Montel Magazine 4 2021 - Nordic power spat - Page 20

implies a rough doubling of capacity to somewhere around 100 GW . These plans imply staggering annual additions . Solar alone will need to grow by 17 GW every year from 2022 , says Aurora . That is more than double the record years of early last decade and three times what Germany built last year . The country ’ s BWE wind energy association says onshore wind rollout will need to double to 5.5 GW .
“ There is not much time left if we take into account construction periods for grid connection ,” says Christoph Maurer , head of Consentec , an energy advisory firm to successive German governments . The last administration of chancellor Angela Merkel , which was ousted in elections in September , struggled to speed up power line developments , allowing bottlenecks in moving wind power from the country ’ s north to its south to become aggravated . It also failed to alleviate administrative issues that saw planning times for new onshore wind projects blow out to five years . The incoming administration has promised to solve these constraints and to tackle another limitation : available land . It plans to make it easier to upgrade existing sites with newer wind turbines , to prune back zoning laws that inhibit the location of wind farms near residential areas and to set aside 2 % of German surface area for wind farms . The trouble is that state governments are responsible for many of these issues . Berlin will need to cooperate with some premiers who in the past campaigned on tightening zoning laws against wind energy . “ Acceptance will be crucial ,” says Maurer .
As will be securing the technical know-how . The coalition wants to make solar mandatory on new commercial buildings and the norm for all other new constructions . Yet installing the equivalent of more than a quarter of Germany ’ s present volume of solar panels every year for the rest of the decade is likely to stretch both available capital and labour , says Konstantin Lenz , a Berlin-based economist with energy consultancy Volue . “ Even if China can supply the panels , who is going to install them ?” The
German Institute for Economic Research ( DIW ) sees a shortage of skilled labour for the task at hand as a threat to the government ’ s ambitions . The coalition ’ s plans still put Germany on track to miss a goal – contained in the previous government ’ s climate law – to cut emissions by 65 % on 1990 levels by 2030 , according to the DIW . Only the energy sector stands a chance of meeting its target , other sectors will require more tools . “ It is incredibly ambitious , but there is also a lot of catching up to do due to the inactivity of the last government ,” says Claudia Kemfert , head of DIW ’ s energy department . Speeding up permitting and increasing the availability of land could spur rapid growth as 10 GW of wind projects are currently awaiting approval , says the German wind industry .
The impact of such volumes of renewable energy supply is another matter . A sharp rise in the sluggish rollout of recent years will help Germany retire coal plants earlier than the previous administration ’ s goal of 2038 . But it will also cast some of the market ’ s present difficulties into sharper relief . Aurora expects the impact of supply growth to outweigh that of higher carbon prices and electricity demand in the coming years . If the plans are achieved , Aurora sees German power prices falling 13 % from the company ’ s business-as-usual projection of around EUR 66 / MWh . Prices for renewable energy are likely to be far more severely affected . Wind and solar installations are only likely to capture 56 % of the EUR 45-60 / MWh range that they otherwise would have earned , by Aurora estimates . This is because of the tendency of wind and solar installations to operate during the same hours . Known as cannibalisation risk , this means power prices are generally lower when renewables get to generate electricity and that they are generally only higher precisely when renewables are not around to cash in on them . This in turn is likely to make market-driven expansion of renewable energy – via power purchase agreements ( PPA ) – less attractive , according to Aurora .
22 Montel Magazine 4 – 2021