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Aus der Fraktion

    • Date: 29 March 2017
    • Selbstlernende Thermostate, Dachziegel mit integriertem Windrad, intelligent vernetzte Speicher oder Heizungen im Fenster - die grüne Bundestagsfraktion hat zusammen mit der Generation Energie 4.0 in die Zukunft geblickt.
    • Date: 23 March 2017
    • Beim Treffen mit der Energiespeicherbranche wurde deutlich, dass das größte Hemmnis für den Einsatz von Energiespeichern die Bundesregierung ist. Das macht die Energiewende teurer als sie sein müsste.
    • Date: 23 March 2017
    • Am 23.3.2017 haben wir gemeinsam mit der CDU/CSU- und der SPD-Fraktion das Gesetz für die Endlagersuche beschlossen. Der Gesetzesentwurf enthält auch ein Exportverbot für Forschungsmüll, für das wir hart gekämpft haben.
7. August 2014

The electricity market we need – ecological and flexible!

Twenty-eight percent of electricity generated in Germany now comes from solar, wind, biomass, hydro and geothermal energy. This is a huge success, made possible by the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, or EEG).

The electricity market we need – ecological and flexible!

Fifteen years ago, this figure was just four percent. During individual days and hours each year, renewable sources of energy even generate the majority of the country’s electricity, with these periods becoming longer and more frequent as renewables are expanded. Yet on our way to achieving our goals, we need suitable back-up capacities that generate electricity in a climate-friendly and flexible way, even when the sun is not shining nor the wind blowing. Capacity markets that create incentives for capacity to be made available when it is needed have been the subject of much discussion in this respect. Yet the grand coalition has so far shirked its responsibility to design an electricity market that is compatible with renewable sources of energy. We in the Greens have picked up this issue and are bringing together the need for readily available capacity with the climate protection target: as the next step on from focused capacity markets, we view the ecological flexibility market as the suitable tool for guaranteeing security of supply, keeping down costs for electricity customers and driving the transformation of the electricity sector, moving it towards a prospective fully-green energy supply.

The expansion of renewable energies is a success story for the Greens. Over 370,000 people work in the renewables industry in Germany – despite setbacks such as those experienced in the solar sector. Numerous community energy cooperatives, private individuals and small and medium businesses up and down the country are driving the Energiewende, as Germany’s new direction in energy policy is called. Solar and wind energy facilities generate electricity on the exchanges, incurring almost zero marginal costs. They have been a contributing factor in the market price of electricity falling by over 60 percent over the last five years, while at the same time continually reducing the load of fossil fuel plants. This is the intended effect and represents a huge success for the Energiewende, as electricity is generated in a climate-friendly and sustainable way, instead of by coal-fired and nuclear power plants. Yet producing electricity in this way has one drawback: periods of strong winds and intensive sunshine alternate with cloudy and low-wind spells. As long as cost-effective storage options are not sufficiently available, wind and solar facilities can only supply part of the amount required for a secure electricity supply. As it stands, this is not yet a problem, as Germany has sufficient generation capacity. In order to ensure it does not become a problem in future, electricity grids must be optimized, modernized and, to a limited extent, expanded across all voltage levels, and storage technologies developed further. The challenge will be in the interim years. Increasingly unreliable generation, continued delays in network expansion – due in part to the CSU’s populism – further nuclear plant shutdowns in southern Germany in particular, and the closure of fossil fuel plants, driven by economic factors, mean that shortages could occur from 2020. That is why we need load management, storage and environmentally-friendly and highly-flexible gas-fired powered stations, where possible using cogeneration.

Incentives for this are far too weak, as a result of the wrong political objectives in recent years. Merkel’s governments have instead focused on fossil fuel power plants – above all, on inflexible and climate-unfriendly coal-fired plants. The beneficiaries of the nuclear exit are thus primarily inflexible lignite-burning power stations – which dig up huge swathes of land and deprive thousands of people of their homes in order to obtain their fuel. At the same time, highly flexible and climate-friendly gas-fired power stations are used less and less frequently as a result of the higher marginal costs compared with coal-fired plants. The number of full utilization hours decreases further, making business increasingly unpredictable for the facility operators. We cannot allow climate-unfriendly and inflexible coal-fired power stations to keep producing electricity, while highly flexible, climate-friendly gas-fired plants, load management mechanisms and storage lose out in the transformation of our energy sector.

We need a new style of electricity market

Although we wish to drive forward renewables expansion as quickly as possible, we must still consider the security of supply. To act otherwise would be a major disservice to the Energiewende. That is why the energy market of the future needs to be designed in a way that allows highly flexible, climate-friendly back-up capacities to step in at precisely those times when, as unreliable renewable energy sources, sun and wind are not available. Yet at present the market is apparently unable to ensure sufficient capacity for secure, flexible and climate-friendly power in the long term. We thus need to act in order to ensure security of supply on the one hand, while consistently pushing forth with the Energiewende towards 100 percent renewable energies on the other. Incentives must be created for flexible and climate-friendly capacities. Naturally, this involves the reform of the EU emissions trading system (set-aside, minimum CO2 price), alongside the amendment of the Cogeneration Act (greater incentives for highly flexible gas-fired plants with a heat supply from cogeneration). These instruments have not been tackled with sufficient ambition by past governments. Furthermore, there are justified doubts over whether emissions trading and cogeneration promotion on their own are enough. That is why capacity markets have been under discussion, the aim being to provide an economic basis for back-up capacities which the energy-only market in its current form cannot provide. Capacity markets are intended to create a market for supply security. There are three main models:

