German Electricity Sector Research Articles

Power (re)distribution: How dominant capital regained control of the Energiewende

The Energiewende (energy transition) is the dynamic and contested project of energy transition in Germany. It encompasses both the sociotechnical transformation of the German electricity system and the reorganization of the sector’s ownership structure. In this paper, we present a Capital-as-Power (CasP) based analysis, investigating industrial path-dependency and innovation as part of the dialectics of power and sociotechnical change in capitalism. According to CasP, dominant capital seeks to increase its differential accumulation, i.e., accumulation relative to a benchmark. Energiewende policies initially decreased the differential accumulation of dominant electricity firms in Germany. However, we find that by concentrating their control over the shrinking conventional generation capacity, while variable generation expanded, dominant firms gained the leverage needed to increase differential prices and profits, thus managing to regain sectoral control by increasing their threat to reliable power supply. We find that these processes coincide with spatial centralization, ownership concentration, and decreasing penetration rates of renewable energy resources in Germany. By presenting new conceptual tools and empirical findings, we trace the ways in which the recovery of dominant capital in the German electricity sector shapes and restricts energy transition processes.

Thermal storage power plants – Key for transition to 100 % renewable energy

Transition from fossil/nuclear towards renewable energy supply can be achieved in three phases: firstly, variable renewable electricity (VRE) can be fed into the electricity grid just as available, while its fluctuations are balanced by thermal power plants fired by fossil fuels. Secondly, after achieving grid saturation with VRE, the residual load gaps must be covered and grid stability must be secured by highly flexible thermal power stations that generate dispatchable renewable electricity (DRE) without using fossil fuels. Thermal Storage Power Plants (TSPP) that integrate solar- and bioenergy are proposed for that purpose. Finally, in the third phase, renewable power supply can be extended to other sectors via power-to-X technologies, reducing fossil fuel consumption for transport, heat and industrial purposes. The phases of energy transition are described in the frame of a model scenario of the German electricity sector with TSPP as central element for the realization of Phase 2.

Electric Vehicle Cost in 2035: The impact of market penetration and charging strategies

This paper analyzes charging cost of battery electric vehicles (BEVs) for different penetration levels of BEVs and for different charging strategies by taking into account their impact on the electricity sector. We analyze a multi-level equilibrium model, which incorporates endogenous generation capacity investment, network expansion, and congestion management. We calibrate our model for the German electricity sector in 2035 and consider different degrees of BEV penetration and various charging strategies: (i) non-smart charging based on a standard charging profile, (ii) smart charging, where the charging load can be shifted throughout the entire day to provide flexibility to the system, and (iii) a mixed charging strategy, where smart charging is only possible during night hours. Our final results reveal that larger BEV penetration yields lower CO2 emissions even in those scenarios with smaller availability of green electricity production. Furthermore, both charging cost and resulting CO2 emissions are substantially reduced for smarter charging strategies for all scenarios considered. Finally, even for scale deployment of BEVs, charging cost remains comparatively low. The Total Cost of Ownership (TCO) of BEV adoption thus continues to crucially depend on the evolution of vehicle purchase prices.

Accounting for spatiality of renewables and storage in transmission planning

The current governance process to plan the German energy system omits two options to substitute grid expansion: First, placing renewables closer to demand instead of where site conditions are best. Second, utilizing storage instead of additional transmission infrastructure to prevent grid congestion.In the paper, we apply a comprehensive capacity expansion model based on the AnyMOD modeling framework to compare the status quo to alternative planning approaches for a fully renewable energy system. To represent spatiality and fluctuations of renewables, the German electricity sector is modeled with great spatio-temporal detail of 32 NUTS2 regions and hourly time-steps. In addition to the German electricity sector, analysis also accounts for exchange of energy with the rest of Europe and demand for electricity and electricity-based fuels, like hydrogen or synthetic gases, from the industry, transport, and heat sector.The results reveal that a first-best solution can be well approximated if the current planning approach also considered storage for congestion management. Placing renewables different has no significant effect in our case, because the available potential must be exploited almost entirely leaving little room for optimization. Furthermore, a sensitivity on the first-best scenario prohibiting additional transmission lines entirely suggests that grid expansion can be substituted at tolerable costs.

