Just as the election of Donald J. Trump could result in redirected energy policy in the U.S., 2017 elections in France and Germany could reshape plans for electricity infrastructure on the European continent. Also on both continents, some factors and trends will be out of elected officials’ control.
“Difficult to see. Always in motion is the future,” said Yoda to Luke Skywalker while he was undergoing Jedi training a long time ago, in a galaxy far, far away. But from our point of view, overlooking Europe’s energy landscape today, we can plainly see that national elections in 2017 will largely decide energy generation and environmental policies in France and Germany, which constitute the core of the European Union (EU). That said, there are so many renewables now online or in the pipeline that the energy matrix is being transformed regardless—as are old business and generation models.
According to the U.S. Energy Information Administration (EIA), net European generation capacity likely increased by 7 GW in 2016. Fully 75% of this growth was forecast to come from expanding renewables. And while the rates of growth might fluctuate from nation to nation, the trend away from fossil fuels has to hold if the EU will meet both its emissions goals and its 27% renewable energy target by 2030. Germany, already in the pole position, will be moving toward 40% by then and, depending on how elections go in 2017, France might also be pushing 30% or more.
Caught up in the French and German political races are the futures of both nations’ nuclear and coal-burning fleets. Currently, France is committed to reducing dependence on nuclear to just 50% by 2025, down from today’s typical 75%. No other world power relies so heavily on nuclear—and France has long been a leader in nuclear technology internationally. But at the moment, with almost a third of its reactor fleet down and plagued with quality control issues (see “France’s Nuclear Storm: Many Power Plants Down Due to Quality Concerns” in the December issue), France is relying on coal, other fossil fuels, and expensive, imported power from Germany (Figure 1). That drives up emissions rates in both nations. Worse, as candidates in both nations debate policy ahead of elections, energy provider EDF, the French state-owned energy giant that produces the majority of the nation’s power, may literally be struggling to keep the lights on as voters go to the polls.
In a report released on November 29, the European Network of Transmission System Operators for Electricity said, “France is facing its lowest nuclear power generation in the last ten years: thirteen nuclear plants should be unavailable in December 2016 and nine at the beginning of January 2017 for safety tests and maintenance. This leads to a tense situation in France in the event of a severe cold wave in early December up to early February. Cold waves meaning temperatures 3 degrees below average in December and 5 degrees below average in January. The situation in France could affect neighbouring countries including Belgium and Great Britain.”
Though Germany’s scheduled nuclear phaseout shouldn’t become a bone of contention in the 2017 elections (but, after 2016, who can really predict anything?), the long-term plan for that nation’s lignite and other coal plants is already being debated.
At the moment, fossil fuel–dependent producers and stakeholders like the new Uniper unit of E.ON, which are losing long-term market share, are furiously mounting a concerted rear-guard effort to push for capacity support as they struggle for a place in Europe’s new post COP-21 energy paradigm. As Germany’s oft-shunted coal burners fire up, they want to attain a near-permanent seat at the energy table, albeit only for backup and standby power. The argument is that German coal plants can provide a safety net in times of energy emergencies for much of Europe due to its plethora of international grid interconnections—as the situation in France is currently proving.
Meanwhile, on November 30, Reuters reported that EU regulators were preparing to introduce reforms “to promote a greater share of renewables in Europe’s grid by 2030, with plans to cut energy use by 30 percent, phase out subsidies for coal-fired plants and enforce greater cross-border trade.” It seeks to meet emissions reduction goals by adapting Europe’s grid to “a roll out of digital technologies and growth of wind and solar power that is transforming industry and challenging utilities.” As Reuters noted, the proposal puts Brussels “on a collision course with national governments who have increasingly sought to insure against black-outs by subsidising conventional power.”
EDF Flounders While France Prepares for Election
Politically, France seems like it is moving rightward as contests continue between center-right and far-right candidates who will face an as-of-yet-undetermined socialist candidate. However, the current president, François Hollande, is already widely unpopular even within his own Socialist party. Consequently, many political pundits are beginning to write off the left as opinion polls reflect an increasingly frustrated electorate.
