The answer is the most forceful possible no. Solar
power itself is a good thing, but Germany's pro-renewables policy has
been a disaster. It has the absurd distinction of completing the
trifecta of bad energy policy:
- Bad for consumers
- Bad for producers
- Bad for the environment (yes, really; I'll explain)
Pretty
much the only people who benefit are affluent home-owners and solar
panel installation companies. A rising tide of opposition and resentment
is growing among the German press and public.
I was shocked to find out how useless, costly, and counter-productive their world-renowned energy policy has turned out.
This is a serious problem for Germany, but an even greater problem for
the rest of the world which hopes to follow in their footsteps. The
first grand experiment in renewable energy is a catastrophe! The vast
scale of the failure has only started to become clear over the past year
or so. So I can forgive renewables advocates for not realizing it yet
-- but it's time for the green movement to do a 180 on this.
Some awful statistics before I get into the details:
- Germany
is widely considered the global leader in solar power, with over a
third of the world's nameplate (peak) solar power capacity. [1] Germany
has over twice as much solar capacity per capita as sunny, subsidy-rich,
high-energy-cost California. (That doesn't sound bad, but keep going.)
- Germany's
residential electricity cost is about $0.34/kWh, one of the highest
rates in the world. About $0.07/kWh goes directly to subsidizing
renewables, which is actually higher than the wholesale electricity
price in Europe. (This means they could simply buy zero-carbon power
from France and Denmark for less than they spend to subsidize their
own.) More than 300,000 households per year are seeing their electricity shut off because they cannot afford the bills. Many
people are blaming high residential prices on business exemptions, but
eliminating them would save households less than 1 euro per month on
average. Billing rates are predicted by the government to rise another
40% by 2020. [2]
- Germany's utilities and taxpayers are
losing vast sums of money due to excessive feed-in tariffs and grid
management problems. The environment minister says the cost will be one trillion euros
(~$1.35 trillion) over the next two decades if the program is not
radically scaled back. This doesn't even include the hundreds of
billions it has already cost to date. [3] Siemens, a major supplier of
renewable energy equipment, estimated in 2011 that the direct lifetime
cost of Energiewende through 2050 will be $4.5 trillion, which means it will cost about 2.5% of Germany's GDP for 50 years straight. [4] That doesn't include economic damage from high energy prices, which is difficult to quantify but appears to be significant.
- Here's the truly dismaying part: the latest numbers show Germany's carbon output and global warming impact is actually increasing [5] despite flat economic output and declining population, because of ill-planned "renewables first" market mechanisms. This regime is paradoxically forcing the growth of dirty coal power.
Photovoltaic solar has a fundamental flaw for large-scale generation in
the absence of electricity storage -- it only works for about 5-10
hours a day. Electricity must be produced at the exact same time it's
used. [29] The more daytime summer solar capacity Germany builds, the
more coal power they need for nights and winters as cleaner power
sources are forced offline. [6] This happens because
excessive daytime solar power production makes base-load nuclear plants
impossible to operate, and makes load-following natural gas plants
uneconomical to run. Large-scale PV solar power is unmanageable without
equally-large-scale grid storage, but even pumped-storage
hydroelectricity facilities are being driven out of business by the
severe grid fluctuations. They can't run steadily enough to operate at a
profit. [2,7] Coal is the only non-subsidized power source that doesn't
hemorrhage money now. [8] The result is that utilities must choose
between coal, blackouts, or bankruptcy. Which means much more pollution.
So
it sucks on pretty much every possible level. If you're convinced by
these facts, feel free to stop reading now, throw me an upvote, and go
on about your day. This is going to get long -- I haven't even explained
the half of it yet. There are lots of inter-related issues here, and
the more you get into them, the worse the picture gets.
Issue 1: Wrong place, wrong tech to start the green revolution
Renewables
advocates constantly hold up Germany as an example of how large-scale
rooftop solar power is viable. But the problem is,
Germany's emphasis on solar power is bad policy. I'm pretty sure other countries can do solar better, but that isn't saying much because German solar is just awful.
