Fritz Vahrenholt: The desperate attempts of energy policy

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by Kalte Sonne

Dear Sir or Madam,

Before we talk about the Federal Government’s plans to overcome the energy crisis, let’s take a look at the temperature development, which is the reason for the Federal Government’s climate strategy.

The deviation of the global temperature from the 30-year average of the University of Alabama’s (UAH) satellite-based measurements fell from 0.26 degrees to 0.17 degrees Celsius in May 2022 compared to April. The temperature has been rising by an average of 0.13 degrees Celsius per decade for 40 years. That is not exactly worrying.

The destruction of the German gas network

If someone had told us ten years ago that in 2022 a representative of the federal government would explain to the citizens and companies of the country that the German gas network would have to be dismantled by 2045 for climate protection reasons, we would have declared it crazy, wouldn’t we?

Patrick Graichen, State Secretary in the Federal Ministry of Economics of Robert Habeck (Greens) had called on the Municipal Utilities to start planning the dismantling at the Handelsblatt conference “Stadtwerke 2022” on 10 May 2022 in Berlin. Graichen explained: “Of course there will be no more gas in the grids in 2045” and the operation of individual heating systems with climate-neutral hydrogen as a substitute for natural gas is “reverie”, as the “Welt” reported. By 2025, there should be heat planning in every municipality that sets clear guidelines on how long which gas network will continue to be operated, said the state secretary. This would then be the third final attack on the security of Germany’s energy supply: after the nuclear energy and coal phase-out, the natural gas phase-out follows.

With its more than 500,000 kilometers of gas distribution networks, Germany has an excellently developed infrastructure that supplies around 1.6 million industrial and commercial customers and more than 19 million households with gas. Today, more than half of all households receive their heat from gas – either directly via gas heating systems or indirectly via district and local heating systems.

Mr. Graichen justifies this intervention, among other things, with the situation after the Ukraine war. But he has been following the planning for some time. Anyone who listened to Mr. Graichen in his former function as director of the lobby group AGORA Energiewende before the election could already read it in September 2021: “By 2030, the coal phase-out will be completed, by 2040 the gas phase-out will follow”. The municipal utilities are indignant, as they had expected that they could continue to operate their gas networks with hydrogen or synthetic green gas.

Michael Riechel, President of the German Gas and Water Association, DVGW: “The latest statements by State Secretary Graichen from the Federal Ministry of Economics cannot be surpassed in audacity and ignorance. To call on the municipal utilities now to plan the dismantling of the gas networks is grossly negligent. State Secretary Graichen had better take off his ideological blinkers.” This would devalue an infrastructure worth several hundred billion euros, assisted him by Ingbert Liebing, Managing Director of the Association of Municipal Enterprises.

The Easter Package of Dr. Robert Habeck

The Federal Government has submitted to the Bundestag a legislative package to change electricity generation in Germany (called the Easter Package). In order to accelerate the expansion of renewables in all areas of law, the Renewable Energy Act (EEG) is to enshrine the principle that “the use of renewable energies is in the overriding public interest and serves public safety”. The explanatory memorandum to the draft law goes on to say:
In 2030, at least 80 percent of the electricity consumed should come from renewable energies, and by 2035 the electricity supply is to be covered almost entirely by renewable energies.” The amount of electricity is to rise to 750 terawatt hours (TWh) by 2035 in order to supply electromobility and heat pumps with additional electricity. By 2030, 600 TWh are to come from renewable energies, mainly from solar and wind. How realistic is that? How secure is that? And how expensive will that be? The legislative package is silent on this.
Today’s power consumption mix shows the starting position. (Source BDEW Annual Report 2021, p. 33)

In today’s electricity mix, wind and solar supply about 29% of the electricity. The 42% renewable electricity repeatedly thrown into the debate gives the wrong impression, because biomass, hydropower and waste incineration plants cannot be significantly expanded. An increase of more than double is therefore announced for wind and solar in 7 years (the new EEG will apply from 2023).

Therefore, the Easter package logically increases onshore wind energy from a current generation capacity of 56,130 MW to 115,000 MW in 2030. Offshore wind turbines are expected to increase from 7,800 MW today to 40,000 MW in 2030. But even a doubling of the generation capacity will not be sufficient to provide a secure performance even in times of lull. The only way from fluctuating generation to secured power is (if you want to do without the simple way of backup power plants based on gas and coal) the intermediate storage in hydrogen. However, this leads to considerable conversion losses of 70-75%.

Dr. Ahlborn has calculated for a 100% wind/solar system that “the power grid can absorb 36% of the energy immediately. The amount of excess energy is 64%. This proportion is divided into 52% of the energy supplied to the electrolysis process and 12% of the amount that is regulated. Because only for a few hours of the year, the tremendously high peaks in generation will not be economically accommodated in electrolysis. When the hydrogen is converted back into electricity, 30% remains under favourable conditions, i.e. less than 16% of the 52% electrical energy supplied to the storage process remains after reconversion into electricity. Ahlborn continues: “This consideration makes it clear that due to the interaction of the random feed-in with the storage system and the grid, a total of around 50% of the original electrical energy from solar and wind power plants is lost through curtailment and conversion losses. The entire system consisting of the electrical grid and storage system must therefore be supplied with twice the amount of electrical energy.” So we need twice as many plants as the German government is planning to bridge the dark doldrums with hydrogen electricity.

Photovoltaics is also to be greatly expanded. To this end, the subsidy from the federal budget is to increase.
New rooftop systems, which feed their electricity completely into the grid, receive an increased (!) Funding of up to 13.8 cents/kWh. Photovoltaics on arable land (Agri-PV) will be expanded, which will drive up the lease prices for arable land. Already today, 2000 € lease prices per hectare of arable land are paid by PV investors. Photovoltaics is now even to be extended to water surfaces (floating PV) and moor soils (moor PV!!). The generation capacity is to be quadrupled from today’s 55,000 MW to 215,000.

Now one could point out that today’s stock market electricity price is already at 12-15 cents/kWh and we therefore have to get used to these high electricity prices. But in a system of fluctuating power supply with hydrogen-based lull protection, electricity is 2-3 times as expensive. On the one hand, the energy losses on the hydrogen path described above double the price. On the other hand, electrolysers, intermediate storage systems and hydrogen power plants are not available for free. Of course, decentralized battery storage for house roofs can reduce the costs for the self-consumer somewhat. But it lacks the total cost balance. It is already clear that this is anything but competitive internationally. There is also no sentence in the bill on this.

With best wishes
Fritz Vahrenholt