The answer is that Germany has so far managed to integrate and balance high shares of renewable energy with very modest changes to its power system. Bigger changes will be necessary in the future, certainly, including new market frameworks that are currently under active discussion. But today, Germany has managed quite well to reach close to a 30% share, for seven main reasons, which are discussed below.
Grid Integration
Many power grids around the world are already transitioning to high shares of renewables. The cases of Germany, California, and Denmark are among the leading examples. Germany has already reached a 30% share and targets 35% by 2020. California will meet its target of 33% by 2020. Denmark is already at 33% wind power.
In other words, since 2006 we have witnessed a stabilization of Germany’s impressively reliable grid even as some 35 gigawatts of solar and 35 gigawatts of wind were installed on a grid with peak demand of generally around 60-70 gigawatts. Clearly, installing the equivalent of 100 percent of peak demand as wind and solar capacity does not bring down the grid. At the same time, the main correlation with low SAIDI seems to be the amount of underground cabling (as opposed to overhead lines), not the share of renewables, as I explained last year.
This is what feed-in tariffs do, fundamentally, by setting a fixed price for wind production which is high enough to reassure producers on their initial investment, and low enough to provide a hedge against cost increases elsewhere in the system. Indeed, when gas prices were higher such as in 2008, feed-in tariffs in several countries ended up being below the prevailing wholesale price.
That is the point of feed-in tariffs, which provide stable, predictable revenue to wind producers, and ensure that their maximum production is injected into the system at all times,
which influences market prices by making supply of more expensive production unnecessary. . . These tariffs make sense for consumers. The higher fixed price (feed-in tariff) is added to the electricity buyers’ bill, but as that bill is lower, thanks to wind input, than it would have otherwise been, the actual net cost of the tariffs is much lower than it appears. . . i.e. an apparent fixed cost imposed on consumers ends up reducing their bills.
According to the FT, National Grid said the closures should not affect the UK’s energy supply. “Demand is low at this time of year, and a lot of wind power is being generated right now,” it said.
But today, 5 out of 16 of the nuclear plants are off line (source: Sygration ). That is 27% of our nuclear capacity, or 3400 MW. The nuclear units that are off line are 50% more than the total installed wind capacity in the province. And of course the system has to back up this intermittent nuclear electricity supply.
The Energy Regulatory Commission (ERC) has finally approved the Feed in Tariff (FIT) Disbursement and Collections Guidelines, which will pave the way for an additional 320 megawatts of much needed generation capacity in the national grid.
You can find here wind-power generation forecasts, real-time estimates of actual wind-power generation, and historical wind-power generation data.
Even at 30% penetration, results indicate that the PJM system can handle the additional renewable integration with sufficient reserves and transmission build out.
