Wednesday, March 02, 2005

Wind Energy Integrated Into German Grid

Bundesverband WindEnergie e.V. /
Federal Wind Energy Association
Press Release of 24 February 2005
Timetable Given for Expansion of Wind Energy
Berlin – The wind energy sector adopted the DENA grid study yesterday evening. This means
that nothing now stands in the way of further integration of wind energy into the German
electricity grid. Together with grid operators and the Federal Office for Economic Development,
the wind energy sector has drawn up a timetable for the further expansion of wind energy.
“Despite differences of opinion and indiscretions, we still completed the study”, summarises Peter
Ahmels, the President of the National Wind Energy Association: “All the prejudices and disaster
scenarios have been disproved. To guarantee decentralized energy supply, the grid operators
will have to expand the high-voltage grid by just five per cent. The network operators could only
charge consumers a few hundredths of a cent per kilowatt/hour for that.”
- In total, 850 km of new high-voltage grid will be required by 2015. Costs per year would be 110
million euro. By way of comparison: the grid operators invest two billion euro every year in their
whole 1.6 million km-long grid.
- Grid charges could increase due to the expansion of the network by 2.5 hundredths of a cent
per kilowatt/hour in 2015. That is less than one euro per year per household.
- Until 2003, grid operators required that wind turbines be isolated from the grid in the event of
short-circuits. This increased the hypothetical risk of greater breaks in supply. However, more
recent wind power installations could remain on the grid even in the event of undervoltage. Older
plant will be upgraded over time, and phase-shifters (synchronous generators to control power
flow) ensure grid stability, says the DENA study.
- Due to the expansion of wind energy, conventional power stations with output of approximately
2,000 MW could be replaced. That is equivalent to three large coal-fired stations.
- No additional power stations need to be built for balancing energy generation. The additional
5.6 TWh minutes and hours reserve required per year can be supplied by the existing normal
power stations. The impact on electricity prices will only amount to six to eight hundredths of a
cent per kWh in 2015, which is between two and three euros per year per household.
- The costs of the network expansion, balancing and reserve energy amount to about 0.1
cent/kWh in 2015. “But”, says Ahmels, “the study also has many serious deficiencies, such as
the assumptions about future fuel prices or Renewable Energy Act grants.”
- According to the basic scenario of the study, real prices (compared with 2003) of lignite and coal
will remain constant until 2015 and those for natural gas and oil will even fall. Deutsche Bank
Research, DIW and other research institutes are assuming rising fuel prices for coming years.
However, due to the improbable scenario, the study comes up with costs for further integration of
wind energy of 0.36-0.45 cent/kWh. For the average household using 3,500 kWh per year, the
differential costs would be 12.6 to 15.8 euro per year. That is calculated too high.
- Furthermore, the study requires that the existing tax exemption for lignite and coal in
comparison with natural gas and oil will be maintained.
- According to Offshore-WEA – contrary to the current Renewable Energy Act – there will be an
increased grant even after 2010. For the other renewable energy sources, the rates of REA grant
that apply today will be subject to sliding-scale reductions. Particularly in the fields of biomass
and geothermal energy, sharp cutbacks in grants can be expected.
- The annual rate of inflation is assumed to be 1.5%. In the event of higher inflation – which is
probable with higher oil prices – of 2% for example, the real rates of grant (REA grants are set in
absolute figures) will decline.
- According to the study, CO2 certificate prices will only rise to 12.5 euro/tonne. In the light of the
target of a 40% cut in CO2 emissions by 2020 which is necessary for climate protection reasons,
this appears rather unrealistic. This assumption reduces the contribution of wind energy to
climate protection. In addition, wind energy has other positive environmental effects.
Ahmels: “We have accepted the study despite a large number of criticisms. However, a
continuation is absolutely essential.” Network optimization and temperature monitoring have not
been taken into account yet. Part II of the Grid Study will have to explain how optimal power
transport can be organized within the country, how the connection can be made to the
Scandinavian electricity market and load flows can be organized with neighbouring countries. An
adaptation of the UCTE rules to reflect alterations in electricity generation would also be
necessary. How can wind power be incorporated into the balancing energy market? “All these
questions”, says Ahmels, “have yet to be resolved.”