Renewable Energy

[Bob Wallace]

Here's some recent LCOE numbers from Lazard -



Wind is now our least expensive generator.  Solar is hitting the 6 cent point and working its way into the second least expensive slot.

Of course efficiency is the real bargain...

[SATire]

I'm finding myself in disagreement with just about everything you wrote.

Bob, since we are talking here not about opinions but about facts and planning we have to work this out. This is about reasoning, simple math and preconditions. So there could be a difference in the preconditions or one of us (or both) made some error in the calculations. So it is worth the effort to track that error to improve our calculations to enable better planning.

Concerning preconditions I repeat myself to be sure we are talking about the same thing here:

Wind and solar are competitive only for privat use (cheaper than electricity bought including all the taxes and grid prices) or in the case, that renewables are not significantly present in the grid (e.g. less than 25% mean).

I think we can probably agree on the cost for installation of renewables (basically investment costs devided by life-time) and the number of kWh produced during life-time (there are maps showing the wind & sun for each reagion available and knowing the angle of the PV or the heigth of the hub you know average production during life-time at your place).

So I believe we have different opinions about the market: For which price can you sell your renewables power e.g. at EEX? (If you know an other market with >25% renewables I would be glad to learn about it).

For Germany that data is available in conventient presentations here: http://www.ise.fraunhofer.de/en/renewable-energy-data/electricity-production-data

Let us look in a month (April 2014) and a single week (week 11 in 2014) of electricity production and the prices at the market (pictures attached, so log in to see it):
You see, that the prices vary between e.g. 2 and>5 ct/kWh (20-50 €/MWh: Right axis of the graphs: You need to use the slider under the picture to see that). But if there is wind and sun the prices are well below 4 ct/kWh. So the average price you will earn with your PV will be much less than the average price you will earn e.g. by burning coal. And this will get more extreme if the long-range grid is not growing as fast as renewables installations. Do you see what I try to explain? Without a guaranteed price you will never invest in a turbine to sell the power at EEX...
 
edit: Even more convinient you may look at the power generation and the prices on the web here: https://www.energy-charts.de/index.htm
 

[crandles]

You see, that the prices vary between e.g. 2 and>5 ct/kWh (20-50 €/MWh: Right axis of the graphs:

If everyone was selling all their electric production at those prices then everyone bar wind would be losing money according to Bob figures. Therefore, I would suspect that little electric production is sold though that spot market. Producers could well be selling what they can guarantee to have available at higher prices and only sell surpluses through that spot market.

[SATire]

You see, that the prices vary between e.g. 2 and>5 ct/kWh (20-50 €/MWh: Right axis of the graphs:

If everyone was selling all their electric production at those prices then everyone bar wind would be losing money according to Bob figures. Therefore, I would suspect that little electric production is sold though that spot market. Producers could well be selling what they can guarantee to have available at higher prices and only sell surpluses through that spot market.

Crandles, in Germany all power from PV and wind is sold via that spot market. But there are subsidies (EEG): Poeple get fixed price (the older the installation, the more) and the electricity is sold on the spot market. And renewables will allways be sold first by law, because there are no running costs. The difference (between that fixed price for producer and the price on the spot market) is put on the prices for end users.

But without subsidies you can only get money with PV or wind if you are the only one.  Once a lot of poeple do the same the price is dead. I guess in 10 years it will be similar in US and elsewhere - so please calulate in such a way, that you have your investments back before that date...

And Crandles, pardon me: "Producers could well be selling what they can guarantee to have available at higher prices" with PV on your roof, what are you going to guarantee? That is the heart of the problems with renewables: You need a big long grid to get all power to places far away and next day you let it flow reverse.

edit: The volume of trading at the spot market is on the bottom side of the picture, e.g. in April >20 TWh day ahead and >1.6 TWh intraday.
And here trend of the monthly volume (source again http://www.ise.fraunhofer.de/en/renewable-energy-data/electricity-production-data ) in attached picture:

[crandles]

Thanks for filling in the picture re use of that market.

(BTW I thought you had accepted that "Wind and solar are competitive for private use" so the discussion was about what price a solar farm perhaps in a desert like near Dubai or in Sahara would produce so it would be possible to guarantee some production. For the odd sandstorm you may have to buy some on the spot market.)

[SATire]

Private use is different since the price is way larger at your home. E.g. 30 ct/kWh after grid & taxes & someones profit & EEG-subvention...

And here a final word about production vs. spot market price in Germany: Renewables are always used in the grid. The conventional power generation is tuned to meet demand. From the attached picture you may see how conventional producers react to the prices and you may guess their running cost from that picture.

You see, that this is only true for gas (>5 ct/kWh) and hard coal (>3 ct/kWh). The installed nuclear basis ist not designed to be tuned - so they produce also for negative costs (they pay that someone takes that power). Brown coal is only be tuned to 50% below 1 ct/kWh. 

What does it tell us? The market is not properly designed for renewables yet. So some work is underway to prepare for that. Please do not dream that "the market will do it". The market is a tool we did design for some purpose. Now the purpose needs to be changed and we need to set up new market rules until that tool fits the new goal. Please forget the ideology - it is all just business made to serve us.

