Energiewende X transition énergétique

The Mutual Support Needed between Germany and France for the Success of Energy Transition

Source: https://www.kino.de/film/der-rhein-von-oben-2013/

“plus une discussion sur l’énergie dure longtemps, plus la probabilité d’y trouver une comparaison impliquant l’Allemagne s’approche de 1”

“The longer a discussion on energy lasts, the more the likelihood of finding a comparison involving Germany approaches 1 “

~Energy Transition’s Version of Godwin’s lawThibault Laconde

Although there exist a hell lot of nuclear nerds around the world wide web who often claim that France is the exact opposite of Germany when it comes to energy policies, the energy policies of the two nations are actually converging right now.

We all know the German side of the story (at least those who read my articles frequently). What about the French side of the story? Consider the following:

  1. In 2015, France declared to phase out ⅓ of their nuclear capacity by 2025, that is about 20 GW of nuclear. Coincidently, this was also how much nuclear Germany had had when Fukushima broke out.
  2. France also plans for 20GW of solar capacity and 26GW of wind by 2023. This will triple their capacity of solar and double that of wind.
  3. Nuclear in France has shown similar trends when compared to brown coal in Germany; although no official phase out plan or closure occurred, their power output still gradually declined. Germany recently mothballed some of its brown coal power plants, while EDF seems to be willing to reassess the economics of some of its nuclear power plants in 2019.

In March, a German thinktank (Agora) cooperated with a French equivalent (IDDRI) to conduct a study. It showed that not only both nation’s energy policies are converging, but the success of these policies depend heavily on each other’s mutual support and coordination.

The key findings of the report is not surprising: with renewables blooming in both nations, the demand for a more flexible power system will threaten the economics of the overcapacity of nuclear and coal (Germany’s coal faces another risk: high carbon prices).

One most interesting finding in the report: keeping more than 50 GW of France’s nuclear power plants will probably make the entire fleet uneconomic, even when the carbon price doubles from current values to 30 EU per tonne CO2. It is only when the carbon prices are raised to 50 EU per tonne CO2 will the fleet cover its fixed costs.

This means that despite the recent announcement of delaying the nuclear reduction plan and no concrete time schedule yet, France probably would have to reduce ⅓ of their nuclear capacity eventually.

Taking flexibility issues into account, if France decided to phase out not a single one of its current 58 reactors, then the lowest utilization rate among its nuclear fleet would drop to 30%, and the average utilization rate would drop to 70%. The LCoE of those nuclear power plants on the margin will simply reach a LCoE unmanageable to the industry such that EDF has to retire some of its nuclear power plants inevitably.

Of course EDF could always call for bail out from the government, just like what the US nuclear operators are doing right now. But subsidizing the nuclear industry to keep it alive will also affect the economics of renewables.

If all 63 GW of France’s nuclear remain on line, the average wholesale price of electricity will drop to 15 EU/MWh, and that means around 20 EU of additional remuneration per MWh is needed for solar PV to install.

So if the France government, like some internet nuclear advocates propose, keep every single nuclear online with a total of 9 billion dollar subsidy annually by 2030, it will also have to make consumers pay a lot of renewable surcharge for the solar and wind installed.

On the other hand, we also see that Germany’s wind power plants can only sustain without additional remuneration when a fair carbon price is set.

But perhaps the most surprising thing one finds in this report is how effective a rise of carbon price could do to carbon reduction.

The chart above is a little bit like comparing apple to oranges, but it is without doubt that a sound carbon price policy in EU probably will also affect the electricity markets and policies in both Germany and France. So in the end, the two largest economies in Europe would probably want to discuss properly about this subject.

Some things I would like to add is that in this report. Firstly, it was assumed that Germany only halved its coal power fleet. Suppose that it phase out coal faster than this assumption, the carbon reduction would be far faster. Not only because that burning coal itself is a carbon intensive process, but also the inflexibility of brown coal would make Germany export more when times of renewable surplus.

For example, in a recent research paper, we see that CO2 emissions in Germany would decrease about 10 million tonnes in 2014, if we take the emissions of cross border power flows into the account of the true consumers. This is about 3% of the carbon emissions of the energy sector in Germany.

Other sources has suggests that if coal were truly flexible and response fully to the residual load variations, Germany could have reduce coal use by 37%.

So it might be the right time to seriously consider Greenpeace and Green party’s suggestion of a coal phase out by 2030.

Thinktank Energybrainpool’s Scenario to phase out coal in Germany by 2030; the scenario will reduce carbon emissions of energy sector in Germany from today’s 300 Mton/yr to 60 Mton/yr by 2030 (about 20% of 1990’s emission)

Secondly, I’m not sure how they get the fixed cost of extending the nuclear power plants. But if there is anything we have learnt from the previous experiences of the industry, that is to never underestimate their capability to make their budget rocket. The extending US nuclear fleet is not looking well, and requires government bail out more and more often.

And while nuclear operators in US can argue that it is conventional gas who is taking away their market share, in France it will be mostly the nuclear power plants competing with each other. The industry has a less persuasive argument of climate effect in France to keep all its nuclear power plants alive.

Lastly, the LCoE of renewables will continue to decline, and with the rise of storage solutions so will the integration costs. Meanwhile, the utilization rates of the remaining nuclear and coal will continue to be threatened as the share of VRE grows. All of these things might lead to a faster nuclear and coal downfall than we expect presently.

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Tony Yen

Tony Yen

A Taiwanese student who studied Renewable Energy in Freiburg. Now studying smart distribution grids / energy systems in Trondheim.