Germany has seen some interesting developments in its renewable energy sector over the past few years. After successfully moving away from nuclear energy, Germany is now more dependent on renewables for electricity generation than ever before. In fact, this European nation is producing so much renewable energy (almost 5 times more than the last decade), that it sometimes finds it difficult to manage the excess electricity that is being generated from all the solar panels and wind farms installed throughout the country.
However, Germany’s grid operators have excelled at managing the variable loads that come with renewable energy, and they have done so without any meaningful energy storage capacity. While Germany has not needed energy storage to source around one quarter of its electricity from renewables up until now, deeper penetrations of solar and wind will likely require expanded use of batteries and other storage technologies to smooth out the fluctuations in power generation.
What is the renewable potential without improved energy storage?
50 Hertz, a company that is partly owned by Australia’s Industry Funds Management, operates transmission grids in the eastern and northern part of Germany and covers more than 30 percent of the country’s electricity grid. It covers around 109,360 KM2 of area and as part of the European Grid, it is directly connected with Czech Republic, Poland and Denmark. Boris Schucht, the CEO of 50 Hertz, believes that its grid could easily absorb up to 70 percent of solar and wind energy without requiring any kind of energy storage.
‘It’s about the mind-set, 10 to 15 years ago when I was a young engineer; nobody believed that integrating more than 5 per cent variable renewable energy in an industrial state such as Germany was possible. No other region in the world has a similar amount of volatile renewable energy. Yet we have not had a customer outage. Not for 35 or 40 years,” said Boris Schucht who also believes that the idea of renewable energy integration and its potential has evolved with time. Related: Top 10 Oil And Gas Stories Of 2015
Which renewables have the biggest share in the total energy mix?
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Germany is a global leader when it comes to renewables. Wind, biomass and solar energy have the biggest share in the total renewable energy mix. Germany received around 8.6 percent of its total electricity from onshore wind turbines in 2014 and it was also the cheapest source of renewable power. The country now plans to triple the share of renewable wind energy (both onshore and offshore) by the year 2020. Related: Oil Prices Charging Lower As Oversupply Concerns Plague Traders
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Solar PV is slowly and steadily becoming more competitive with onshore wind power, although it is still more expensive. However, photovoltaics (PV) are less expensive when compared to offshore wind power.
Does Energy Storage Have Potential in Germany?
One of the biggest reasons why energy storage market is not that developed in Germany is because of the country’s power grids. When compared to other countries, Germany’s power grids are very strong and power outages almost never happen. Germany had started using renewables since the year 1990. On 25th July, 2015, renewable energy created a new record in Germany, accounting for almost 78 percent of the total German domestic electricity consumption. Related: Oil Bankruptcies Mark Devastating End Of The Year For U.S. Drillers
With few upgrades, the grids have been able to handle the renewables pretty well, without requiring any additional energy storage. However, a lot has changed since 1990s and renewables currently constitute around 30 percent of the total country’s power supply. Although the grids are able to absorb renewable energy at the moment, this might not be the case in the next 15 years when the country targets to produce at least 50% electricity through renewable energy sources. Energy storage market does have a business potential in Germany but in the next 5 to 10 years from now.
Through its Energiewende program (which also is also referred to as Energy Transition), Germany is successfully tapping its variable renewable energy sources and has even implemented some laws and programs such as Nuclear Phase Out, Renewable Energy Act, Emission Trading and others which are making the transition to renewables even more efficient. With an aim to reduce its energy consumption, reduce greenhouse emissions and improving its overall efficiency, Germany is indeed leading the global renewable energy market. Besides Germany, the other European nations that are investing billions of dollars in renewables are Norway, France, Finland, Austria, Latvia, Sweden, U.K., Denmark and Scotland.
Research suggests that in spite of having a grid that could handle close to 70 percent of renewable energy, small scale battery systems and large scale energy storage systems (that include the control power market and ‘Power To Gas’ energy storage technology) have a fair business potential in Germany. However, apart from some few pilot projects, the energy storage market is almost negligible in Germany at the moment. According to some experts, the energy storage market can only flourish in Germany once the renewable energy’s total share grows above 40 percent.
By Gaurav Agnihotri of Oilprice.com
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