Renewables: timing the transition

Renewables: timing the transition

Renewable energy may be green but it’s notoriously unreliable. We can’t summon the sun or the wind but we can time demand to coincide with supply. Here is how.

In German, they have a special word for cold, cloudy, windless days – Dunkelflaute. From a weather point of view, the combination may seem dull and unremarkable. But in a world looking to replace carbon-intensive energy with wind and solar power, Dunkelflaute can spell disaster.

Indeed, unsuitable weather is to blame for the fact that although Germany managed to produce enough renewable energy to cover 100 per cent of a day’s electricity use back in 2018,1 five years later the average share of renewables in its power mix is still only expected to be 46 per cent.2 The intermittency of solar and wind power will need to be addressed if the government is to meet its target of 80 per cent by 2030.

The challenge is further amplified as electricity use is actually expected to pick up significantly over the coming years as people ditch petrol-powered cars and gas-fuelled heating for electric versions in a bid to cut carbon emissions.

De-carbonisation of the transport sector in Germany will mean that 2.5 times more green electricity will need to be produced, according to the Pictet-Clean Energy Transition Thematic Advisory Board.

To achieve this, storage and transmission of renewable power will have to be improved. But, according to the board, we will also need to ensure that demand and supply are much better matched through so-called “sector coupling”.

Based on current infrastructure, once the share of electric cars in Germany reaches 30 per cent, the country could experience widespread blackouts if the supply and demand of electricity is not matched. Research by consultancy Oliver Wyman suggests this could happen as soon as 2032.3

 The idea behind sector coupling is to ensure that the use of electricity is best matched to its production. That means not charging all the electric cars at once, as well as timing the charging to coincide with periods when there is less demand for power from other sources (such as industry or domestic heating) and when the weather conditions are favourable for production.

Taking it one step further, car batteries could even be used to store power for use elsewhere at times when production is low and demand is high. Admittedly, each car battery can store only a relatively small amount, but acting together millions of cars can create a significant buffer for the grid.

Research collated by the advisory board shows that smart charging has been proven to have a significant positive effect on reducing peak electricity load in case studies around the world, from China to Scandinavia to Hawaii.

The same smart coupling principle can apply to household heating – another area targeted for electrification as part of the green transition.

Currently, most of the heating is done in the evening. This is not an issue when using gas but the concentrated demand will become a problem as more people switch to electric-powered heat pumps. If the heat pumps can be programmed to run at different times and store the heat for later use, the strain on the grid can be avoided.

Logistics and legislation

However, smart coupling won’t happen overnight.

For a start, better management of the use and supply of power relies on smart meters. Germans have been particularly slow to adopt these, with current penetration rates in the low single digits, compared to 100 per cent in Denmark and Sweden and over 80 per cent in France.4 But the government is on the case with a mandatory roll out planned in coming years. Other infrastructure will also be needed, both within the homes and outside them.

A new breed of companies is bringing a much more digital approach to the energy sector, which should ease the transition.

Another challenge is persuading the public. Advisory board members expect strong resistance from consumers to being told when to run their heating or charge their cars. This could be partially overcome with price incentives. And, with more people installing their own solar panels, they may be more open to managing their own power production and use – channelling surplus production into their car or their heater rather than selling it back to the grid, where some power will be lost through transportation.

The complex nature of the energy sector and its strong lobbying power presents additional administrative and legislative challenges (in Germany, and elsewhere). Adjustments will also need to be made to enable flexible power pricing.

With governments committed to the green transition and with the public increasingly holding them to account on those targets, the hurdles do not seem insurmountable.

If successful, smart sector coupling could enable maximised use of renewable electricity and reduce redundant power generation, creating stable grids. With more reliable renewable supply, there will be less need for “insurance” capacity for fossil fuel power to plug in the gaps on dark and still days. Over time, that should also help reduce costs. And Dunkelflaute may eventually be consigned to linguistic history.

Please confirm your profile
Please confirm your profile to continue
Confirm your selection
By clicking on “Continue”, you acknowledge that you will be redirected to the local website you selected for services available in your region. Please consult the legal notice for detailed local legal requirements applicable to your country. Or you may pursue your current visit by clicking on the “Cancel” button.

Welcome to Pictet

Looks like you are here: {{CountryName}}. Would you like to change your location?