High Renewable Energy Costs Damage the German Economy
In September 2010, the German government announced a new energy policy with the target of increasing the relative share of renewable energy in gross electrical generation to 35% by 2020, 50% by 2030, 65% by 2040, and 80% by 2050. Germany has been increasing its renewable energy generation from 6.6% (mostly existing hydro) in 2000, when the EEG law took effect, to 23.4% of total generation, at the end of 2013. If current RE growth continues, Germany likely will meet the 2020 target.
Energy Generation in Germany: At the end of 2013, German energy sources were 25.6% lignite coal, 15.4% nuclear, 19.6% hard coal, 10.5% natural gas, 1.0% mineral oil, 4..0% Other, for a total of 76.1% from non-RE sources, plus 8.4% wind, 3.2% hydro, 6.7% biomass, 4.7% PV solar, 0.8% Municipal waste, for a total of 23.9% from RE sources.
For the years 2008 – 2013:
Total electrical generation was 640,700; 595,600; 633,000; 613,100; 629,800; 633,600 GWh
Total RE generation was 93,200; 94,900; 104,800; 123,800; 143,500; 151,700 GWh
Total EEG generation was 71,148; 75,377; 82,332; 103,136; 118,330; 132,400 GWh
EEG fraction, %, of total RE was 76.3, 79.4, 78.6, 83.3, 82.5, 87.3
Coal Generation in Germany: The below data show German coal generation is increasing, and will continue to increase for the next 10 - 20 years, as near-CO2-free nuclear plants are decommissioned and replaced with additional RE and new coal plants. Late-vintage, modern, coal-fired plants are more efficient, have less CO2 emissions, gram/kWh, than older plants near retirement.
Here are the coal generation, TWh, for the years 1991 and 2008 – 2013:
Braunkolle 158.3 in 1991, and 150.6, 145.6, 145.9, 150.1, 160.7, 162,0
Steinkolle 149.8 in 1991, and 148.8, 107.9, 117.0, 112.4, 116.4, 124,0
Total coal 308.1 in 1991, and 299.4, 253.5, 262.9, 262.5, 277.1, 286.0
Coal fraction, % of total generation; 50.5 in 2000, and 44.0 in 2012, 45.2 in 2013
German Energy Balance:
Dim Physical Prospects for Cost-Efficient RE in Germany: Heavily-industrialized Germany is building its ENERGIEWENDE on mediocre wind and mediocre solar, with biomass not scaling up! In 2012, Germany's onshore wind capacity factor was 0.192, and PV solar CF was 0.095; NIMBY will prevent future significant build-outs of onshore wind turbines, and offshore wind turbine energy cost is at least 2 times onshore.
Because of a lack of cropland, biomass could at most produce about 10%, versus 6.8% in 2013, and because of a lack of suitable geography, hydro could at most produce about 5%, versus 3.4% in 2013. Yet Germany is charging ahead anyway, but uneasiness about the ENERGIEWENDE feasibility and cost is finally beginning to creep into the minds of more and more policymakers.
Adding Renewable Energy Increasingly More Costly: Renewable energy production covered by the EEG law increased from 71,148 in 2008 to 132,400 GWh in 2013, an 86% increase, and the EEG surcharge on household electric bills increased from 1.1 in 2008 to 5.227 eurocent/kWh in 2013, a 375% increase, i.e., as each GWh of RE is added, it costs more to produce and integrate it into the energy system, akin to climbing a mountain, initially, it is easy going, but further along, it becomes harder and harder, as its gets colder and the air gets thinner.
The EEG surcharge increase took place despite improved efficiencies and lower costs/MW of RE technologies, and some reductions of the excessive PV solar feed-in tariffs.
RE Costs Adversely Impacts Household Electric Rates: The average annual electric bill of a 3-person German household was 598.80 euro in 1998, with an annual energy surcharge of 2.80 euro, increased to 1005.60 euro, with an annual EEG surcharge of 184.70 euro, likely to increase to 220 euro in 2014.
EEG surcharges were 0.8, 1.0, 1.1, 1.3, 2.05, 3.53, 3.592, 5.227, 6.24 eurocent/kWh, excl. 16% VAT, from 2006 to 2014, with annual increases of 1.0 - 1.5 eurocent/kWh to follow, a politically untenable situation.
German household electric rates increased in about a straight line from 13.94 in April 2000 (start of EEG law), to 21.65 in April 2008, to 28.73 eurocent/kWh in April 2013.