To be blunt, it's a stupid place for politicians to push solar panels.
I was there all last week for a work meeting and I didn't see the sun
the entire time. From talking to the locals, it's overcast for about a
third of the year in the region near Hanover where I was staying. Their
solar resource is simply bad, nearly the worst of any well-populated
region in the world:
Annual Solar IrradianceBetween
the northern latitude, the grey weather, and the Alps blocking much of
the diffused morning sunlight from the south, Germany is a terrible
place for solar power. When you put the US side-by-side on the same
scale, you realize that Germany has the same solar power potential as
dismal Alaska, even worse than rain-soaked Seattle:
Solar Radiation MapI
look at this and ask, "what on earth are they thinking?" They couldn't
have picked a worse generation technology for their climate.
But
most people seem to look at it and say, "if Germany is investing so much
in solar power, then it's obvious the US should build solar panels
too." I insist we examine the contrapositive: if solar power is only
taking off slowly in the US, even with significant subsidies/incentives
and one of the world's best solar resources, then the Germans should be
building even less solar capacity. It's clear their market must be
severely distorted for them to pursue such a sub-optimal energy policy.
You're
welcome to disagree with my thought process here, but the simplest
proof can be seen in the capacity factor, which is the percent of the
nameplate capacity that is actually generated over the course of a year.
The existence of nighttime means solar capacity factors must be less
than 50%, and when you add clouds, dawn, dusk, dust, and non-optimal
installations, 18% is the average capacity factor for panels in the
continental US. [9] In contrast, Germany's total solar capacity factor
in 2011 was under 9%! [1]
German residential solar panel
installations today cost about $2.25/watt capacity, [10] versus a hair
over $5/watt in the US. [11] (Numbers vary over a considerable range.
Most of this is labor/permitting costs.) But German panels generate less
than half as much actual power over time.
So when you normalize the panel install cost by capacity factor, US and German solar power generation are already at cost parity. The
payback periods for solar investments are about the same in California
and Germany. This is surprising to most solar advocates, who tend to
blame higher costs for the low uptake rates in the US. But system
economics alone do not explain disparities in installation rates.
So
why does Germany have 16 times as much nameplate panel capacity per
capita as the US? [12] Yes, permitting is much easier there, but that's
mostly captured by the $/watt costs since installation companies usually
pull the permits. And I don't think the German people are
that
much more pro-environment than the rest of the world. There's no good
reason for the disparity that I can find -- it ought to swing the
opposite way. Solar just isn't a good power source for a cold, dark
country that has minimal daytime air conditioning load. Solar in
Phoenix, Arizona makes sense, but not in Frankfurt. The only conclusion I
can come to is that
Germany's solar power boom is being driven entirely by political distortions. The growth of solar is not economically justified, nor can it continue without massive political interference in power markets.
Many
people are surprised to hear that Germany only gets a tiny 2.0% of its
total energy / 4.6% of its electricity from solar power (in 2012).
[5,13] All the headlines about new records on peak summer days make it
seem more like 50%. Despite all the cost and pain and distortions, PV
solar has turned out to be a very ineffective way of generating large
amounts of energy. They could have generated at least
four times
as much carbon-free power via new nuclear plants for the same cost. [14]
(Nuclear would have been a better option for a lot of reasons. I'll get
to that later.)
With subsidies for new solar systems phasing out over the next 5 years, solar growth has already started to decline.
The installation rate peaked and is now dropping.
[13, 15] Despite falling panel and installation costs, the majority of
new German solar projects are expected to stop when subsidies end.
They're already on the downward side of the technology uptake bell
curve:
(Data after 2008 from [14], prior to 2008 from Wikipedia)
If
you pay close attention, all the pro-solar advocates are still using
charts with data that stops after 2011. That's because 2011 was the last
year solar was growing exponentially. Using data through July 2013 and
official predictions for the rest of this year, it's now clear that
solar is not on an exponential growth curve. It's actually on an S-curve
like pretty much
every other technology, ever. Limitless exponential growth doesn't exist in the physical world. [13]
Also
note the huge gap on that graph between the actual generation and the
nameplate capacity. That's where the miserable capacity factor comes in.
