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Energy options: Just say ‘Nein’ to nukes and coal?

Maximilian Auffhammer, professor, international sustainable development | June 2, 2015

On March 11, 2011, I was sitting in a coffee shop in Berlin, dressed appropriately in a black turtleneck and leather jacket, reading about the terrible Fukushima Daiichi Nuclear disaster. The next day I read that the German government was pushing for “Atomausstieg,” which is German for “let’s retire all nuclear generating capacity.” Eighty percent of Germans surveyed were in favor of this move. The nine remaining German nukes are being phased out and the last one will shut its doors by 2022.

The Energiewende Law, which was proposed only months before the Fukushima disaster, was enthusiastically approved in 2011 and has led to rapid growth in the penetration of solar PV and wind power across Germany, as the advertising below indicates.


While there is no way to establish causality here, no one can argue with the fact that the installed cost of PV has come down by 66% in a decade. And the creation of the German market could have had something to do with this. In 2012 Germany (1.1% of the world’s population) had 32% of installed solar capacity globally, according to government figures. And capacity continues to grow – 2014 installed capacity was 113% above that in 2010, suggesting a 21% growth rate.

This has come at a cost. While owners of PV installation have to pay for some of the cost of the solar panels privately, the average German household now pays about 260 Euro per year to subsidize renewables, which is nothing to sneeze at. But it’s also not the end of the world as some have suggested (about the equivalent of a Starbucks latte twice a week, which unlike the renewable subsidy, does not come with a green halo). The Energiewende enjoys less, but still strong, public support. So now the government is starting to contemplate what to do next to achieve its ambitious emissions reduction goal of 80% by 2050.

germany energy long

Sigmar Gabriel, who is Angela Merkel’s Energy minister, has started talking about something called “Kohleausstieg” (German for Coal Exit). When visitors from Germany to the Energy Institute lunch table mentioned this, I thought I misheard. But I had not. There is a slowly emerging vision of the German energy system, which will no longer have domestic baseload generation. Just say Nein to coal and nukes. This is fascinating. Let’s take a look at what estimated power supply looks like in May 2012 versus 2020:

german energy power demand

What we are seeing here is the huge variability in generation of renewables, which of course does not line up quite as beautifully with demand as has been pointed out elsewhere. This picture also shows nicely that by 2020 renewables are generating more power than is demanded (at least on the weekends). And if the installation trend continues, this will be true for most weekdays, too.

This means that we may not need the always-on baseload (coal and nuclear in most places). In one version of the world you use fossils that ramp up quickly to meet residual demand (e.g., gas from Russia). In a second version of the world you use clean hydro power from Northern Europe instead. In a third version, which is the one Elon Musk would like you to consider, you use a giant battery in your house, which stores renewable power at times when there is plenty of it to be had for cheap (requiring a pricing revolution).

I am a confessed hip-/techie. I like the last version of the future. But I have some questions.

  • Is Germany this bold since it can always buy cheap nuclear baseload from France if things go terribly wrong? What if you are a country like the US, where you do not have this type of backup at scale?
  • What about the political economy of a coal exit? Coal mining unions are very powerful and this would put a lot of people in poor areas out of jobs. And miners will not go into installing PV panels on people’s roofs, since the sunny rich areas are not usually where the coal mines are.
  • How much storage do we need to make this work? I can see a residential model, where Elon Musk sells me a battery or my car serves as storage. But what about BMW, Porsche, and Intel? Will we come full circle where firms will have their own fossil backup generation (which is the case for most manufacturers in China currently)?
  • What if the major players exit coal? That shift in demand, drives down price and leads to consumption elsewhere. In order to make this work you would have to exit coal and find a way to leave what you don’t consume in the ground.

While writing this blog post I was surprised by how similar California’s and Germany’s energy policies and challenges are. Both places are pushing hard for an almost fossil free future using a combination of market based policies and huge number of competing standards. Both places have political leadership proposing radical long range policy targets, which we do not necessarily know how to achieve. Both places are relatively wealthy. Both places have industries that have been at the forefront of technological innovation, especially in the STEM fields.

