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In this issue:

Welcoming the policy brief series: German Ministry for the Environment and U.S. Department of Energy

Looking ahead: The need for a modern and flexible power system

Integrating renewables: Grid modernization and expansion

Delivering electricity when it is needed: Flexible power stations

Meeting peak electricity use: Demand response

Capturing electricity: Storage technologies

The future: Challenges lie ahead, but they can be met

For the inaugural edition of this series, C2ES and Ecofys have invited the following guest editorials from senior officials of Germany and the United States.

Welcoming the policy brief series:
German Ministry for the Environment and U.S. Department of Energy

Restructuring our energy systems to achieve sustainable, affordable and secure energy supply is one of the major challenges and opportunities of our time. This applies equally to the US and to Germany. Both the US administration and numerous US states have launched progressive initiatives on developing sustainable energy systems. After the Fukushima nuclear disaster, the German government adopted the "Energiewende." This Energiewende - the transformation of our energy system - is a comprehensive reform program for our energy markets based on the expansion of renewable energies, integration of electricity grids and improved energy efficiency.

On the road to an environmentally sound energy system it is crucial that we share views and experience internationally, and that we learn from each other. Since 2008 the Transatlantic Climate Bridge has provided a forum for dialogue between the US and Germany on climate and energy policy. This transatlantic initiative addresses key aspects of climate change and energy policy by promoting exchanges on political and technological solutions. It covers issues such as emissions trading, incentive systems for renewable energies, technological trends and financing for renewables and energy efficiency measures.

With the US-German Clean Energy Leadership Series we are now launching a series of dialogues to provide a clear picture of key elements of Germany's Energiewende and innovative developments in the US. One focal area is to identify best practices to enable both countries to develop new ideas for our mutual benefit. Our cooperation partners, the Center for Climate and Energy Solutions and Ecofys, will publish a new contribution to discussions every two months. We look forward to a lively exchange between stakeholders on both sides of the Atlantic.

Dr. Karsten Sach
Deputy Director-General, International Cooperation
German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety

In June 2013, President Obama put forward his Climate Action Plan, outlining a wide array of steps his Administration is taking to cut carbon pollution and develop and deploy clean energy technologies in the United States and globally. The plan touches all aspects of the U.S. economy, from tackling methane emissions in agriculture, energy, and waste management to reducing carbon pollution from power plants and heavy-duty vehicles, to adapting to the consequences of the climate changes we are already seeing.

The U.S. Climate Action Plan also recognizes the global nature of the climate problem, and outlines a series of international actions the U.S. will take to support a global solution. For example, working with other major countries around the world, the U.S. launched and continues to strongly support the Major Economies Forum and the Clean Energy Ministerial. This latter initiative convenes energy ministers from major economies and other energy leaders around the world to advance technologies and policies to enhance energy efficiency in buildings, build a 21st century electricity grid, improve energy access, and more.

The United States’ partnership with other countries actively leading in clean energy, especially Germany, has never been more important. For decades, Germany has championed the research, development, and deployment of clean energy technologies and has backed those technologies with innovative policies. A continued, robust transatlantic dialogue can continue to benefit us both – as mutual trade partners, research collaborators, and allies in developing policy responses to climate impacts and emission reductions. This US-German Clean Energy Leadership Series provides a constructive and informative contribution to this vital dialogue.

Dr. Jonathan Pershing
Deputy Assistant Secretary for Climate Change & Deputy Director, Office of Policy
US Department of Energy

The views expressed do not necessarily represent those of C2ES and Ecofys.

Looking ahead: The need for a modern and flexible power system

Germany and the United States are expanding their use of renewable electricity generation. This development has several major benefits, but it also poses challenges for the electrical system, including the mismatched availability of renewable sources and electricity consumption. This brief highlights how different approaches in the two countries are successfully addressing these challenges. With continued focus on these issues, Germany should be able to meet its target of 80 percent renewables by 2050. With major effort, reform, and innovation, the United States too has the potential to reach this level, according to a study by the National Renewable Energy Laboratory (NREL).

