Change Isn’t as Easy as a Flip of a Switch

Source: By MAGGIE KOERTH-BAKER, New York Times • Posted: Tuesday, December 8, 2015

Protesting a high-voltage power line in Pegnitz, Germany. The government has agreed to bury such lines wherever possible, increasing their cost. Credit David Ebener/DPA Picture-Alliance, via Agence France-Presse 

The spinning blades of wind turbines produced 9 percent of Germany’s electricity in 2014.

Most of those turbines are in the north of the country, near Denmark and the Netherlands, or off the coast in the North Sea. The majority of Germany’s electricity demand, however, comes from some 400 miles to the south, in the factories and corporate headquarters of Bavaria.

Transporting electricity from the place where it is generated to the place it will be used means installing high-voltage power lines. But while renewable energy is extremely popular among the German public, power lines are not.

Public protests against construction have been influential enough that, in July, the country’s governing coalition had to agree to bury high-voltage lines wherever possible — a move that could raise the cost of those lines by billions of dollars.

All over the world, people are looking at Germany as an example of a successful renewable energy transition. In 1990, almost none of the country’s electricity came from renewables. Last year, more than a quarter of the gross electricity generation was attributable to a combination of wind, solar, biomass and hydroelectric power. In contrast, renewables accounted for about 13 percent of United States electricity production in 2014.

Besides inspiration, the German experience has also offered an important lesson. Switching to wind and solar isn’t just about building wind farms and installing photovoltaic panels.

Developing renewable energy anywhere requires an understanding that the wind and the sun work as part of a broad system, encompassing both technological challenges related to integrating electricity into the grid and political, cultural and economic factors.

“This mode of systems thinking is gradually becoming more important,” said Dolf Gielen, director of innovation and technology for the International Renewable Energy Agency. For example, even the seemingly simple question of “Why renewables?” has different answers in different parts of the world.

In Germany, the shift to wind and solar power is intimately tied to the phase-out of nuclear energy.

Based on a plan announced in the wake of the 2011 Fukushima Daiichi nuclear power plant accident in Japan, there will be no nuclear energy produced in Germany by 2022. In 1990, 25 percent of the country’s electricity came from nuclear. By 2014, that share had fallen to 16 percent.

Meanwhile, Mr. Gielen said, China’s interest in renewable energy is driven by public concern about air pollution. And, in India, renewables — especially solar — are proving to be a vital part of bringing reliable electricity to parts of the country left out of traditional infrastructure development.

Compared with plotting and installing transmission lines, it is cheaper and faster to build a small stand of solar generation and a microgrid to handle local needs like water pumping, lighting and phone charging, said Matt Rogers, director of McKinsey & Company in San Francisco and a 20-year veteran of energy consulting.

“Reliability means a very different thing in rural India than it does in San Francisco,” Mr. Rogers said. “People are discovering that some power fast is worth more than being able to get the perfect solution 20 years from now.”

In developed countries, though, installing renewable sources of electricity generation means making sure those sources fit into the existing grid. This can be a tricky problem to solve. All electricity grids must be balanced — with supply almost perfectly matching electric demand at any given moment.

Historically, this has been done by adjusting production in real time, as it is very difficult to store electricity. Because wind and solar generation are dependent upon variable natural resources, they can upset that balance. Avoiding blackouts means upgrading grid technologies and adding storage. This is why those transmission lines are so important to Germany’s future.

It’s also why Germany has changed the policies it uses to set prices for electricity and encourage renewable development, Mr. Gielen said. Previous policy had made renewable development so attractive that it was outpacing the country’s ability to keep up with infrastructure support. “It’s much more difficult to do the grid investments because that’s long-term planning,” he said.

California is one of the world leaders in adding storage into the grid system, primarily by using lithium-ion battery packs, the same technology found in computers and home electronics. The cost of these packs at grid scale has plummeted 80 percent in the last six years, from about $1,000 a kilowatt-hour in 2009 to $250 per kWh today, Mr. Rogers said.

Control is also an important part of upgrading electricity grids. Historically, matching generation of electricity to demand has been based on phone calls — grid controllers calling electricity producers to request more or less generation. Changing both hardware and software technologies within the system will allow controllers to make those changes automatically, speeding up the process and increasing stability.

The cost of these technologies affects the cost of electricity generated by renewable resources, as does the cost of solar panels and wind turbines themselves.

Public policy also plays a role in determining how expensive renewables are. It is no surprise that China, which produces most of the world’s solar panels, is also one of the countries with the lowest cost for installing rooftop solar.

In Germany, the household cost for electricity, in general, is about 30 euro cents per kilowatt/hour. With bank financing easy to get because of the country’s long history of stable regulation, the cost to generate rooftop solar is about 15 cents per kilowatt-hour. “There’s a clear economic case to install such a system,” Mr. Gielen said.

California also has a strong economic outlook for solar, largely due to the fact that policy in that state means electricity prices fluctuate widely depending on demand. But in the United States over all, rooftop solar electricity is about twice as expensive as it is in Germany. Policy again plays a big role in that cost, Mr. Gielen said.

“In Germany you fill out one form. In the U.S., in some instances, you have to fill out 20 forms,” he said. “If there’s a lot more paperwork to be then done, that’s reflected in the prices.”