Institutional work in the transformation of the German energy sector

Two European and German policies – one transitioning to sustainable energy and the other enhancing competition – strained the German electricity sector's organizational structures, which had been designed for network stability and a secure supply. Digital technologies and the new business models were important factors in these changes. Based on qualitative interviews, we analyze how changes caused by liberalization and energy-transition policies are related to the internal organizational changes at publicly owned energy providers. While some companies legitimate new forms of work organization and employment, thereby disrupting old institutions, others block internal change with reference to the external institutional framework.

Do investments in flexibility enhance sustainability? A simulative study considering the German electricity sector

AbstractCurrent research concerning industrial demand side management primarily focuses on monetary aspects. Herein, we extend this perspective by assessing whether economically driven measures increasing the flexibility also result in reduced contributions to the residual load. For this purpose, we conduct a simulative study using historic and projected time series for the German electricity sector. First, Fourier analysis are performed to show that the main oscillation in the electricity price time series has a period length of 12 hr, whereas the renewable generation is primarily characterized by an oscillation with a period length of 24 hr. Second, a generic process model with capabilities for load shiftings is used to evaluate how the fluctuation patterns can be exploited via scheduling optimizations. Most importantly, our results demonstrate that prevalent price fluctuations prevent adequate monetary incentives for providing storage capacities for bridging up to 24 hr, which are desired for reducing the residual load.

The European Union Emissions Trading Scheme and Fuel Efficiency of Fossil Fuel Power Plants in Germany

I investigate the impact of the European Union Emissions Trading Scheme (EU ETS) on fuel efficiency of fossil fuel power plants using administrative micro data on power plants in Germany from 2003 to 2012. I find positive efficiency effects in fuel use, leading to a decrease in fuel input of 0.4 percent for an increase in carbon cost of one Euro. A back-of-the-envelope calculation suggests that the reduction in fuel use by fossil fuel power plants due to the introduction of the EU ETS translates into reductions in annual carbon emissions within the German electricity sector by around seven million tonnes in 2012. This represents about 2.4 percent of total annual carbon emissions in the German electricity sector and exemplifies the potential magnitude of efficiency improvements as a measure for reducing carbon emissions.

Decoupling the EU ETS from subsidized renewables and other demand side effects: lessons from the impact of the EU ETS on CO2 emissions in the German electricity sector

This paper analyzes the impact of the EU ETS on CO2 reduction in the German electricity sector. We find an ETS-induced emission abatement which is not exceeding 6% of total emissions with a maximum already in 2010. Thereafter the ETS has not induced additional reductions. This outcome corresponds to the recent debate about sub-optimal performance of the EU ETS caused by excessive allowances. Following up on this we develop a unilateral flexible cap to eliminate demand side effects which lead to excessive allowances. The unilateral flexible cap is based on emission intensities. Using the works of Newell and Pizer (2008); Sue Wing et al. (2009) we prove that an intensity-based emission cap is advantageous in the German electricity sector when compared to an absolute cap. An ex-post analysis shows that the amount of excessive allowances resulting from the economic crisis during the second trading period could have been significantly lowered with a unilateral flexible cap. This approach also decouples the EU ETS from a simultaneous promotion of renewable energy.

Evaluation of co-firing as a cost-effective short-term sustainable CO2 mitigation strategy in Germany

