Is PV Solar Energy a Success Story in Germany?
- January 26, 2012
- 232 views
German households and businesses are increasingly concerned and upset with the rising cost of electricity as a result of the energy policies pursued by their government. Whereas some people felt good about phasing out nuclear plants, the estimates of capital and other costs of doing so are steadily increasing as energy systems analysts in Germany and elsewhere are becoming more aware of the magnitude of the various impacts.
Add to that the increasing capital and subsidy costs of building out the renewables capacities required to meet self-imposed CO2 emission reduction targets, the total cost becomes about 1.7 trillion euros ($2.26 trillion) for the 2012 – 2030 period, as estimated by Siemens, and more costs thereafter. Making such investments will have major adverse impacts on Germany’s international competitiveness, high-wage job creation and economic future.
If the US were to follow on the same course, the cost would be about ($14.5 trillion, US GDP)/($3.5 trillion, German GDP) x $2.26 trillion = $9.36 trillion. It is 100% sure, the US will NOT follow on that course anytime soon, if ever, and almost all other nations will not either.
Additional estimates of capital and other costs are in these URLs.
GERMANY’S RENEWABLE ENERGY AND ENERGY EFFICIENCY TARGETS
In September 2010, the German government announced the following three targets:
Renewable electricity: 35% of total electricity production, TEP, by 2020, 50% by 2030, 65% by 2040 and 80% by 2050
Renewable electricity was 16.8% of TEP in 2010 and 19.8% in 2011.
Renewable energy: 18% of gross energy consumption, GEC, by 2020, 30% by 2030, and 60% by 2050.
GEC was 14,044 petajoules in 2010, of which 249 PJ from wind and hydro and 1,073 PJ from other renewables, i.e., renewable energy was (249 + 1,073)/14,044 = 9.4% of the GEC.
It was 5.3% in 2005, 6.4% in 2006, 7.9% in 2007, 8.1% in 2008, 8.9% in 2009, 9.9% in 2010, 10.8% in 2011. See reference 14 in the wikipedia URL and the Reuters URL.
Energy efficiency: Reduce national electricity consumption, NEC, 50% below 2008 levels by 2050.
Efficiency measures, (more efficient light bulbs, appliances, HVAC systems, etc.) that reduce the NEC by about 1.07%/yr, which compounded over 38 years (2012 to 2050), would reduce the NEC by 50%. However, if the long-term growth of the GDP is 1.8%/yr, the NEC will double by 2050 thereby completely offsetting the reductions from efficiency measures. To have an NEC reduction of 50%, PLUS have 1.8%/yr GDP growth, efficiency measures that reduce the NEC by about 3.7%/yr compounded over 38 years would be required.
This a very tall mountain to climb. Phasing out the nuclear plants will make this nearly impossible. Chancellor Merkel agreeing to the nuclear phase-out is strictly politics to keep her party in office. As the reality of the feasibility, and capital cost and other costs, and the environmental impacts sink in, more rational heads than those of the Green Party will have to prevail.
– Greater percentages of GDP growth would require greater annual efficiency percentages.
– Germany’s electricity consumption per unit of GDP decreased by an average of about 1.7%/yr from 1990 to 2010. During that period the GDP grew, but the primary energy consumption remained about the same; 14,905 PJ in 1990 and 14,044 PJ in 2010.
See reference 14 in this URL.
– One way to “manage” the NEC and CO2 emissions is for Germany to build industrial plants in East Europe and elsewhere, instead of in Germany; Germany’s GDP would increase, but not its NEC and CO2 emissions.
– If Germany were serious about global warming/climate change, it would find the most severe pollution sources in the world and offer to clean them up at nominal cost or for free; it would be similar to “doctors without borders”. The cost per ton of CO2 avoided would be much less than in Germany.
IS PV SOLAR A SUCCESS STORY IN GERMANY?
Total Cost: Germany’s total cost of its PV solar systems is about 100 billion euros capital cost by the end of 2011 + 100 billion euros subsidy cost by the end of 2031 = 200 billion euros, and counting as more PV systems are added.
Capital Cost: At the end of 2011, Germany had about 1.1 million PV solar systems installed with a total installed capacity of 24,820 MW costing about 100 billion euros. As there are about 40 million households in Germany, only about 2.5% receive the EEG feed-in-tariff benefits of PV solar systems, the other 97.5% receive only the “benefit” of higher electric rates.