German household electric rates, 29.65 eurocent/kWh in December 2013, were the 2nd highest in Europe, after Denmark’s 30.45 eurocent/kWh. France, 80% nuclear, was at 15.48 eurocent/kWh. See URL for breakdown of electric bill charges per kWh.
Total household cost................................................29.650
Less VAT.................................................................4.744.............16% of Total
Less EEG surcharge.................................................5.227
Less other taxes and levies.......................................4.722*
Utility service, distribution............1.407
Utility Energy, Service, Operations............................14.907..........50.28% of Total
* Includes: Energy tax, Offshore hafnungsumlage, Parapraph 19 umlage, KWK aufschlag, Konzessions ausgabe
Regarding the above 5.5 eurocent/kWh, this URL, figure 10, shows wholesale prices of about 5.5 eurocent/kWh for all of Europe in 2010, 2011, 2012 and half of 2013.
Using utility wholesale prices of about 5.5 eurocent/kWh at a basis, the EEG surcharge calculates to 5,227/5.5 = 95% of energy in 2013, and 6.24/5.5 = 113% of energy in 2014.
RE Capacity, Production, Capital Cost, 2000 - 2013 period
1999.......................Wind, onshore.............Wind, offshore............Biomass...........Solar
Cap. Cost, b euro...........8.9...............................0............ ..............0.8...............0.6
Capacity, MW....... ...34250.............................520........................7100..............35692
Energy, GWh........ ...53400.............................722......................42600..............30000
Cap. Cost, b euro.........68.5..............................2.1........................21.2..............107.4
The above table indicates the total additional capital cost for the 2000 – 2013 period was about 59.6, 2.1, 20.6, 106.8 b euros, for a total of 189.1 b euros, for wind onshore, wind offshore, biomass and PV solar, respectively, which produced a total additional RE of about 115.6 GWh in 2013, about 115.6/633.6 x 100% = 18.2% of total generation. The rest of the 2013 RE was produced by mostly existing hydro (20500 GWh) and miscellaneous sources (4478 GWh).
The 189.1 b euros does not include the capital costs of additional balancing capacity build-outs, MW, and grid build-outs, estimated at about 40 b euros, which Germany should have made, but largely did not. As a result, Germany has to frequently use the grids of nearby nations to balance its variable wind and solar energy.
NOTE: Nuclear energy would have been a more rational alternative:
Nuclear production: 14,670 MW x 8,760 hr/yr x CF 0.9 = 115,600 GWh, at a capital cost of about 70 b euro (at $5000/kW for standard plants); no balancing capacity and grid build-outs would be required. Nuclear plants last for about 60 years, whereas, RE systems last only 20 – 30 years. Also, standard nuclear plants would produce energy at about half the cost of RE systems.
High Renewable Energy Costs: It is useful to look at the RE costs of Germany's ENERGIEWENDE. For the years 2008 – 2013:
EEG generation was 71,148; 75,377; 82,332; 103,136; 118,330; 132,400 GWh
EEG payments to RE generators were 9.0, 10.8, 13.2, 16.8, 21.1, 22.9 billion euros
EEG RE costs were 0.1265, 0.1433, 0.1603, 0.1629, 0.1783, 0.1730 euro/kWh; note the rising trend
EEG supplementary EEG payments (subsidies) were 0.0, 0.0, 0.0, 1.1, 1.0, 4.2 billion euros
EEG total payments were 9.0, 10.8, 13.2, 17.9, 22.1, 27.1 billion euros
EEG RE costs, incl. supplementary payments, were 0.1265, 0.1433, 0.1603, 0.1736, 0.1868, 0.2047 euro/kWh
EEG RE was sold by utilities for 4.3, 5.5, 3.8, 4.7, 5.1, 6.7 billion euros on the open market
EEG RE sales prices were 0.0604, 0.0730, 0.0462, 0.0562, 0.0431, 0.0506 euro/kWh, i.e., sold at about 0.0506/0.2047 = 1/4 of the cost in 2013.
EEG surcharges on electric bills were 4.7, 5.3, 9.4, 16.8 + 1.1 – 4.7 = 13.2, 17.0, 20.4 billion euros; 23.6 (est) in 2014
Renewable Energy Sold at a Loss: In Germany, the normal procedure is to use materials and labor to make a product and sell it at a profit. It is just the opposite with RE, where the normal procedure is to use materials and labor to make a product that is sold at 1/4 of the cost, i.e., at a loss which is made up by placing a surcharge on household electric bills. This is completely uneconomic and irrational.