[icefest]

How does storage fit in the picture, SATire?

[Sigmetnow]

How fast will solar grow?

Even Greenpeace has underestimated the growth of renewables.  In particular, solar has been growing exponentially, and may continue to be so for a while, though likely at a slower percentage rate.
...
Nevertheless exponential growth inevitably runs into limits as some stage.  This is captured by the classic fable of grains of rice on a chessboard, where one grain is put on the first square, two on the second, four on the third, eight on the fourth and so on, doubling with each square.  Half way through the chessboard the pile of grains, though very large, is manageable – around 50 tonnes for the 32nd square.  However amounts then quickly begin to go beyond all reasonable physical constraints.  The pile on the final square would contain 2⁶³ grains of rice, which is about 230 billion tonnes.  This is about 300 times annual global production, and enough to cover not just a square of the chessboard but the entire land surface of the earth (to a depth of about a millimetre or two).

Extrapolating growth rates for solar PV from the period 2000 to 2013, when cumulative installed capacity doubled every two years, runs into similar limits.  At this growth rate the entire surface of the earth would be covered with solar panels before 2050.  This would provide far more energy than human civilisation would need, if there were room for any people, which there would not be because of all the solar panels.   So are there constraints that imply that renewables are now in second half of the chessboard – or, if you prefer a more conventional model, the linear part of an s-curve for technology adoption?

http://theenergycollective.com/onclimatechangepolicy/2164071/grains-rice-japanese-swords-and-solar-panels

[Sigmetnow]

Worldwide, governments, companies and families could be saving trillions of dollars by improving efficiency with cars that go farther on less fuel and improved appliances, light bulbs and factories, experts say.
...
Some also argue that making energy cheaper by reducing demand just leads consumers to use more, a phenomenon called the rebound effect. Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, said the effect was real but relatively modest, with about 20 percent of saved energy in developed countries being used as a result.

http://www.nytimes.com/2014/12/01/business/energy-environment/energy-efficiency-may-be-the-key-to-saving-trillions.html

[SATire]

How does storage fit in the picture, SATire?

icefest, in Germany pumped-storage hydropower is used for storage to bridge the gaps in the morning and in the evening: 40 GWh capacity with 7 GW power for about 4-8h time to bridge some part of the demand at ~70% efficiency.

Some poeple talk about car batteries for storage - but that is actually nonsense. Today such electrical battery can be used for 1,500 cycles - it would be a pitty to put a single electron into the grid at such costs (>>5 ct/kWh only due to the battery storage). But batteries make sense for private use because it is competitive compared to the price for electricty bought from the grid after tax and such. Such storage can make your home completely independent from CO2 emissions and you may use your home made PV power - ask Neven how much fun that is. 

In future, when we want to have >80% renewables in the grid that storage will be essential. Possible today are powerlines to hydro-places like Norway - I explained that above: http://forum.arctic-sea-ice.net/index.php/topic,256.msg18176.html#msg18176
Next storage technology is power-to-gas possibly: Convert electric power by electrolysis to Hydrogen or with some CO2 from combustion to methane. But that is a future dream since it is only in prototype stage today (e.g. the Audi plant with 6 MW, http://www.etogas.com/ ). Redox-flow batteries in Japan are at a similar stage. Maybe in 10-20 years such technology or another one may come close to hydro power storage. But today the most promising and most efficient technology are power lines bridging regions with wind/sun with regions without. Powerlines are allways more efficent than storage. Only pricate use or isolated places are exeptions, where batteries make some sense.

The next thing is to consider tuning the demand: In a >50% renewables grid it makes a lot of sense to run e.g. the aluminum production or such on the weekend, in the night or during sunny noon... Please take a look at todays graphs of power production and you can easily see how to act.

[Neven]

Such storage can make your home completely independent from CO2 emissions and you may use your home made PV power - ask Neven how much fun that is. 

[Sigmetnow]

A new world record for the conversion of sunlight into electricity has been established in Europe, after a multi-junction solar cell developed through a French-German collaboration achieved 46 per cent efficiency – up from 43.6%.

http://reneweconomy.com.au/2014/new-world-record-for-solar-cell-efficiency-set-at-46-73582

[Bob Wallace]

Bob, since we are talking here not about opinions but about facts and planning we have to work this out. This is about reasoning, simple math and preconditions. So there could be a difference in the preconditions or one of us (or both) made some error in the calculations. So it is worth the effort to track that error to improve our calculations to enable better planning.

I gave you US prices and the latest Lazard LCOE for all electricity sources.  I don't see any sense in trying to do our own calculations when we have  both real world and high quality LCOEs.

Wind and solar are competitive only for privat use (cheaper than electricity bought including all the taxes and grid prices) or in the case, that renewables are not significantly present in the grid (e.g. less than 25% mean).

I really don't know what that means.  Clearly grids all around the world are incorporating wind and solar as part of their energy mixes.  We have US states that now get more than 25% of their electricity from wind.  The fact that more places don't get more than 25% from wind/solar is simply a matter of not enough installation time has yet passed. 

