Liberalization gave
an unprecedented boost to development of the industry as a whole, and
the interconnection to a single market
in Europe is fast approaching. Also,
already 20 percent of the energy produced in Germany now comes from
renewables, and the markets have absorbed these growing volumes.
Following the German government’s
decision to phase out nuclear energy
by 2022, it has become more important than ever to increase the volumes
generated by renewables and to make
provisions accordingly. A main driver
of expansion has been the promotion
of energy generated from renewables,
which is anchored in the Renewable
Energy Act. It provides operators of renewable energy installations with
a fixed feed-in tariff for up to 20 years
and requires network operators to
take this energy first. The feed-in tariffs
are differentiated by technology and
site, and are designed to make economic operation of the installations possible. The tariffs for new installations
decrease annually by a certain percentage. This steady degression puts
pressure on the costs and acts as an
incentive for the learning curve of
new technologies. The intention is for
installations to be built more efficiently
and cost-effectively so that they can
become established in the market without aid in the long term.
Recipient operators pass on the difference between the feed-in tariff and
the market price for the electricity to
the transmission system operators
(TSOs). Since 2010, the TSOs have sold
energy from renewables on a power
exchange and charge pro rata for
the difference in production costs for
renewable energy and the selling
costs in the form of a “renewables u
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contribution.” The electricity supply
companies then include the added
costs in the form of this contribution
in the calculation of the end consumer prices.
The electricity customers thus paid
over €13 billion in 2011 to promote
the generation and feed-in of renewable energy. These payments have enabled renewables in Germany to come
of age and to leave their niche position – but renewables are untroubled
by the pressures of competition that
the rest of the energy market has been
experiencing for some time now.
Something must change if the expan-
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Solar power is generated only when
the sun shines. Hence, network operators cannot rely on their permanent
availability and have to make arrangements accordingly. As long as there
are not enough storage facilities to offset the volatile feed-in from renewable energy sources, sufficient reserve
capacity will be needed to compensate
for periods of little wind and little
sunshine.
Challenges from
Fukushima Fallout
The closure of eight nuclear power
plants in the aftermath of the reactor
“The Renewable Energy Act
has brought about remarkable
developments in renewables,
but also tremendous challenges
for the grid.”
sion of renewables is to remain predictable. Renewables must leave behind
the risk-free feed-in tariffs and be integrated, step by step, into the market.
But declining feed-in tariffs alone will
not involve the producers in the price
and volume risks. It is true that trading energy from renewables on the
exchange since January 2010 has been
a big step forward, but real integration will require producers of renewable energy to take on the price and
volume risks themselves.
The Renewable Energy Act has brought
about remarkable developments in
renewables, but also tremendous challenges for the grid. For the grid, these
developments mean one thing, above
all: stress. Renewables, because of
the fluctuating production, have little
consideration for the concerns of the
grid. Wind power can be generated
only where and when the wind blows.
accident in Fukushima adds to the
challenges faced by the grid. The
Bundesnetzagentur has probed the
implications of this decision for the
security of supply, and could have
given orders for back-up operation
of a nuclear plant. However, this is not
considered necessary for this winter
or the next. These were the findings
of all the feed-in and load scenarios
studied. All the studies have shown
that the transmission network would
remain controllable even in a situation of exceptional contingency. Indeed,
to avert states that threatened the
stability of the grid, considerable intervention by the TSOs in the operation of the power plants would be necessary, and extreme situations in the
grid could be managed only with the
help of changes to the power plant
schedules, which are determined by
market outcomes. However, given
our current level of knowledge, the
main extreme situations for the transmission networks are manageable as
a result of the TSOs’ intervention instruments, without the need to order
operation of a nuclear reserve power
plant.
The Bundesnetzagentur’s studies on
the impact on the transmission networks of exiting nuclear power show
that the networks have reached the
limits of their capacity as a result of
the large number of additional transport tasks in the last few years and
the changes in the structure of generation. Electricity must be transported
on average much farther today than
just a few years ago, and no end to
this trend is in sight. In past decades,
the grid was built around the main
fossil and nuclear production plants,
not all of which were close to where
the energy was actually needed. Grid
expansion is therefore urgently required, as the changes in energy production call for radical structural
changes to the conventional grid.