Both Germany and the United States have been working to increase the share of renewable energy on their electrical grids to address energy security, climate change, and air pollution. Germany currently generates about 23 percent of its electricity through renewable sources, and the current figure in the United States is about 13 percent. The share of renewables is growing in both Germany and the United States, though much more quickly in Germany (See Figure 1). Germany has set a target of generating 35 percent of electricity demand from renewable sources by 2020 and 80 percent by 2050. Unlike Germany, the United States does not have a nationwide renewable electricity target, though 30 individual states and the District of Columbia do, adding up to a cumulative target of about 18 percent by 2025. California has a particularly ambitious target, which requires the state’s largest utilities to deliver 33 percent renewable electricity (not including generation from large, old hydroelectric plants) by 2020. NREL has developed scenarios showing that the United States could potentially generate 80 percent of its electricity from renewables by 2050 in its Renewable Electricity Futures Study (2012), but would require significant policy changes to do so.

Figure 1: Renewable electricity generation in Germany and the US (Sources: AGEE-Stat, Development of renewable energy sources in Germany 2012; EIA, Electricity)

Expanding renewable energy mainly from wind and solar resources (See Figure 2) will pose challenges because these are inherently intermittent. NREL projects that the United States will need to increase its solar generation between 25- and 60-fold, and its wind generation from between 7- and 10-fold to reach 80 percent renewables. Germany has a smaller mountain to climb, but its challenge is still considerable. According to the German Aerospace Center (DLR), to meet its 2020 target Germany will have to increase both its wind and solar generation capacity by over 150 percent. To reach an 80 percent share of renewable electricity in 2050, solar generation will have to increase between two and three times compared to today’s levels, and wind capacity will have to increase somewhere between two and four times.

Figure 2: Growth in solar and wind generation share in California, Texas, the U.S., and Germany (Sources: AGEE-Stat, Development of renewable energy sources in Germany 2012; EIA, Electricity; EIA, States)

The United States and Germany will have to continuously upgrade their electricity systems to keep pace with this wave of new generation. Specifically, the electrical transmission system must be designed to link renewable generation to locations with high electricity demand. Moreover, the intermittency of renewable sources (for example, solar is impeded by clouds and unavailable at night) poses a challenge during mornings and evenings when demand is high and renewable generation is not fully available (See Figure 3).

Figure 3: Typical daily load and intermittent generation in Germany (May 15th, 2013) (Sources: EEX Transparency Platform; Agora Energiewende)

The United States and Germany are successfully addressing the challenges of power system reliability and stability through a variety of means that aim to make the power system more flexible. Helpful approaches include, for example, grid modernization and expansion, flexible power generation, demand response, and energy storage.

Integrating renewables: Grid modernization and expansion

Grid expansion has two major benefits to renewable integration. First, new transmission lines link sources of electricity generation, such as wind and solar farms, to points of consumption. Second, interconnecting large regions allows renewable resources located in different areas to balance each other. For example, the power system can use wind farms from distinct regions if the wind is blowing at different locations. This can be combined with sun, which also is available to a different extent in different regions. Grid modernization also improves communication among consumers, generators, and utility operators, allowing more refined dispatch of resources.

Best practice in the US: renewable Energy Transmission Initiative (RETI)

California has long been a leader of renewable energy integration in the United States, and currently has one of the more ambitious renewable electricity requirements in the country: 33 percent by 2020. Recognizing that regions of the state with the best potential for wind and solar generation are far from cities with high electricity demand, the California agencies responsible for electric reliability joined the publicly-owned utilities to form the Renewable Energy Transmission Initiative (RETI) in 2007. RETI is an open and transparent effort to help identify the transmission projects needed to accommodate the state’s renewable electricity goals. In Phase 1 of RETI’s work, which ran from 2007 to 2009, participants developed a study methodology and input assumptions to identify Competitive Renewable Energy Zones (CREZ). These CREZ have high densities of high-quality renewable resources, and planning around them minimizes the number of transmission facilities necessary to access and deliver sufficient renewable energy to meet state goals. In Phase 2, which ran from 2009 to 2011, participants refined CREZ determinations based on physical evaluations, added out-of-state resources to the analysis, and produced a statewide transmission plan to optimize the pathways between renewable resources and large cities.

