Category: Germany

An ambitious step-up on transport

dchone May 21, 2021

Last week the German government announced a step-up in their ambition to reduce emissions, with a new target date for net-zero emissions of 2045. This will bring with it an even faster transition in the coming decade to 2030, which the government outlined by sector as follows;

Sector	2019 reductions from 1990	2030 reduction goal relative to 1990
Electricity generation	45.5%	62.5%
Buildings	41.9%	66.7%
Transport	0.6%	42.1%
Industry	33.8%	50.7%
Agriculture	24.4%	35.6%
Other	76.3%	86.6%
Overall ambition	35.7%	56.5%

While most sectors have made significant progress to date, transport stands out as having not changed since 1990. The reality here is that the same basic energy service technologies are still in place for planes, trucks, ships and automobiles and that efficiency improvements have been broadly offset by demand growth, meaning no change in thirty years. In 1990 personal transport demand in the Eastern part of Germany would have been quite low, albeit rather inefficient, so the demand increase over the years would have been a factor. This is illustrated in the figure below (Source: Car ownership and usage trends in Germany – Response to the Commission on Travel Demand’s Call for Evidence: Understanding Travel Demand, Tobias Kuhnimhof, Institute of Transport Research at the German Aerospace Center (DLR), May 2017).

Key car stock and vehicle kilometres traveled trends in Germany since the early 1990

The goal for 2030 represents a very sudden and fast paced deployment of battery electric vehicles (BEV) or hydrogen fuel cell vehicles (FCEV), although the auto industry in Germany is not approaching this from a standing start. Over the past few years the likes of VW, Audi, BMW, Daimler and Porsche have been developing a new range of electric vehicles and releasing them into the market. In a recent statement by the CEO of Volkswagen Passenger Cars, he noted that 2020 was a turning point for Volkswagen and marked a breakthrough in electric mobility. Last year, the brand delivered nearly 134,000 battery electric vehicles (+197 percent versus 2019). However, despite a challenging market environment, Volkswagen delivered around 5.328 million vehicles across all drive systems to customers around the world, so this represents 2.5% of their production.

In Germany, transport emissions are 95% road based, with internal aviation, barges, coastal ships and trains making up the rest. Within the road sector, this breaks down to about 65% passenger vehicles, 25% heavy freight and 10% light commercial (N.B. this breakdown is approximate based on a variety of articles and EU data sources). As noted, many models of passenger BEV are now available to purchase and this is also becoming a reality for light commercial vans and small trucks, although the range isn’t as extensive at the moment. However, it is not the case for heavy freight trucks, where some BEVs and FCEVs have been demonstrated, but commercial availability is very limited.

So if we assume little change in the 5% non-road transport emissions and large scale rollout of heavy freight BEVs and FCEVs from 2025, the heavy lifting for the transport goal will have to be done by rapid uptake of passenger EVs and light commercial EVs. The overall picture from 2020 (pre-COVID) to 2030 could look like the table below;

Mode of transport	2019 total emissions (scaled to 100)	2030 emissions relative to 2020 scale
Passenger vehicles	62	30
Light commercial	9	5
Heavy freight	24	18
Non-road transport	5	5
Total	100	58
		(or 42% reduction)

Based on the above, the deployment calculation is relatively straight forward. In 2019 the sale of passenger BEVs in Germany was 65,000 units in a total market of 3.6 million units. However, in 2020 this number tripled to 194,000 units, so we enter the decade with BEV sales at around 5%. There are some 47 million vehicles on the road in Germany with, at best, 1% being electric (470,000 vehicles) at the start of 2021. Although sales of cars at between 3 and 4 million and a 47 million car fleet points to an average age greater than 10 years, assume nevertheless that 10% of the fleet is turned over each year – perhaps the German government will introduce policies to accelerate the retirement of older less efficient vehicles. The calculation will also assume, as a starting point, that 10% of the sales in 2021 are battery electric, or double the 2020 number.