People think the Germans are so smart, but selling 2013 RE at 1/4 of the cost is unwise, AND it is unsustainable, because, as RE increases in future years, the cost/kWh increases, and the fraction at which the RE can be sold decreases. When standing in a deep pit, it is wise to stop digging.
High RE Costs Damage German Economy: Germany’s exports would have been 15 b euro higher in 2013, if its industry had not paid a premium for electricity compared with international competitors, according to an analysis published on Thursday. Germany’s manufacturing suffered 52 b euro in net export losses for the six-year period from 2008 to 2013, per the Financial Times of 27 February, 2014.
Managing Renewable Energy on the Grid: Without variable RE, Germany has the most reliable grid in the world. If, instead of exporting energy to nearby nations during windy and sunny periods, Germany had to keep its variable wind and solar energy within its borders, there would be chaos, as Germany has failed to make the investments in grid infrastructure, tens of billions of euros, to match its rapid RE build-outs.
The northern German grid has limited ability to deal with variable energy. Because traditional generators dominate the grid, frequency and voltage are maintained within required ranges for stability, even with some variable energy on the grid. But during periods of low demand with windiness, usually at night, the variable wind energy is excessive and is either curtailed (wind turbine owners object), or spread out to other grids (at very low prices), such as of The Netherlands, Belgium, Poland, Sweden, etc., to maintain stability, i.e., exported at a loss!
The southern German grid also has limited ability to deal with variable energy. Because traditional generators dominate the grid, frequency and voltage are maintained within required ranges for stability, even with some variable energy on the grid. But during periods of clear skies, the variable solar energy is excessive (cannot be curtailed, except by grounding some of it) and is spread out to other grids (at very low prices), such as of Austria, The Czech Republic, France, etc., to maintain stability, i.e., exported at a loss!
RE promoters crowing about Germany being able to export energy while closing down nuclear plants, or about Germany generating 50% of its energy with RE on a particular hour of a day, or Germany’s RE reducing wholesale energy costs, are mentioning the parts of the picture favorable to their cause, but leave out the other parts, i.e., misrepresenting reality, to say the least.
A third way could exist if Germany had a north-south, HVDC, overlay grid, but that would cost at least 50 to 75 billion euro, if buried, and would take about 5 - 10 years to place in service. Building it overhead would be less costly, more visible, but would be delayed by much NIMBY. The HVDC grid would be connected to the existing high voltage grids at many points to spread out the variable energy all over Germany, i.e., less need to rely on money-losing exports for balancing.
Germany Using Foreign Grids For RE Balancing: As above noted, Germany, not having sufficient domestic RE balancing capacity, MW, uses the spare balancing capacity of the grids of nearby nations to balance its excessive energy during high RE production periods. These nations provide these services, because the surplus energy is received at a very low cost/kWh, usually much lower than they could produce it with their own generators. Also these nations have not much use for their spare balancing capacity, as their RE build-outs proceeded at a much slower pace than Germany’s. This mode of operation cannot be long-term, as these nations ultimately will have greater RE production, and greater need of their own balancing capacity, i.e., Germany will have to make additional investments in balancing capacity.
Denmark Using Foreign Grids For RE Balancing: For more than 35 years, Denmark has used the grids of Sweden and Denmark, each with significant hydro-plant capacity, MW, for balancing its excessive energy during high wind energy periods.
As Denmark aims to increase its wind energy from just over 30% of its total generation in 2012 to 50% in 2020, mostly from offshore, Denmark will become an energy exporter during almost all hours of the year, but the wholesale export prices are about 0.25 DKK/kWh x 13 eurocent/DKK = 3.25 eurocent/kWh, whereas offshore wind energy costs about 1.05 DKK x 13 eurocent/DKK = 13.65 eurocent/kWh, 4.2 times greater. Danish climate and energy minister Petersen has threatened to cancel 1,000 MW of offshore wind turbine plants, unless their energy prices are lowered.
The difference in price is via the green electricity tax, the PSO levy, to the tune of 1.3 billion DKK/yr, mostly paid by Danish households, instead of industry, as not to impair industrial competitiveness. How going to 50% wind energy is a wealth generator for Denmark remains a mystery.
At present, the hydro plants of Norway and Sweden act as a balancing and storage utility for Denmark. The more wind energy Denmark generates, the more it needs that "battery". Denmark pays for this by delivering energy at low grid prices and absorbing it at high grid prices. The exact $ amount appears to be a state secret; it has been estimated at well over 1 billion euros some years ago. As much of the additional Danish wind energy will be offshore, that 1 billion likely will double or triple. Danish households already have the highest electric rates in Europe; 30.45 eurocent/kWh in December 2013.