1.) In a comprehensive capacity market, the regulator (for example the Federal Network Agency) puts out a call to tender for the required guaranteed capacity (e.g. annual peak load) in order to ensure overall security of supply. All power plant operators, irrespective of technology, can then bid for security of supply contracts in an auction. Successful operators receive payment and must provide the guaranteed capacity of their facility to the energy market under fixed conditions for the period agreed. If their capacities are not required, they can offer these at market price on the energy-only market.

2.) In a decentralised comprehensive capacity market there is no central auction, instead, electricity traders purchase the maximum guaranteed capacity they require using certificates or similar. This aims, at least in theory, to create a price for guaranteed capacity that is in line with what is required. In fact, the decentralised market, like the comprehensive capacity market, results in all power plants receiving a capacity premium until peak annual load. Both systems therefore maintain the existing overall power plant structure.

3.) In a focused capacity market a call to tender is made for the missing guaranteed capacity (where this occurs). This is the most straightforward way of controlling precisely how recognised capacity shortages can be met, including on a regional or power plant-type (climate-friendly, flexibility etc.) basis. It also involves the least intervention in the energy-only-market.

The ecological flexibility market Based on and further developing the focused capacity market model, we propose the ecological flexibility market, in which the regulator (for example the Federal Network Agency) only auctions the amount required each year to close the gap in security of supply. If a shortage is foreseeable, a capacity payment for the required additional capacity only is allocated on a technology-specific basis to the lowest-priced bidder in an auction. Based on specific criteria (see below), the lowest-priced bidders receive the contract. There is an auction for fossil fuel power stations at risk of closure, along with load management measures and an auction for highly flexible new projects, such as gas-fired power plants with a heat supply from cogeneration, storage and stable sources of renewable energy (biogas) with capacity payments in the longer term. Both sub-markets are located within the existing electricity market and can thus take part in the energy-only market as usual. This prevents climate-friendly and flexible capacities being artificially removed from the market and causing the price of electricity to rise due to reduced capacity. The winner of the auction only has to ensure that they are able provide the capacity offered in potential shortage situations at the price asked at that point in time.

Unlike the comprehensive market and the decentralised market, the amount to be covered by the ecological flexibility market is subject to strict requirements, with the bidder deemed most suitable and offering the best price receiving the contract. These criteria are:

Efficiency

As a rule, the most efficient technology in each case should be used. Demand-side management (load transfer), storage and gas-fired power plants with a heat supply from cogeneration must have priority in auctions.

Emissions

To prevent capacity auctions contradicting climate protection goals, lowest-possible emissions are a further key criterion. This should generally correspond with the efficiency criteria.

Flexibility

Capacities must be flexible in order to adapt to renewables. They must be able to be controlled quickly in order to be able to balance fluctuations in renewables’ generation.

Availability

The capacities on the market must be available at any time and must offer at least a minimum degree of reliability. In general, the facility operator should make independent decisions on use of capacity, as long as the network operator does not order the commissioning or decommissioning of the plant.

Regionality

In order to avoid electricity shortages in individual regions, new capacities can be restricted to regions or transmission network zones with specific capacity shortages.

The time has come to chart our political course

Policy-makers and the energy industry must now set the course for suitable back-up capacities for renewables. This is a key element in designing the electricity market of the future and the structural transformation this entails for fossil fuel power plants. Only in this way will the Energiewende succeed. Reforms to existing instruments (above all reform of the EU emissions trading system, amendment of the Cogeneration Act, CO2 limits for power stations) form the basis for managing this transformation. Where the steering effects of these measures fall short, however, we believe the ecological flexibility market is the most suitable means of supporting security of supply on the path to 100 percent renewables in a targeted and economic manner, without great intervention in the energy-only market. It does not necessarily have to be implemented if the desired changes are already brought about by the aforementioned instruments. Yet it is an important option to have if we are to be able to react quickly in a system that is learning, as is the case with the Energiewende. Unfortunately, the grand coalition has so far shirked its responsibility to design an electricity market that is compatible with renewable sources of energy – counteracting their own renewable energy and climate goals.

Our proposed ecological flexibility market provides players in this field with a specific option for developing the market further and creating market competition for increasing capacity. It ensures that revenue is received only by those generating capacities that guarantee security of supply, yet do not represent an obstacle for the transformation of the electricity sector into one fully supplied by renewable energy. The ecological flexibility market thus represents a pragmatic and – compared to the comprehensive or decentralised capacity markets – controllable and predictable approach to mastering the challenges in the areas of security of supply and energy system transformation now and in the future. Last but not least, in terms of costs, it is likely to offer far better value for electricity customers than all other models, as it will avoid the subsidisation of a large number of power plants, if not all of them.