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Mark Z. Jacobson, Chris Nelder, Carl Pope and Damon Matthews Talk Germany's Energiewende

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Two years ago, director of the Atmosphere and Energy Program at Stanford University and staunch supporter of renewables Mark Z. Jacobson shared his opinion on Germany's Energiewende and the article garnered much attention. As the program has progressed, I now reached out to Dr. Jacobson as well as former executive director of the Sierra Club, Carl Pope, energy analyst Chris Nelder and Concordia University research chair (Climate Science and Sustainability), Dr. Damon Matthews, to get their views on Energiewende today. Together they covered many aspects of the program's effect from economics to environmental impact. The answers are below.

Dr. Mark Z. Jacobson:

The world is transitioning to 100% clean, renewable wind, water, and solar electricity for all purposes, but not fast enough. Such a transition is essential for stopping the large-scale humanitarian disaster that is occurring daily today and that will increase in the future due to our energy consumption. Converting will eliminate 4-7 million annual premature air pollution mortalities worldwide due to fossil fuel and biofuel burning, eliminate global warming, create more global jobs than lost, stabilize energy prices because fuel costs are near zero, reduce international conflict by creating energy-independent regions, and reduce terrorism risk by decentralizing power. The barriers to conversion are neither technical nor economic. They are primarily social and political. To that end, it is important for some countries and states to lead by example to show that barriers to a transition can be overcome. Germany's Energiewende has proven to be an effective example of how to start and accelerate a transition. The key test will be to determine whether such a transition can be completed. Humanity will depend on this.

Carl Pope:

Germany's Energiewende is entering a critical new phase -- and once again Germany is poised to be a path-breaker. In its latest forecasts, Bloomberg New Energy Finance projects that even though current levels of investment in renewables in Germany are only 1/3 of their peak, that by 2040 the % of Germany's electrons that come from intermittent renewables will rise from 16% to 77%, and that as Germany has shifted its emphasis from high-cost renewables incentives like FIT's to low-cost policies like auctions, wind has become the cheapest form of electricity available to its grid, even as its total projected electricity demand is falling.

This means that the going forward the incremental cost of increasing renewables share at the point of generation is negative -- a non-issue. But a national grid which is 77% intermittent, substantially distributed, but zero marginal cost electrons raises a broad swathe of issues which are not solved by the current technological and economic structures which derived from an era of high marginal cost but dispatchable centralized generation.

A very high level of connectivity and information transparency is almost certainly the sine qua non for such a system. And Germany, because it is a federal system with push and pull between the center and the various states, is actually a much more useful laboratory for the world than a small, centralized example like Denmark. Both the US and India, for example, face example the kinds of inter-state tensions about transmission and who pays vs. who benefits from zero marginal cost connectivity that Germany struggles with. (hint -- there is no market theory to answer this question, so macro-economic models are not helpful -- old fashioned political economy is much more useful.) And the question of international connectivity within the EU grid also grows more important as the overall reliance on intermittent renewables spreads Europe wide. France, it appears, will have the largest proportion of dispatchable electrons in 2030 because of its legacy nuclear fleet -- how can the EU as a whole make the best economic use of this asset?

Storage is another much more critical ingredient in such an energy world. But what exactly do we mean by storage in the 21st century? The Volkwagen scandal is also, for Germany, a crisis. For Europe as a whole it means that the project of postponing a disruptive transition to electric vehicles through massive numbers of "clean diesel" cars has been an enormously expensive detour, creating a vast array of stranded assets in Europe's auto industry. EV's as a form of storage has been posited in the US as one visionary solution. But what is the EV revolution is also a transition from personally owned and driven vehicles to collectively managed fleets of autonomous EV's, which instead of sitting idle 90% of the time are on the road almost all of the time during waking hours -- these vehicles instead of becoming a source of dispatchable storage for the grid become a much steadier drain.

So the Energiewende's next phase will be challenging. But Germany did the world an enormous favor with its first phase investments -- and the rest of us need for the country to stay the course for the next and very intriguing round.

Dr. Damon Matthews:

Meeting the 2°C climate target requires that global CO2 emissions be eliminated before the end of this century, and as early as 2070 if we want to maintain a reasonable likelihood of not exceeding this threshold. Given the current emissions inequalities among countries, high-emitting countries need to lead the way on decarbonization, and set their sights on complete decarbonization by mid-century. Germany is the most compelling example of progress in this direction, but even the ambitious emission targets of the Energiewende (80-95% decreases by 2050) may not be ambitious enough to keep us below the 2°C target.

Chris Nelder:

Having become the world leader in installed solar capacity at roughly 38 GW and the third-largest producer of solar electricity at 5.7% of generation, with nearly 30% of its total power coming from renewable sources today, Germany is about to face the next set of difficult questions in energy transition: How to maintain healthy power markets when zero-marginal-cost sources like wind and solar are driving power prices down across the board and destroying the profitability of conventional power plants? How to accommodate even more renewables in markets that are sometimes saturated already, without resorting to curtailment (throwing renewable power away)? And how to keep phasing out coal and nuclear without damaging the grid's reliability?

None of these are easy questions, and their answers will depend on developments that we can't foresee. But here are some possibilties.

Germany will continue to rely on electricity exports to neighboring countries while it builds up the internal transmission capacity and storage capacity that it will need in order to use more of its renewable power domestically. However, the pace of deployment of wind and solar will likely continue to slow down as financial incentives fall and it becomes more difficult to integrate higher levels of variable power.

In addition to this physical infrastructure, Germany (like progressive US states such as California) will have to modify markets that were designed around dispatchable conventional generators so that they work for variable, non-dispatchable renewable generators - market innovations like unbundling so-called ancillary services (e.g., voltage and frequency regulation), creating larger regional balancing markets, testing and refining incentives and payments for storage services, and perhaps implementing capacity payments for nuclear and coal generators as they are gradually phased out. At the same time, it must begin to plan for a future when incentives for residential solar disappear but the systems are still producing power - an inevitable scenario that will likely lead to a brisk market in residential storage systems and greater residential self-sufficiency in power provisioning.

In general, Germany will likely begin to transition from wholesale to retail electricity markets, and in so doing, offer a useful example to the rest of the world which is grappling with the same difficult questions. But the Energiewende will move ahead, because once generators that put out virtually free power begin to dominate the market, there will be no way to turn them back.