Dr.-Ing. Dipl.-Phys. Gregor Czisch is the managing director of the consulting company Transnational Renewables Consulting in Kassel, Germany. He specializes in consulting in the field of renewable energy, energy supply and energy policy. Recently, Czisch got interviewed by Richard Senner and Stefan Dudey. The main question is important enough: how can a market system be made to work in such a way that it does not exceed the limits imposed by nature and our planet’s finite resources? This translation has been sponsored by Intrenex, the world’s first renewable energy grid operator. www.intrenex.com
Preface to this translated version of the interviews with Gregor Czisch:
The interviewee, Gregor Czisch, has contributed on a few passages of the translation by comments in order to place in the context major developments since the publication of the German version and update the interview where it seems to be expedient.
Interview: The supply from renewable energies in Germany, Europe and beyond
Mr. Czisch, your doctoral thesis on “Scenarios for a Future Electricity Supply: cost-optimized variations on supplying Europe and its neighbours with electricity from renewable energies 1 ” was published in early 2005 after presenting individual scenarios in 2001. The starting point for your book is two simple considerations: fossil fuels are finite, and they contribute to CO2 emissions. This is where our first question comes in. Since its publication in Germany and worldwide, have we actually been trying to reduce the share of fossil fuels used?
It can be seen as progress that the use of renewable energies has increased in Germany and worldwide and that the share of renewable energies in primary energy consumption has also increased significantly. Starting from the base year of 1990, on which most of the national CO2 reduction targets refer to, by the end of 2013 their world-wide share rose from 6.4 to 8.9% and relatively therefore by almost 40%. However, the primary energy consumption increased 7 ½ times as much as the renewable energies with almost 60% of the increase in renewables being attributable to the “old” hydropower, while the “new” wind and solar energies contributed only around 23% and just 5% respectively. In Germany, the developments have been much more favorable, although Germany is increasingly cited as a bad example because electricity costs have risen sharply with the increasing share of renewable energies. However, the successes can only be measured by considering the problem that renewable energies are aimed at resolving, namely climate change, which is mainly caused by greenhouse gas emissions from fossil fuels. The use of renewable energies is therefore not an end in itself, but a necessity. Unfortunately, between 1990 and 2013 the resulting carbon footprint does not look very pleasing, with CO2 emissions, rather than dropping, actually rose sharply by 55% world-wide.
Worse still, the trend has not flattened-out since then, but on the contrary the emissions have risen more and more rapidly and not only in absolute terms, but even relative to the latest level reached. If one follows the trend over the last 4 decades, one can see that up to the end of 2013 the average of the relative increases has always gone up, and recently these increases are more than twice as high as between 1973 and 1983. In absolute terms, CO2 emissions have over the past four decades increased from 17 billion tons of CO2 per year, first by 2.0, then by 3.6, then by 4.6, and by the end of 2013 by 7.8 billion tons of CO2 to an annual emission total of 35 billion tons of CO2.
Comment by Gregor Czisch 2017: In the last three years the annual increase of CO2-emissions was very moderate and stayed clearly far below 1%. Some like to see that as a remarkable change. However there were other episodes with several years of low emission growth or even some years with reductions of emission from one year to the other. These episodes typically correspond with times of low economic growth or economic crises. And again the youngest period of a flat emission curve came with relatively low economic growth word wide as well as and especially in the by far most CO2-emmitting economy, China. Furthermore it must be stated that a rapid emission reduction is required and remaining at the current high emission level is not an option when fighting the man-made climate change is taken as a serious task. At the high emission levels of today the atmospheric CO2-content is still rising sharply. In fact the rise of CO2 in the atmosphere reached above formerly unprecedented 3 PPM per annum in 2015 and 2016 significantly raising the growth of CO2 in the atmosphere over the 2010s to 2.4 PPM annually until 2016. Combining all these arguments one must state that there is no place left for optimism and therefore efforts must be intensified dramatically in order to cope with the problem to be solved.
So it does not look much like an improvement on the climate front, in fact the situation is becoming more and more acute.
In Germany, we have actually reduced CO2 emissions since 1990 by 18%. However, the greatest “progress” in this direction was the deindustrialization of the former German Democratic Republic (GDR) and since the turn of the millennium very little more has been happening.
The rapid increase in emissions is due not least to the disproportionate increase in coal consumption. Since 1990, this contribution has not been able to be compensated by the increased use of renewable energies and nuclear energy (which since 1990 relieved the situation world-wide somewhat less than the contribution of wind energy) or through the increased use of relatively low-emission natural gas.
