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The Myth of the German Renewable Energy 'Miracle'

Is it true that Germany has a grid that is superior to that in the U.S. and the U.S. should strive to mimic the success of the German grid?

The addition of substantial levels of wind and solar resources to an electric energy grid raises significant reliability concerns at the transmission system level because these resources operate intermittently and, unlike other generating resources, they do not spin in synchronism with the grid.  An electric grid is a large complex machine that must have many needs attended to in order to function properly.  Dependable rotating generation operating in synchronism across the power system enabled the evolution of the modern grids.  Without due regard to the issues of intermittency, voltage control, frequency control, and grid inertia an electric grid cannot operate reliably and stably.  If the first world continues to expect affordable electricity, when we want it and in whatever quantity we want, these needs must be met. 

In August of 2017, the U.S. Department of Energy issued a report investigating the reliability impacts of renewable energy resources and other recent developments on the electric grid.  In the months leading up to its release, the German grid was held up as the model that the U.S. should emulate.  Before seeking to do so, many questions should be explored.  What levels of intermittent and asynchronous renewable energy (solar and wind) has Germany integrated into its electric system?  Is it true that Germany has a grid that is superior to that in the U.S. and the U.S. should strive to mimic the success of the German grid?  Should the US initiate a corresponding renewable energy miracle?  We would argue that renewable energy in Germany is not at the high levels we have been led to believe, that the German grid is not superior and that there has been no miracle to be emulated.  

Renewable Energy in Germany

Although Germany has a higher percentage of renewable energy resources than the U.S., the percentage is nowhere near the level that the U.S. public has been led to believe.  Statistics from 2016 show that renewable energy resources in the form of onshore wind, offshore wind, hydroelectric power, biomass, solar and waste provided 29% of Germany’s electric energy in 2016 as shown in Figure 1. [1]  Wind and solar amount to slightly over half of the total renewable energy resources (17.8% of Germany’s total energy resources) – with biomass a significant portion of the total.  Coal in the form of hard coal and lignite provides 40% of energy, nuclear just over 13% and natural gas is at 12%.  Thus, conventional resources in Germany are still generating two-thirds of the country’s electric energy requirements.

Figure 1 Share of energy sources in gross German power production in 2016. Data (preliminary) AG Energiebilanzen 2017. Power production in terawatt-hours (TWh)

This level of renewable energy resources is within the range of what the National Renewable Energy Laboratory (NREL) study of 2012 said could be feasibly integrated into the U.S. grid by the year 2050.  That study also said that additional dispatchable generating capacity would need to be added to accommodate intermittency and the electric grid itself would need to be much more flexible requiring technology advances, new operating procedures, different business models, and different market rules than are in place today. [2] 

As the NREL 2012 study noted, other issues arise as the percentage of renewable energy resources on the grid increases.  In Germany’s case, as the percentage of renewable energy resources in the form of wind (both onshore and offshore) and solar has increased, Germany’s carbon emissions have increased.  This is because conventional resources must be kept on line to provide stability to the grid due to wind and solar’s intermittency.  As Germany phases out its nuclear units, those conventional resources increasingly are coal.  In addition, solar resources and wind resources are often producing at maximum output at times when the grid doesn’t need them – resulting in excess electricity supply on the grid – and pushing the market price of power to very low levels, even negative  (negawatts).  [3, 4]

Is the German Grid Superior?

The short answer is no.  Germany does not have an independent standalone high voltage grid (transmission system) but rather is part of the European interconnected grid.  In evaluating reliability impacts associated with penetration levels of renewables, the focus should be on overall grid comparisons.  It is not appropriate to expect to achieve grid-wide that which can only be achieved within a “dependent” subset of the grid.  The German portion of the grid is supported by extensive hydroelectric resources in Denmark and coal resources in Poland.  The interconnected grid as a whole does not have anywhere the same level of renewable penetration as is found in the German portion.  The 2016 statistics show that 75% of the generation within the European interconnected grid in 2016 was conventional thermal and nuclear.  Renewables in the entire European interconnected grid were 12% hydroelectric, 10% wind, and 4% other. [5]  Thus, Germany relies on (or “leans on”) the conventional rotating machinery in neighboring counties in order to ensure continuous, reliable operation. 