Best practice in Germany: Consultations for the annual Grid Development Plan

Modernizing and expanding transmission grids is necessary for various reasons – ultimately, it is indispensable for making the German energy transition possible. The annual Grid Development Plan describes the necessary measures over the next ten years, indicating how and where the grid needs to be modernized and extended. The plan is developed on an annual basis by the four Transmission System Operators (TSOs) 50Hertz, Amprion, TenneT and TransnetBW.

However, expanding the grid is only possible if all relevant parts of the society support this endeavor. Public opposition to new transmission lines has been a challenge in the past.

Therefore, since 2012 the Federal Network Agency (BNetzA) has given a wide variety of stakeholders the opportunity to introduce their viewpoints on grid modernization and expansion. For each plan, BNetzA establishes three consultation periods for stakeholders to express their opinions. In 2013, more than 350 comments and statements from institutions, municipalities, associations, local initiatives and individual citizens have been submitted. Their input has been published and evaluated by the TSOs and has effectively influenced the expansion of the development plan; the TSOs explicitly state how the comments and suggestions have been addressed in the development plan.

By effectively including the public in the process of crafting the development plan, the TSOs have made measures to modernize and extend the grid more effective and efficient.

Delivering electricity when it is needed: Flexible power stations

Modern, flexible power plants (especially natural gas power stations, hydropower, and combined heat and power plants) can complement intermittent renewable energy sources by delivering electricity when these sources are unavailable. Renewable sources themselves can also be improved to increase compatibility with the electricity system, for example by enabling them to react to changing grid conditions.

Best practice in Germany: Retrofit of PV power plants: Solution of the “50.2 Hz problem”

Power grids are sensitive: at any given time, energy demand and energy supply must be in balance. The frequency in the grid reveals whether this is the case. In Europe, a stable grid operates at 50 Hertz (Hz). As the frequency increases, this indicates that more power is being fed into the grid than is being consumed. Slight fluctuations are common and are dealt with by the operators of electricity networks. But if the frequency is above the target value of 50.0 Hz (e.g., 50.2Hz), many power plants (e.g. photovoltaic systems) will automatically switch off at the same time. However, if a large number of PV-plants are switched off at the same time, a large capacity shortfall might result in a black out. The probability of this happening is extremely low because a very high level of security of supply is guaranteed in Germany and Europe (the “continental synchronous area”), but its relevance is increasing.

A consortium of government agencies, industry and research organizations studied the problem and developed a number of solutions.

Since 2012, the electric output of PV systems is externally controlled, and it is limited only to extent necessary to ensure grid stability. That is, PV systems no longer automatically switch off for minor grid adjustments. For existing plants, this is possible via a mandatory retrofit. This “soft steering” has several advantages: there is no negative impact on the system operator (no disruption of plant operation), the upgrade for plant owners is free (funded by the government), the distribution system operator (DSO) organizes the upgrades and recovers the costs, and there is no loss of income for PV system owners.

Meeting peak electricity use: Demand response

In addition to controlling supply as a means to integrate renewables, utilities can use demand response and other techniques to control demand. Utilities might seek to match demand with supply by charging different prices for electricity at different times, or enrolling large customers in demand response programs wherein the customer pays a discounted electric rate in exchange for sharply curtailing demand in response to signals sent by the utility.