Actually, after checking Denmark got 33% of  its electricity from wind in 2013 and 41% during the first half of 2014.

Now please don't spin that into "Bob's talking about a 100% wind and solar grid" - I've said nor implied nothing of the sort.

So I believe we have different opinions about the market: For which price can you sell your renewables power e.g. at EEX? (If you know an other market with >25% renewables I would be glad to learn about it).

I gave prices earlier.  Reply #549. 

Denmark.

Do you see what I try to explain? Without a guaranteed price you will never invest in a turbine to sell the power at EEX...

It is true that in the US we do not have any "merchant" wind or solar farms.  Those are generators who go to the market to sell 15 minutes blocks of power.  All our wind and solar (except end-user produced) is pre-sold in a contract called a Power Purchase Agreement (PPA).

Apparently because wholesale prices are high in Chile a large solar farm is coming on line as a merchant source.

I'm not sure what it matters whether power is sold on or off contract.  Contracts protect both parties and utilities are signing PPAs for solar to protect them from fluctuating natural gas prices.

I can see how it would make sense to do a PPA with a gas peaker plant.  Guarantee a payment that would cover fixed expenses along with a per kWh payment that would cover fuel and 'wear and tear'.  That way the gas plant stays in business and makes some money even if the plant doesn't run.

Actually, we already do that with "capacity contracts", not that I think of it.  We basically pay plants to "be there" in case we need them.  Exelon recently tried to get capacity payments for its reactors that are losing money.  Unfortunately for them, they were turned down.

Now, did I cover your issues?  If not, get back to me.  And how about we take on one topic and work it through rather that trying to deal will multiple issues at the same time?

[Bob Wallace]

If everyone was selling all their electric production at those prices then everyone bar wind would be losing money according to Bob figures.

If we had a free market working then when the wind was blowing it would push all other generation off.  Except solar which while it has a higher LCOE it also has zero fuel costs and slightly lower operating costs.  Making a penny over costs is better than making no penny.

The wind doesn't blow all the time and the Sun doesn't shine all the time.  When there's not enough wind and solar input there's opportunity for other generation/storage.

To the extent that there was any nuclear, and possibly coal, those hard to stop and start thermal plants would sell for a price below the wind and solar minimum, take their loss, and hope to make it up later.

Gas and hydro are dispatchable.  They would simply shut down and save fuel/water.

--

The future in my crystal ball...

It seems extremely likely that wind and solar will rule.  (Perhaps tidal and wave will join them in second place - higher opex.)  The rest of the market will be divided up among the sources which can provide fill-in for the lowest cost.

I'm guessing the order would be right now 1) already built hydro, 2) CCNG, 3) storage.  Obviously hydro would grab all the market if there were enough of it, but there isn't so NG is selling a lot of fill-in.  Storage is starting to take a little of the market away from NG and lots of people expect storage to keep eating away at the NG share.  Over time storage is likely to push NG into a deep backup role.  For the few hours a year which are not affordably handled by storage.

Notice the lack of thermal plants?

[SATire]

Now, did I cover your issues?  If not, get back to me.  And how about we take on one topic and work it through rather that trying to deal will multiple issues at the same time?

Hi Bob - no, I am not through that. By far not, because such market systems are complicated and very different at different places. You explained well how to calculate the cost using some formulars and data. But I could not get it how you determine the prices you get if you sell your electricity to the grid at your place. I guess you need a good idea of both numbers and also a good projection for the life-time of your plant before you do the investment and put some PV on your roof.

You mentioned Denmark: They pioneered renewables and managed to stay ahead and do very well. Of course they pay the price for that - Denmark is the only place in Europe where electricity is more expensive for privat end users than in Germany.
In Denmark they use the bonus system: If you sell your home made electricity you get the market price plus a bonus of several ct/kWh you delivered to the grid. So as in Germany that is not a market where renewables are competitive without subsidies (So my statement above still holds: Renewables in larger amount are not and will not be competitive in the grid without subsidies).
The market in Denmark is joined with Norway, Sweeden, Finland and Lithuania in Nord Pool: http://www.nordpoolspot.com/Market-data1/Elspot/Area-Prices/ALL1/Hourly/?view=table
I do not see big problems for Scandinavia to go ahead to even 100% renewables: With Norways close to 100% hydro that market will surely be able to buffer even several winter weeks without wind and sun. Furthermore, those reasonable societies are used to good regulation and will continue to try hard to have both a high quality supply and to fight climate change. I would consider them as ideal example. 

I believe in USA the reference in terms of renewables could be California: http://www.caiso.com/Pages/TodaysOutlook.aspx
But I do not know how they determine the selling price there and how the conventional power plants react: Is the behaviour as one would expect according to the costs you calculated above? Can/do they tune nuclear?

[Bob Wallace]

I guess you need a good idea of both numbers and also a good projection for the life-time of your plant before you do the investment and put some PV on your roof.

I didn't deal with end-user solar.  That's not how utilities purchase energy.  (BTW, I've had panels in my yard for over 20 years.  I've been off the grid for over 25 years.)