BackgroundIn order to achieve the German greenhouse gas reduction targets, in particular, CO2 emissions of coal-fired power plants must be reduced. The co-incineration of biomass-based substitutes, here referred to as co-firing, is regarded as a highly cost-effective and short-term method of reducing CO2 emissions in the electricity sector. Another advantage of co-firing is its ability to meet base load demands and offer controllability. In this paper, we, therefore, evaluate the effectiveness of co-firing as a CO2 mitigation strategy in the German electricity sector by 2020.MethodsWe consider the co-firing of three different substitutes: wood chips, industry pellets and torrefied biomass. Likewise, a comparison with three alternative mitigation strategies is part of the evaluation. We use seven sustainability indicators covering social, ecological and economic aspects as the basis for the evaluation. These sustainability indicators are determined by means of a merit order model, which enables us to simulate the electricity market in 2020 on an hourly basis and adjust it based on the assumption of widespread implementation of co-firing or one of the alternative mitigation strategies.ResultsOur results show that all mitigation strategies have a significant potential to reduce the CO2 emissions of the electricity sector. Compared with the alternative mitigation strategies, co-firing is characterised on the one hand by rather low mitigation potentials and on the other hand by low CO2 mitigation costs. The co-firing of industry pellets appears to have the most advantageous combination of mitigation potential and mitigation costs.ConclusionsThe widespread implementation of co-firing with industry pellets until 2020 would have led to 21% reduction in CO2 emissions on average. Nevertheless, it cannot be implemented immediately because time is needed for political decisions to be taken and, afterwards, for the technical retrofitting of power plants. Co-firing will, therefore, not be available to contribute to the achievement of the greenhouse gas reduction targets for the year 2020. However, our approach can be used to assess the contribution of the various CO2 mitigation strategies to the ambitious mitigation targets for the year 2030.

On the Effectiveness of Germany's Renewable Energy Sources Act

To what extent does environmental legislation achieve the objectives it pursues? The paper contributes to this discussion on effectiveness in two ways. First, it provides a conceptual framework from an economic and legal perspective. In particular, it clarifies that effectiveness in the narrow sense relates to achieving legally set goals ± which, in turn, depends on suitability and enforcement of rules. However, a comprehensive framework needs to go beyond effec- tiveness in the narrow sense: that is, the more demanding concept of cost-effectiveness, which requires goal achievement at a minimum of societal costs, as well as un-anticipated secondary impacts, may impact the overall assessment. Second, the paper evaluates the effectiveness of the main policy instru- ment to support renewable energy sources (RES) in the German electricity sector, i.e., the German RES Act (Erneuerbare-Energien-Gesetz). To this end, the paper investigates in what respect the RES Act effectively contributes to achieving the objectives of the RES Act; subsequently, the analysis is extended to a more comprehensive approach, assessing both cost- effectiveness and secondary effects of RES support in Germany.

Geographical comparison between wind power, solar power and demand for the German regions and data filling concepts

Abstract The rising penetration of renewable energies became an important issue in the German electricity sector within the past years. In order to plan the required infrastructure for the energy distribution, a detailed knowledge about the complete geographical and temporal power generation compared to the demand is crucial. However, the available data for the renewable power generation in Germany is insufficient due to the complexity of the energy system. For this reason, a comparison between the renewable power generation and the electricity demand is presented for 95 German zip code regions based on real input data with a sample time of 15 min from renewable energy generators. For enhancing the incomplete data, different model-based data filling methods using the data of neighboured regions or additional meteorological data are introduced and compared. As a result, a number of modelling methods, based either on a heuristic model, a wind speed model or a combination of both, has been investigated, leading to similar correlation coefficients of above 80%. Finally, the obtained data set is applied for an analysis with a high spatiotemporal resolution. For three use cases the resulting optimal flow of the inter-regional power transfers is calculated.

The European Union Emissions Trading Scheme and Fuel Efficiency of Fossil Fuel Power Plants in Germany

I investigate the impact of the European Union Emissions Trading Scheme (EU ETS) on fuel efficiency of fossil fuel power plants using administrative micro data on power plants in Germany from 2003 to 2012. I find positive efficiency effects in fuel use, leading to a decrease in fuel input of 0.4 percent for an increase in carbon cost of one Euro. A back-of-the-envelope calculation suggests that the reduction in fuel use by fossil fuel power plants due to the introduction of the EU ETS translates into reductions in annual carbon emissions within the German electricity sector by around seven million tonnes in 2012. This represents about 2.4 percent of total annual carbon emissions in the German electricity sector and exemplifies the potential magnitude of efficiency improvements as a measure for reducing carbon emissions.

