Transition to what? Scenarios for an energy future

The shifting of energy production to renewable energy sources – including solar, wind and hydroelectric, for example – is one of the biggest processes of innovation Germany has embarked upon since the end of the Second World War. The aim is clear: by the year 2050 primary energy consumption should be cut by half on the level of 2008. The proportion of renewable energies in power generation should increase from 20 per cent of power consumption to at least 80 per cent in the year 2050.

But what will the journey to that point be like? There are various scenarios. Four of these have been outlined by Roland Berger[1] in a study:

1. More of the same

Renewable energies enjoy a high level of guaranteed state support. This means there are no incentives for consumption-oriented power generation. Storage technologies and smart grids make limited progress, and the expansion of renewable energy plants makes network integration more difficult.

2. A guiding hand

Here too, renewable energies enjoy a high level of guaranteed state support. However, the support system focuses on the integration of capacities into the overall network. In order to achieve this, the energy transition is steered centrally by a federal ministry. A state “master plan” for research brings innovations to the network and to storage facilities.

3. Anarchy

Economic difficulties put the state and companies under pressure. The result will be an abrupt exit from the state support scheme. As a consequence, companies will overwhelmingly rely on their own energy provision with electricity. The decentralisation and lack of networking in the system threatens security of supply.

4. Energy system 3.0

There will be market-based support with no guarantees or privileges. Revived trading will mean renewable energies are supported indirectly. Attractive investment regulations bring business on board as a source of funding. A cooperative R&D policy between state and industry leads to advances in innovation.

Four extreme points – and it’s most likely none of these scenarios will prove to be perfectly accurate. But they show the dimensions between which the situation may hover. What is clear is that this will always include the exhaustion of all possibilities for achieving the objectives of the energy-economy triangle (environmental compatibility, affordability, security of supply). And it’s likewise clear that, since they are unable to meet baseload demand, renewable energies need a conventional energy source as a partner in order to guarantee an uninterrupted power supply even when there is no sun or wind. Natural gas is ideally suited to this role as it is environmentally friendly, flexible and can be used decentrally.

[1] Roland Berger Strategy Consultants: Think Act - Energiewende Reloaded, March 2014

Between global and regional

What’s more, energy doesn’t stop at borders: aspects such as climate protection and security of supply are issues that demand a cross-border, European approach. The energy transition is proving to be a mammoth project in which European framework conditions, as well as federal and state policies, are defining the direction. Its success, however, will depend on those that are implementing it locally: municipalities, companies, private households and many more.

Here too, natural gas plays an important role – and thus so does Open Grid Europe as a European service provider with regional competence as well as a large transmission network: thus this transmission network also enables energy to get to the consumer, for heating, cooking and driving. Virtually half of all homes are heated with natural gas. What’s more, the natural gas network is linked up to fifty German underground storage facilities in around 40 different locations. These can take almost 23 billion cubic metres of natural gas – more than a quarter of all the natural gas required in Germany in 2012. They represent an important building block for security of supply.

Decentral transition

The foundation for the transition is laid locally: it is here that wind turbines, biomass and solar systems develop. Open Grid Europe has been represented locally in the regions for many years, as it maintains fifty field sites along its natural gas network. In its heartland of North Rhine-Westphalia alone, Open Grid Europe runs 12 field sites, with an installed capacity that corresponds to 43 intercity trains of the very latest generation. This proximity to the region is beneficial when it comes to expanding the gas infrastructure, as this way the most appropriate course of action for the region can be identified in projects, ensuring the needs of people and the environment are met. The planning of gas pipelines, like the Schwandorf-Forchheim loop line in Bavaria, takes into consideration such factors as the particular features of the local terrain: existing lines, ecologically valuable areas, existing development and infrastructure, and future construction sites all help to determine the basic route the line will take. The loop line connects the Upper Palatinate region with Upper Franconia, in order to increase the capacity of the north-south transmission line.

Trailblazers for the new energy market

The future of the energy transition will therefore not only be decided on a grand scale, but primarily on a regional and local basis. The back-up function of gas as an environmentally-friendly energy source fundamentally benefits the regions when it comes to switching to renewables, although it does require the acceptance of citizens and local politicians, otherwise no project can be realised according to plan. Acceptance can only be achieved when measures do not run contrary to the region’s objectives and give stakeholders room for manoeuvre so that they can be involved in shaping the energy supply. This way, the energy transition can even trigger impulses for regional growth. Open Grid Europe is well-versed in this approach and is also represented on a regional level. Many years of experience with various different regional projects and innovative solutions enable the company to meet the relevant requirements.

Whichever direction it takes: Open Grid Europe supports the energy transition and wishes to ensure that in the energy policy debate, natural gas is given a role that corresponds with the potential this energy source harbours in the energy mix of the future.

[August 2015]