1 billion (US) = 1 milliard (Europe) = 1,000 million.
Subsidy Cost: Under Germany’s Renewable Energy Law, EEG, each new system qualifies for 20 years of subsidies. According to the Rhine-Westphalia Institute for Economic Research, RWI, the 7,500 MW of solar systems connected to the grid in 2011 will cost electricity customers about 18 billion euros in subsidies over the next 20 years, in addition to the 30 billion euros to install them; the useful service life of the panels ia about 25 years. RWI expert Manuel Frondel states: “The demand for subsidies is growing and growing. If all commitments to pay subsidies are added together, we have already exceeded the 100 billion euro level.”
Solar system owners collected more than 8 billion euros ($10.6 billion) in subsidies in 2011 (5.1 billion euros in 2010), but the electricity they generated was just 3 percent of the total energy production in 2011.
Solar energy subsidies, $/kWh, are the highest of all renewables. For comparison: If solar is set at 1, then, per dollar of subsidy, energy production by hydro is at least 6 times solar, wind 5 times solar, biomass 3 times solar.
CO2 Avoidance Cost: To avoid a ton of CO2 emissions, one needs to invest 5 euros in insulating the roof of an old building, or 20 euros in a new gas-fired, 60% efficient CCGT plant, or 500 euros in a PV solar system.
Note: Because solar energy is variable (especially during variable cloudiness) and intermittent, the ton of CO2 emissions avoided will be partially offset by the increased part-load-ramping operation of the balancing plants, as noted below under “Solar Energy Production” and “Backup Plants”.
EEG Charges on Electric Bills: RWI expects the EEG surcharge on electricity bills to increase. It is currently 3.59 eurocents/kWh. Because of recent developments (phasing out nuclear plants), Mr. Frondel predicts that the surcharge will soon increase to 4.7 eurocents/kWh. For the average family, this would amount to an additional charge of about 200 euro/yr. German households complain about having the second-highest electricity prices in Europe; 26.3 eurocents/kWh. Denmark, another renewables maven, has the highest; 30.1 eurocents/kWh.
The nuclear phase-out and meeting CO2 and energy efficiency targets will require greatly expanded renewables capacities, primarily offshore wind turbine systems that produce energy at about 2 times the cost of onshore systems. EEG surcharges will significantly increase.
The EEG surcharges are estimated to increase monthly electricity bills of households from 26.3 eurocents/kWh, incl. VAT in 2011, to 39.7. incl. VAT in 2021, a total increase of (39.7 – 26.3)/26.3 = 51% by 2021 compared with 2011. This is a real increase based on 2011 euros. Bills will likely increase by more than 51%, because other components of the household bill will also increase.
The inefficient, Rube-Goldberg, EEG subsidizing scheme of robbing Peter (the 97% without solar systems) to pay Paul (the 3% with solar systems) creates unacceptable inequities, especially for lower income households without solar systems, and inefficiencies throughout the economy. The PR mantra of renewables promotors justifying subsidies, because they are saving the world from global warming/climate change, is self-serving in the extreme. See URL.
Solar Energy Production: Germany’s solar systems are mostly located in southern Germany; it is more sunny than northern Germany. On sunny summer days, especially around noontime, solar generation is well over 12,000 MW which exceeds what can be used to serve the demand of southern Germany or sent to northern Germany. If France needs it, the excess energy is usually exported to France at low prices, because economically viable, utility-scale, battery-type storage does not exist. If France, or others, do not need the excess energy, it is fed into the ground, i.e., wasted.
Germany’s national PV solar capacity factor for true-south-facing, correctly-angled, single-axis systems is about 0.115, but the actual CF is about 0.95, due to roofs being not true-south-facing and not correctly-angled, and because panels are aging (about 0.5%/yr), being partially shaded, and dust and snow covered.
Typically, solar energy is minimal in the morning, maximal at noon about 3-4 hours before peak demand, minimal in the evening, minimal on cloudy days, minimal with snow on the panels, and zero at night. That means there is about zero solar energy for at least 65-70% of the hours of a year.
Solar energy has no dispatch value to a grid operator, because it is variable and intermittent; it has a daytime scheduling value that is a very small percentage of installed capacity.
During varying cloudcover, solar energy, on a minute-to-minute basis, is even more variable and less predictable than wind energy. For example: In Nevada, the output may be 8.5 MW out of 10 MW installed at 10 am, and 2 out of 10 at 12:30 pm, with many such variations during a day. See pg 54 of this URL.