In 2002, Denmark had so little winds that during 54 days no wind energy was produced, but the wind turbines were consuming energy, a.k.a., parasitic energy, just the same. There likely were an additional 50 or so days with minimal energy production.
Luckily, Denmark's OTHER coal, gas, nuclear, generators, and the hydro plants of Norway and Sweden provided the shortfall, but with Denmark's current annual wind energy percent on the grid, this would be a significantly greater effort.
Whereas, weather systems tend to cover large geographical areas, at that time, the lack of wind energy generation was noticed mostly in Denmark, as other nations had much fewer wind turbines, which would not be the case at present and going forward. Something for many nations to think about for planning purposes.
Spain Using Its Own Grid For RE Balancing: Spain, with an “island” grid with weak connections to nearby nations, uses gas-fired OCGTs and CCGTs, and pumped storage hydro plants to balance its RE. Spain has a feed-in tariff regime similar to Germany, but, instead of surcharges on household electric bills, the net feed-in tariff costs were added to the national debt, causing the people to think RE as having no cost!!
This grand deception, approved with much crowing by RE aficionados, to promote Spanish-style RE build-outs, added to other economic mismanagements/deceptions, ultimately caused an unemployment rate of 25% for workers aged 25 and over, and 50% for workers under 25. As Europe is in near-zero population and near-zero economic growth, it will be decades before Spain will have an overall unemployment rate of 8%, the same as in June 2007.
Balancing, Adequacy, Grid Expansion Costs due to RE on the Grid: The above EEG surcharges do not cover any costs and energy losses, with attendant CO2 emissions, for:
- “Dealing with”, i.e., balancing, the variable energy by the OTHER generators (increased start/stop operation, increased 3,600 rpm spinning operation, increased part-load-ramping operation), and having an increasing capacity, MW, of generators for balancing.
- Providing "capacity adequacy”, i.e., having sufficient capacity of a suitable mix of generators, staffed, fueled, maintained in ready-to-serve status, during ALL hours of the year, especially during the 65% of the hours of the year PV solar energy is minimal, and during the 30% of the hours of the year wind energy is minimal.
- Grid expansion to connect distributed wind turbine plants to the grid, reinforce the grid to distribute the energy, and maintain the required stability. The grid capital cost ranges from about 15% to 30% of the installed capital cost of the wind turbines, depending on the condition of the existing grid, extend of grid modifications, and the distance of the wind turbines from population centers. See URL for cost examples.
These costs have led to the OTHER generators, utilities and grid owners experiencing reduced profits and operating losses. When RE was insignificant, those losses were minor and absorbed, but as RE increases those losses increase and cannot be absorbed without consequences, i.e., providing them with proper compensation.
Whereas, claims are made by RE promoters regarding RE reducing grid prices, they cannot be backed up or refuted. Heavily-subsidized RE, with priority access to the grid, may artificially depress costs in one area, such as grid prices, but increase costs in other areas that are not obvious and not traced.
The extra costs to grid owners and generator owners to deal with RE are spread out over the entire German energy system and are difficult to trace, as historic accounting systems are not set up for that purpose. A whole new system of identifying, measuring and recording of costs will be required for proper cost accounting and subsequent compensation.
NOTE: Wind turbine energy to the grid = Production - Parasitic energy. At low rotor RPM, the parasitic energy may become greater than the production, and energy is drawn from the grid for wind turbine electrical requirements. In areas with low CFs, as in Germany, the parasitic energy is a significant part of production. See URL.
NOTE: Economically-viable, utility-scale, energy storage would enable storing energy for later use, as with pumped hydro, but such storage has not been invented and would take 10 - 20 years to deploy AFTER its invention.
Japan, which imports almost all of its energy, has installed much solar capacity, MW, but its grid cannot balance the energy. As a result, the government will spend $204 million on the world's largest battery bank to stabilize the flow of solar energy. This is the first battery bank of this size to be installed at a utility substation. Capable of storing 60 MWh of energy, it will be operational by early 2015. The battery operating range will be about 20 - 90% of battery capacity, i.e., the usable storage is 42 MWh of energy, to ensure lives of at least 7 years. The battery DC inflows of solar energy will be variable, the AC energy outflows will be controlled within grid required standards. A to Z system losses will be about 15 - 20%. It will be located on the island of Hokkaido where inexpensive land is attracting many solar projects.