The chart below shows how the fleet emissions change as sales change. As indicated in the table above, passenger vehicle emissions need to halve by 2030 such that Germany reaches its transport sector goal. That doesn’t happen until the deployment annual growth rate of BEVs reaches nearly 50%, or a doubling of sales every two years until 2027 when all passenger vehicle sales are BEV from then on.

A deployment rate that requires doubling production every two years is a formidable task. Although EV sales tripled in 2020 vs. 2019, this was from a very small base. Such a rate won’t be maintained as numbers climb. For rapid BEV growth it isn’t just about retooling the existing auto plants but also building new battery plants, sourcing the necessary minerals for the batteries (e.g. lithium, nickel, cobalt), ensuring sufficient infrastructure is available for battery recharging and most importantly, building customer confidence in the product. Should Germany fall behind this rate of deployment, the only remaining option will be much higher turnover rates for vehicles later in the decade, but that will mean temporarily producing new cars at a rate that is unsustainable in later years.

By 2025 Germany will need to produce nearly two million electric cars per year for domestic use, which will also mean battery production capacity of some 160 GWh (assuming an 80 KWh battery for each car). At the moment the battery ‘gigafactory’ pipeline for Germany has several projects, with the total approaching this sort of scale and there are plans for future production increases. The Fraunhofer Institute for Systems and Innovation Research ISI, even suggests that EU production capacities of 300 to 400 GWh could be achieved by 2025. The website Battery-News.de anticipates that the German market alone will account for more than 170 GWh of production capacity. By way of comparison, Europe currently has around 30 GWh of production capacity.This ambitious German plan for e-mobility is getting underway!

The Role of the EU Emissions Trading System

dchone August 22, 2018

Over recent weeks, a number of media outlets have noted the launch of a new commission in Germany, officially known as the “Commission on Growth, Structural Change and Employment”. The initiative is a welcome development and is born out of two concerns;

That German emissions are not falling fast enough, with an apparent reason that there is continued reliance on coal in the power sector. Demand has not fallen significantly in recent years despite the emphasis on renewable energy through the Energiewende. However, it should also be noted that German nuclear output has nearly halved in ten years as that industry has been forcibly wound down.
That when emissions do fall, the impact on the personal welfare of those in the coal sector could have wider ramifications for the economy.

According to the Financial Times, the objective of the task force is to lay out a plan for the elimination of coal from the country’s energy mix and to report by the end of the year. In doing so, the task force must look at the employment and regional development issues associated with such a move, so as not to repeat the problems that manifested in other countries when coal use went into rapid decline. The FT concludes with the observation that chances are the outcome will be radical rather than minimal, with the commission perhaps even setting a date for the complete elimination of coal that is much earlier than many observers expect.

In the Shell Sky scenario released earlier this year where the goals of the Paris Agreement are met, coal use in the EU roughly halves from current levels by 2035. Over the same period, natural gas use rises, peaks and begins to fall, while wind and solar grow several fold. This would certainly involve significant change for Germany and the coal sector in particular, hence the need for the Commission to look at employment and structural impacts for such a shift.

But should the Commission also develop a plan for the elimination of coal itself, or should it focus on the societal impacts of such a change?

German power generation is covered by the EU Emissions Trading System (EU ETS) and has been since 2005. That system embodies an emissions trajectory that is now declining at 2.2 percentage points per annum (against a 2005 baseline), which implies an overall reduction of EU ETS emissions by 43% in 2030 relative to 2005. Extending that rate of change out further, the system will have no further issuance of allowances from 2056, or in other words emissions must be zero by then (or at least net-zero if the system allows for storage units via carbon capture and storage (CCS)). That system alone ought to be sufficient to guide the transition in terms of the energy mix.