Nevertheless, Hollande hopes to leave behind an enduring energy legacy. In early November, he announced new targets over the next seven years of between 69,980 MW and 77,000 MW of renewable energy capacity with the goal of delivering between 150 TWh and 167 TWh of renewably sourced electricity per year by the end of that period. Additionally, while attending the COP-22 climate summit in Marrakesh, Morocco, in 2016, Hollande announced that all of the nation’s coal-fired power plants will shut down by 2023. These ambitious goals coincide with already-stated plans to reduce nuclear dependence to just over 50% two years later.
But can renewables really fill in that gap? In 2015, installation of new wind power and solar photovoltaic capacity in France increased 23.3% and 25% respectively compared to 2014, and it looks like 2016 is set to be a banner year as well, because installation costs for onshore and offshore wind keep falling. But with the ongoing nuclear crisis, EDF currently is struggling to find, let alone generate, enough power. As noted above, officials feared in late 2016 that EDF may be unable to meet existing demand if temperatures dip 3 degrees Celsius below average this winter. To avoid a total shutdown, Réseau de Transport d’Electricité, the grid operator, has drawn up an emergency plan that could involve a series of two-hour-long power cuts to homes and businesses to reduce peak demand if the mercury plummets.
Questions about EDF’s ability to ensure domestic power coincide with the company’s struggle to complete, and contain ballooning costs on, several nuclear construction projects worldwide. Complicating matters, EDF continues to deal with fallout from the disclosure that Areva, its sister company in the French nuclear industry, falsified safety tests on key reactor components. Nevertheless, a long-planned EDF purchase of a majority of shares in Areva’s nuclear reactor business moved forward, with a contract signing on November 15.
With debts now in excess of €37 billion, the state-owned EDF is not instilling confidence. If the lights go out across France, energy policy reform and EDF’s future may well rocket to the top of the political debate.
Germany’s Merkel Hopes to Hold the Center
Almost immediately following Donald Trump’s victory in the U.S. presidential election German Chancellor Angela Merkel announced that she would stand—firmly in the middle—for a fourth term. Even though Germany’s renewable energy turnaround, or Energiewende, has been slowing of late, few in her conservative Christian Democratic Union party challenge the wisdom of renewables, though some question the rate of deployment. But with right-wing populism on the rise, many in Germany are desperate to hold the center. As this article went into production, liberal parties like the Greens and left-of-center Social Democrats were still deciding if they should coordinate on a coalition candidate to challenge Merkel from the opposite side of the spectrum as well.
Whichever government eventually forms following the election, energy policy is very much on the table—particularly the direction of the Energiewende and the possibility of meeting even currently agreed-upon emissions goals. Up until the middle of November, Germany’s current coalition government had failed to agree upon a Climate Action Plan post COP-21. But just before COP-22 commenced, they agreed upon a new deal calling for an 80% to 95% reduction of greenhouse gas emissions by 2050. In order to reach this goal, Germany’s government has set intermediate targets that are to be met by 2030.
Standing in the way, however, is a plan to stem the largest emissions source: Germany’s coal-fired power plants. Roughly 40% of Germany’s greenhouse gasses come from coal—and just a little more than 43% of Germany’s power comes from coal. So the new plan calls for a halving of coal-generated emissions by 2030. That sounds simple, but nowhere in the new Climate Action Plan is there a concrete pathway toward shutting down the coal fleet. Indeed, the future of said coalition government depends on the election support of both coal producers and the tens of thousands of coal miners whose future is at stake.
Market Changes Advocated. As of late 2016, in Germany and western Europe, power prices have surged and will likely remain high as long as a substantial portion of France’s nuclear fleet remains down. As coal-fired power plants throughout Germany fire up to fill in the gaps, Klaus Schäfer, chief executive of Uniper, the former conventional generation business unit of European utility E.ON, used the company’s recent third-quarter earnings call as an opportunity to push for capacity price supports.
