Can Prosumers create disruptive progress for energy transition?

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1 Can Prosumers create disruptive progress for energy transition? Dr. Patrick Graichen BETD BERLIN, 20 MARCH 2017

2 Agora Energiewende Who we are Think Tank with more than 20 experts Independent and non-partisan Project duration Financed with about 29 million Euro by Mercator Foundation & ECF Mission: How do we make the energy transition in Germany a success story? Methods: Analyzing, assessing, understanding, discussing, putting forward proposals, Council of Agora 2

3 The energy transition implies a new energy world characterized by flexibility, decentralized structures and a wide variety of actors Illustrative visualisation of the old and the new electricity system high voltage medium voltage low voltage Own illustration 3

4 EUR The economic dimensioning of a system for self-consumption depends on the technology cost race between PV and battery storage. PV system cost in EUR/kWh and battery cost in EUR/kWh * 1,400 1,208 PV system cost in EUR/kWpeak 1,200 1,052 Battery cost in EUR/kWh 1,000 1, Prognos (2016) * including value added tax The development of PV cost follows a path described in Current and future cost of PV (Fh-ISE 2015) The development of storage cost starts from current cost described in the Speichermonitoring (ISEA/RWTH Aachen 2016) and is inspired by further recent publications from ISEA/RWTH.

5 In an increasing number of countries, solar PV systems have reached grid parity and will continue to do so, even with battery systems Deutsche Bank (2015) 5

6 TWh / Jahr Dear central planners, do not be too afraid: The potential for self-consumption with PV energy storage systems is lower than expected Electricity consumption and self-consumption potential in TWh/year Stromverbrauch in den Sektoren insgesamt Haushalte Gewerbe/Handel/Dienstleistungen Haushalte Stromverbrauch der sektoralen Teilmengen Handel und Landwirtschaft Eigenversorgungspotential * Ein-/Zweifamilienhäuser Lebensmittelhandel und Landwirtschaft In Family houses, farms and super markets (i.e. the sectors where the biggest potential lies), self-consumption in Germany will reach at most 44 TWh until But this includes self-consumption for new heat applications so that the estimate of reduced energy use from the grid is around 20 TWh hours per year (single-/two family-homes 20 TWh; food trade and agriculture 4 TWh). If the potential was achieved in the short term, Germany s EEG surcharge would rise by around 0.5 cent per kilowatt hour. Prognos (2016) * with reduced energy use from the grid 6

7 The three main Challenges to be solved

8 Challenge #1: Redesign taxes and levies (e.g. grid fees, EEGlevy, taxes) so that prosumer are encouraged to go ahead while paying their fair share of grid fees Costs of batteries and household electricity price Büro F, own amendments Current system puts most taxes and levies on kwh taken from the grid but this is not sustainable Possible changes to the system of taxes and charges within the energy sector: Higher share of capacity based pricing Making taxes and levies more dynamic by indexing on wholesale power market price Shifting levies and charges from the power sector to the heat and/or transport sector Abolish power tax and/or create a publicly financed RES fund Amending the system of taxes and charges could lower the household electricity price by about 10 cents/kwh. 8

9 Challenge #2: Household storage usage should be based on solar forecasts, otherwise prosumer add additional stress to the grid instead of relieving it! Single household storage without forecast Single household storage with forecast (non-it-based/it-based) Use of stored electricity PV system electricity fed into grid Solar electricity charged to battery Generation peak at noon; electricity enters grid with steeper gradients that without battery. Battery storage creates problems for the grid instead of solving them. Charging when electricity supply is high, grid overload Increased/decreased feed-in based on demand and generation forecasts Battery storage reduces feed-in level, providing relief for the grid and allowing more PV units 6 AM 12 PM 6 PM 6 AM 12 PM 6 PM Sterner et al. (2015) Sterner et al. (2015) 9

10 Challenge #3: How do we efficiently integrate new electric consumption like Electric Vehicles and Heat pumps? INEES-Project: using EV as temporary storage INEES 2015 Cars are not used for 23 hours a day Electric mobility larger market than home systems Mobile batteries will enter the power system and could (should!) operate like stationary batteries Used EV batteries may enter the power market at very low cost (2 nd life) Open Questions: Where will EVs be during charging & release times: At home or at work? Next to PV system? Optimisation of individual homes or of the system? 10

11 Recommendations for Energy Policy Prepare the Power System for a High-Solar-PV-World: Modelling of a System with 150 GW Photovoltaics and appropriate Storage amounts is needed Grid Development Plan 2050 needs to be calculated for a 90% RES including GW Solar PV world (will probably not decrease Grid Development needed for 2025, but maybe those that go beyond) Create stable business environment for residential Solar Battery Systems Adjust system of taxes and levies in order to create a sustainable finance base for the energy transition power system and to incentivize system-benefitting storage usage Adjust regulatory framework for optimal storage usage Limit feed-in of rooftop PV to 50% (short-term adjustment) 40% (mid-term adjustment) of the installed capacity (leads to incentive for forecast-based loading) 11

12 Further reading at Electricity storage in the German energy transition (2014) Heat transition 2030 (2017) Self-consumption with solar power systems (2016) System perspective 12 Individual perspective

13 Agora Energiewende Anna-Louisa-Karsch-Str Berlin T +49 (0) F +49 (0) info@agora-energiewende.de Please subscribe to our newsletter via Thank you for your attention! Questions or Comments? Feel free to contact me: patrick.graichen@agora-energiewende.de Agora Energiewende is a joint initiative of the Mercator Foundation and the European Climate Foundation.