But the EU ETS has been the subject of much criticism, in large part because of the low prices seen from 2008 through to 2017 (~€5 for much of that time). This isn’t to say that the EU ETS wasn’t working in that allowance allocation and surrender against emissions proceeded without a hitch. That is still the case today. The problem was a growing surplus of allowances and a market view that such a surplus would persist, leading to very low prices. That surplus initially grew for a number of reasons (i.e. the 2008+ recession, inflow of units from the Clean Development Mechanism of the Kyoto Protocol) but persisted for another reason; overlapping policies. These are actions taken by government which force emissions down at a rate faster than the EU ETS, thus throwing up allowances and adding to the surplus. Perhaps the most prominent of these policies was the EU wide push for renewable energy, which includes the German Energiewende.

Policies that overlap a cap-and-trade system will tend to do two things;

Lower the prevailing carbon price;
Raise the cost of emissions reduction across society.

These effects are illustrated in the charts above and this is exactly the impact that the Energiewende and other similar policies had on the EU ETS. This was eventually recognised and a correcting mechanism has now been built into the ETS, the Market Stability Reserve (MSR). The MSR removes and banks surplus allowances according to a formula built into its design.

With the MSR now starting to impact market perception, allowance prices are on the rise from a low of just €3 in 2015. Recently IETA noted in a tweet;

The EU ETS always was and remains the single most effective tool to push coal out of the power generation mix. For a period that will favour natural gas, but over time renewable energy, nuclear and possibly coal or gas with CCS will grow to dominate power generation. Coal would depart first. That is exactly what has happened in the UK, with that country bolstering the weak EU ETS with a floor price of £18 per tonne of CO2 (~€21). But it didn’t happen in Germany because of interventions on two fronts; the Energiewende favouring renewable energy and the national nuclear policy phasing out that technology.

Moving forward, the EU ETS is fully capable of shifting the EU power system (and industry) to an effective state of zero emissions in the 2050s. That date could even be brought forward by implementing more aggressive linear reduction rates from 2030 onward. A shift to 3% per annum from 2031 onward would deliver a zero emissions outcome by 2050. Notably, the system would deliver that outcome at lowest cost to society, an inherent design feature of the mechanism.

As the EU ETS bites, decisions will have to be made about the closure of individual generating stations and this is where the Commission could add value, ensuring that the transition is just and fair for various parts of the country. But if the Commission also proposes state intervention to force coal down an even faster exit route for Germany alone, there may be downwards pressure on allowance prices and the effectiveness of the EU ETS could be undermined, not just in Germany but right across the EU. While some of the surplus allowances will be absorbed by the MSR, others will flow out of Germany and underpin the longevity of coal in other EU member states. This means that the environmental benefits of early coal closure could be undermined as well.

But should the Commission land on a recommendation for accelerated phase out of coal, it could then advise on the use of newly introduced measures to cancel ETS allowances where governments take actions in addition to the EU ETS. This means that allowances can be cancelled in the case of deliberate coal phase out.

Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018, states;

In the event of closure of electricity generation capacity in their territory due to additional national measures, Member States may cancel allowances from the total quantity of allowances to be auctioned by them referred to in Article 10(2) up to an amount corresponding to the average verified emissions of the installation concerned over a period of five years preceding the closure. The Member State concerned shall inform the Commission of such intended cancellation in accordance with the delegated acts adopted pursuant to Article 10(4).

While the cancellation of allowances represents a further intervention in the ETS, it would at least address the issue of environmental leakage to other Member States. But the simple alternative is to leave the EU ETS to perform its job and phase coal out as part of a lowest cost driven transition. This might be the most prudent approach. The EU ETS is a robust, well designed system that will deliver on the required emission reduction goals.

COP23: Long pathways and lengthy documents

dchone November 13, 2017

Under grey autumnal skies, COP23 is now into its second week. This year the event has been presided over by the Government of Fiji, but held on the sprawling UN Campus in Bonn, Germany. The setup has largely split the Party negotiators from the bulk of civil society and the business community, with two sites separated by over two kilometers of winding path across park-lands. While many have badges that allow them to enter both the Bula Zone (negotiations) and Bonn Zone (displays, side events), the distance, slow buses, cold temperatures and copious amounts of rain has rather limited the interchange. This is a loss for both sides.

