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Energy transition ‘only possible with a European approach,’ says German TSO

The energy transition can only be implemented efficiently if it is planned and performed jointly at the European level, according to the power grid operator of Germany’s Baden-Wurttemberg region

By: EBR - Posted: Monday, June 27, 2022

"Now is the time to think more European,” said Werner Gotz, the CEO of TransnetBW. "There is no single state, no single company, no single technology that can do this transition on its own".
"Now is the time to think more European,” said Werner Gotz, the CEO of TransnetBW. "There is no single state, no single company, no single technology that can do this transition on its own".

by Frederic Simon

The energy transition can only be implemented efficiently if it is planned and performed jointly at the European level, according to the power grid operator of Germany’s Baden-Wurttemberg region.

TransnetBW, one of Germany’s four electricity transmission grid operators, launched a new study on Monday (27 June), which calls for greater EU involvement in energy planning to reduce the cost of the transition to a zero-emission energy system.

While Russia’s war in Ukraine focuses the EU’s attention on gas supplies and energy security, the climate emergency also “calls for a radical transition” to ensure Europe’s energy independence, said Bodo Lehmann, the head of the Baden-Wurttemberg state representation in Brussels.

“While the future is uncertain, the rising impact of climate change and the necessity for a paradigm shift, I think, is undeniable,” explained Werner Gotz, the CEO of TransnetBW, who spoke at a Brussels event on 13 June to present the study’s findings.

And the EU’s role in driving this transition “is of utmost importance,” he insisted.

“Our conclusion is that the Energiewende is only possible with a European approach,” Gotz said.

When TransnetBW launched the study two years ago, it initially focused exclusively on Germany. But the authors quickly realised the European dimension was simply unavoidable and needed to be factored in.

“Now is the time to think more European,” Gotz said. “There is no single state, no single company, no single technology that can do this transition on its own. We have to work together, we need an integrated Europe, we need an integrated approach,” he said.

“And we have to start now.”

‘Massive challenge’

These conclusions are derived from a study commissioned by TransnetBW, which predicts a surge in electricity demand by 2050, with peak load at least tripling by mid-century, putting a huge strain on the electricity grid.

Due to new demand coming from sectors like heating, mobility and industry, electricity demand in the EU is expected to increase from 2,491 TWh in 2020 to 5,190 TWh or 5,833 TWh, depending on the scenarios.

“We can see that there is a massive increase” in electricity demand by 2050, which leads to “a massive challenge for the future,” said Jonas Lotze, project manager for the study at TransnetBW.

Germany’s power grid is in dire need of upgrade to ensure stable supply in a country aiming to source 80% of its electricity from intermittent wind and solar by 2030.

In April, the German government presented a comprehensive revamp of the country’s electricity sector, including plans to complete 19 power grid expansion projects to support the transition to net-zero emissions by 2050.

Two scenarios, with hydrogen in both

To achieve climate neutrality, the TransnetBW study examines two scenarios: one assuming hydrogen is freely traded on global markets, representing 60% of EU supply, and another with no hydrogen imports at all.

Both scenarios conclude that reducing emissions to net-zero by 2050 is achievable and brings significant benefits in terms of climate protection and decreased reliance on imported oil and gas.

But the study also highlights key bottlenecks, such as the growing need for land to produce electricity from wind and solar, which increases even further in the scenario where hydrogen is produced within Europe, Lotze said.

According to the study, up to 32% of the additional demand for electricity will come from the production of synthetic gases such as hydrogen – so-called power-to-X applications.

This additional demand adds tremendous pressure on the electricity system, with projections showing “a massive overload all over Europe,” highlighting the need to further develop the power grid to avoid congestion and blackouts, Lotze said.

To deal with the extra load, “a massive expansion of 2.8 times the current electrical grid is necessary,” the study says. This means power interconnections between EU countries need to increase from around 70 GW today to at least 200 GW in 2050, Lotze explained.

And gas infrastructure too will play a crucial role, with hydrogen pipelines forming the backbone of a hydrogen network connected to the electricity grid. “In both scenarios, you need a hydrogen grid,” Lotze said.

Catharina Sikow-Magny, director at the European Commission’s energy department, supported the study’s conclusions, saying the shift to renewables will prompt “a huge change in the mix and location” of electricity generation – both centralised, with lots of offshore wind electricity in areas like the North Sea, and decentralised generation from small-scale solar rooftop panels.

“And this needs to be connected to where the consumers are,” she added.

“If we look at the map, nobody lives in the sea, people live in the centre of Europe. So we need to get electricity there. And this obviously crosses borders – TSO borders and member state borders. And that, I think is inevitable if we want to be economical,” Sikow-Magny said.

Of course, the transition can also be self-sustained, with fewer cross-border exchanges of energy, but this will come at a high cost, she said. “We have done some studies on this, and the difference is huge”.

Towards a pan-European electricity grid?

Michael Bloss, a German Green MEP who took part in the same Brussels event, said the time had come to open a debate about the need for a pan-European electricity grid.

“We need to have more responsibility on the European level,” said Bloss. “If we want to go for 100% renewables, we need such a grid on a European level,” he stressed. “Otherwise it won’t work or we will have over-planning” with unnecessary gas power plants constructed as back-up.

The TransnetBW study supports this, saying the energy transition “can only be implemented efficiently if it is planned and performed jointly at the European level”.

But building a pan-European electricity grid will also require radical changes in how electricity is traded. The EU model for power trading is currently based on bidding zones – or geographical areas where wholesale electricity prices are uniform.

This is why bidding zones also tend to match national boundaries – they reflect grid deployment decisions that were often made decades ago, at a time when electricity was still largely happening within national borders.

The European Commission has tried splitting national bidding zones into smaller units in order to make them more efficient and cut across borders. But the definition of bidding zones can be a highly political issue and most EU countries were not ready to consider it.

Security of supply remains a competence of EU member states, and it is national authorities or TSOs who are ultimately accountable in the event of a black-out.

“Of course, we need to have rules in place for who’s responsible” to ensure grid stability, Sikow-Magny said. Since electricity cannot be stored, grid operators need a system that is able to react every 15 minutes to fluctuations in demand, she remarked.

“And where the market cannot provide solutions, the TSO would have to do it,” she said.

The TransnetBW study acknowledged this, saying power supply and demand must be envisaged in a radically different way, from a pan-European perspective.

In particular, “the concept of ‘demand determines generation’ can no longer be applied to an energy system with variable renewables,” the study said.

A more efficient energy system also requires “a very high share of flexible demand” coming from power technologies that are not reliant on generation capacity being immediately available, Lotze said.

According to the study, 62% of that demand will need to come from flexible energy sources like demand-side management, battery storage, or hydrogen which can convert excess wind and solar power into gas.

“Today, not that much is flexible,” Lotze conceded.

*first published in: www.euractiv.com

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