Agent-Based Simulations for Electricity Market Regulation Advice: Procedures and an Example

This paper discusses the use of agent-based simulation models for regulatory advice in electricity market regulation. It briefly introduces the necessary procedures and the state-of-the-art of the methodology, and outlines its possible range of application. In a second part, the paper presents an agent-based simulation model developed by the authors. The model can be applied for analyzing different market designs and market structures in order to derive evidence for regulatory advice. This is exemplified through the analysis of two settlement rules in the balancing power market and of several divestiture scenarios of the German electricity sector.

Integrated assessment of a phase-out of coal-fired power plants in Germany

Germany is liable to miss its greenhouse gas reduction target for 2020. Nonetheless, additional political measures such as an early phase-out of coal-fired power plants might make it possible to reach this target. However, this generates several (conflicting) challenges, which arise from the technical, environmental, economic, and social implications.An integrated assessment of phasing out coal-fired power plants was therefore performed by investigating impacts on the German energy system, the economy, and public perception. The latter is explored by analyzing representative data from our latest annual survey of the German public. Economic impacts on the sectoral level are illustrated by an input-output analysis. Furthermore, an energy systems model examines the long-term technical consequences.Our scenario-based analysis shows that phasing out coal in the German electricity sector is not sufficient to fully meet German emission reduction targets. Additionally, the input-output analysis indicates strong sensitivity with the CO2 certificate price, only resulting in an overall economic benefit in the case of a high certificate price. The survey shows that public acceptance of coal for electricity generation is low and decreasing. By combining all the results, a more detailed analysis was performed of the consequences of an early phase-out of coal-fired power plants.

Financial Viability of Grid-connected Solar PV and Wind Power Systems in Germany

Abstract The German electricity sector is in a period of transition, spurred by the German government's endeavor to maintain a sustainable, secure, climate-friendly and affordable energy supply system. The most important aspects of this Energiwende are the phase out of nuclear energy, promotion of renewable energy technologies, and reduction of greenhouse gas (GHG) emissions. As a consequence, huge investments in power generation systems and infrastructure are needed. Wind and solar photovoltaics (PV) are important renewable energy sources for achieving the goals, but power generation depends on spatial and meteorological conditions on site. For new build PV systems, the level of on-site solar irradiation is crucial, whereas the yield of wind turbines is mainly determined by the wind speed on site. In the model-based analysis with the RETScreen software, we distinguish between three different regions in order to take differences in climatic and geographical conditions in Germany into account. For each region, six locations with specific site conditions are used for the calculations. Projections are made for the base year 2015 and the future year 2030. We find that PV systems achieve levelized cost of electricity (LCOE) below 11 €-ct/kWh in 2030, with a GHG reduction potential of 133-289 €/tCO 2 . The LCOE of wind power ranges from 5.1-16.1 €-ct/kWh and the related GHG mitigation costs from 101-321 €/tCO 2 . In light of these results, it seems to be possible to restructure the German electricity generation system in a cost-effective and environmentally efficient way. Due to decreasing unit investment costs and increasing capacity, solar PV and wind power become increasingly competitive against conventional power generation. Hence efforts are needed to enhance and optimize the grid integration of wind energy and PV and to maintain the long-term security of electricity supply during the transition process.

Pass-Through of CO2 Emission Costs to Hourly Electricity Prices in Germany

AbstractI estimate the level of emissions cost pass-through to hourly wholesale electricity prices in Germany, based on spot market data. I control for contemporaneous shocks to demand and supply by constructing a detailed supply curve for fossil generation and intersecting it with residual demand for fossil-based electricity for every hour. Determining the marginal generator allows me to use marginal fuel and allowance costs (rather than prices) as explanatory variables in order to identify the level of cost pass-through directly and with a high level of precision. I find that allowance costs are passed through to electricity prices completely (or nearly completely) on average, but that the degree of pass-through varies over the load curve. My results suggest that there is no economic reason for free allowance allocation to the German electricity sector, and thus I support the updated allocation rules in phase 3 of the European Union Emissions Trading Scheme.