- Denmark is the only place in Europe where electricity is more expensive for privat end users than in Germany.

Danish and German retail electricity prices are high due to taxes, not the cost of electricity.  Best to use wholesale electricity prices when making comparisons.

I don't have wholesale prices but I can show you the price charged medium sized industries in the EU.  You'll notice that both Germany and Denmark are lower than the EU 27 average.

. So as in Germany that is not a market where renewables are competitive without subsidies

As Germany has added renewables to their grid their wholesale cost of electricity has fallen.  Yes, it took FiT systems up front to get the German solar industry started, but now solar has matured to the point where support is basically not needed.  Don't make the mistake of comparing the cost of new wind or new solar with paid off coal or nuclear.  New:new is the proper comparison.

If renewables are not competitve then you need to explain why Germany wholesale prices have been dropping...



And why solar has knocked the price of wholesale power to the basement on sunny days...

Can/do they tune nuclear?

I'm not sure what you are asking.  Is it whether US reactors can load-follow?  If so I think a few might be able to but most can't.  (Not sure of any of that.)

You do realize that load-following makes nuclear-electricity more expensive, do you not?  Nuclear has very, very limited variable costs.  Almost all of the costs are fixed, slowing production saves no money to speak of.  Fuel is only $0.0079/kWh (less than a penny) and if the plant is dropping production by dumping steam then they aren't even saving fuel.  The cost of nuclear...

Total annual costs / total annual production = X

If you load follow and drop output by 50% then it's...

Total annual costs / 0.5 total annual production = 2X

[Sigmetnow]

Falling Oil Price Won’t Affect Solar Industry, SunPower CEO Says

Plunging prices for crude oil will have little impact on the solar industry, said the chief executive officer of the second-largest U.S. solar manufacturer SunPower Corp. (SPWR)

Oil would have to drop “a lot more” for the economics of burning oil or diesel to be cheaper than solar power,’’ Tom Werner said today at the Credit Suisse 2014 Annual Technology Conference in Scottsdale, Arizona.

The price of oil has fallen nearly 40 percent since June, amid swelling supplies from U.S. shale and OPEC’s decision last week to maintain production.

Green energy is expected to be unaffected, in part because it’s set to receive almost 60 percent of the $5 trillion forecast to be invested in new power plants over the next decade, according to the International Energy Agency.

Werner said that recent contracts signed by power companies in the U.S., Chile, the United Arab Emirates and other places show that the price of power from the sun is competitive with fossil fuels.

In May, for example, the U.S. utility Southern Co. and billionaire Ted Turner’s renewable energy company agreed to buy a First Solar Inc. solar farm in New Mexico that has a deal to sell electricity for 5.79 cents a kilowatt-hour.

The cost of electricity from a typical advanced combined-cycle natural gas power plant is 6.4 cents a kilowatt-hour for plants coming online in 2019, according the the U.S. Energy Department.

http://www.bloomberg.com/news/2014-12-03/falling-oil-price-won-t-affect-solar-industry-sunpower-ceo-says.html

[SATire]

Bob, I try to answer step-by-step because I believe in this way I can explain better what I tried to explain in all the last posts. It is not complicated to understand but I have the feeling our viewpoints are different: You seem to look on the costs to produce electricity and I try to explain that the price we get on the market is not enough to cover the costs of renewables. And that this problem is a matter of principle because we did design the market like that.

I didn't deal with end-user solar.  That's not how utilities purchase energy.  (BTW, I've had panels in my yard for over 20 years.  I've been off the grid for over 25 years.)

Here all renewables go in the grid and change the prices on the market. If your PV is not at the grid it will not change market prices - you only step out of the market. Future utilities are we, because the renewables are produced decentral by us poeple.

Danish and German retail electricity prices are high due to taxes, not the cost of electricity.  Best to use wholesale electricity prices when making comparisons.

I don't have wholesale prices but I can show you the price charged medium sized industries in the EU.  You'll notice that both Germany and Denmark are lower than the EU 27 average.

That is not the complete thruth: Of course we have taxes (in Germany 19% VAT + eco tax and others), and grid price but also the subsidies are in that price (EEG): So the difference between cost of renewables and the price they fetch at the market is directly put on end-users price. In germany that is 6 ct/kWh. See the composition of the end-users price here:
 http://de.wikipedia.org/wiki/Strompreis#mediaviewer/File:Strompreiszusammensetzung_2014.png



To look at the prices industry pays in Germany may be very misleading, since the "big consumers" do not pay that EEG to help them against competition from countries without "Energiewende". So some of them pay reduced prices and some others not.

As Germany has added renewables to their grid their wholesale cost of electricity has fallen.  Yes, it took FiT systems up front to get the German solar industry started, but now solar has matured to the point where support is basically not needed.  Don't make the mistake of comparing the cost of new wind or new solar with paid off coal or nuclear.  New:new is the proper comparison.

If renewables are not competitve then you need to explain why Germany wholesale prices have been dropping...

