'Baseload Is Poison' And 5 Other Lessons From Germany's Energy Transition

Baseload power is not the answer to the variability of renewable energy, a German energy official said Friday, and energy storage may not be the answer either.
Germany has achieved moments in its Energiewende, or Energy Transition, in which renewables met 100 percent of demand without the aid of baseload power or batteries, said Thorsten Herdan, a director general for energy policy at the German Federal Ministry for Economic Affairs and Energy. Germany was able to do that, he argued, because of its system's flexibility.
1. Flexibility Trumps Baseload
"What we need for this fluctuating renewable energy in the electricity mix is not baseload. Baseload is poison for our electricity transition in Germany," Herdan said in a briefing at the Dirksen Senate Office Building in Washington, D.C. "What you need is flexibility, because the sun is shining and then you have PV production, wind is blowing and you have wind production. So it’s not according to demand, it’s according to weather conditions, which means they are there in any case and then you need to have flexibility to fill the gap."
Baseload power was traditionally supplied by coal and nuclear plants, with peaks in demand met by natural-gas plants.
But flexibility can displace the old notion of baseload and peak, Herdan said, and flexibility can take many forms, including gas peaker plants, batteries, demand management or regional exchanges. It's most important to keep in mind, he argued, that flexiblity is the goal, not any one of the forms it takes.
2. Flexibility Trumps Storage
Herdan appeared in a briefing on Germany's Energy Transition hosted by the Environmental and Energy Study Institute. Asked whether an energy transition like Germany's will increase the demand for energy storage, Herdan said, "I don’t know whether the demand for storage will increase. What I know is the demand for flexibility will increase, will increase dramatically… and if storage proves to be the cheapest flexibility, and the market chooses storage, then of course storage will increase.
"It’s always coming down to flexibility. That’s what we need and storage is one sort of that."
But other sorts may prove cheaper:
3. Flexibility Can Be Geographic
Energy storage is not necessarily the cheapest form of flexibility. Germany is building transmission lines into Norway so the two countries can exchange electricity between Germany's northern wind farms and Norway's 937 hydropower stations.
"That’s the cheapest flexibility you can think of. We don’t need to build, for that, storage facilities which are much more expensive," he said. "If you integrate yourself the various states in the U.S. you can see that you can help each other."
4. Markets Should Be Transparent
To manage flexibility, electricity providers need real-time information about electricity production and demand, Herdan said, and that information should also include the price for the various forms of flexibility.
"All you have to do is create a market, an electricity market, where prices tell the truth," he said.
"I’m talking to everyone in the world about transparency, I tell them, try to get your data on electricity production real-time. We didn’t have that for a long time, and all the various lobby groups told us a lot of interesting stories. So we decided we needed to have in real time the electricity produced in every second from every source so that we know what’s going on."
5. Flexibility Provides Reliability
Germany moved from almost no renewable energy in the 1990s to 37 percent today—its single largest block of power, almost all of it generated from wind and solar photovoltaic. Anxieties about a loss of grid reliability have not materialized, Herdan said:
"The grid is extremely stable. We have grid disruption in a year of about 12 minutes. So, 12 minutes a year is effectively nothing," he said, citing Germany's average duration of electric supply disruption. The comparable number in the U.S., where power producers boast of their reliability, is 114 minutes.
"So we could cope with the question of whether we can adopt a high share of renewables, the volatile ones in our grid, and we would like to talk with you about how we achieved that, what we did right, what we did wrong, and how can we perhaps achieve that in the States."
6. Powerful Price Signals Help
Germany has more than 100 Gigawatts of renewable capacity, more than enough to meet a demand that fluctuates between 40 and 85GW. One day in May, renewables were meeting 100 percent of demand, Herdan said, and the price of electricity dropped below zero.
"At the time the renewables were at 100 percent, the price went down and it was negative, so we had a negative price, and what we say is, fine, there is nothing bad in negative prices because that very clearly tells the other generators how to behave," he said. "That forced the generators, specifically the coal generators, to change their behavior, shut them down or reduce them or whatever is possible."
Market transparency and real-time data allow prices to send such immediate signals to power producers.
"That is something that we established last year and that we heavily use in order to not be told by lobby groups that offshore wind power is the best one, or coal generators are the most flexible ones, we can see what happens, and we can tell them how they should behave or the market tells them how they should behave."
Herdan cautioned that Germany's example is not a model for every country. Germany has decided not to use nuclear power, for example, and few countries share that commitment. But he contends that Germany's example reveals an underlying principle about the importance of flexiblity.
"Of course as I said in the beginning it’s different in the various countries around the world and also in the U.S., but this principle—that if you create renewable energy you need to have flexibility and no baseload—that is valid for each and every country in the world."