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 a record 10 TWh of curtailed renewable energy in 2023.
Why curtail the power?
Grid operators are authorized and obliged by law to take certain measures to maintain the security and reliability of the electricity supply system: Redispatching, the use of reserve power plants and feed-in management are some of the measures that grid operators take in Germany today.
Measures to overcome grid bottlenecks 2017-2022 in GWh
Source: Bundesnetzagentur
The figure shows that the grid is increasingly overloaded, as can be seen from the constantly increasing redispatch measures https://www.bundesnetzagentur.de/EN/Areas/Energy/SecurityOfSupply/NetworkSecurity/start.html.
What was done so far to keep the lights on?
Around 10 TWh of fossil electricity 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?
Restriction must be approached with a holistic vision. Here are some much-discussed topics that we would like to highlight:
Price zones
Many experts argue that a division into price zones is the order of the day for Germany, but taking all the implications into account, this is not the panacea. Our COO Christoph Gardlo has a blog article on this topic and explains why he sees more disadvantages than advantages.
Build more battery energy storage systems (BESS), today!
Battery energy storage systems are being built in Germany today, even without subsidies, because they generate revenue. In fact, battery energy storage systems (BESS) have repeatedly proven in various regions that they contribute to security of supply (see, for example, the recent frequency event in the UK).
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 build an infinite number of batteries today, the problem of power cuts will remain, because it is also a transmission problem. On March 1, the Federal Network Agency confirmed 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, the German transmission system operators are planning annual investments of 13.54 billion euros, which should lead to climate neutrality in 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 electricity 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 are earmarked for the national transmission grids in Europe, with a major boost from Germany
Planned investments in national transmission grids, average per year over the planning period (in billions of euros)
Source: EMBER
The new age 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 seen as an alternative to support grid resilience. These options, as well as the increase in 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.
Intelligent flexibility optimization is important to achieve Net Zero!
Despite all efforts to expand the electricity grid and the availability of flexibility, we need intelligent methods for flexibility marketing to ensure security of supply and the efficient handling of demand management. Achieving this with high returns for market participants requires an excellent track record in energy trading and good communication protocols with the transmission system operator (TSO) or distribution system operator (DSO).
In summary, it is important to take a holistic view of the market in order to reduce Germany's costs and dependence on fossil fuels and thus pave the way for security of supply.
By focusing on important and urgent measures such as the expansion of the electricity grid infrastructure and a considerable expansion of flexibility and storage options, we can reduce the costs for frequency maintenance and redispatch measures caused by the need to integrate renewable energy producers. Finally, intelligent use of the available flexibility and energy storage options to increase grid utilization is a must in order to enable a sustainable and predominantly renewable energy-based grid for all.