And why solar has knocked the price of wholesale power to the basement on sunny days...

Bob, the pictures you show are very similar to the ones I attached above (but for some reasons I can see your pictures only on my phone and not on my computer - so sometimes I will miss information you give, sorry for that). But please read them in the right way: The prices we get on the market are not the costs we have producing power with PV or wind - because subsidies are there and will be there.

To explain why renewables are not competitive but caused the price drop is easy: We have feed-in-tarife here, the producer (that is e.g. me with PV on my roof) today gets about 10 ct/kWh for a 15 years time whenever sun is shining. This power is sold on the market at the price the market finds: That is a low price at noon (e.g. <4ct/kWh), since a lot of poeple have PV on their roof. The difference of 6 ct per kWh I deliver is put on the electricity bill of all customers by our EEG law.
If this subsidies where not present I would get only the 4ct/kWh and I would not be able to pay of my investions. And furthermore nobody would invest anymore, since the more PV is in the market, the lower is the price you get at noon. You see, since we want to increase renewables we need this subsidies to make that happen. Do you understand now, the market can not do that in principle?

Can/do they tune nuclear?

I'm not sure what you are asking.  Is it whether US reactors can load-follow?  If so I think a few might be able to but most can't.  (Not sure of any of that.)

You do realize that load-following makes nuclear-electricity more expensive, do you not?  Nuclear has very, very limited variable costs.  Almost all of the costs are fixed, slowing production saves no money to speak of.  Fuel is only $0.0079/kWh (less than a penny) and if the plant is dropping production by dumping steam then they aren't even saving fuel.  The cost of nuclear...

Total annual costs / total annual production = X

If you load follow and drop output by 50% then it's...

Total annual costs / 0.5 total annual production = 2X

Bob, with "tuning" I mean more than "load-following": The conventional power plans must follow load minus production by renewables. That is way more challenging, since on a windy day in Denmark or a sunny Sunday in Germany 100% of the demand is produced by reneables, the prices on the spot markets are about 0 ct/kWh and every plant burning something should be just off.

Of course our nuclear does not tune: They have only fixed costs for construction, deconstruction and nuclear wast treatment. So they run 24/7. That is the reason why we can shut down them first: In a grid with >25% renewables there is not such a thing as "base load" but a fluctuating "demand minus production by renewables" between 0 and 100%. The next thing to shut down here is brown coal and later hard coal and finaly we have to replace natural gas by power-to-gas... You see the reasons why, if you look at plant utilization attached to my post 555.

[icefest]

Thankyou SATire.

I'm quite envious of your setup neven. Another year until I finish uni and start working, another couple of years after that and I should be able to have a similar set-up.

[Bob Wallace]

You seem to look on the costs to produce electricity and I try to explain that the price we get on the market is not enough to cover the costs of renewables. And that this problem is a matter of principle because we did design the market like that.

I'm looking at two things.  1) the LCOE and 2) selling prices.  Wind and solar have become cheap in the US looked at either way.

We built our grids around coal, nuclear and hydro.  Now we are in the process of refurbishing our grids and markets so that they can operate on renewables.  This is not an overnight process but will take years, perhaps decades to complete.

(My comment about being off the grid for over 25 years was to indicate that I have a bit of experience with a mostly renewable grid, tiny as it is.)

That is not the complete thruth:

No, that is the truth.  It's right there in the numbers.

To explain why renewables are not competitive but caused the price drop is easy: We have feed-in-tarife here, the producer (that is e.g. me with PV on my roof) today gets about 10 ct/kWh for a 15 years time whenever sun is shining.

FiTs, ITCs, PTCs and other subsidy systems are investments in future generation.  We've spent some money up front in order to bring the cost of renewables down.  And, for the most part, the cost of renewables are down.

We will be paying off those investments for some more years, but at we're about at the point at which no more investment is necessary for onshore wind and solar.  Those are almost-mature technologies.  We've reached or almost reached price parity.

Some countries that are only now starting to install renewables will need to invest in their local installation but they won't have to spend money to get the cost of hardware down.  That job has been done by countries such as Germany, the US and Spain.

[Bob Wallace]

Bob, with "tuning" I mean more than "load-following": The conventional power plans must follow load minus production by renewables.

Load-following is load-following.  Even before renewables appeared grids had to constantly adjust for differences in supply and demand.  Load-following had to deal with both changes in demand and changes in output as non load-following supply entered and exited the grid.

Load-following is easier (according to ERCOT - the Texas grid) with renewables than with large thermal plants.  The behavior of wind and Sun are very predictable over near hours.  There is no way to predict when a large coal or nuclear plant will go off line without notice.

[SATire]

I can very well understand the disappointment resulting from the realization, that despite renewables going down in cost all the time they still will not be able to compete on a free market. That was a tough time for me, too. But once you realize reality you do not have to rely on dreams and wishes anymore and in that state of mind you are able to see new routes towards the future. Anyway we can be sure, that renewables will be our energy source - just because we make them our future energy source.

