German Energiewende: cost-optimal expansion of renewables would save Germany up to two billion Euros a year

Berlin, 31 July 2013. Germany could save two billion euros a year in the course of expanding its supply of renewable energies. This potential savings results from a faster expansion of wind turbines onshore and a slower expansion of offshore wind turbines. The total volume of power generated by the wind power sector as a whole would be the same in both scenarios. The savings would be about the same whether the further expansion prioritizes wind turbines primarily in the north or wind park sites in proximity to areas of high power consumption. These are the key findings of the study “Cost-Optimal Expansion of Renewables in Germany,” which was conducted by two renowned German research institutes.

“Policy makers have a broad scope for action in designing policies for the regional distribution of renewables,” says Rainer Baake, director of the think tank Agora Energiewende, which is backed by the Mercator Foundation and the European Climate Foundation. “This is illustrated by the analysis with unprecedented accuracy.”

The study compares two realistic paths for expanding wind and solar power in Germany: One focuses on the best “resource” sites, namely by locating wind power primarily in the north and solar power primarily in the south.  The other scenario focuses more on locating production facilities near the centers of power consumption.  The results show that both expansion paths lead to approximately the same total costs. In the consumption-driven scenario, a somewhat higher number of wind and solar power plants have to be built. Yet because they produce power at different times and closer to the consumers, they relieve the power system and have to be curtailed less often than in the resource-driven scenario.

In addition, the study shows that the transmission grid expansion foreseen in the current draft of the federal grid expansion law (Bundesbedarfsplan) is urgently needed. Yet delays of a few years would not spell the end of the Energiewende and would not necessarily make it more expensive. The development of new wind and solar plants does not have to wait until the entire transmission grid envisioned in the Bundesbedarfsplan is built. While a delay in grid expansion will lead to the costly curtailment of wind and solar power on windy or sunny days, this will be partly compensated for by savings from postponed investment in the grid. 

“It’s important that the transmission grids foreseen in the Bundesbedarfsplan are built,” says Baake. “In terms of costs alone, a delay of a few years won’t make that much difference.”

Agora Energiewende commissioned the study, which was carried out by the Aachen-based consulting company Consentec with support of the Fraunhofer IWES.  It is based on a comprehensive simulation of the German and European power systems, including the transmission grid, conventional power plants, and weather-related power production from renewables.