xSpecifically, DENA calculates that compared with adding no more wind to the generation mix after 2003, expanding wind power to meet 15% of demand by 2015 will raise household electricity rates by EUR 0.0039-EUR 0.0048/kWh. Rates for energy intensive industry, which pays less for electricity, will rise by EUR 0.0015/kWh.
xThe controversial study made headline news across Europe in late February and early March, with interpretations of its findings alternatively damning wind power as a huge economic burden, or vindicating Germany's investment in 16,600 MW of wind station capacity (box next page). Wind energy today provides 4% of Germany's gross electricity production, or 6% of net electricity consumption.
xIf Germany succeeds in generating 20% of its electricity needs from renewables by 2015, carbon emissions in the electricity sector will go down, despite the phasing out of one-third of the national nuclear fleet by that time, says the DENA report. Wind is earmarked to provide slightly more than half the renewables' contribution.
xThe wind lobby sees the study as mapping a clear path to continued expansion of German wind power. "All horror stories can be laid to rest," says Peter Ahmels of the Bundesverband Windenergie (BWE), with reference to nightmare-scenario claims over the past year that raising the level of wind power in the German generation mix will destabilise electricity supplies without massive investment in back-up power.
xThe DENA report proves the claims to be false, says BWE. It demonstrates that 2000 MW of conventional power station capacity can be replaced by wind energy by 2015 while maintaining 99% security of supply. That volume of wind power is equal to about 6% of nominal installed wind capacity, a relatively low percentage reflective of the poor wind resource in much of Germany. "With 15% of national electricity consumption covered by wind energy, the power stations that supply the remaining 85% of electricity consumption can cover for the necessary balancing power," says BWE.
xDENA also reports that the cost of balancing power and reserve for periods of low or no wind are much lower than previously claimed, states BWE. Replacement of large chunks of ageing conventional capacity scheduled for the coming years provides potential for optimising integration of wind power into the thermal generation mix. The necessary incremental increase in balancing power and reserve to accommodate wind power will push the market price of electricity up by just EUR 0.0006-0.0008/kWh or 1.7-1.8%, points out BWE in its overview of DENA's findings.
xFor successive additions of new wind plant in the period to 2015, the average payment for production under Germany's system of fixed rates for wind will fall from today's level of EUR 0.0904/kWh for new installations to EUR 0.0692/kWh. The avoided costs achieved by plant replacing other generation are calculated to increase to EUR 0.0257-0.0393/kWh in 2015, depending on which of the study's three economic scenarios is adopted.
xBWE is critical of the scenarios, two of which assume no significant change in the real price of lignite coal, gas and oil to 2015. But in support of the scenarios, Markus Peek of the Energiewirtschaftliches Institut in Cologne argues that gas and oil prices in 2003 and 2004 are "enormously high" and therefore not likely to rise further, if at all.
xThe wind association also points out that DENA does not take proper account of wind's environmental cost benefits. It assumes carbon emission offsets will be trading at no more than EUR 12.5/tonne by 2015, while a more usual assumption is EUR 50/tonne, and it takes no account of savings in other polluting emissions.
xA primary aim of the study was to establish the required high voltage network expansion needed to accommodate additional wind power to 2015 while retaining 99% security of supply. It concludes that some 850 kilometres of new grid, or about 5% of existing high voltage transmission network is needed, while another 400 kilometres requires reinforcement. The average cost of the work is projected as EUR 115 million a year, or 5% of Germany's annual network investment, amounting to EUR 1.1 billion by 2015. For consumers, it means an additional EUR 1 a year, or EUR 0.00025/kWh by 2015. Energy intensive industry pays less.
xSeveral options exist for ensuring the wind power fleet does not destabilise the grid, including modernising turbines to make them less likely to trip with sudden grid voltage dips, repowering with new machines or phase shifters at conventional power stations.
xBWE points out that at present there is no incentive on utilities to keep grid costs down since for onshore wind these are rolled directly onto the consumer. With the arrival of an energy market regulator, expected in July, pressure will be applied to reduce network costs, with the result that there could be no increase at all, it argues. Cabling for offshore wind plant is projected to cost EUR 5 billion by 2010 and will form part of the total project cost carried up-front by developers, providing an incentive to keep costs down.
xAny new wires on land will not solely benefit wind power, says BWE, but also increase network capacity for national and international trading of electricity. The German branch of the European Federation of Energy Traders (EFTA) is not so sure. It argues that the obligation to take-up all wind power will mean reduced network capacity for trading cheaper power as wind generation grows. Bottlenecks induced by wind power, particularly at national borders, will increase, it warns. Previously, EFTA has suggested that these bottlenecks are greater than they have to be. "There is a continuing tendency for grid operators to minimise rather than truly maximise the declared availability," it said.
xThe 500 page DENA report was published in late February nearly a year behind schedule and after a last minute conflict over interpretation of its results by the wind and conventional energy sectors. Its original remit was to identify what was required of the German power system for wind energy expansion to 2020. Defeated by the enormity of the task, the project steering group shortened the horizon to 2015. The group is made up of representatives from high voltage grid companies, the economics and environment ministries, power industry lobby groups and wind developers.
xA subsequent second part of the DENA study is to be carried out for the 2015-2025 period. Among its tasks will be to look at further expansion of the high voltage network and the available options for an "overlay grid" if needed. It will also look into generation management for wind turbines and load management for specific customers along with marine cable costs for offshore wind farms after 2015.