Nevertheless, in contrast to COP22 and the most recent inter-sessional meeting, the negotiations themselves have been more open to observers. This has allowed those that can tolerate the pace of the process to witness the gradual expansion of the very exact text of the Paris Agreement into multiple pages of headings, ideas and text elements as the Parties sought a ‘rule book’ to guide full implementation. This is particularly the case for Article 6 on cooperative approaches (interpreted by most as carbon trading), which does need further detail to function and deliver on its potential benefit.

Prior to COP23, the International Emissions Trading Association (IETA) released a further iteration of its own straw-proposal for Article 6, a somewhat simplified version of the same document released earlier in the year. Instead of trying to reconcile all accounting aspects of the Paris Agreement within Article 6, we (the IETA International Working Group, which I co-chair with Jonathan Grant of PwC) recognized that much of what we had been considering more correctly sat within Article 13, the transparency framework. This makes Article 6 somewhat simpler, although that didn’t stop the negotiators from turning a page of Paris Agreement text into over 40 pages of suggested proposals.

While the 40+ pages that the negotiators produced is a record of all the proposals made over several sessions, rather than the result of a negotiation to reach a conclusion, it nevertheless throws up some very diverse views as to the operation of national emission accounts, carbon unit trading and the impact that trading has on ambition. The latter point may become an issue, as the current text proposals appear to reflect the view (by some, not all) that each trade (ITMO) or use of a mechanism must demonstrate that it has led to enhanced ambition, rather than the more accepted view that trade at the macro level leads to lower costs, greater efficiency and therefore (in the case of carbon markets) to enhanced ambition. This is simple to demonstrate as a concept but probably impossible to establish for a single transfer or mitigation activity. Take for example the desire to establish net zero emissions at the economy level. Without trade, a country may be reluctant to do this as there may be insufficient domestic emission sinks to balance remaining emissions. But with access to a broadly based international carbon market, said country may be very willing to set a goal for net zero emissions, knowing that the global market for sequestration units is considerable. It is therefore prepared to invest in that market by purchasing units, potentially increasing the rate at which the global economy can also reach net zero emissions. But this concept is not necessarily demonstrated in every given trade. Further, the trades become integral to the realization of the net zero emissions NDC.

The Article 6.4 process also threw up similar stark divisions, with views on the mitigation mechanism under 6.4 looking troublesome to resolve. While many Parties were proposing ideas that aligned very closely with the business community views in the IETA straw-proposal, some countries saw the mechanism as something that operated above the ambition of the nationally determined contributions (NDC) of the host and recipient Parties involved. This is illustrated by the statement within the draft elements document that says;

An overall mitigation in global emissions takes place when emission reductions are delivered at a level that goes beyond what would be achieved through the delivery of the host Party’s NDC and the acquiring Party’s NDCs in aggregate and beyond offsetting.

While this view may be laudable from an ambition perspective, it would render the mitigation mechanism useless and put a stop to linkages or transfers between trading systems. For example, it would mean that the EU ETS could never accept units from outside its own borders as the ETS is integral to achieving the NDC itself. All of this must now be resolved in the year ahead.

Back to the broader COP event, the highlight for the weekend was the official opening of the unofficial pavilion of the United States of America. At every previous COP I have attended, the USA has had a very large display stand, which in recent years has had an elaborate and very popular NASA display of global climatic changes projected onto a globe. Not so in 2017, with the current Administration opting not to repeat this. An alternative appeared, apparently sponsored by various non-state actors, with the opening also being the launch of America’s Pledge (#wearestillin), where said actors (e.g. California, Washington, Virginia etc.) pledged to deliver on the US NDC, even if the nation leaves the Paris Agreement as announced by President Trump in June.