(I think this is the source of a lot of misplaced optimism about
solar's growth rate.) Green media outlets only report solar power either
in peak capacity or as percent of consumption on sunny summer days.
Both of these measurements must be divided by about 10 to get the true
output throughout the year.
In reality,
solar is scaling up much slower than conventional energy sources scaled up in the past, despite
solar receiving more government support. This graph shows the growth
rate of recent energy transitions in the first 10 years after each
source reached grid scale (1% of total supply):
[13]
I
think this chart is the best way to make an apples-to-apples comparison
of uptake rates. Only about a quarter of the "renewables" line is due
to solar (the majority is biomass, wind, and trash incineration). So the
true solar growth rate from 2001-2011 is only 1/4th as fast as nuclear
from 1974-1984, and 1/6th as fast as natural gas from 1965-1975. [13]
When a new energy source is genuinely better than the old energy sources, it grows
fast. Solar is failing to do so. Yet it's had every advantage the government could provide.
What
this all implies is that without government intervention, PV solar
can't be a significant source of grid power. The economics of German
solar have only made sense up til now because they tax the hell out of
all types of energy (even other renewables), and then use the proceeds
to subsidize solar panels. Utilities are forced to buy distributed solar
power at rates several times the electricity's market value, causing
massive losses. The German Renewable Energy Act directly caused utility
losses of EUR 540 million in August 2013 alone. [16] It's a shocking
amount of money changing hands. When you strip away the well-intentioned
facade of environmentalism, this is little more than a forced cash
transfer scheme. It's taking from utilities (who are losing money hand
over fist on grid management and pre-existing conventional generation
capacity) and from everyone who doesn't have rooftop panels, and
shoveling it into the pockets of everyone who owns or installs panels.
Which means it's both a massive market distortion and a regressive tax
on the poor.
This explains why per-capita solar uptake is so
high in Germany. The government has engineered a well-intentioned but
harmful redistribution system where everyone without solar panels is
giving money to people who have them. This is a tax on anyone who
doesn't have a south-facing roof, or who can't afford the up-front cost,
or rents their residence, etc. People on fixed incomes (eg welfare
recipients and the elderly) have been hardest hit because the government
has made a negligible effort to increase payments to compensate for
skyrocketing energy prices. The poor are literally living in the dark to
try to keep their energy bills low.
Energiewende is clearly bad
for social equality. But Germany's politicians seem to have a
gentleman's agreement to avoid criticizing it in public, particularly
since Merkel did an about-face on nuclear power in 2011. [17]
Issue 2: Supply Variability
One major problem with all this solar-boosting, ironically, is
oversupply.
It's mind-boggling to me that a generation technology that provides
less than 5% of a country's electricity supply can be responsible for
harmful excess electricity production, but it's true. On sunny summer
afternoons, Germany actually exports power at a loss compared to
generation costs: EUR 0.056/kWh average electricity export sale price in
2012, [18] vs EUR 0.165/kWh average lifetime cost for all German solar
installed from 2000 to 2011. [14] (This is optimistically assuming a 40
year system life and 10% capacity factor -- reality is probably over EUR
0.20/kWh.) German utilities often have to pay heavy industry and
neighboring countries to burn unnecessary power. On sunny summer days,
businesses are firing up empty kilns and furnaces, and are getting paid
to throw energy away.
You can argue that this excess summer solar
generation is free, but it's not -- not only is this peak summer output
included in the lifetime cost math, but excess solar power actually
forces conventional power plants to shut down, thereby lowering the
capacity factor of coal & gas plants.
Yes, this means large-scale solar adoption makes non-solar power more expensive per kWh, too!
On net, excess solar generation is a significant drag on electricity
economics. You're paying for the same power generation equipment twice
-- once in peak conventional capacity for cloudy days, and again in peak
solar capacity for sunny days -- and then exporting the overage for a
pittance.
