Energy transition... still a hurdle race

​​​​​​​​​​​Published on 5th December 2024​

At 140 TWh, more green electricity was generated in the first half of 2024 than ever before. The RE share of public electricity generation in Germany totalled 65%¹. Logically, fossil fuels have consequently reached lower values and with further expansion – especially in PV - it is to be expected that similar values will be achieved in the second half of the year.

It is also interesting to note the dependence on imports often cited by conservative media: 11.3 TWh came from Scandinavia, France, Belgium and the Netherlands. As Scandinavian electricity from wind and hydropower is cheaper, it also displaces electricity from German coal and gas-fired power plants on the market.¹ If we compare the 11.3 TWh alone with the wind power of 73.4 TWh (PV totalled 32.4 TWh), it becomes clear that Germany is hardly dependent on imports as the media have claimed. Exchange electricity prices fell sharply from EUR 100.54/MWh (day-ahead auction, volume-weighted) to EUR 67.94/MWh, which will have an impact on electricity prices in the short to medium term.

These are the facts that illustrate the potential of the further expansion of RE on the electricity market. However, several measures are required in order to make the developments that the industry has undoubtedly been longing for more long-term and thus actually achieve the target development curve for 2045 (as a reminder: according to the Climate Protection Act, Germany should be greenhouse gas-neutral by then):

1. Electricity grid - the expansion is going too slowly and it can already be seen that the first bottlenecks are occurring when connecting producers or consumers (charging infrastructure). New lines are simply needed to transport the amount of green electricity in the country - this has been known for a long time, has been delayed again and again and now, with the booming expansion of generation, the problems are coming to light. The modernisation of the distribution grids is lagging behind (approx. 1.9 million kilometres in Germany) and was overslept - probably back in the days when people still believed that a decentralised supply structure would not come about. The solution to this - in addition to modernisation and expansion - is of course digitalisation. Technically, real-time systems are known and usable² - unfortunately, it was neglected to set incentive systems at an early stage (possibly via grid fee regulation) to tackle modernisation and make it financially attractive. How to do it differently: In Finland and Denmark, grid operators have created central points where all metering and connection data converge (a visualisation of the grid can also be viewed here ). In order to implement something like this in Germany, however, it would be necessary to ‘force’ the approximately 500 grid operators to co-operate.
2. Electricity market - with the further construction of PV systems, there will naturally be high feed-in volumes at the same times. On the one hand, this will lead to a drop in electricity prices to negative electricity prices and (see 1) to shutdowns at grid level. The ‘renewables’ cannibalise each other on the electricity market, so to speak, and there is no quick remedy for this. This is already having an impact on the economic viability of new projects (if they manage to get a grid connection), as there is the question of how this will develop and how many periods with negative prices (= surplus supply of electricity) will materialise - especially as systems larger than 100 kW will not pay any overbuilding of grid connections, the hybrid development of PV / wind or the use of battery storage.
   
   The government has made adjustments on the demand side with the law⁴ to restart the digitalisation of the energy transition. From 1 January 2025, all electricity suppliers will be obliged to offer a dynamic tariff whose price is based on the daily spot prices on the exchange. The idea here is to generate load shifts in order to consume the surplus quantities when the price signal is most favourable. The cockfoot here is the (still) non-existent complete rollout of smart meters (just 0.5 % of consumers have one⁵, as well as the question of whether household and industrial customers can actually shift so much, as the rhythm of life and production are not normally based on sun or wind.​
3. Storage - in 2023, 570,000 new storage systems were installed in Germany in combination with PV systems⁶. Even more interesting, however, are large-scale battery storage systems - of which 1.1 GW are currently installed, although the Federal Network Agency has included a demand of 27 GW⁷ in the grid development plan. This means: Flexibility will experience a significant increase in value - the market is there. The potential of bidirectional charging has not yet been exploited, but with digitalisation this also holds considerable potential.⁸
   
4. Acceptance - acceptance is also an important aspect for me. The RE sector in particular must not stop looking for solutions, taking the public with it and turning the energy transition into our energy transition. Some of the hurdles mentioned above are complex and definitely require the will of society to drive forward the transformation to an energy system based entirely on RE or even a 100% renewable energy system. Nobody in the industry should get tired of focussing on solutions and communicating them. The doubters are quick to come up with more complex issues, which can only be countered with information and explanation.

Conservative media also constantly refer to France, which seems to be doing so well with nuclear power. It should only be mentioned briefly that the almost state-owned EDF has amassed a mountain of debt (mostly from increases in the cost of nuclear power plant construction) totalling 60 billion euros⁹. The upcoming modernisation of the power plants will therefore cost the state considerable sums.

As a society, location and export nation, Germany can only gain if the major project of the energy transition is achieved. And that will only work - if everyone does their bit (see balcony PV) and the topic is tirelessly promoted. The industry must not tire of further developing the technologies, always thinking about digitalisation and explaining the concepts to the public. Even if developments in the electricity sector are currently laying the foundations for further decarbonisation, the fossil fuel pie is still significant in terms of total primary energy consumption (see the following diagram on primary energy consumption in 2023).

The total fossil share was therefore around 80 % in 2023, which shows what still needs to happen to even begin to reach the 2045 target.

___________________________________________________

⁶ https://www.pv-magazine.de/2024/01/17/mehr-als-570-000-neu-installierte-photovoltaik-speicher-in-2023/ (accessed 05/08/2024)
⁷ https://www.bves.de/energiespeich​er/systeminfrastruktur/ (accessed 05/08/2024)
⁸ https://www.roedl.de/themen/erneuerbare-energien/2022/februar/bid​irektionales-laden (accessed 05/08/2024)
⁹ https://www.bfmtv.com/economie/entreprises/energie/tout-comprendre-la-renationalisation-d-edf-est-en-marche_AV-202207080044.html (french, accessed 28/08/2024)
¹⁰ https://ag-energiebilanzen.de/energieverbrauch-ist-2023-kraeftig-gesunken/ (accessed 28/08/​2024)

​

Find out which marketing models work in Germany! 

 

You have a question?

Please do not hesitate to contact us.