Best practice in the United States: Smart end-use energy storage and integration of a renewable energy project

By the end of 2012 the Bonneville Power Administration (BPA) had more than 5 GW of wind generation connected. To optimize the integration of this resource, BPA and the consulting firm Ecofys set out to identify new cost-effective demand-side sources of flexibility. The project involved the development and demonstration of “responsive thermal end-use technologies” capable of storing energy as heat that can be released later. The controllable end-use loads included water heaters and space heaters with electric thermal storage installed at residential and small commercial sites, commercial building heating, ventilation and air conditioning (HVAC) controls, and freezers/chillers in cold storage warehouses at industrial sites. The technologies enable novel demand response strategies: for instance, they can support BPA in balancing demand and supply in the grid, reducing the (costly) need for BPA to hold high night-time reserves. Taken together, these measures improve transmission and distribution efficiency.

The project managed the procurement and implementation of approximately 1.5 MW of responsive load in the service territories of seven consumer owned utilities.

Capturing electricity: Storage technologies

From a theoretical standpoint, energy storage is the ideal enabling technology for intermittent renewables since it can simply store electricity during peak generation and release it during peak demand. As shown in Figure 3, these peaks are typically not naturally aligned and storage can help shift production to meet demand. However, new electricity storage projects are generally prohibitively expensive, though costs are trending downward. Possible technologies include hydroelectric pumped storage, power-to-gas, power-to-heat, batteries, flywheels, and compressed air.

Best practice in the US: Compressed air energy storage, Texas

Texas has considerable wind resources, but they are highly variable. An option for other regions in the United States with variable wind generation, such as the Northwest, is to balance wind generation with hydroelectric power. Since this option is generally unavailable in Texas, utilities there are experimenting with innovative forms of energy storage. One of these is the proposed Bethel Energy Center, which will use a combined compressor/generator to pump air into a salt dome cavern when there is a surplus of energy available on the grid. The built-up air pressure can then be used to bring the generator to its maximum output of 317 megawatts to meet demand. A combined wind and storage project should be able to deliver electricity at costs that are competitive with other forms of generation, with the flexibility benefits of traditional thermal generation.

Best practice in Germany: The virtual power plant

The Harz region hosts a project in which various partners, funded by the Ministries of Economy and Environment, investigate and demonstrate how a high share of renewables can provide stable and reliable power supply. A central control room at the renewable energy combined-cycle power plant in the Harz region receives real-time information on the energy situation in the region. This control room combines and coordinates renewable energy producers, controllable appliances and energy storage (pumped storage and batteries in electric vehicles) and integrates them into one system. This creates a “virtual power plant” that integrates the different power sources and matches supply and demand. The project provides a practical test of how a stable, reliable and consumer-oriented supply of electrical energy is possible with high shares of renewable energy.

The future: Challenges lie ahead, but they can be met

As more renewables are brought on line, the challenge of integrating these intermittent and sometimes remote resources will intensify. Germany has set itself the target of 80 percent renewables in 2050 and the “Leitstudie” (lead study for the German Ministry for the Environment) agrees that achieving such an ambitious percentage of renewables on the grid by 2050 is possible. According to the NREL Renewable Electricity Futures Study such a high share of renewables is also possible in the United States. However, this depends on rapid progress on grid modernization, flexible power stations, demand response, and electricity storage. Figure 4 provides an overview of different flexibility options that can be applied in Europe to integrate high shares of renewables into the power grid – most of these options are available in the United States as well.

Figure 4: Flexibility components (Source: BMU: Working Group 3 on Interaction between renewable energy supply, conventional energy supply and demand side)

Meeting our renewable electricity goals will require major changes to our electricity systems with new business opportunities both in Germany and the United States. Although both countries face challenges regarding renewable integration, Germany and some states in the U.S. have begun implementing the types of programs described above and are making progress toward their ambitious goals. Cooperation between Germany and the United States in developing best practices will make target achievement more likely, effective, and efficient.

C2ES is a nonpartisan, nonprofit organization working to advance strong policy and action to address the twin challenges of energy and climate change.

Ecofys is a leading consultancy in renewable energy, energy & carbon efficiency, energy systems & markets and energy & climate policy.