At present, every figure on the expansion required is dependent on a number of unknowns. This begins with
the period for consideration. If we are
talking about 2015, we need to add
some 850 kilometers of new lines to
the transmission network. Since summer 2009, only about 100 kilometers
have been installed, however. On the
other hand, if we focus on 2020, we
can refer to the second, highly nuanced
study by the Deutsche Energie-Agentur (dena), which states the following:
Using current technology, we need up
to 3,600 kilometers of additional extrahigh-voltage lines. If we take a wholly
new technical approach and convert
existing lines to high-temperature lines
across the country, then – put simply
– the costs would double, but the
number of new lines would be halved.
One thing is clear, however. The longer the period we are looking at, the
more lines we will need. An 80 percent
share of renewables by 2050 will necessitate significantly more lines, and
we will have to think about entirely
new technical solutions. Where exactly
Living Energy · Issue 6/February 2012
the networks need reinforcement and
additions calls for diligent analysis
and discussion – which the Bundesnetzagentur will undertake as part
of the network development plans.
The network development plans will
include all the measures needed in
the next ten years to optimize and to
reinforce and expand the grid. To this
end, the Bundesnetzagentur consulted on the scenario framework in July
last year. The scenario framework,
drawn up by the TSOs, provides a
sound basis under the changed legal
framework for drawing up the first
ten-year network development plan,
and consultation on the scenarios
is an essential part of the process as
a whole.
All this naturally raises the question
of the costs. Many fear it will automatically lead to higher energy prices.
I hasten to qualify this somewhat, however. First of all, no one can seriously
predict what the prices will be in 2015,
let alone in 2020. The best indicators
of price trends are the futures on the
power exchanges. While they do indeed signal rising prices, they do not
signal dramatically rising prices.
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The same is true of the feed-in tariffs.
As expansion proceeds, the costs will
rise, but degression will kick in. Also,
there is another effect that will slow
the rise of the added costs. Falling prices
on the exchange will offset the contribution through lower procurement
costs, and rising prices on the exchange
will improve the revenues from renewables, in turn lowering the renewables contribution.
I will risk a cautious forecast, though,
of the costs of grid expansion. We
really should keep an eye on these.
The Bundesnetzagentur anticipates u
German Energy Statistics
Gross electricity generation
Population
2009:
Hydro
(incl. pump storage)
Renewables
14%
Gas
4%
2%
14%
Others
(e.g., oil,
fuel cells)
82 million
Electricity total final consumption
621 TWh
2009:
23%
44%
Nuclear*
Coal
6,055 kWh
per capita
2010
Transmission
grid operators:
➔
➔
➔
➔
Graphic: independent
82
50Hertz Transmission
Amprion
EnBW Transportnetze
TenneT TSO
Major electricity utilities:
➔
➔
➔
➔
➔
EnBW
E.ON
EWE AG
RWE
Vattenfall Europe
CO2 emissions / population
2009:
9.16 tonnes CO
… and about 950 smaller electricity utilities
*Expert estimate for 2011: ~15 TWh gross electricity generation less from nuclear due to moratorium; to be compensated by other fuels
Source: IEA Statistics
Living Energy · Issue 6/February 2012
2
per capita
IN SHORT
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€30 to 60 billion, depending on the
technology. Given the long depreciation periods, that is much less per
consumer than appears at first sight.
The need to expand the grid is occasionally used to demand less regulation and higher returns. Now and
again, we see attempts to reduce
efficiency requirements and to increase profit margins. If these ideas
gain ground, then it really can become expensive for the network users
and end customers. A second cost
driver could be the tendency to conceal privileges or subsidies, even for
particular branches or stakeholders
in the use of system charges. If these
charges are waived or considerably
reduced for these branches and stakeholders, the costs for the remaining
network users become commensurately higher.
The main obstacles to new networks,
though, are undoubtedly not the
framework conditions for investors,
but the approval procedures, which
have often been intolerably long in the
past. The recently adopted Grid Expansion Acceleration Act, most notably,
marks an important new direction
here. It will streamline procedures
to ensure uniform regional planning
and approval. And so, in future, the
Bundesnetzagentur will be responsible for the following:
• the ten-year network development
plan, updated yearly, which the
Bundesnetzagentur will submit every three years, at the latest, as a
draft for a federal requirements plan
Matthias Kurth
President (2001–), Bundesnetzagentur (German Federal Network Agency)
Background
Chief Regulator
Kurth studied Law and Political Economics at the University of Frankfurt/Main,
Germany. He was admitted to the bar in
1978.