During the dark, cloudy, foggy, snowy, shorter days of the long German winter, solar energy production is on average less than 4% of installed capacity. For comparison: Nuclear, coal and gas plants operate at about 90% of installed capacity, regardless of the weather. A report by the German Physical Society states. “Essentially, solar energy cannot replace any conventional power plants.”
The same is true for wind energy, because about 10 – 15 % of the hours of a year windspeeds over large geographical areas are too low (below 7.5 mph) to turn the rotors, or too high for safety. During those hours, wind turbines DRAW energy from the grid to operate mechanical and electrical systems and to prevent freezing and icing of components.
Note: Parasitic power is the power used by the wind turbine itself. During spring, summer and fall it is a small percentage of the wind turbine output. During the winter it may be as much as 10-20% of the wind turbine output. Much of this power is needed whether the wind turbine is operating or not. At low wind speeds, especially during cold winter nights, the turbine power output may be less than the power used by the turbine; the shortfall is drawn from the grid.
Backup Plants: Variable, intermittent solar energy is useless to households and businesses, unless it is backed up by quick-ramping gas turbine plants that ramp down when solar energy surges and ramp up when solar energy ebbs. This part-load-ramping mode more quickly wears out equipment resulting in shorter useful service lives and is inefficient resulting in increased Btu/kWh and CO2 emissions/kWh. The increases mostly offset the fuel and CO2 emissions solar energy was meant to reduce.
Solar Energy Similar to Wind Energy: Several studies based on 1/4-hour and 1-hour operating data of the grids of Colorado, Texas, Ireland and the Netherlands, which have significant wind energy penetration, show significantly less CO2 avoided/kWh than claimed by wind energy promotors.
The same is true for solar energy, especially in areas with many solar systems, such as southern Germany, the US Southwest and Spain; the random solar energy variations add to the random wind energy variations. See URLs.
Renewables Net Job Creation is a Myth: In a slow-growing economy, the subsidized job creation in inefficient, expensive-energy-producing renewables sectors will result in up to 3.7 times the job destruction in other sectors due to scarce capital being diverted from more productive uses, such as energy efficiency, and due to more expensive energy increasing the prices of goods and services.
The inefficient, Rube-Goldberg, EEG subsidizing scheme of robbing Peter (the 97.5% without solar systems) to pay Paul (the 2.5% with solar systems) creates unacceptable inequities, especially for lower income households without solar systems, and inefficiencies throughout the economy. The PR mantra of renewables promotors justifying subsidies, because they are saving the world from global warming/climate change, is self-serving in the extreme. See URL.
Germany’s Renewable Energy Folly: Here are the URLs of the Summary and the full 28-page article “Germany’s Energy Supply Transformation Has Already Failed”. They give a realistic view of Germany’s renewable energy folly and the mismanagement of its folly.
Ontario’s Renewable Energy Folly: Here is an article regarding Ontario’s renewable energy folly and the misrepresentations by renewables promotors and the Canadian government.
EXPERT COMMENTARY ON PV SOLAR
Germany has successfully demonstrated to the world it is unsuitable for solar energy.
Solar energy is the most expensive mistake in German environmental policy. Berlin energy economist Georg Erdmann, a member of the monitoring group on the energy transition appointed by Chancellor Merkel, views any further expansion of solar energy as a threat to the planned nuclear phase-out, because it is using capital that could be more effectively used for a more energy-efficient structuring of the German economy, for other renewables and energy efficiency.
Joachim Weimann, an environmental economist in the eastern German city of Magdeburg: “From the standpoint of the climate, every solar system is a bad investment.”
Hans-Werner Sinn of the Munich-based Ifo Institute for Economic Research: “Solar energy is a waste of money at the expense of climate protection.”
Economics Minister Rösler wants to cap subsidies for solar energy systems. Under his proposal, further expansion would be limited to 1,000 MW this year, or 6,500 MW less than in 2011.
A proposal by the Monopolies Commission, which is supported by the German Council of Economic Experts, goes even further. The economists want to eliminate the subsidies for solar energy under the Renewable Energy Law.
They argue that energy providers should be required to satisfy a green electricity quota, but without specifying in detail what they should do to fulfill the quota. This would stimulate competition to come up with the best technology.
According to the experts, the advantage over the current system is obvious: Money would no longer be invested in places where the highest subsidies are paid, but in places that produce the most green energy per invested dollar.