And once we accept that we cannot sell electricity from renewables we are able to realize, that selling electricity is anyway not our main goal. The goal is to produce our electricity using renewables to get independent from CO2 emissions. The other goal is that we want to use electricity anytime we need it. So instead of selling and buying electricity we could also share it. Think of the way we share videos these days without the need for big central companies: That is the road for us, too.

What is needed for that are:
* A grid collecting and delivering electricty from/to our homes. That "last mile" is present in high quality.
* A long range broad power network connecting regions far away: That has to be built. Today we have a high power network able to bypass a few large power plants for the case they shut down for maintenance and such. In future with >50% renewables in the grid we will have situations with 200% supply in one region and with <50% in other regions very far away. So we will need 50 NorGer and similar lines crossing large distances. That is a necessary investment similar to the set-up needed for the internet but this time for power. If this is paid again by people’s money (e.g. from taxes or states) there will not be any need to pay or get paid for electricity in future, since the marginal costs of renewables are close to zero. Just as videos at youtube and such.

That is why we need to build the long range international high power grid to prepare for a renewables future. Some storage (power-2-gas or hydro) in large quantity (>100 TWh) could help for back-up in critical times - e.g. similar to our gas storage still present from cold war times here (e.g. we can store gas for >1/2 year here).

[Bob Wallace]

I can very well understand the disappointment resulting from the realization, that despite renewables going down in cost all the time they still will not be able to compete on a free market.

Are you kidding me?  In what reality do renewables not compete with fossil fuels and nuclear? 

And once we accept that we cannot sell electricity from renewable

Absurd.

We share videos because the cost is essentially zero for us as individuals.  Companies pay for our ability to share in order to get us to see their advertising.

You start out by claiming that renewables can't compete in the market and that we can't generate the electricity we need and then you go on to talk about how we do exactly that by creating "long transmission".

Furthermore, there is no need to transmit power over "regions" if by regions you are talking about areas larger than Europe or the central area of North America.  In fact, we don't need to transmit power even that far.

We've got a pile of studies which show that we can build affordable, reliable grids on a single country basis.

[jbatteen]

I can very well understand the disappointment resulting from the realization, that despite renewables going down in cost all the time they still will not be able to compete on a free market.

What?  Unless there exists on earth an infinite supply of fossil fuels, then at some point they will get scare enough that renewables will become cheaper than fossils.  Do we agree on that?

That transition is beginning now.  It's not complete, it's only beginning in certain markets with excellent wind and solar resources.  Mostly wind, because the good solar states here are having internal disagreements about how to handle it.  (Other than California which is doing well.)  New grid scale wind is cheaper than new gas plants all up and down the plains.  Bob showed us 4-5c per kwh.

Even with home retail electricity at .08-.12c per kwh in Arizona, some of the cheapest in the nation thanks to the Palo Verde nuclear power plant, rooftop solar pays back in under 20 years.  The utilities are fighting solar on their grid because they don't want to lose their investments on their plants, but they can't stop the homeowners from dropping out of the grid.  It's going up everywhere.

I travel the country frequently and I'm watching the transition happen.  Where I spend the summer in Minnesota, giant trucks carrying wind turbine blades and tower parts drive by all day long while I'm out working the fields.  South Dakota is building out massive new capacity along with transmission lines to neighboring states.  As we speak, new capacity is being built.

I actually have a sneaking suspicion that the transition will occur far faster than anyone could have predicted once it ramps up.  In America, it's all about the almighty dollar, and eventually even generations of accumulated wealth and influence won't be able to prop up the fossil industry in the face of overwhelming cheap renewable energy.  In the 2020s when the gas boom ends and natural gas power prices start to creep back up toward those of coal, the fossil industry is done.

[wili]

I should let people speak for themselves, but the claim I've heard is that, as long as the production of alternatives is powered largely by ff's, their price will be tied to that of ff's. So if ff prices go up, that won't give alternatives much of an advantage, since the price of producing windmills and solar panels will also go up.

I'll let others poke holes in this argument, or yet others correct it if I have not presented it fairly or fully. I'll just point out that there are, indeed, holes of various sizes to be found.

[crandles]

Wili, that argument might have been believable when renewables were much more expensive than ff.

Most costs are labour related not fuel related so when you see prices like

ff 6.1 to 6.6 cent/KWh (post 532)
solar 5.4 cent/KWh (post 536&7)
Wind 3.7 cent/KWh (post 532)

it becomes obvious that the amount of energy required to build renewables is a lot less than they produce in their lifetime.

[SATire]

Are you kidding me?  In what reality do renewables not compete with fossil fuels and nuclear? 

In a reality with significant renewables (e.g. 25%) in the grid and with a free market for electrical energy (e.g. EEX) this is just an observation. Take a look at the pictures you and me provided above.

You start out by claiming that renewables can't compete in the market and that we can't generate the electricity we need and then you go on to talk about how we do exactly that by creating "long transmission".

Yes, no and yes. (I never claimed we can't generate the electricity - I did say that we are doing that and I claimed, that we will continue to do that. The way we do this is by subsidies, since we know, that renewables can not compete in the free market.)