Why would they bother exporting at a loss? Because the
feed-in-tariff laws don't allow utilities to shut off net-metered
rooftop solar.
Utilities are forced by law to pay residential consumers an above-market price for power that isn't needed. Meanwhile,
Germany's fossil-burning neighbors benefit from artificially-low EU
energy market prices. This discourages them from building cleaner power
themselves. It's just a wasteful, distorted energy policy.
Remember,
electricity must be used in the same moment it's generated. [29] The
technology for grid-scale electricity storage does not yet exist, and
nothing in the development pipeline is within two orders of magnitude of
being cheap enough to scale up. Pumped-hydro storage is great on a
small scale, but all the good sites are already in use in both Europe
and the US. The
only plan on the table for grid-scale storage is
to use electric car batteries as buffers while they're charging. But
that still won't provide anywhere near enough capacity to smooth solar's
rapidly-changing output. [19] And if people plug in their cars as soon
as they get home from work and the sun goes down, the problem could get
even worse.
California's regulators have recently acknowledged that
the generation profile at sundown is the biggest hurdle to the growth of
solar power. The classic illustration is the "duck chart" (shaped
like a duck) that shows how solar forces conventional power plants to
ramp up at an enormous rate when the sun stops shining in the evening:
[29]
People
often complain about wind power being unreliable, but when you get
enough wind turbines spread over a large enough area, the variability
averages out. The wind is always blowing
somewhere. This means distributed wind power is fairly reliable at the grid level.
But all solar panels on a power grid produce power at the same time,
meaning night-time under-supply and day-time over-supply. This happens
every single day, forever. At least in warm countries, peak air
conditioning load
roughly coincides with peak solar output. But
Germany doesn't use much air conditioning. It's just a grid management
nightmare. The rate of "extreme incidents" in Germany's power grid
frequency/voltage has increased by three orders of magnitude since
Energiewende started. [20]
The
severe output swings have even reached the point where Germany's grid
physically cannot operate without relying on neighboring countries to
soak up the variability.
The ramp-down of solar output in the evening happens faster than the rest of Germany's generation capacity can ramp-up.
(Massive power plants can't change output very quickly.) Which either
means blackouts as people get home from work, or using non-solar-powered
neighbors as buffers. Here's one day's generation profile for German
solar power, showing how net electricity imports/exports are forced to
oscillate back and forth to smooth out the swings in production:
[21]
If
Germany's neighbors also had as many solar panels, they would all be
trying to export and import at the same time, and the system would fall
apart. The maximum capacity of the entire EU grid to utilize solar power
is therefore much lower than the level reached by individual countries
like Germany and Spain.
Solar boosters often say people need to
shift their energy consumption habits to match generation, instead of
making generation match consumption. That's feasible, to an extent --
perhaps 20% of power consumption can be time-shifted, mostly by
rescheduling large consumers currently operating at night like aluminum
electrosmelters. But modern civilization revolves around a particular
work/sleep schedule, and you can't honestly expect to change that.
People aren't going to give up cooking and TV in the evening, or wait
three hours after the sun goes down to turn on the lights. And weekends
have radically different consumption profiles from weekdays.
It all adds up.
PV
solar output doesn't properly sync up with power demand. That severely
limits the maximum percentage of our electricity needs it can provide. Germany hit that limit at about 4%. They are now finding out what happens when you try to push further.
Issue 3: Displacing the wrong kinds of power
You
may have noticed in the daily generation chart above how wind power is
throttled back when the sun comes out. Residential solar has legal
right-of-way over utility-scale wind. A lot of the power generation that
solar is displacing is actually other renewables. Most of the rest is
displacing natural gas and nuclear power. Coal power is growing rapidly.
[6,8]
Here's what the weekly generation profile is predicted to look like in 2020:
[22]
Notice
the saw-tooth shape of the big grey "conventional" (coal/gas) category.
What all this solar is doing is eating into is daytime base load
generation, which seems good for displacing fossil fuels, but in the
long run it's doing the opposite.
