Researchers from Fraunhofer ISE have published a new report investigating the net cost of Germany’s energy transition. The good news is that the German government’s current goals are likely to be affordable. The bad news is that 100 percent renewable energy is less so, writes Craig Morris of the website German Energy Transition.
Germany has a goal of at least 60 percent renewable energy in all sectors (heat, transport, and electricity) by 2050. The goal for power alone is at least 80 percent. In formulating that target, policymakers may have had the Pareto principle in mind. It states that 80 percent of effects come from 20 percent of causes. For the goal of 100 percent renewable electricity, which most German renewable energy campaigners have, closing that last fifth means costs will skyrocket.
Now, Fraunhofer ISE has put a finer point on the matter. The study, which has not yet been released in English (PDF in German), first investigates the official German target of an 80-95 percent carbon emission reduction in the energy sector, which makes up around 85 percent of German greenhouse gas emissions.
Below, you see our translation of the main chart. Two scenarios were investigated for cost. The first one has no carbon price and assumes that fossil fuel prices will remain stable. The second assumes a carbon price of 100 euros per ton of CO2 by 2030, with fossil fuel prices rising by two percent per annum. (After 2030, no further price increases for carbon or fossil fuels is assumed). In the first (and unlikely) case, the transition remains more expensive, but in the latter the transition is eight percent less expensive than the reference case.
The 85 percent target is the middle range in the spectrum from 80 to 90 percent investigated. In other words, reaching only an 80 percent carbon reduction would be even less expensive. Below, I simplify one of the charts showing how much wind (offshore and on) and PV would be needed:
The study actually has seven scenarios for 80 percent; above, I have taken the one with the lowest installed capacity in order to stress a difference. The amount of installed capacity rises from 289 GW to 536 GW. In other words, we need to nearly double installed capacity in order to rise a mere 10 percentage points from 80 to 90 – and even then, we are not at 100 percent renewable energy.
The seven scenarios for the 80 percent reduction also investigate things like synthetic fuels from renewable electricity, such as green hydrogen and methane. The installed capacity of such facilities rises from 80 GW to 180 GW, more than doubling for the 10 percentage point increase.
The scenario for 85 percent lower carbon emissions assumes that 157 GW of solar thermal will be used for low-temperature heat in buildings and industry. The efficiency for the production of green hydrogen is assumed to be 50 percent, meaning that half of the energy is lost in the process. Surprisingly, very little electricity would be curtailed at only two percent.
Interestingly, biomass is not emphasized much in the text (a sign of how bioenergy growth is being deemphasized in the German debate), though it would still make up around 14 percent of total energy supply in this scenario. Finally, roughly two times more natural gas and oil would be used than raw biomass, but no coal at all would be consumed. Without a coal phase-out, “a more than 80 percent reduction will be very hard to reach,” the study finds.
There are far more assumptions and findings here than I can do justice to in this small space. Let’s hope that Fraunhofer publishes the full study in English.
My main takeaway is that a focus on 80 percent renewables rather than 100 percent changes the debate considerably. At a recent conference in Morocco, researchers focused on the weak points in the 100 percent target, such as: is green hydrogen really feasible when half of the energy is lost? I recommended that they focus on what needs to be done now and address those issues when they actually arise. If we double the share of renewables by 2030, for instance, we deal mainly with political and finance issues, not technical ones. For instance, we concentrate on the early retirement of existing conventional facilities. If we want zero coal consumption by 2050, we cannot build any further plants, and we have to close the ones recently built early. These issues need addressing now.
Editor’s Note
Craig Morris (@PPchef) is the lead author of German Energy Transition. He directs Petite Planète and writes every workday for Renewables International. This article was first published on German Energy Transition and is republished here with permission.
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one.second says
Let’s cross that bridge when we get there. We should strive for 80% CO2 emission reduction and 60% renewable energy as fast as we can and then take a second look at the remaining path. I guess by then it will be dead cheap anyway.
Craig Morris (@PPchef) says
I agree completely: 80% first, then we’ll talk about closing the gap.
Karel Beckman says
I think that’s exactly the point the author makes at the end.