CO2 Emissions and the EEG Program: Germany's annual CO2 emissions will be INCREASING as more near-CO2-free, nuclear plants are decommissioned and replaced with CO2-emitting, coal-fired plants, during the next 10 - 20 years, even though RE, as a percent of total generation, would increase, which would further increase the above-mentioned losses, and require higher EEG surcharges on household electric bills. When standing in a deep pit, it is wise to stop digging.
I, and many others, have been writing about this for some years, and it seems to have finally sunk in at the highest level.
REVISING THE EEG PROGRAM IS LONG OVERDUE
Revising EEG Mandates and Targets: The newly-formed German coalition government wants to revise the share of RE in the German energy generation mix to be 40% to 45% by 2025, instead of the current 50% by 2030, and to be 55% to 60% by 2035, instead of current 65% by 2040, to increase flexibility. The new German Economics and Energy minister, Sigmar Gabriel, stated green energy mandates have become such an albatross around the neck of industry that they could lead to a "deindustrialization" of Germany.
Revising EU Framework on Climate and Energy: On 22 January 2014, as part of the new EU framework on climate and energy, the European Commission proposed a 40% reduction target (not a mandate) for greenhouse gas (GHG) emissions below the 1990 (Kyoto) level, from all sources, not just energy generation, by 2030.
The European Council will discuss the proposal during the next 12 months. If approved (which may not happen), it will be offered as a conditional pledge during the international negotiations on climate change in Paris in 2015.
EEG Program Not Cost-Efficient and Ineffective: While the German coalition government is in the process of revising the Renewable Energy Sources Act (EEG), the Commission of Experts on Research and Innovation (Expertenkommission Forschung und Innovation – EFI), recommends to abolish the EEG program.
The EFI claims, the EEG program was neither a cost-efficient climate protection tool, nor did it have a positive effect on innovation. The study team presented its 2014 annual report, in German, to Chancellor Merkel on 26 February, 2014. The English version will be issued in June 2014.
Revising the EEG Program: If by 2025, Germany had 40% to 45% of electrical energy from RE, the EEG surcharge, based on its historic progression, would likely be about 24 eurocent/kWh, or about 24/5.5 = 4.4 times utility energy cost, based on current feed-in tariff schedules, and current capacity expansion plans.
However, to contain excessive costs, the German coalition government is revising the EEG program by introducing capacity expansion caps/corridors, and cuts in financial support for onshore wind energy, offshore wind energy, solar energy and biomass energy. See URLs.
Reducing Feed-in Tariffs and RE Build-outs: To limit the damage of RE build-outs to German’s heavy industries, traditional utilities, and other businesses, Germany’s government is planning to reduce EEG feed-in tariffs, effective at the start of 2015, from a weighted average of 0.1730 euro/kWh in 2013, to a weighted average of 0.12 euro/kWh in 2015.
This reduction will apply only to NEW RE systems under the EEG law, i.e., future INCREASES in EEG surcharges on electric bills may be only SLIGHTLY less than they would have been, because EEG payments to generators, etc.:
- Will be decreasing for systems prior to start of 2015, per existing feed-in tariff schedules.
- Will be increasing for systems built in 2015 and after, per new feed-in tariff schedules.
EEG surcharges on electric bills, 23.6 billion euros (est.) at about 24.5% RE in 2014, will continue to increase as more RE is added by 2030, taking into account the proposed decreased feed-in tariffs at start of 2015.
Also, future build-outs, MW, of solar, wind, etc., will be constrained within MW corridors, with the feed-in tariffs adjusted to stay within the corridors.
This is not a trivial reduction, as it will significantly slow the build-out of RE systems all over Germany, including offshore wind turbines plants. How that will enable Germany to meet its 2030 CO2 targets is a technical mystery, especially with additional coal plants coming on line, and nuclear plants retiring.
RE businesses and organizations will be howling, as if THE world is coming to an end, whereas, in fact, it is just a part of THEIR world, but there was a sigh of relief from other households and businesses, as sanity is starting to prevail after all.
NOTE: The only quick way for easing the burden on households is to eliminate the 16% VAT on electric bills.
ESTIMATED SURCHARGE AND COSTS by 2030 UNDER REVISED EEG PROGRAM
If the above proposed weighted average feed-in tariff of 0.12 euro/kWh were implemented at the start of 2015, an estimate of the EEG surcharge on household electric bills could be calculated as follows:
Estimated EEG Surcharge: German total generation was 629,000 GWh in 2013. Assume it remains unchanged during the 2015 – 2030 period.
