Sunday, 6 January 2013

What Lessons from Germany and Denmark? [1]

Energy, like defence, is a topic where huge numbers of people seem to have strong views based on very little knowledge. If evidence is required, go to the Guardian’s Comment is Free website where almost any piece on an energy topic receives hundreds of comments exhibiting ignorance aplenty.

A favourite theme from the green/red camp is ‘what about Germany?’ or its close variant ‘if Denmark can do it, we can, too’. The ‘it’ in question is of course very large-scale renewable generation in both countries, which is taken to be triumphantly proving its worth there in quantities that put the UK to shame.

At the headline level, the statistics are striking. In the 1st half of 2012, renewables generated around 25% of Germany’s electricity, of which 9% was wind and 5% solar. (The balance is mostly biofuels, which greens are a bit more ambivalent about, but let that pass.) Denmark has reached 24% of electricity consumption being generated from renewables: and as a percentage of Denmark’s own generation, the figures are even more remarkable: over 40% is renewable, of which 28% is wind.

The difference between Denmark’s ‘24% of consumption’ and ‘40% of own generation’ immediately tips us off to an important additional factor – imports, or, more generally, cross-border electricity trade. Trade between interconnected countries is generally in either direction at different times, as advocates of free trade would hope and expect: wholesale electricity prices in one country will rarely be identical to those in a neighbour’s market, given different supply/demand dynamics, generation fleets, weather etc. Cross-border trade is the highly appropriate result.

 In Denmark’s case the detailed pattern is complex: they do indeed export electricity some of the time but, as the figures suggest, they are generally substantial net importers. Wind turbines, of course, produce ‘intermittently’ (and relatively unpredictably): and anyone wishing to hold up Denmark’s renewables as an example for other nations should be aware that their significant amount of wind generation is only feasible because of the ease with which they are able to import the ultra-flexible hydro-power available from Norway.  Attempting to balance the grid using their remaining indigenous sources - the largest of which is, yes, coal - would not be remotely economic, and in fact would probably not be feasible at any price (we will comment later on cost aspects.)

Wind plus hydro can be a feasible combination with which to satisfy electricity demand. Denmark, where this is achievable, doesn’t offer a model for countries where there is little or no hydro on tap (or, of course, some equally flexible alternative - of which there are very few indeed).

Germany’s import / export pattern is exceptionally complex, and changing all the time as the unexpected post-Fukushima decision, to shut down a significant portion of its nuclear capacity, is accommodated. But it is not hydro imports that make Germany an unconvincing model for other nations. Rather, it is the distinct possibility that Germany’s power system is not feasible at all.

Read on:

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