The COP now enters the second week and much remains to be done, both in this week and in the year before the end of COP24, when the Paris Agreement ‘rule book’ should be completed.

Energy reality meets Climate Reality

dchone September 16, 2014

In its enthusiasm to spread the word about the rapid uptake of renewable sources of energy, the Climate Reality Project recently circulated the picture below. It references the amount of wind energy, in particular, that is now being generated in the German State of Schleswig-Holstein.

This is Germany’s northernmost state and borders both the North Sea and the Baltic, so benefits from the windy climate that this geography offers. It is well known as Germany’s windiest area

In recent years and as part of the overall push to generate more renewable energy in Germany, considerable wind energy capacity has been installed in this region. While the current level of generation from wind is laudable, this is far from 100% renewable energy. The actual milestone that the state has reached was more accurately described as follows;

The Northern German coastal State of Schleswig-Holstein will be able to mathematically meet its electricity demand fully with renewable energy sources this year if wind yields reach at least average levels, Robert Habeck, Minister of Energy said when presenting a new study last week (May 2014).

This means that the amount of wind (and solar) electricity generated in Schleswig-Holstein will be equal to total demand, but these may not match in terms of timing. At certain times the state will export surplus wind generated electricity into the grid and at other times it will need to draw from the grid to meet its needs, particularly during periods of little wind. Nevertheless, it is quite an achievement, even though it highlights the need for a substantial backup system for renewable electricity generation.

But there is a second major reality associated with “100% renewable energy” statements. We live in a global economy that is only partly powered by electricity, to the extent that even if this electricity is generated entirely from renewable sources, the percentage of renewable energy in the final energy mix will still be less than 20% (see below). Even in OECD countries where electricity is more widely used, this only rises by a few percentage points.

The largest slice of final energy (i.e. energy that is used by the final consumer for the delivery of an energy service, e.g. mobility) is oil, used mainly for mobility in road vehicles, planes, trains and ships. Natural gas and coal are also very large, used primarily for industrial processes such as steel making, chemical plants and similar. Natural gas is also used extensively throughout the world as a residential fuel for boilers and direct home heating.

Coming back to Schleswig-Holstein, the actual percentage of renewable energy in the final mix is probably higher than most areas, not just because of its renewable electricity production but also because of the availability of biomass from the agricultural sector. In Germany as a whole, even if all the electricity was sourced from renewable energy (but it isn’t) and adding to this the biofuel and waste energy sources, a level of ~27% renewable energy would be reached. For Schleswig-Holstein with its current level of renewable generation, that probably translates to ~30% today.

That’s an impressive feat, but it isn’t 100%.

Some energy system home truths

dchone June 25, 2014

One point of note on the annual calendar of energy events is the release by BP of their Statistical Review of World Energy. The data, all available to download in Excel format, covers the period up to the end of the previous year (i.e. the current data is to the end of 2013) and as such is about 18 months ahead of the equivalent data from the IEA (which is currently up to 2011 but will be updated later this year). Just about anything you might want to know on energy supply, energy consumption, CO2 emissions, fossil fuel reserves etc, is there for the interested user. In recent years BP have updated the tables to include a more comprehensive look at renewable energy as well.

The most recent release by BP was just a couple of weeks ago, so here are a few key energy/climate home truths within it;

Global CO2 emissions just keep on rising: This is hardly a surprise, but given the recent burst of capacity from the renewable energy sector there might be some sign of some levelling off at least. OECD emissions are at least flat now, but non-OECD emissions continue to rise sharply as coal use increases in particular (chart below in millions tonnes CO2 per annum).

The global CO2 intensity of energy isn’t budging: This is a bit more surprising given the influx of natural gas into the global economy and the build rate of renewables. But coal continues to surge and quite some nuclear has been shut down in Japan. The chart below shows the OECD intensity falling as renewables take off in Europe and natural gas increases in the USA, but non-OECD intensity offsets this to give a flat picture overall (chart below is in tonnes of CO2 per barrel of oil equivalent).