Germany’s target is 50% RE by 2030 = 314,500 GWh, of which about 23.4% RE in 2013, or 147,100 GWh is already in place. Assume 24.5% RE, or 154,105 GWh at end 2014, i.e., about 160,395 GWh is to be added during the 2015 – 2030 period.
Extra cost/kWh = 12 – 5 = 7 eurocent/kWh, assuming an average wholesale price at 5 c/kW for the 2015 - 2030 period. Much of the new wind energy will be offshore, and its unsubsidized energy cost is likely to be 15 - 20 eurocent/kWh.
Approximate EEG surcharges MOSTLY ON HOUSEHOLD ELECTRIC BILLS = 0.07 x 160,375,000,000 kWh = $11.2 b euros; this item increases from zero at the start of 2015 to 11.2 b euros at the end of 2030.
This amount is in addition to the 23.6 b euros (est) in 2014, say $24.5 b euros in 2015, which will be slowly declining, per existing feed-in tariff schedules.
Estimated RE and Capital Cost: The Federal Ministry for Economic Affairs and Energy (“BMWi”) has drafted a first working vision of a revised German Renewables Energy Sources Act (EEG). This first draft led to further clarification of the EEG 2.0 program, i.e. the reform of the EEG.
The draft revision includes 2030 capacity targets, GW, for new onshore wind, new offshore wind, new solar, new biomass, but no targets for hydro and geothermal energy.
Germany’s total generation was 629,000 GWh in 2013. Assume it remains unchanged during the 2015 – 2030 period.
The new RE production, GWh, in 2030 is estimated as follows:
New wind onshore = 2.5 GW/yr x 15 yrs x 8,760 hr/yr x CF 0.20 = 65,700 GWh
New wind offshore = 15 GW by 2030 x 8,760 x 0.45* = 59,130 GWh
New solar = 2.75 GW/yr x 15 x 8,760 x 0.10 = 36,135 GWh
New biomass = 1.5 GW by 2030 x 8,760 x 0.70 = 9,198 GWh
Total new RE = 170,163 GWh
* The Alpha Ventus offshore project, near Borkum, North Sea, 12 units, 5 MW each, 600 ft tall, capital cost 250 m euro, or 4,200 euro/kW, had a CF of 0.482 over a 3-yr operating period (2011, 2012, 2013).
* Windpark Noordoostpolder, onshore/near-shore, Ijselmeer, 48 units 3.6 MW, plus 38 units 7.58 MW = 450 MW, capital cost 1 b euro, or 2,220 euro/kW, CF of 0.355.
The proposed new GW, installed per growth targets, will produce a few percent in excess of the above 160,395 GWh, however, performance degrades with age.
The capital cost of the proposed new RE capacity is estimated as follows:
New wind onshore: Cost 2 million euro/MW; Capacity 37,500 MW; Capital cost 75 b euros.
New wind offshore: Cost 4 million euro/MW; Capacity 15,000 MW; Capital cost 60 b euros.
New solar: Cost 2 million euro/MW; Capacity 41,250 MW; Capital cost 82.50 b euros.
New biomass: Cost 2.5 million euro/MW; Capacity 1500 MW; Capital cost 3.75 b euros.
Total new capital cost by 2030 = 221.25 b euros.
The new capital cost excludes:
- EEG supplementary payments, 4.2 b euros in 2013, likely increasing in future years. See above.
- Onshore/Offshore transmission system build-outs, about 75 b euros, if buried on shore.
- Capital costs and O&M costs for balancing and backup build-outs, billions of euros, as Germany cannot continue to use neighbors' grids for that purpose.
- Capital costs and O&M costs for maintaining "capacity adequacy" of conventional generating units for when wind and solar energy are minimal.
The end result will be, absent utility-scale, economically-viable energy storage (not yet invented), a capacity of RE systems that produces expensive energy, plus a capacity of conventional energy systems for “capacity adequacy”. The levelized cost of such a dual energy system will be about 2 – 3 times greater than without the RE systems.
Photo Credit: Germany and Renewables Cost/shutterstock
Willem Post, BSME'63 New Jersey Institute of Technology, MSME'66 Rensselaer Polytechnic Institute, MBA'75, University of Connecticut. P.E. Connecticut. Consulting Engineer and Project Manager. Performed feasibility studies, wrote master plans, evaluated and performed designs for incineration systems, air pollution control systems, utility and industrial power plants, and integrated energy ...
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