Germany as certainly one of the most important pioneers in the use of renewable energy resources and its contribution to the establishment of new renewables should therefore not be underestimated. However, in order to master the climate problem, a much more consistent and coordinated use of renewable energy resources is needed, not least in order to minimize the costs of a worldwide “energy revolution” that deserves this name.
Between the end of 2006 and the end of 2013, prices for photovoltaic plants fell by more than 60% (p. 8). Do you expect this development to continue?
Since 2001, the prices of photovoltaic (PV) roof systems in Germany have fallen from about 6,000 € per kW nominal output (including VAT) to a price of about 1,900 € per kW today (data for 2013 provided by the German Federal Association of Solar Energy – BSW).
Comment by Gregor Czisch 2017: Also in the last 3 years the costs of PV-systems declined. But the pace was, as expected, quite moderate. According to the same source of information – BSW – prices went down another 12% to roughly 1670 € per kW photovoltaic roof systems at the end of 2016.
Based on the global installation figures, a world-wide cumulative PV capacity by the end of 2013 of around 140 GW represents an increase to 90 times the value achieved in 2001. From these figures we can calculate a cost reduction of 16% per doubling of the power produced, which is an expected value for a new technology.
Comment by Gregor Czisch 2017: The moderate price reduction between 2013 and 2016 comes with a fast pace of growth of the cumulated rated power of PV-installations from roughly 140 to 320 GW of installed capacity. Even if a period of three years does not allow for an overly meaningful analysis of learning curves it is remarkable and not unexpected that the cost reduction per doubling of the installed power fell from 16% to just slightly more than 10%. This is well in the frame of cost reductions of technologies in a mature production state and could indicate that for PV the time is over in which it was a new technology with high techno-economic learning rates.
But it should be noted that significantly higher cost reductions were originally predicted for PV systems. However, one needs to always treat the results derived from learning curves with some caution. There again and again are phases of stagnation which can be followed by steep downward movements, such as the steep decline in costs in Germany between 2006 and 2012. Since then, the prices have remained relatively constant.
Prices will surely go down further. However, a clear answer to the question of just how long the learning curve long-term trends can be sustained borders on reading tea leaves. Initially the cost of the high-tech components was predominant. However, their prices are sinking particularly fast, so that the cost share of the low – tech parts, such as the system mountings and glass covers etc. (which change at a considerably slower rate), will over time become dominant. This effect can also be seen in the fact that the module prices have declined significantly faster than the prices of whole PV systems and due to this development, we should expect a flattening of the learning curve in the future.
Are there other relevant power-generating methods which have also been observed over the last 20 years to follow significant production cost reductions or are expected to do so in the future?
Wind energy is a good example of new technologies experiencing big cost reductions. However, its cost-cutting phase began and ended much earlier than that of photovoltaics. Between 1980 and 2000, the cost per unit of energy thus produced decreased to less than one tenth. Since then, however, it has remained more or less at this level and is relatively heavily influenced by material prices. It is difficult to assess whether innovations will be implemented in the future that will significantly reduce costs, which is just as difficult as predicting the long-term price development in photovoltaics.
Ultimately, the cost of individual components is not the single criterion. The system as a whole must always be considered in case of the electricity supply. As long as a technology is not able to be used at all times and in a sufficient amount to produce the power required, its availability over time plays a significant role. This is well illustrated in my scenarios where I was looking for the most cost-effective way to provide an electricity supply for Europe and its neighbours utilizing renewable energies only. This was achieved by means of mathematical optimization, not least to achieve results having the greatest possible objectivity. In the basic scenario, the costs of photovoltaics were calculated at 5,500 € per kW rated output. The result of the optimization was that PV should not be used since there was no solution to the supply problem in which PV could provide a cost reducing economic contribution. The most favourable system with which electricity can be supplied significantly below today’s electricity costs in Germany proved to be a strong transnational electricity grid system combining wind energy, hydropower (as used at the time the scenarios were calculated), and energy from biomass used sensibly. However, due to the continuing trend of high cost reductions for PV systems, these results could not be simply left unquestioned. It was therefore valid to assess how lower PV costs might change the situation and so scenarios assuming reduced PV costs were also calculated.