Is the German grid more reliable?

Data used to showcase the German grid as more reliable than the grid in the U.S. generally use SAIDI (System Average Interruption Duration Index) and SAIFI (System Average Interruption Frequency Index) statistics, which are data on the distribution system.  These statistics measure interruptions at the end-use customer.  The reliability concerns around renewable resources, however, occur at the bulk system level.  Thus, these statistics do not demonstrate that the “German” bulk grid is more reliable as they do not measure bulk system reliability. 

Bulk system reliability applies to the high voltage system – the transmission system that consists of large high voltage wires that move power long distances – from generating stations to load centers.  Planners constantly evaluate bulk system reliability in order to prevent voltage collapse, instability, cascading outages and uncontrolled separation.  These undesirable conditions are rare, result in blackouts over wide areas and make national and international news.  For example, the Northeast Blackout of 2003 impacted 55 million people and is estimated to have caused $6 billion in damages as well as at least 11 deaths.  [6]  

Distribution system reliability, such as measured by SAIDI and SAIFI, is very different from bulk system reliability on the transmission system.  The overwhelming majority of customer outages occur because of issues on the distribution system.  These issues are the result of conditions including weather, falling trees, animals and equipment failures.  These minor outages do not represent significant risks to bulk grid stability.  Such outages are inconvenient for impacted businesses, homes and neighborhoods but they do not generally have the associated large economic impacts and safety risks associated with widespread grid outages.  They are more typified by events like a lightning strike causing a neighborhood to go dark for a few hours, a car running into a power pole, snakes nesting in a power switchyard or an old transformer failing.  Relying upon measures such as SAIDI and SAIFI to evaluate bulk system reliability is like evaluating the foundation of a bridge based on the performance of its guardrails. 

At present, tools are not available to quantify bulk system reliability.  Thus, comparing the reliability of bulk systems of particular countries or across a continent is not feasible. 

Does Germany have superior distribution systems?

This question is not really relevant to the discussion as to whether Germany has become a renewable energy miracle or whether its bulk system is reliable.  However, since studies and reports on studies tend to confuse transmission system reliability with distribution system reliability, it is worth addressing in this article.  Some renewable advocates tout stereotypical German engineering prowess in order to spur greater renewable efforts in the US as well as to dismiss valid reliability concerns from U.S. utility industry engineers and planners.  While recognizing that Germany has lower outage rates as measured by SAIDI and SAIFI, a careful evaluation is needed to determine to what degree the lower outage rates may be attributable to other factors.  Additionally evaluation of distribution performance must be tied to costs as well.

SAIDI is calculated in various ways by differing utilities such that comparisons are challenging and specific benchmark studies must be done to get reasonable comparisons.  However, it is clear that Germany does have significantly lower outage rates than are found in the US.  What is also clear is that Germany spends considerably more per kWh or load (kW) served on the transmission and distribution systems.  German consumers pay about 7 cents per kWh exclusive of energy for just the grid while in the U.S. the number is half that.  (German households on average use about 30% of the amount of electricity as American households.) [7]

Utilities in the U.S. made decisions regarding transmission and system improvements by balancing reliability, cost, and public responsibility.  For example, one way for U.S. utilities to improve SAIDI is to proactively replace aging transformers at a younger age than is the current practice.  There are tradeoffs, however.  Very aggressive replacements will minimize outages but will be very expensive.  Keeping aging transformers in service longer will reduce costs and minimize the environmental impacts associated with the delivery and installation of new equipment.  Balancing such considerations will likely vary significant from utility to utility, however depending on the values of the electric consumers.  Varying policies can lie within the spectrum of good engineering practice and none are objectively superior. 