The majority of electricity
worldwide comes from coal and nuclear base load plants. They are big,
efficient, and cheap. But base load generation is extremely difficult
and expensive to throttle up and down every day. To simplify the issue a
bit,
you cannot ramp nuclear plants as fast as solar swings up and down every day. It
takes several days to shut down and restart a nuclear plant, and
nuclear plants outside France are not designed to be throttled back, so
nuclear cannot be paired with the daily oscillations of PV solar. Supply
is unable to match demand. You end up with both gaps and overages.
Most
people think Germany is decommissioning its nuclear fleet because of
the Fukushima accident, but the Germans didn't really have a choice.
They are being forced to stop using nuclear power by all the variability
in solar output. That's a big, big problem -- Germany gets four times
more electricity from nuclear than solar, so the math doesn't add up.
The generation time-profile is wrong, and the total power output from
solar is too low. They have to replace nuclear plants with something
else.
The normal way to handle variable power demand is via
natural gas "peaker" plants. But Germany has minimal domestic natural
gas resources and load-following gas plants are very expensive to
operate, so
what they're doing is building more coal plants, and re-opening old ones.
[6,8,22] It's expensive and inefficient, but you can run a coal plant
all night and then throttle it back when the sun comes up. It has better
load-following capabilities than nuclear (although worse than gas). The
German Green Party has been fighting nuclear power since the 1970s, and
has finally won. Nuclear is out, and coal is in.
If you're a regular follower of my writing, you'll know what a terrible idea this is. [23]
Replacing nuclear power with coal power is unquestionably the most scientifically-illiterate, ass-backwards, and deadly mistake that any group of environmentalists has ever made.
It's unbelievable how much cleaner and safer nuclear power is than coal
power. The Fukushima meltdown was pretty much a "worst case scenario"
-- one of the largest earthquakes ever recorded, the largest tsunami to
ever hit Japan, seven reactor meltdowns and three hydrogen explosions --
and not a single person has died from radiation poisoning. [24] The
expected lifetime increase in cancer rates due to the released radiation
is somewhere between zero and a number too small to measure. [25] Even
spectacular nuclear disasters are barely harmful to the public. Studies
are now showing that the stress from the evacuation has killed more
people than would have been killed by radiation if everyone had just
stayed in place. [26,27]
In comparison, coal power kills about a
million people per year, fills the oceans with mercury and arsenic,
releases more carbon dioxide than any other human activity, and is
arguably one of the greatest environmental evils of the industrialized
world. [23]
This is counter-intuitive, but second-order effects are enormously important.
Expansion
of photovoltaic solar power past 1-2% of total electricity demand means
less nuclear, and more coal. The amount of damage this does completely
overwhelms the environmental benefit from the solar panels themselves. You
have to avoid building so much solar power that it destabilizes and
eliminates other clean power sources. When you get to the "duck chart"
stage, things start to get bad. Otherwise you'll end up worse off than
when you started, as Germany has found out to its dismay.
So that all sucks
a lot. German solar power is hurting people and the planet. But there's more.
Issue 4: The kicker
The category for "biomass" power you see in all these charts is actually firewood being burned in coal plants. 38% of Germany's "renewable energy" comes from chopping down forests and importing wood from other countries. [28] Effing
firewood, like
we're back in the Middle Ages or something. Due to overzealous
renewables targets, and a quirk in the EU carbon pricing system that
considers firewood carbon-neutral, Europe is chopping down forests at an
alarming rate to burn them as "renewable biomass." The environmental
movement has spent most of the last 200 years of industrialization
trying to fight deforestation, and that noble goal has been reversed in
an instant by bogus carbon emission calculations.
In the very
long run, over 100 years or so, firewood is close to carbon neutral
because you can regrow the trees and they absorb CO2 as they grow.
Unfortunately, using firewood for fuel destroys a living carbon sink and
releases all its carbon to the atmosphere
right now. When you consider that you're destroying a carbon sink as well as releasing stored carbon,
firewood is actually much worse than coal
for many decades thereafter. [28] The next few decades is humanity's
most critical time for reducing carbon emissions, so this policy is
mind-boggling lunacy.