The annual increase in fossil fuel use far exceeds the increase in renewable energy production: While many will readily quote the annual increase in renewable energy investment or annual increase in renewable energy capacity as evidence of turning the corner, the reality in terms of renewable energy produced is somewhat different. The chart below compares the annual coal increase with global solar and wind increases. For reference, the total fossil fuel increase from 2012-2013 was 183 Mtoe (million tonnes oil equivalent). The whole picture is rather distorted by the global financial crisis, but coal alone is increasing by something like 100-150 Mtoe per annum. At least for the last couple of years solar has been flat at about 7 Mtoe annual increase.

Solar and wind are growing rapidly, but the fossil fuel share of global primary energy is high and steady: Both solar and wind are in their early rapid growth phase where double digit annual increases are expected, but as they become material in the energy system at around 1% of global energy production, don’t be surprised to see this start to level off. The chart below has a log scale (otherwise solar and wind are barely discernible) and shows fossil fuel up in the mid 80’s as a percent of the global energy mix.

$Energy mix fraction$

Even in Germany it is taking a while for solar to make a showing: While solar PV in Germany is having a profound impact on electricity generation on long sunny days in June, the annual story when looking at total energy use is different. Solar has reached about 2% of the mix (i.e. reached materiality) and might even be showing some signs of slowing up and growing at a more linear rate (but a few more years data are needed to see the real trend). Again, this is a log chart.

Thanks to BP for the time and effort they put into this work every year.

Steps towards Paris 2015

dchone June 10, 2014

National climate negotiators and a number of Energy/Environment Ministers are currently meeting in Bonn as the global climate deal process slowly edges forward. Whether the steps being taken are big or small remains to be seen, but there are at least steps, so that is a start. The most well publicized have been those of the United States and China who are both active domestically with action on emissions. In the case of the USA this is the EPA rules that gained heavy media coverage and for China it is the notion that they will peak their coal use at some point in the reasonable future, perhaps as early as 2020. The idea of peak coal in China is also starting to appear in government conversations and is not just something emanating from the Chinese academic community.

But another step was also taken in Bonn last week when Ministers were in town as part of an ADP Dialogue; a new business coalition reared its head. Called “We Mean Business”, this is a coalition of a number of existing business linked organizations and has been established to demonstrate to government that a broad business base sees the need for action on climate change and is prepared to support their actions in creating the necessary policy frameworks under which emissions can then be reduced. “We Mean “Business” has started life with seven supporting organizations;

The question that needs to be answered is how important is this and can such a group exert any influence over the process at all. Looking back, one parallel that comes to mind is USCAP (Unites States Climate Action Partnership), a group of some 25 companies and NGOs that coalesced around the 2007-2009 US process to implement climate legislation, but most notably a cap-and-trade bill. This was a detailed federal legislative process and USCAP certainly got into the weeds of it, with a comprehensive manifesto of requirements. When the Waxman-Markey Bill did eventually pass through the House there were many elements within it that aligned with the USCAP manifesto, so arguably that organization did have some influence on content. More importantly perhaps, the very existence of USCAP helped create the political space in which comprehensive legislation could be considered, even though the process eventually stalled and ultimately failed in the US Senate.

But Waxman-Markey was a specific piece of national legislation; at the international level the process is more complex. While a cap-and-trade system is a very tangible policy outcome with a set of well understood rules and metrics, the likely outcome from Paris may be far less defined. One aspect that is common to both is the need for political space in which to act. While the majority of this will come from the Parties themselves, business can play a role here. However, such a business coalition will have to act at both national and international levels to be truly effective, in that delegations are most likely given a certain negotiating mandate within which they can operate before they leave for the COP. As such, simply showing that business supports the process at the international level will probably not be enough.