E.ON and sister German utility RWE were among the biggest financial losers in the nation over the last few years. Both companies have peeled off their renewable assets from their conventional fleets in attempts to maintain some shareholder value. Uniper is today arguing for a different approach to getting paid for services rendered: receiving money for maintaining available capacity, whether or not it’s used. Schäfer argues that “capacity market producers” such as Uniper can take advantage of Germany’s massive cross-border interconnections and provide energy stability far beyond central Europe in times of crisis.
So another question before German policymakers is whether it is necessary in order to ensure grid stability throughout Europe to enter into long-term, multi-year capacity contracts that support older coal-fired plants, particularly dirty lignite-burning plants, to provide emergency standby services.
Keeping the System in Balance. Of course, various options exist for balancing the inherent variability of wind and solar generation and ensuring grid security beyond using conventional power as a strategic reserve (see sidebar). One option is overall reduction in energy use. To achieve this, Germany recently announced a €17 billion ($19.4 billion) campaign titled Effizienzoffensive, the ultimate goal of which is to cut the country’s energy consumption in half by 2050. Germany launched the scheme because officials understand that renewable expansion alone will not be enough to meet the country’s carbon emissions reduction targets.
Other solutions include:
■ Building out more baseload renewables such as offshore wind.
■ Widespread deployment of battery storage and/or hybrid renewable energy/storage systems.
■ More investment in demand response technology.
■ The introduction of virtual power plants through the use of networked systems.
■ Building more grid infrastructure to move all the energy.
Germany seemingly has decided to take an all-of-the-above approach, as developers are now bringing that whole range of solutions online.
All of the Above: DG, Storage, and Virtual Power Plants
According to the EIA, by 2019, Europe may end up with almost twice as much new distributed generation (DG) as central generation (47 GW vs. 28 GW). With as much as 256 GW already online, one of the logical ways to better harness all that energy is to network it into a virtual power plant.
That’s what Siemens and RWE are doing with their new Smartpool project, planned to become the IT backbone of a large number of connected and bundled DG sources. Building on past collaborative projects, Smartpool will be opened up to other utilities and grid operators as well. (A video about the project, in German, can be found at http://bit.ly/2gWGvcw.)
“Many innovative steps must be taken in order to successfully manage the energy transition to the new energy mix,” said Dr. Joachim Schneider, CTO of RWE Deutschland AG. By collaborating with Siemens, “we will be able to significantly expand the benefits of new IT technology systems and thus provide customers and grid operators with efficient solutions for their business.” As a result, public works and grid operators will be able to use RWE Smartpool to optimize the marketing of what are frequently small amounts of locally generated electricity. If the project proves successful, look for others to be announced in 2017 and beyond, thanks to the expansion of the Internet of Things (IoT) and cloud (scaleable, offsite) computing.
Additionally, with over 67 MW installed as of the end of 2015, Germany is now one of the world’s leading energy storage markets. Europe’s first commercial battery storage system, a 5-MW/5-MWh lithium-ion-unit went online there in September 2014. In November 2016, power plant operator STEAG Energy Services GmbH—a wholly owned subsidiary of STEAG GmbH, Germany’s fifth-largest electricity generator—along with partner Nidec ASI, formerly known as Ansaldo Sistemi Industriali, inaugurated a 90-MW storage system comprising six 15-MW lithium-ion batteries located at existing power stations.
Regardless of who wins the next round of elections, it’s clear that new technologies will have an essential role to play alongside traditional ones in keeping the European power grids reliable and flexible. ■
—Lee Buchsbaum (www.lmbphotography.com), a former editor and contributor to Coal Age, Mining, and EnergyBiz, has covered coal and other industrial subjects for nearly 20 years and is a seasoned industrial photographer.