The term Energiewende, literally translated to English as “energy turnaround,” is the name given to the combined set of intentions and policy prescriptions that have been developed at the federal level to shift Germany to an energy portfolio dominated by renewable sources, energy efficiency and sustainable development.
Study - The Future of Renewable Energy Usage
Erin Grossi | UL
The U.S. attitude towards energy transformation is greatly different than Germany’s. However, the U.S. is home to the technology innovations and disrupters that Germany (and other countries throughout the world) will ultimately need to support their own transformation efforts.
What is the biggest difference between Germany and the U.S. in terms of working towards a renewable energy future?
The biggest difference between the two is the fact that Germany’s central government has made the decision to transform its energy market, which has caused the energy sector stakeholders across the country, including utility representatives, renewable generators and Virtual Power Plant (VPP) operators to work in concert together to manage the closure of nuclear power plants and the rapid additions of renewables to the grid at scale. The U.S. does not have a similarly aggressive mandate at the national level, so grid transition efforts take place more slowly, in a more decentralized fashion and coordination across states or regions is much more limited.
What are some of the reasons Germans are so supportive of renewable energy initiatives?
I found the German populace generally values the environment and is concerned about the contributions to climate change made by its old fossil-based energy system. They are also concerned about national security risks of being reliant upon other nations in the region for energy and concerned about safety and security risks associated with potential nuclear disasters. Perhaps one of the most evident reasons Germans are supportive though is because the country is approaching the effort as an engineering challenge that their experts already feel confident they can solve and will eventually master. In so doing, they will create new, productive industries in the country that will create value and bolster the economy well into the future.
Is it the German federal government that drives the initiatives or is it a state by state trend?
The term Energiewende, literally translated to English as “energy turnaround,” is the name given to the combined set of intentions and policy prescriptions that have been developed at the federal level to shift Germany to an energy portfolio dominated by renewable sources, energy efficiency and sustainable development. While it is true that the Energiewende has a strong policy connection and is driven by Chancellor Angela Merkel herself and her administration, the fact that the desire to phase-out nuclear power completely and restructure the energy sector is now shared by at least 85% of the German population is something that does not get enough recognition. Indeed, even as the German regulator overseeing the transformation, the Federal Ministry of Economics and Technology (Bundesnetzagentur), describes that German customers have endured a variety of cost increases, including a Renewable Energy Surcharge (RES) increase from 0.9 cents per kilowatt hour in 2000 to 6.17 cents per kilowatt hour in 2015 to support the infrastructure transformation, the majority of the country remains solidly supportive of the technological shift that is taking place
Are there forward-looking states in the U.S.? What are they doing to push the renewable energy agenda?
There are forward-leaning states like California, Hawaii and New York that are really pushing hard from both a regulatory and a market perspective to achieve massive changes to make their grid systems more sustainable, and even cities like Burlington, Vermont and Aspen, Colorado that have taken similar actions independent of their states. But, as a whole, the country is less in a state of transformation and more in a state of transition, with largely uncoordinated approaches being taken in uneven ways and in fits and starts across the nation.
Is the US Federal Government up to speed on renewable energy and what can they do better to encourage its advance in the country as a whole?
I think the Federal Government is active in researching and promoting the use of renewable energy. This would include President Obama's consistent support for clean power solutions throughout his presidency. Things the government could do to advance grid transition more effectively would be to focus more on commercializing promising technology and knowledge products being developed by the National Labs across the country and to cooperate more with leading countries like Germany to ensure a sufficient and mutually beneficial technological exchange occurs at the international level.
What is Germany focusing on now to add renewables and maintain grid stability?
Across the nation in every part, regulators, transmission system operators distribution system operators, and renewable energy suppliers are working together to ensure that Germany’s long-standing record of having one of the most reliable grid systems in the world is not hampered by the intermittency of renewable energy sources like solar and wind. Something traditional grid system operators had failed to anticipate in earlier years was the creation of information technology tools and resources to help make balance achievable with higher levels of renewables—mainly virtual power plants or VPPs. Today, VPPs play an essential role in the rapid increase in renewable energy in Germany, since they connect a wide variety of individual energy producers through sensor technology and sophisticated software tools that help the individual producers, many of them farmers with solar arrays on their fields, to market their electricity in the open energy market. It also harnesses these distributed power generators under one centralized control mechanism so hat energy generation can be ramped up to meet peak load demand or curtailed if the grid becomes over-loaded.
How can the U.S. contribute to the growth of renewables and grid stability in Germany, in the U.S. and other countries?
U.S. based entrepreneurs and innovative companies are already commercializing a variety of distributed battery resources, intelligent transformers and inverters, and sensors and data analytics technologies that will help with our own and Germany’s transformation. We may end up speeding the transformation of grid systems in other nations and also help developing nations to begin with distributed systems even faster than we transform the grid in the United States. I certainly hope we don't allow the US system to lag too far behind the rest of globe.
About Erin Grossi, Chief Economist, UL LLC
Erin Grossi serves as the company’s chief economic strategist, providing the organization with macroeconomic analysis, insight and trend forecasts. Erin recently completed a UL-sanctioned research project that included on-the-ground research of Germany’s energy ecosystem and its usage of renewable energy. The white paper titled “Putting the Pieces Together: Transition and Transformation in Global Energy Markets” explores the key differences between the German and American approaches to adding increased renewables to grid systems. Her work on renewable energy earned her a “40 Under 40” award from Midwest Energy News. Erin has also done extensive research in the area of building sustainability and previously completed a study forecasting where future dollars will be spent in this area.
In her 10 years with UL, Erin has served as the Director of Corporate Innovation and Director of Global Government Affairs in UL’s Washington, D.C. office. Prior to joining UL, she held a variety of roles in the financial sector.
The content & opinions in this article are the author’s and do not necessarily represent the views of AltEnergyMag
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