In successive halving steps, all of the costs of PV systems were reduced and new scenarios were calculated; whereby somewhat optimistic estimates for their service and maintenance costs were used. However, reducing costs of PV down to and including a quarter of the initial costs (already well below current costs), the result remained the same. That is, as before, PV still could not make a cost-saving contribution. An improved result was only obtained following the third halving of the costs to one-eighth of the initial costs. In this case, PV was able to make a small cost-cutting contribution by utilizing it only in the southernmost African regions of the supply area (The whole supply area in the scenarios reaches from the southern Sahara-states including Scandinavia in the north and from the Atlantic in the west until West-Siberia in the east.). Overall, this resulted in the electricity supply cost being reduced by a negligible 0.8% compared to the base case scenario. According to this scenario, the electricity was sent from the southern outskirts of the Sahara and from Egypt via specially built power transmission lines to the consumers in Europe. However, we are still a long way off from achieving these projected PV costs, and thus it remains uneconomical to use PV in less sun-drenched regions like Europe. Even a further halving to a 16th of the initial costs (roughly one-sixth of today’s costs) did not fundamentally alter the situation. Although this scenario made use of PV in regions on the European Mediterranean coast, it did not reach more northerly regions such as Germany or Scandinavia. Even though the calculations arrived at costs of the photovoltaic generated electricity already well below the average electricity generation costs in the scenario area, the total proportion of PV in this scenario was relatively small. The production cost reductions of just a few percent compared against the basic scenario were rather poor. These results show that concentrating on the question of possible cost reductions for individual technologies is in itself not expedient and that the systematic relationships must also be taken into account.
At the same time, one can deduce from the results that there is no use in waiting for cost reductions, whether they are realistic or not, before making decisions. The structure of a low-cost electricity supply system also does not change fundamentally due to cost reductions of individual components. Further waiting before implementing a full electricity supply from renewable energies is also not necessary from the cost point of. We already today have everything that we need to create a climate-friendly supply in a practically cost-neutral manner in the electricity sector and thus to resolve the problem in the most important sector currently responsible for half of global CO2 emissions from fossil fuels. The fact, that in spite of these findings, that there is still debate at the climate conferences about who should take over what part of the “extra costs” – which at least in this area of electricity supply does not actually have to exist – rather than on how to cooperate to solve the problems is therefore a terrible tragic comedy.
The situation between Ukraine and Russia also creates uncertainties for our energy supply. If, in the future a part of our energy comes from regions which are also politically unstable, then do you expect to be confronted with concern and political resistance?
Today, and already for a long time, a large proportion of our energy comes from regions that cannot be regarded as strongholds of political stability. Oil, for example, still comes in a large part from the Middle East, where bloody wars have been and are still being carried out. Algeria, which is the second largest gas exporter in to the EU after Russia, has experienced critical situations during its long period of gas delivery.
It should be noted that throughout the Cold War there were no interruptions of the gas supply to Europe on the part of Russia. However, today it looks as if politics is increasingly using energy as a weapon, also as part of economic wars. The driving force behind this development, however, is not the classical countries of origin. When Europe first started to use their resources for its energy supply there was little concern and resistance in the European beneficiary countries, which has been justified in the end by the real reliability of the supply over decades. Today, the argument of energy security policy is deliberately cited more frequently, although the experience so far does not really support these concerns. But, if one thinks in terms of war, then the idea is that one needs an autonomous energy supply. However, this approach is diametrically opposed to the goal of cooperation as being a peace-building strategy, which for example, was a fundamental foundational motive for the EU and overcoming the cold war.
I do not consider it desirable to abandon the strategy of cooperation in exchange for a move towards maximizing autonomy, even if it was technically and economically feasible. In fact, it is fully contrary to the ever-growing international integration of the world’s economies. Why should a country like Germany, which has been trying for decades to expand its exports and which is already producing huge export surpluses with all its negative consequences, now also boost its trade balance to even higher surpluses through the nationalization of its energy supply? Economically this makes little sense and is even dangerous and destructive.
Such high level considerations may not interest everyone. Some may perhaps desire to build a truly “bomb-proof” energy supply and then, of course it cannot be decentralized enough. If one goes further with this consideration then one eventually comes to the concept of autonomous self-sufficiency for everyone. The supply from non-imported renewable energies increases in cost as the area to be supplied is decreased. The smallest unit is the single family house and today these small units are often equipped with a photovoltaic system and equipped with daily storage capacity in the form of lithium-ion batteries. This seems to make some people believe that an autonomous electricity supply is close at hand. Far from it; in fact if it is not allowed that there is compensation via connection to different climatic zones, then it is necessary to store an amount which is far above the daily requirement, such as for a week or even for a whole season. However, we are both technically and economically far from the possibility of actually realizing these amounts of storage covering seasonal storage needs in a self-sufficient micro-supply. Even the use of electro-chemical daily storage methods makes the electricity generated considerably more expensive and is far from being economical. Furthermore, the size of larger storage units, which would be required for the smallest self-sufficient unit, cannot be sensibly envisioned. In addition to the costs and their potential large dimensions, the relatively large primary energy requirement for the electrochemical storage renders a quick amortization practically impossible in seasonal operation.