Germany is so focused on meeting renewables targets that it is willing to trample the environment to get there.
They've managed to make renewables unsustainable! It's tragicomic.
To summarize: Energiewende is
the worst possible example of how to implement an energy transition.
The overzealous push for the wrong generation technology has hurt
citizens, businesses, and the environment all at the same time.
I want to make it clear that I'm
not
saying we should abandon solar. It should definitely be part of our
generation mix. Due a mix of bad climate and bad policy, Germany ran
into problems at a very low solar penetration, and other countries will
be able to reach higher penetrations. But even if we ignore cost, there
is still a maximum practical limit to solar power based on the realities
of grid management.
- You can't build more PV solar than the rest
of the grid can ramp up/down to accept. The necessary grid storage for
large-scale solar power is a "maybe someday" technology, not something
viable today. Calls for 50% of power to come from solar in our lifetimes
are a fantasy, and we need to be realistic about that.
- You
can't force utilities to buy unneeded power just because it's renewable.
The energy and materials to build the excess capacity just goes to
waste. That is the opposite of green.
We have to learn those lessons. We can't sweep this failure under the rug.
Every
time a renewables advocate holds Germany up as a shining beacon, they
set back the credibility of the environmental movement. It's unsupported
by reality and I think even gives ammunition to the enemy.
We have to stop praising Germany's Energiesheiße and figure out better ways to implement renewables. Other models should work better. They have to -- the future of the world depends on it.
[1]
Solar power by country [2]
Germany's Energy Poverty: How Electricity Became a Luxury Good - SPIEGEL ONLINE[3]
German 'green revolution' may cost 1 trillion euros - minister[4]
Global Warming Targets and Capital Costs of Germany's 'Energiewende'[5]
Germany's 'Energiewende' - the story so far[6]
Germany: Coal Power Expanding, Green Energy Stagnating[7]
Merkel's Blackout: German Energy Plan Plagued by Lack of Progress - SPIEGEL ONLINE[8]
Merkel’s Green Shift Backfires as German Pollution Jumps[9]
Capacity factor,
Price per watt[10]
German Solar Installations Coming In at $2.24 per Watt Installed, US at $4.44[11]
It Keeps Getting Cheaper To Install Solar Panels In The U.S.[12]
Germany Breaks Monthly Solar Generation Record, ~6.5 Times More Than US Best[13]
Germany and Renewables Market Changes (source link in original article is broken, here is an updated link:
http://www.bp.com/content/dam/bp...)
[14]
Cost
of German Solar Is Four Times Finnish Nuclear -- Olkiluoto Nuclear
Plant, Plagued by Budget Overruns, Still Beats Germany’s Energiewende[15]
313 MWp German PV Capacity Added in July 2013 - 34.5 GWp Total[16]
EEG
Account: 5,907 GWh of Renewable Energy in August Sold for EUR 37.75 at
Expenses of EUR 399.52 per MWh - EUR 540 Million Deficit [17]
Germany will dilute - not abandon - its Energiewende plan[18]
German power exports more valuable than its imports[19]
Ryan
Carlyle's answer to Solar Energy: How large would an array of solar
panels have to be to power the continental US? How much would such an
array cost to build? And what are the major engineering obstacles to
powering the US this way?[20]
Electricity demand response shows promise in Germany[21]
Energiewende in Germany and Solar Energy[22]
Problems with Renewables and the Markets[23]
Ryan Carlyle's answer to Society: What are some policies that would improve millions of lives, but people still oppose?[24]
Stephen Frantz's answer to Nuclear Energy: What is a nuclear supporter's response to the Fukushima disaster?[25]
Fukushima Cancer Fears Are Absurd[26]
Evacuation ‘Fukushima’ deadlier then radiation[27]
Was It Better to Stay at Fukushima or Flee?[28]
The fuel of the future[29]
Fowl Play: how the utility industry’s ability to outsmart a duck will define the power grid of the 21st century