Furthermore, there is no need to transmit power over "regions" if by regions you are talking about areas larger than Europe or the central area of North America.  In fact, we don't need to transmit power even that far.

We've got a pile of studies which show that we can build affordable, reliable grids on a single country basis.

I talked above about regions with sun, regions with wind, regions without wind, regions without sun, regions with demand and such. We need efficient transmissions between that - e.g. in Germany from the coast to Norway’s hydro plant, from the windy coast to industry in Bavaria and Baden-Würtemberg, from sunny regions to regions under clouds. The longer the transmission lines the less fluctuations we have and thus the the more efficient the electricity production is in general - that is much less costly than batteries to be build for a similar purpose.

All my statement above where just observations (backed up with the data in the pictures) - just the claim about "sharing power like we share videos" is some kind of a vision. I was not talking about making money with commercials like some companies do. I was talking about sharing videos you produce with your own equipment and deliver it other people with zero marginal costs. Same could be done e.g. by today’s 1.4 million electricity producers once the systems are paid. But this part is really not an observation but a vision to work around our problem. 

[wili]

crandles--yep, those are a few of the holes I was referring to.

[SATire]

I can very well understand the disappointment resulting from the realization, that despite renewables going down in cost all the time they still will not be able to compete on a free market.

What?  Unless there exists on earth an infinite supply of fossil fuels, then at some point they will get scare enough that renewables will become cheaper than fossils.  Do we agree on that?

The cost is not the reason, why renewables can not compete without subsidies. The reason is, that it can not earn the money back, because the price is < 4 ct/kWh in any time with wind and sun (post 551, 565). So wind and PV will always earn less than needed to pay back the invest. 
Of course wind and PV pushes coal and others out of the market during that time - so they stop burning coal (post 555). But when sun is gone and wind stops blowing the prices go up >5 ct/kWh and coal is able to make profit. So while fossils can make some profits in dark hours without wind the renewables have not a single hour to make profit to pay back the invest.
This is not the case, when you have not much renewable energy in your grid because they make no effect. But once you get to e.g. 25% the bubble will collapse and all systems paid on loans will go default. So I hope you do not pay your wind and PV with loans - such will become junk bonds just after you have been successful.

Since this problem is essential I want to use a citation, since it could be, that you do not understand me since I am not a native speaker (from here http://www.agora-energiewende.org/topics/electricity-market-and-system-reliability/how-does-germanys-electricity-market-work/):

In addition, there is the question of whether the energy-only market will ever be in a position to refinance wind power and solar power, even if their total costs are below those of coal or gas power plants. For the problem of wind power and photovoltaic systems, based as they are on the marginal-cost-determined spot market, is that they price themselves out of the market. When the wind blows and the sun shines, all the wind and PV systems within the same weather zone produce electricity at the same time. Once a certain number of wind turbines and PV systems are in the system, this impacts the price on the electricity market. Thus, when the wind blows and/or the sun shines, a lot of power is available with a marginal cost of zero, the market price decreases because power plants with more expensive marginal cost won’t be needed and power plants with lower marginal costs will determine the market price (the so-called merit-order effect). As a consequence, wind and solar power cannot refinance themselves on today’s break-even market.

Please find also attached a picture explaining, how our market is working (from same source as the quotation above):

[crandles]

The cost is not the reason, why renewables can not compete without subsidies.

You then go on to use current market prices to show that solar cannot make money. But if you looked at wind with 3.7 US cent /KWh which converts to about 3 Euro cent /KWh.

so the price of <4 Euro cent/KWh while there is wind is sufficient to be profitable. (I assume the rule that renewables are always used first continues after subsidies are eliminated.)

FF suppliers have to cut output during periods of sun and wind and while fuel costs might be slightly reduced, other running costs are not. Their costs of 6.1 US cent /KWh converts to about 5 Euro cents/KWh so while profitable during some times this is probably more than made up for by losses during times with wind and sunshine.

If solar fell in cost to around that of wind and you had solar plants as far east as Dubai and as far west as Morocco which were started at such low cost prices with suitable power distribution through Europe to cope with peaks and troughs in demand.... then surely solar would also be able to be profitable.

The capacity of renewables can with such infrastructure, then be set without creating too much excess production capacity. If the production capacity surplus kept rising then the difference between your prices of over 5cent/KWh and under 4 cent /KWh might separate further and this would stop investors going mad installing too much renewables electricity production capacity.

However, with suitable power production in diverse locations and suitable power distribution there is much less need for renewables to create excess production capacity. This would lead to a narrowing of the price differential.

So it seems to me that we are not there yet for solar to compete in Germany but with the way prices are falling, I don't think you can rule out solar being able to compete in future.

[wili]

Does anyone have linked data on the latest Energy Returned on Energy Invested (EROEI, or sometimes just EROI) for PV? Is it higher than 7:1 now?

(I'm in a bit of a debate with someone on a different forum about it. I hadn't kept up with official estimates, but I had assumed the rapidly dropping prices also had something to do with rapidly improving EROEI. Was I wrong?)

Apologies ahead of time if this was recently addressed and I missed it. I don't get to every post on every thread here, much as I would like to.