Germany, specifically, has been at the forefront of pushing new distributed generation technologies and shouldering much of the cost of the global energy transition. This is laudable. California is along for the ride and doing its part. It looks like we might be the ones leading the charge on designing cost effective storage. Thanks Elon.

While I don’t think a coal free Germany is necessarily an unrealistic idea, I want us to keep our eye on the prize. What we should shoot for are drastic global reductions in CO2. Germany and California are small. If what comes out of our policies is a way to drive coal and natural gas up the merit order in places like China and India, this would be the real success.

Cross-posted from the blog of the Energy Institute at Haas (tag line: Research that Informs Business and Social Policy).

Comments to “Energy options: Just say ‘Nein’ to nukes and coal?

  1. The real purpose of this article comes at the end of the article when the associate professor discusses why it should really be India and China the ones steering away from coal (probably inspired by the article of a few weeks ago of another baby boomer techie, Thomas Friedman “Germany, the Green Superpower”).

    So India and China should be buying foreign batteries (preferably German ones according to this blog) instead of using their own cheap resources? What Germany and the West should be doing is cleaning the damage they have already done to the environment and cleaning what is now being done by the developing world (after all the developing world is just following the economic model and recommendations of the West) and then we can talk about altering the use of fossil fuels in those developing economies.

    Subsidies: These German environmental policies are only possible thanks to the fact the Euro has had and continues to have an undervalued German “component” of its currency and an overvalued eastern or mediterranean one… Europe is the one subsidizing Germany and its environmental policies. Let’s correct that and make German products as expensive as Swiss ones so that those products can correspond to their real market value.

    The question of leadership: Germany does not lead Europe not even in environmental issues. Europe is wary and suspicious about anything that Germany does. Germany will never have the consent of the continent necessary to lead. Germany is specially mistrusted not only by the austerity belt paying for the economic gambles of German greed but by the Polish, Czechs, Slovaks and so many others of the new EU members. Germany yet again missed the opportunity to be a true soft power.

    The future: Germany is the only European country that thanks to currency subsidies has been able to focus more and more of its trade surplus in the BRICs (excluding Russia of course) and other emerging players. Southern and Eastern Europe should be doing the same while continuing to use Germany to their benefit and not detriment.

    This is not an apolitical or just a technological issue. Let’s not forget that it is also about oil-consuming countries (like Germany, China, and India) and oil-producing nations (like Russia and Iran).

  2. The best way to ban fracking & shut down nukes is for Berkeley to pass a Solar Payment Policy that requires PG&E to pay solar home owners $0.99 kwh.

    Next, every house that adds a new roof, or does over 50% remodeling must add 50 solar panels, Lancasters, California only allows the building of solar homes that are 100% solar.

    And credit unions need to offer lower interest loans to anyone adding solar.

    Why $0.99 kwh?? Because the actual cost of all energy is $0.99 kwh, when you add in the cost of an atomic meltdown, Oil Wars, fracking pollution clean up costs, etc. Why not require consumers to pay solar homeowners who sell solar onto the grid the true cost of energy: $0.99 kwh???

    Is it better to spend the money on the front end, paying solar homeowners for clean, safe, free, solar energy, or try to clean up our water after fracking or an atomic meltdown, on the back end??

    I would rather pay $5 a month more to solar homeowners to generate solar than to try to clean fracking chemical out of our water.

    PGE is actually just People’s Green Energy, if we force PGE to pay $0.99 kwh. I would rather do that, than to be suckered into Marin Clean Energy, ( which is actually Shell Oil. ) is just more CENTRALIZED corporate control of energy. We need DECENTRALIZE home roof top solar, where the homeowners earn the lion’s share of the money from solar. Boycott Marin Clean Energy.

    Whole grid? Our grid!!

    Batteries are not necessary if we control our grid. We do not need to be off the grid. We should use our grid to make money, create JOBS for young people, and shut down Diablo Canyon. If we play our cards right, we can use our grid to ban fracking and make money for solar homeowners.

    The cost of solar energy is now similar to fossil fuels, but will fall dramatically once 60% of the homes have 100 solar panels. By 2022, the cost of energy in Germany will be $0.06 kwh, because the cost of solar is FREE.