The second area for business advocacy comes in terms of content. This is more difficult in that the business coalition will be made up of a broad range of constituents acting in many different sectors of the economy. While a cap-and-trade system may be ideal for one company in a given sector in a particular country, another company might prefer financial incentives to help it develop a particular technology. Further, the nature of the international agreement won’t include specifics such as cap-and-trade, but will be much more about the process of establishing suitable national contributions and commitments. However, a business coalition could at least ask for some basic building blocks to be included, such as the use of market instruments and the ability to transfer some or all of a national contribution between Parties , both necessary precursors to the longer term development of a global carbon market.

It is early days for “We Mean Business”, but it at least exists and is starting to mobilize resources and interest. But the hard work hasn’t started; what it will actually do and how it might positively influence the process and eventual outcome is for the days and months ahead.

Two sides to every coin

dchone May 16, 2014

As we near the middle of the year and therefore have, at least in the Northern Hemisphere (i.e. Germany), long days with lots of sunshine, renewable energy statistics start to appear in the media and the renewables distortion field enveloping much of Europe expands just that little bit more. The first of these I have come across was posted by a number of on-line media platforms and highlighted the fact that on Sunday May 11th Germany generated nearly three quarters of its electricity from renewable sources. Given the extraordinary level of solar and wind deployment in recent years, it shouldn’t be a surprise that this can happen. But it’s rather a one sided view of the story.

The flip side is of course December and January when the solar picture looks very different. The Fraunhofer Institute for Solar Energy Systems ISE use data from the EEX Platform to produce an excellent set of charts showing the variability of renewable energy, particularly solar and wind. The monthly data for solar shows what one might expect in the northern latitudes, with very high solar in summer and a significant tailing off in winter. The ratio between January and July is a factor of 15 on a monthly average basis.

But wind comes to the rescue to some extent, firstly with less overall monthly variability and secondly with higher levels of generation in the winter which offsets quite a bit of the loss from solar.

The combination of the two provides a more stable renewable electricity supply on a monthly basis, with the overall high to low production ratio falling to about 2. One could argue from this that in order to get some gauge of the real cost of renewable energy in Germany, monthly production of 6 TWh of electricity requires about 70 GW of solar and wind (average installed capacity in 2013, roughly 50% each). By comparison, 70 GW of natural gas CCGT online for a whole month at its rated capacity would deliver 51 TWh of electricity, nearly a factor of 9 more than for the same amount of installed solar plus wind. But to be fair, some of that 70 GW of natural gas will have downtime for maintenance etc., but even with a 20% capacity loss to 40 TWh, the delivery factor is still about 7. For solar on its own it will be closer to 10 in Germany.

But this isn’t the end of the story. Weekly and daily data shows much greater intermittency. On a weekly basis the high to low production ratio rises to about 4, but on a daily basis it shoots up to 26.

Fortunately, Germany has an already existing and fully functioning fossil fuel + nuclear baseload generation system installed, which can easily take up the slack as intermittency brings renewable generation to a standstill. But the cost of this is almost never included in an assessment of the cost of renewable power generation. In Germany’s case this is a legacy system and therefore it is taken for granted, but for countries now building new capacity and extending the grid to regions that previously had nothing, this is a real cost that must be considered.

This is perhaps an anti-leapfrog argument (being that regions with no grid or existing capacity can leapfrog to renewables). The German experience shows that you can shift to renewables more easily when you already have a fully depreciated fossil & nuclear stock, and your demand is flat. Otherwise, this is looking like a potentially costly story that relies on storage technologies we still don’t have in mainstream commercial use.

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As a complete aside, but certainly the “flip side” of another issue, I came across this chart which highlights the flip side of rising CO2 levels in the ocean and atmosphere due to the combustion of fossil fuels – falling levels of oxygen. This is a very small effect (given the amount of oxygen in the atmosphere) and certainly not an issue, but it’s entirely measurable which is the interesting bit. The chart is produced by Ralph Keeling, son of the originator of the CO2 Keeling Curve.