Environmental factors play a significant role as well.  The outages on the distribution system do not impact bulk system reliability and are generally localized – and do not generally have serious economic and safety consequences.  Because Germany’s size, topography and location differ significantly from the U.S., it is not reasonable to expect U.S. utility distribution system reliability to achieve the same level.   Germany is slightly smaller than the state of Montana with much higher load density making it easier to provide networked backup service.  Most of the U.S. has orders of magnitude more lightning activity than Germany which also does not experience hurricanes. In addition, it is not clear that most U.S. customers, who appear to be more aware of what they are paying for electricity than German customers, would want to incur significantly higher costs to reduce occasional distribution system outages. 

Given such differing environments and drivers it should be expected that Germany and the U.S. might differ as to distribution level outage statistics. 

Conclusion

There is a widespread belief that Germany has demonstrated that large amounts of intermittent renewables can be easily integrated without adversely impacting the reliability of the bulk power grid.  This article has noted that such a conclusion is not supportable:  1) Germany has not integrated as high a level of renewables as many suppose, 2) Germany is part of and relies upon a larger integrated grid which contains even lower levels of renewable resources and 3) Germany has incurred nontrivial transmission costs, reliability concerns, and marketplace dislocations associated with their efforts to integrate renewables.

Much of this erroneous belief has been based on inappropriate comparisons of outage statistics between Germany and the U.S.  The large majority of outages comprising SAIDI values are limited to the distribution system.  Improving SAIDI (which means decreasing SAIDI) within the U.S. will not serve to decrease bulk system/transmission reliability risks.  Increasing asynchronous intermittent generation resources will increase bulk reliability risks and the emergence of such risks will not be well observed through monitoring SAIDI numbers in the U.S. or Germany.  Germany’s physical size and location also contribute significantly to the differences in outage statistics between the two countries.  Finally, it was noted that electric utilities within the U.S. would probably have to incur significantly greater costs than warranted by good engineering practice in order to replicate outage indices in Germany. 

Hopefully, we can lay to rest the myth that Germany has demonstrated that higher levels of renewable energy resources can be integrated into a bulk transmission grid without concern for bulk reliability impacts or emission impacts.  With big challenges ahead of us, how do we stop misleading information and comparisons from impacting public policy?  There are serious concerns about grid reliability that many in the public, press and academic institutions are working hard to discount and diminish.  As we address the concerns and issues in front of us, we need to ensure that plans for the U.S. grid continue to balance economics, reliability and public responsibility. 

References:

1.  Appunn Kerstine, Felix Bieler, and Julian Wettengel, Clean Energy Wire, “Germany’s  energy consumption and power mix in charts,” https://www.cleanenergywire.org/factsheets/germanys-energy-consumption-and-power-mix-charts, August 1, 2017. 

2.  Mai, T.; Sandor, D.; Wiser, R.; Schneider, T (2012). Renewable Electricity Futures Study: Executive Summary. NREL/TP-6A20-52409-ES. Golden, CO: National Renewable Energy Laboratory.

3.  Martin, Richard, Germany Runs Up Against Renewable Limits, MIT Technology Review – Sustainable Energy, https://www.technologyreview.com/s/601514/germany-runs-up-against-the-limits-of-renewables/, May 24, 2016. 

4.  Moore, Stephen and Kathleen Hartnett White, Fueling Freedom:  Exposing the Mad War on Energy, Washington, D.C.:  Regnery Publishing, 2016. 

5.  Electricity production and supply statistics, Eurostat Statistics explained, May 2017, http://ec.europa.eu/eurostat/statistics-explained/index.php/Electricity_production_and_supply_statistics. 

6.  Minkel, J.R., The 2003 Northeast Blackout - Five Years Later:  Tougher regulatory measures are in place, but we’re still a long way from a ‘smart’ power grid”, Scientific American,  https://www.scientificamerican.com/article/2003-blackout-five-years-later/, August 13, 2008. 

7.  Clean Energy Wire Fact Sheet, What German households pay for power, https://www.cleanenergywire.org/factsheets/what-german-households-pay-power, February 16, 2017.

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