Energiewende, announced by the German Federal Government in the wake of the Fukushima nuclear power plant disaster, is understood to the most ambitious experiment in large-scale deployment of variable and non-dispatchable renewables. German experience is very important to quantify the practical and economic challenges of large-scale wind/solar power deployment. Available data reveal ambivalent results. On the one hand, Germany has been able to continue expanding its renewable electricity output at a very impressive rate. On the other hand, the costs of German energy transition have been higher than expected and CO2 emissions has remained stable.

A report published by the McKinsey & Co, a global management consulting firm, explores Energiewende’s performance. The report reveals that level CO2 emissions produced in Germany has remained stable, because increasing share of renewables had primarily substituted nuclear power due to a nuclear power phase-out. For these reasons coal remains the second most important power source in Germany and CO2 emissions largely stagnated in recent years.

As regards share of renewables in gross German power production, the rate at which Germany has expanded renewables is very impressive. In 2017, renewables accounted for 36% of gross electricity consumption in Germany. However, the Report also reveals that primary energy consumption and electricity consumption have remained quite flat. In light of very high electricity prices, this result therefore illustrates the limits of energy efficiency. Germany has managed to maintain impressively high grid reliability, however, translated into increased network costs associated with grid stabilization and reserve power plants. The characteristics of renewable energy sources result in unique challenges for system operators when integrating clean energy into power systems. Thus, expansion of German grid and increased interconnection on electricity systems should be facilitated. It is worth mentioning that German households pay almost 50% more for electricity than the European average.

Energiewende has clearly proven that renewables can be expanded rapidly (German energy transition is proceeding ahead of schedule). However, its cost has more than doubled and cost is likely to pose a significant challenge in years to come. Now, the Energiewende enters the next stage of renewables integration which will require further grid expansion and increased interconnection of electricity systems. In other words, up to this point, renewables integration was attractively simple, however, continued expansion will require large and complex national and international grid expansion projects as well as energy storage.

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Energypost