Let’s have a look on the current situation!
At 251.2 terawatt-hours (TWh), total generation from renewable energy sources in 2023 was 7.5 % higher than the previous year’s figure of 233.7 TWh. However, grid congestion cost Germany a whopping 3.13 billion euros and resulted in a record 10 TWh of curtailed renewable energy in 2023.
Why curtail the power?
By law, grid operators are authorized and required to take certain measures to maintain the safety and reliability of the power grid: redispatching, the use of reserve power plants, and feed-in management are some of the measures that grid operators in Germany take today.
Measures to Address Grid Congestion, 2017–2022, in GWh
Source: Bundesnetzagentur
The figure shows that the grid is becoming increasingly overloaded, as evidenced by the steadily rising number of redispatch measures https://www.bundesnetzagentur.de/EN/Areas/Energy/SecurityOfSupply/NetworkSecurity/start.html.
What was done so far to keep the lights on?
Approximately 10 TWh of electricity from fossil fuels and 5.6 GW of conventional generation were paid for as part of ramp-up and grid reserve measures in conjunction with congestion management measures https://www.bundesnetzagentur.de/DE/Fachthemen/ElektrizitaetundGas/Versorgungssicherheit/Netzengpassmanagement/start.html. In a world where we are talking about becoming carbon-neutral, these figures are alarmingly high.
What should be done instead?
This challenge must be addressed with a holistic vision. Here are some widely discussed topics that we would like to explore:
Price zones
Many experts argue that dividing Germany into fare zones is the order of the day, but when all the implications are taken into account, it is not a panacea. Our COO, Christoph Gardlo, has a blog article He has written about this topic and explains why he sees more disadvantages than advantages in it.
Build more battery energy storage systems (BESS), today!
Battery energy storage systems are now being built in Germany even without subsidies because they generate revenue. In fact, battery energy storage systems (BESS) have repeatedly demonstrated in various regions that they contribute to grid reliability (See, for example, the recent frequency event in the United Kingdom).
Vor allem aber müssen Batteriespeicher als intelligente Flexibilitätsoption und nicht als alleiniger Stromverbraucher betrachtet werden. Unter dieser Prämisse könnten die derzeitigen Netztarife für das Recht auf Netznutzung gesenkt werden https://tennet-drupal.s3.eu-central-1.amazonaws.com/default/2024-02/EVA_TenneT%20whitepaper_v1_Final_0.pdf.
Expansion of the grid infrastructure to achieve climate neutrality
Even if we were to build an infinite number of batteries today, the problem of power outages would remain, because it is also a transmission problem. On March 1, the Federal Network Agency approved the new Electricity Network Development Plan (NEP) https://www.bundesnetzagentur.de/SharedDocs/Pressemitteilungen/EN/2024/20240301_NEP.html for a climate-neutral energy supply. On average, German transmission system operators plan to invest 13.54 billion euros annually, which is intended to lead to climate neutrality by 2045 https://ember-climate.org/insights/research/putting-the-mission-in-transmission-grids-for-europes-energy-transition/. In the short term, transmission-coupled batteries at strategic locations can expand the capacity of the power grid and reduce the need for costly redispatch measures https://www.linkedin.com/posts/sma-solar-technology-ag_smas-grid-forming-solution-provides-stability-activity-7173626402376826882-uJPt.
At least 30 billion euros have been earmarked for national transmission grids in Europe, with a major contribution from Germany
Planned investments in national transmission grids, average per year over the planning period (in billions of euros)
Source: EMBER
The New Era of Flexibility Options
Bitcoin mining facilities https://modoenergy.com/research/podcast-bitcoin-mining-grid-support-jamie-mcavity-transmission and energy-intensive data centers are increasingly viewed as alternatives for supporting grid resilience. These options, along with the rise of Vehicle-to-Grid (V2G) and behind-the-meter applications (see our press release with sonnen or our blog article with 1komm5) can be of enormous value in shifting demand.
Smart flexibility optimization is key to achieving net zero!
Despite all efforts to expand the power grid and increase the availability of flexibility, we need smart methods for marketing flexibility to ensure security of supply and the efficient management of demand response. To achieve this while generating high returns for market participants, an outstanding track record in energy trading and effective communication protocols with the transmission system operator (TSO) or distribution system operator (DSO) are required.
In summary, it is important to take a holistic view of the market in order to reduce costs and Germany's dependence on fossil fuels, thereby paving the way for energy security.
By focusing on key and urgent measures—such as expanding the electricity grid infrastructure and significantly increasing flexibility and storage capacity—we can reduce the costs of frequency control and redispatch measures caused by the need to integrate renewable energy generators. Ultimately, the intelligent use of available flexibility and energy storage options to increase grid utilization is essential to enabling a sustainable grid—one based predominantly on renewable energy—for everyone.
