Over a two-week span earlier this month, the German solar power sector broke three national power production records, according to analysis from a German industry research institute. Its growing solar capacity also makes it a world leader, but whether the remarkable growth can continue could hinge on what happens in the energy storage market in the next two years.
In the first week of June, the German solar power sector generated a record total of 1.26 terawatt-hours of electricity, according to Fraunhofer ISE. On the second Monday in June, a national holiday in Germany, it produced 23.1 gigawatts between 1 and 2 p.m., equaling 50.6 percent of the nation's total electricity demand.
But several coinciding circumstances aligned to help set these records, according to Tobias Rothacher at Germany Trade & Invest, the country's economic development agency. Solar power production in early June has shown what the sector is capable of, but whether Germany is able to consistently harvest this much power is another question.
One reason for this month's records is, simply, that Germany has more solar panels installed this year than it has in the past, Rothacher said.
But good weather and the fact that it was a national holiday weekend, when there is usually less electricity demand, were big factors in producing this month's records, Rothacher said. In the first five months of this year German solar power production is about 34 percent higher than it was last year, while actual installed capacity only increased by 10 percent.
Without more storage, solar power will be lost
But even with steadily increasing capacity and a proven potential to supply the bulk of Germany's electricity demand, solar power isn't going to be able to displace fossil fuel resources until it is able to store the surplus energy it generates on good-weather days.
"Nowadays we also need fossil fueled power plants in case the weather is not so good," Rothacher said. "Over time, we need to have more flexibility, and that means we need to store this [solar] electricity.
"We can only provide this consistency of solar power in the grid if we have storage capacity: for example, the bundling of thousands of [photovoltaic] energy storage systems in order to provide grid support services."
In the next few years energy storage capacity is going to be crucial to the long-term economic survival of Germany's solar power sector. The industry is currently supported by a feed-in tariff that pays solar power providers for the electricity they feed into the grid. When the country reaches 52 GW of installed solar capacity, that tariff will stop. Germany currently has 37 GW of installed capacity, and Rothacher expects the country to reach 52 GW in next three or four years.
The solar power sector -- along with other intermittent renewable power sectors in Germany -- is also hurt by some details of the European grid system, which charges power producers for feeding power into the grid when there's an oversupply.
The "negative pricing" during periods of oversupply is needed to keep electricity supply and demand in balance, but for conventional fossil fuel power sources, it is often cheaper to pay the charge rather than shut down. Some power producers are technically not quick enough to reduce their output when they have to, so they pay, too (ClimateWire, June 18).
Incentives needed for batteries?
Renewable energy sources, on the other hand, are required to shut down during periods of oversupply -- which is also often when solar and wind power facilities are producing the most power. And as solar capacity grows, electricity oversupply will become more of a problem, Rothacher said.
"If we don't build up storage capacity then our other renewable energy sources will be shut down more often," he added.
But there are several ways Germany could build storage capacity over the next few years, according to Rothacher, including through some financial benefits the market hasn't valued yet. For example, electricity providers in Germany have to pay every time they transport electricity through the grid. With enough storage capacity those fees could be avoided.
There are no major technological obstacles in the energy storage market, but Rothacher said the storage market will need similar monetary and regulatory support from the German government that the solar industry has received in order to grow.
"Both of these markets are really interconnected," Rothacher added. "We need to change some of these grid regulations, and we could maybe start to value, monetize some of the services batteries can provide."
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