Served as MP in Hesse state parliament
(1978–1994). State Secretary in the
Hesse Ministry of Economics (1994 to
1999).
In February 2001, Kurth was appointed
President of the Regulatory Authority
for Telecommunications and Posts, later
renamed the Federal Network Agency –
Germany’s supreme regulatory agency
for telecommunications, gas, and
railway networks as well as postal services.
“The exit from nuclear power has
been decided and the accelerated
expansion of energy from renewable sources is under way. Now,
grid expansion and optimization
must keep up.”
for the transmission network, which
will be submitted to the lawmakers;
• specialist federal planning, which
will examine planned routes and
corridors with a view to their compatibility with regional planning and
the environment and whose findings will be binding on the federal
states and local authorities; and
• planning approval procedures for
specific line build projects when an
ordinance requiring the consent of
the Bundesrat determines that the
Bundesnetzagentur will carry out
these procedures.
This will strengthen the Bundesnetzagentur’s contribution to accelerating
expansion of the grid. If all the procedures could be carried out uniformly
under federal authority, it would be
possible to achieve timescales of around
five years. Crucially important here,
however, is constructive participation
by a wide public at an early stage.
Power lines are not particularly attractive, whether above or below ground.
But attractive or not, they are needed,
and it is vital that this is understood.
Those affected at the local level need
to accept that particular construction
measures are required at the federal
level and need to be able to have their
say much sooner, and more vigorously, than hitherto. Procedures should
therefore be transparent and must be
conducted openly for all those who
are interested and/or affected. I expect
constructive participation from intensive, open discussions that are held
in a timely manner and that have been
well prepared. People do not want to
be presented with plans that have already reached the completion stage.
No, they want to take part, to have a say,
in finding the best solution possible.
The exit from nuclear power has been
decided and the accelerated expansion
of energy from renewable sources is
under way. Now, grid expansion and
optimization must keep up. Many
questions and challenges still remain.
But all these questions can be resolved
and all the challenges can be met, given
commitment on the part of all concerned. p
Living Energy · Issue 6/February 2012
85
International News in Short
Twelve brief news items on current projects, recent developments,
and the latest innovations in the Siemens Energy portfolio.
Taking to the Hills: Solar Farm for South of France
In mid-October 2011, Siemens put the
Les Mées solar farm in the department
of Alpes-de-Haute-Provence in France on
line. Located at an elevation of 800 meters above sea level on the wide, undulating La Colle des Mées plateau, the
solar farm comprises a total of 112,000
solar modules covering an area of
70 hectares. For this project, Siemens
installed a total of six turnkey photovoltaic (PV) power plants. Siemens was
not only responsible for grid connection
and the control systems for Les Mées,
but also for supply and installation of the
inverters, low- and medium-voltage
components and transformers.
The customer was Eco Delta Développement (EDD), whose subsidiary Delta
Solar and Siemens jointly developed the
PV farm in the district of Les Mées. The
plant design met the demands for maximized efficiency despite the difficult
landscape. Siemens erected the six PV
plants in Les Mées in only ten months.
The solar power plants, for which Siemens
will also handle maintenance, will generate a combined peak output of 31 MWp.
Approximately 12,000 French households can thus be supplied with clean
electricity.
“The Les Mées project demonstrates
that we’re the right partner for successful, on-schedule implementation of
complete PV plants,” says Martin Schulz,
Vice President of the Photovoltaics Business Unit of the Siemens Solar & Hydro
Division.
An engineering and construction
wonder: the Les Mées solar farm on
the 800-meter-high La Colle des
Mées plateau near the French Alps,
completed in just ten months.
Siemens Smart Grid Portfolio Enhanced
Photo: Siemens
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With the aim of enhancing its global
market position in the field of smart metering, Siemens closed a deal in December
to acquire eMeter, a meter data management specialist based in San Mateo,
California (USA). “The acquisition means
that the EnergyIP meter data management software of eMeter will become an
Living Energy · Issue 6/February 2012
integral part of our smart grid portfolio,”
says Jan Mrosik, CEO of the Smart
Grid Division of the Siemens Infrastructure & Cities Sector. “Ever-increasing
demand for more efficient power supply
networks for cities and utilities make
this acquisition even more important.”
Siemens has partnered with eMeter
since 2008. With the EnergyIP platform,
Siemens is now one of the world’s
leading providers of meter data management software, which can efficiently
read out, manage and provide the increasing quantities of data from smart meters
in the power supply network.