Analysing the interaction between emission trading and renewable electricity support in TIMES

As the number of instruments applied in the area of energy and climate policy is rising, the issue of policy interaction needs to be explored further. This article analyses the interdependencies between the EU Emissions Trading Scheme (EU ETS) and the German feed-in tariffs (FITs) for renewable electricity in a quantitative manner using a bottom-up energy system model. Flexible modelling approaches are presented for both instruments, with which all impacts on the energy system can be evaluated endogenously. It is shown that national climate policy measures can have an effect on the supranational emissions trading system by increasing emission reduction in the German electricity sector by up to 79 MtCO2 in 2030. As a result, emission certificate prices decline by between 1.9 €/tCO2 and 6.1 €/tCO2 and the burden sharing between participating countries changes, but no additional emission reduction is achieved at the European level. This also implies, however, that the cost efficiency of such a cap-and-trade system is distorted, with additional costs of the FIT system of up to €320 billion compared with lower costs for ETS emission certificates of between €44 billion and €57 billion (cumulated over the period 2013–2020).Policy relevanceIn order to fulfil ambitious emission reduction targets a large variety of climate policy instruments are being implemented in Europe. While some, like the EU ETS, directly address CO2 emissions, others aim to promote specific low-carbon technologies. The quantitative analysis of the interactions between the EU ETS and the German FIT scheme for renewable sources in electricity generation presented in this article helps to understand the importance of such interaction effects. Even though justifications can be found for the implementation of both types of instrument, the impact of the widespread use of support mechanisms for renewable electricity in Europe needs to be taken into account when fixing the reduction targets for the EU ETS in order to ensure a credible long-term investment signal.

Including road transport in the EU ETS (European Emissions Trading System): A model-based analysis of the German electricity and transport sector

The EU ETS (European Emissions Trading System) is being enlarged stepwise to cover an increasing amount of overall European CO2 emissions. However, one of the largest and still growing CO2-emitting sector, the transport sector, and particularly road transport, has not yet been included in the EU ETS. Against this background, the question arises whether integrating the road transport sector in the EU ETS represents a cost-efficient CO2 reduction strategy. For this reason, the consequences of this integration are analysed with a focus on Germany. To do so we utilise a model-based approach. In order to account for both sectors simultaneously, we couple an electricity system model, PERSEUS-EU (Package for Emission Reduction Strategies in Energy Use and Supply in Europe), with a road transport model, COMIT (CO2 emission Mitigation in the Transport sector). The time horizon we consider ranges from 2010 to 2030. In our analysis, we differentiate our scenarios according to commodity prices, share of renewable energies in electricity generation and share of electric vehicles. The results show that the enlargement of the EU ETS to include road transport leads to a reduction of overall CO2 emissions, but equally reduces the mitigation efforts in the road transport sector. Simultaneously, the German electricity sector is mainly influenced according to the certificate demand or supply of the road transport sector.

The impact of heat waves on electricity spot markets

Thermoelectric power plants depend on cooling water drawn from water bodies. Low river run-off and/or high water temperatures limit a plant's production capacity. This problem may intensify with climate change. Our study quantifies the impact of forced capacity reductions on market prices, production costs, consumer and producer surplus, as well as emissions by means of a bottom-up power generation system model. First, we simulate the German electricity spot market during the heat wave of 2006. Then we conduct a sensitivity study that accounts for future climatic and technological conditions.We find an average price increase of 11% during the heat wave 2006, which is even more pronounced during times of peak demand. Production costs accumulate to an additional but moderate 16m. Due to the price increase, producers gain from the heat wave, whereas consumers disproportionately bear the costs. Carbon emissions in the German electricity sector increase during the heat wave. The price and cost effects are more pronounced and increase significantly if assumptions on heat-sensitive demand, hydropower capacity, net exports, and capacity reductions are tightened. These are potential additional effects of climate change. Hence, if mitigation fails or is postponed globally, the impacts on the current energy system are very likely to rise. Increases in feed-in from renewable resources and demand-side management can counter the effects to a considerable degree. Countries with a shift toward a renewable energy supply can be expected to be much less susceptible to cooling water scarcity than those with a high share of nuclear and coal-fired power plants.

A comprehensive model for the German electricity and heat sector in a future energy system with a dominant contribution from renewable energy technologies—Part I: Methodology

A comprehensive model for the German electricity and heat sector in a future energy system with a dominant contribution from renewable energy technologies—Part I: Methodology