Utilities still not listening
Yesterday, Dutch parliamentarians held a half-day session to see how Germany’s switch to renewables might affect them. Representatives of the conventional sector came, complained, and copped out when it was time for those representing Germany’s success with renewables to talk about a new power market design.
It is safe to say I was the smallest fish in a fair-sized pond at the meeting in Den Haag yesterday; the second panel (which I was on) consisted partly of the heads of the WWF, Greenpeace, and Ecofys. You’d think that much competence would be enough for the first panel, which consisted largely of conventional energy firms, to stay around for another 90 minutes, but they left after making their statements.
In the first session, Lex Hartmann, the Dutch head of German grid operator Tennet (wholly owned by the Netherlands), admitted that “Germans are 10 times more interested in energy policy than the Dutch are. It’s the second biggest topic after the euro crisis.” He also pointed out that, while the German grid is stable, “we have to intervene a lot more than we used to.”
He did not, however, mention something that readers of Renewables International know: Germany had the most reliable grid in the EU in 2012 (see chart below). That task was left up to Greenpeace’s Thomas Breuer when Hartmann was already gone.
Hans Bünting of RWE Innogy, the renewables subsidiary of German coal giant RWE, agreed that “all of these grid interventions take place in something that used to work fine.” And he added that “all of this subsidized renewable energy is the problem.” In particular, he felt that solar in Germany doesn’t make much sense. “Spain gets twice as much sun, so if we can transport that up here at a lower price, that would be a better idea.”
He did not mention the practical impossibility of that idea. It was left up to me to point out the unlikelihood that Spain and France would agree to fill up their landscapes with giant solar farms and power lines so the Germans can save a penny. Likewise, Bünting was gone when I reminding the Dutch parliamentarians (who nodded in agreement) that the Spanish representative had not even bothered to attend the last Desertec meeting in Berlin, where agreements were to be signed.
As the WWF’s Regine Günther pointed out, the renewables sector and environmentalists understand that the time has come to redesign power markets. “Germany has two,” she explained, “the first being based on the merit order – and hence, marginal costs – and the second based on a cost-plus approach [feed-in tariffs] for renewables. Neither of them will work going forward.”
Hey, utilities, we have been trying to tell you what our aim is for twenty years. Now, you complain that renewables are offsetting nuclear and fossil energy like it’s a surprise, but it’s exactly what we said we were planning. You thought it wasn’t possible, so you didn’t listen.
We now come in good faith to discuss what needs to be done: capacity markets, emissions trading, community ownership, backup capacity, etc. We are ready to talk about redesigning power markets. We are putting the feed-in tariffs we defended for twenty years on the table. We know German power demand peaks when the sun never shines. And we understand you need to be profitable. But you are still not listening. (Craig Morris)