For example present-day lead-acid batteries are characterized by a primary energy requirement of roughly 150 kWh per kWh of storage capacity. This means that only after 150 full charging and discharging cycles is the amount of energy circled through the battery equal to the amount of energy that was spent on the battery itself. Up to this point, it is an “energy shredder”, even without considering the losses due to storage efficiency, charging processes and necessary conversion from direct to alternating current, as well as for self-discharge. Even at this moment it cannot be argued that the storage is amortized energetically, since the stored and lost energy in a smarter system without storage by no means would be lost, but could for example be utilized by distributing energy elsewhere for direct consumption. In a well-designed daily storage system, the time point when the energy carried through the system corresponds to the primary energy requirement for the storage should be reached within the first few years. Even today weekly storage on the basis of lead acid batteries is energy-wise by no means sensible to operate and the costs involved are too high. Such storages will not reach the point in time when at least as much energy has been passed through them, as was expended for making the battery itself.
Seasonal storage systems are completely unthinkable on this electrochemical basis, since even with an optimum utilization it would take 150 years until the battery, even without considering all intermediate stored energy losses, would no longer make a negative energy contribution. Even more unfavorable is the case utilizing other electrochemical storage methods. The next-best system using lithium-ion batteries is roughly three times as unfavorable with a primary energy requirement of about 450 kWh per kWh of storage capacity. Any storage that can be avoided, especially over a somewhat longer period, is therefore a great energy gain and also considerably reduces the ecological and economic impact.
In general, the storage requirements can be reduced by oversizing the production plant, so that even in times with a lower energy supply, more often sufficient electricity can be generated for the daily demand. However, in economic terms and depending on the system configuration, this strategy might end up at a comparable price similar to that of larger storage systems such as for instance those required for the weekly compensation.
Today’s storage design for PV systems is usually chosen in such a way that the owner’s share of the consumption being self-produced in the moment of consumption can be raised to a relevant range – for example up to 20%. The remainder of the power is fed into the grid as a guaranteed matter of course. In fact, in case of such an arrangement the distribution network must be able to absorb the maximum power of the PV installation if no losses are to be incurred during production. This nowadays already leads to the fact that the most expensive components in the distribution/transmission system, namely the distribution network, must be expanded especially where the share of PV production is high. These costs would not appear if less decentralized approaches were pursued. However, the network strategy avoids the previously described problems of storage requirements and oversizing by allowing the upstream supply system to deal with the cases of local surplus, as well as back-up in the case of a lack of supply from the renewable resources at site. Naturally there is nothing of self-sufficiency in this case. It is also not enough to only look at the distribution network. In the previously mentioned estate of single-family houses equipped with photovoltaic systems, the problems are everywhere similar. The surpluses and deficiencies are highly correlated and there need to be possibilities for the discharge and provision of electrical power. For this to work there must be production facilities somewhere in the system that are capable of production when the others are not. As long as fossil fuel power plants and the electrical network are still available, then the situation is quite robust. However, with this we find ourselves using a system that quickly takes on national and larger dimensions, which contradicts the realization of self-sufficiency or autonomy. If we want to be completely free from fossil energies, then in the medium term we cannot fall back on the fossil fueled power plants and thus it becomes much more difficult to organize compensation for surpluses and deficits. This difficulty increases evermore as the size of the areas jointly supplied decrease.
The question of the security of supply in spacious large-scale systems in times of crisis is mostly related to the international electricity supplies, apart from recent reservations concerning Russia as a gas supplier in the course of the Ukraine conflict. The concerns here were almost always concentrated on projects seen as extensions of the existing system. For example, security of supply becomes a theme when considering linking the EU grid system with Africa. The grounds for this can be many. Recently this has been the so called Arab Spring.
Instead of progressively reacting to the political changes and creating perspectives of cooperation, anxiety is instrumentalized. Similarities with EU’s refugee policy force itself to the spectator. There is practically no proper debate about the opportunities and risks of energy cooperation. Comparisons to the gas supply system are rarely used but might help a lot. The EU is dependent on just a few countries for its gas supply and as the resources become exhausted this number will be further reduced in the future. The fact that this situation is completely different from that of an international electricity supply using renewable energies is unfortunately not apparent in the current superficial “discussions”. The potentials of renewable energies are distributed over many more countries. While they will also not run out, they can be developed more and more cost-effectively. The differences in costs from region to region are not nearly comparable to the enormous price fluctuations in the fossil fuel sector, where for example in the past the oil price has increased more than tenfold within a decade. Diversification can be pursued as a strategy for the establishment of supply security in the field of renewable energies comparatively easily, broadly and cost-effectively. Also technically, a large-scale supply system can be built up in a highly redundant manner without raising the costs very significantly. The fact that all of these points are scarcely mentioned in the “discussions” suggests that these discussions are not unprejudiced in the real sense, but a deliberate stirring-up of resentments.