    The cost of a phone call from SF to NY was $20 in 2001. Now it is FREE. By 2040 the cost of a solar house with 100 panels will be FREE, because people will be making $400./ month from selling solar onto our grid.

    I hope this answers some of your questions.

  3. As a follow up to my comment above, I spent at few hours and determined that here in the foggy Bay Area, to remove myself from the grid and to store and supply all the 1785 KWH I used over the course on one year, I would need KWH storage capacity of about 11-12 percent of my annual usage.

    For me, that would be about about 200 KWH of battery storage. If Elon Musk batteries cost $3,500 per 10 KWH, I’d need 20, for a total cost of $70,000. That’s about five times what I’d pay these days for the PV installation, assuming a 1300 watt system at a capacity factor of 16 percent.

    Musk seems to assume a battery would allow arbitrage on a daily basis, but the reality is in California, with its need for air conditioning, that power is most expensive during business day, and least expensive at night.

    Under current net-metering rules, my PV system pumps high-value electrons in the grid during the day (and I get credit for them), and I use low-value elections from the grid at night. If anything, a battery would make the less economical, not better.

    What am I missing here?

    • Utility companies in California do not like net metering and have a bag of tricks to oppose it and fight it every step of the way and have been for years. (See this San Jose Mercury News article.)

      Net metering works for you because you have been able to navigate the obstacle course that the utility invokes because they have been FORCED to permit a token amount of net metering for residential customers.

      Daytime storage capability — batteries in the broadest generic technical definition — are available from many sources and not just from charismatic poster boy Elon Musk. But again, this daytime storage capability is simply a counterproductive financial burden to renewable energy by inflexible utility companies and Musk knows it but he cleverly wants to capitalize on it.

  4. GRID STORAGE needs are usually predicated on a bad premise. The bad premise is that renewable energy should bear the added financial burden of feeding its electrons into storage during periods of high fluctuations and periods of low demand.

    Fortunately a study has been performed that has created controversy because it lays out a solid case that up to 40% of the grid input can come from RENEWABLE SOURCES UNENCUMBERED BY INTERIM STORAGE BURDENS.

    California needs to take this more rational approach to stop utilities from financially hurting renewable energy project balance sheets.

  5. It is time to give our highest long-term energy supply priority to designing and building fusion energy plants with the greatest sense of urgency, especially now that we have exceeded 400 ppm atmospheric CO2 and our water supplies, economy, climate and long-term future quality of life are in gravest jeopardy.

    We continue to fail to act on warnings by some of the most important people in 20th century — such as President Eisenhower in his 1961 Farewell Address and Sir John Maddox, late editor of Nature, in his book What Remains to be Discovered (especially his concluding chapter on “Avoidance of Calamity”). Time to overcome the increasingly disastrous consequences of global warming is running out far too rapidly.

  6. Germany is “shouldering much of the cost of the global energy transition.” Uh, what global energy transition is that, burning more coal? ‘Cause that’s what Germany is doing now.

    From an energy technology standpoint, I’m not sure it makes much sense to write of Germany as a distinct entity anyway, when nuclear baseload is available next door from France, and dispatchable hydro is available from Scandinavia. The EU as whole has a very complementary mix of electricity-producing energy sources, and Germany is just a part of that tightly integrated system.

    As our beloved and recently departed nuclear chemist Heino Nitsche used to say, “Germans have no problem with nuclear power, just as long as the reactors are on the other side of the Rhine.”

    Show me a Germany that is coal- and nuclear-free, both domestically and in its energy imports, and has a cost of electricity that would make its technologies relevant for China, India and the developing world. I’m afraid Germany, and the rest of the world, still has a long way to go.

    And as for Elon. Really? Household storage might make sense near the equator, where the days are pretty much the same length all year. But here in Bay area, at the 38th parallel, it’s a different story.

    Here’s a challenge. Assume a home solar PV system that meets annual household demand i.e. it “trues up” annually. Given PV output is highest in the summer, when demand is low (unless you have air conditioning), and PV output is lowest in the winter, when electricity demand for lighting is highest, calculate how many excess Kwh you would have to bank, either in grid storage or Elon batteries, to make it through to the Spring. It’s a lot of batteries.

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