S. Herb says
It’s interesting to note that the Fraunhofer 85% CO2 reduction scenario includes as primary energy 33% fossil fuels (22% gas and 11% fluid). The natural gas consumption is over 50% of the current value. This seems to be about as far as you can push before the green conversion efficiency problem hits hard. I have also read through the Stanford (Jacobson) paper referenced Dec. 1. For 100% WWS in Germany, it implies a total PV installed capacity of more than 1000 GW (mostly classified as ‘utility PV’) compared to 174 GW for Fraunhofer 85%. It’s not clear how to interpret this – the paper gives a strong impression of being in an partly finished state (quick pub before Paris)?
Jan VeselĂ˝ says
So, it looks that last 20% or so will have to be covered from outside of Germany from some God blessed “Saudi Arabia” of wind/sun/hydro. Still more fancy than current ~50%.
There will be a huge fleet of LNG/oil carriers fighting for chance, terminals are on place, no need for new techs. Cost will be the main driver.
Jeffrey Michel says
The Fraunhofer report is sufficiently enigmatic to question its resiliency for any policy analysis. For instance, the authors refer to an investigation from 2012 of 100% renewable energy scenarios for electricity and heat, so they may have changed particular horses in midstream. Their demand for a “fundamental retrofit (Umbau) of today’s energy supply system” could easily involve the largest white elephant sale in postwar European history of ill-suited equipment with inestimable social consequences for its retirement. The authors also omit specifying the analytical tools required for predicting the likelihood of a “constant” cost of € 100 per tonne of CO2 after 2030. Any such resolution by the world community could motivate China to boost the number of its nuclear reactors past those 110 plants recently announced for that year, and to assist other nations in following the same course. We can only now await Mark Z. Jacobson’s response to that prospect.
Math Geurts says
Amazing: most German renewable energy campaigners have a 100 percent % renewable target for 2050, which target, according to Fraunhofer researchers, will skyrocket the costs. Green Zealots in the Netherlands, considerably more densely populated and without any hydro, believe that the country could be 100 percent renewable already in 2030.
S. Herb says
Two additional comments: first, both the Fraunhofer ISE and Jacobson reports are conservative (or ‘pessimistic’) in that they assume very modest technological improvements, and consider Germany in isolation, rather than as part of a larger system (but this is where you have to start).
Second, I have a great deal of respect for what both groups have been accomplishing (and with modest resources). They are performing serious and detailed simulations to understand how the pieces could really fit together, which is hard work with wind and solar in the mix. I find the Fraunhofer reports to be very clearly written.
Paul Hodges says
I’m not sure why they have assumed fossil fuel costs will rise by 2% a year till 2030.
There is vast over-supply of all fossil fuels, and the IEA Energy & Climate Change report in June on the impact of COP 21 national commitments said these would mean oil demand only rising 9% by 2030. So there seems little reason for any price rise.
Equally important is that the German population is the 2nd oldest in Europe, and therefore will have increasing numbers of pensioners on relatively low incomes by 2030.
Surely therefore the critical objective must be to provide low-cost supplies of renewable energy?
Jeffrey Michel says
The assumptions drawn by the Fraunhofer researchers employ speculatively rounded numbers with little expectation of being precise. However, a number of significant cost relationships are omitted in the analysis. For instance, the current thermal price of internationally traded coal is now lower than domestic lignite delivered to third-party customers. Switching to imported coal could therefore reduce the extent of landscape devastation caused by surface mining. Many chemical industry power plants and cement factories will be in operation long after domestic lignite extraction has been terminated, so that the required fuel conversion might soon be sensibly undertaken. The direct use of solar energy in such applications would be limited to 10 percent in 2050 according to the study.
Mike Parr says
Has anybody been following the cost evolution & performance enhancements of wind turbines? Thought not. 🙂
Perhaps you you should (those that feel that falls in fossil fuel costs are some how important to power gen (I suppose they are if you are a coal miner) need to keep in mind – we are facing as stern observed “an existential challenge/crisis” – giving consideration to coal prices, oil prices or the confort/discomfort of the arabs states (or indeed Vlad & his chums) should be the last thing on our minds.