Transmission of electricity over long distances raises fears and resistances in those communities impacted by the placement of the transmission lines and this is currently apparent in Germany. Is it to be expected that similar difficulties will arise with regard to transport across different countries?
Nimbyism in the meantime is very advanced. According to the principle “wash me but do not make me wet”, we have experienced how even green factions in municipal parliaments seek to prevent the installation of wind turbines at reasonable places. A similar culture of indignation appears to have developed in parts of the population in relation to overhead electricity transmission lines. The anti-attitudes often come with a very poor rational foundation. However, with a little more rationality it would be possible to find a basis for a sound criticism of the officially planned expansion of the German electricity network which might justify protest. This should be quite different to the simple rejection of the construction of transmission lines in one’s own backyard because the value of one’s property is feared to be reduced.
What few people know is that we have more than 100,000 km of high-voltage and extra high-voltage power lines in Germany alone. The current plans for a new construction of overhead lines of less than 3,000 km are thus a trifle compared to the existing stock. What is also little known is the fact that today much more efficient overhead lines are available than those currently designated for the expansion of the existing network. With today’s high-voltage direct-current transmission technology (HVDC) already in use in several countries, it is possible to transport 5 times as much power via such an overhead line as with a conventional 400 kV dual three-phase alternating current overhead line as is usual in Germany. If one used the HVDC masts with the highest voltage available for two circuits, then one could achieve a factor of 10 and so such a route would have the potential to replace 10 conventional routes.
Comment by G.Czisch 2017: Even higher voltages and capacities could be reached with technology currently under development. Such lines could also be used if one wanted to build a powerful international network for the full electricity supply only with renewable energies. They cause very small losses even over large transport distances and are extremely cost-effective for this application.
These power lines can also be built in such a way that they pass over wooded areas and thus no large corridors have to be cut free for them and afterwards kept clear. Of course, they would also be visible above the forests, which could be a reason for someone who values the protection of the visual landscape more than anything else to reject a plan which otherwise is ecologically beneficial for various reasons. If this knowledge about the possibilities of modern transmission is reflected concerning the current sadly unambitious plans for the expansion of the overhead line system in Germany and the EU, disillusionment will inevitably occur.
The power transmission of the planned routes in Germany remains far behind the possibilities. Due to an inappropriate design, the planned lines are not suitable for an international renewable electricity grid and their endpoints are also located hundreds of kilometers distant from the borders to our southern neighbors. Therefore, a development of our electricity supply system in the sense of sustainability is not really intended for these lines. One could suspect that the German energy industry also pursues its own interests, namely the avoidance of competition enabled by a powerful international electricity network. The current concept is planned only for tomorrow, but not for the future. These criticisms would be worth taking further, but unfortunately very little is heard about them. Unfortunately, it is much more about one’s own backyard rather than about drafting a design of a sustainable, climate-friendly energy supply.
The planned transmission lines represent only a very small contribution to the renewable electricity network of the future and therefore represent a relatively large effort for relatively little return. With approximately 6,000 km of HVDC, i.e. 6% of the existing high and extra high voltage lines, a highly redundant transmission system could be established in Germany which would be fully sufficient for the international supply completely by renewable energies. It is to be expected that such a system would make some of the existing transmission lines superfluous and so the addition of the new lines would be at least partially compensated by the dismantling of parts of the old system. This would require detailed load flow calculations and simulations of the transmission line system to be made. Ultimately, however, this question is not of very great relevance, given the relatively small need for additional lines.
To be continued in Part 2.
Dr.-Ing. Dipl.-Phys. Gregor Czisch is the managing director of the consulting company Transnational Renewables Consulting in Kassel, Germany. He specializes in consulting in the field of renewable energy, energy supply and energy policy.
Selected publications on the topic
- Doctoral thesis: Scenarios for a Future Electricity Supply: cost-optimized variations on supplying Europe and its neighbours with electricity from renewable energies translated into English and published 2011, IET, London, UK, ISBN: 978-1-84919-156-2, http://www.theiet.org/resources/books/pow-en/scenarios.cfm
German original, Feb. 2005
- Low Cost but Totally Renewable Electricity Supply for a Huge Supply Area