[SATire]

The cost is not the reason, why renewables can not compete without subsidies.

You then go on to use current market prices to show that solar cannot make money. But if you looked at wind with 3.7 US cent /KWh which converts to about 3 Euro cent /KWh.

so the price of <4 Euro cent/KWh while there is wind is sufficient to be profitable. (I assume the rule that renewables are always used first continues after subsidies are eliminated.)

Crandles, no, 3 Euro cent are not cheap enough. Look at the pictures Bob and me posted above (e.g. #551): Most time with wind & sun selling price is < 2,5 ct/kWh. On windy days it can be only 0 ct/kWh you get. And the more wind/PV we build the lower that price will be. You can turn it as you want: The market is dead and we need subsidies in future or we have to change the way we run a market. Both things are not a big deal. We will go for >50% renewables anyway and we will have to build "grid 2.0" now. Forget all the ideological mind traps - we can do it but we have to do it reasonably.

edit: And didn't I say that cost is not the problem? Please take that seriously and think about it a night. It is strange but easy to understand, since it is only stupid economics...

[crandles]

Satire, do you accept that it is capacity oversupply that makes the price differential you are pointing out?

So if there was little capacity oversupply, then a small differential would be enough to limit supply adequately? Desert solar supplies very much as expected I would think with very little overcast and cloudy conditions.

Wind might have this price problem if you installed too much wind because you need generation when there is no wind so you end with a lot of capacity oversupply and big price differentials. Desert solar doesn't have the same problem - ff capacity can be cut as you add desert solar.

[SATire]

crandles,
the reason is regional and temporal over supply. So a long range transmission line would be the easiest solution. Next thing could be storage - e.g. hydro and power-2-gas in the future. Maybe someday even battery could get down in costs to help a bit.

On the other hand: Some subsidies are really ok for the society: Renewables bring the over-all costs down and really cut the revenues of big utility now. So to put some ct/kWh back on the costs really hurt no one (but CO2 burners...). So I think we could life with that quite well.

[jbatteen]

The cost is not the reason, why renewables can not compete without subsidies. The reason is, that it can not earn the money back, because the price is < 4 ct/kWh in any time with wind and sun (post 551, 565). So wind and PV will always earn less than needed to pay back the invest. 
Of course wind and PV pushes coal and others out of the market during that time - so they stop burning coal (post 555). But when sun is gone and wind stops blowing the prices go up >5 ct/kWh and coal is able to make profit. So while fossils can make some profits in dark hours without wind the renewables have not a single hour to make profit to pay back the invest.
This is not the case, when you have not much renewable energy in your grid because they make no effect. But once you get to e.g. 25% the bubble will collapse and all systems paid on loans will go default. So I hope you do not pay your wind and PV with loans - such will become junk bonds just after you have been successful.

You make it sound like there are only two states of being, one in which the wind is absolutely still and one in which the wind is so strong that they can't export all the power and the price goes to zero.  In the Great Plains, a slow but steady wind is always blowing.  They are getting that 4c per kwh most of the time.  The people building these towers aren't flying blind.  They put up test towers with anemometers to gauge the yearly potential of a site against the wind towers specifications.  Knowing climatological averages they have a good idea of how much power the turbine will produce in its lifetime.  They also sign multi-year purchasing agreements with local grid operators to ensure a steady buyer for their power.  If they wouldn't pay for themselves, they wouldn't keep building them.  Yet, they keep going up in droves.


Two states have passed and several states approach that magical 25% mark yet installations show no sign of decreasing. 

[Bob Wallace]

I should let people speak for themselves, but the claim I've heard is that, as long as the production of alternatives is powered largely by ff's, their price will be tied to that of ff's. So if ff prices go up, that won't give alternatives much of an advantage, since the price of producing windmills and solar panels will also go up.

The production/manufacturing is largely carried out with electricity, not petroleum.  Rising petroleum prices could have some impact on wind and solar hardware to the extent that we use petroleum to mine and transport.

Coal is very unlikely to see cost increases going forward.  As we close coal plants demand will fall and the more expensive producers will drop out.  Multiple coal businesses have already shut down leaving the least expensive producers in business.

Then, if for some unforeseen reason coal were to get expensive there might be a short term increase in electricity cost, but the transition to renewables would speed up which would bring the prices back down.

[Bob Wallace]

The cost is not the reason, why renewables can not compete without subsidies. The reason is, that it can not earn the money back, because the price is < 4 ct/kWh in any time with wind and sun (post 551, 565). So wind and PV will always earn less than needed to pay back the invest.

The market will always have to pay producers enough money for them to stay in business.  The average wholesale price will not drop below the cost of the energy needed to supply demand.

There will be short periods at which wholesale costs drop below cost of production but those are averaged out by higher prices during peak hour.

What is currently killing coal and nuclear is that wind is now setting the late night floor at a point where thermal plants often sell at no profit or a loss.  And solar is starting to lower the peak hour ceiling where they used to make their profits and recover their losses.

Nuclear reactors are closing in the US because they are no longer competitive.  German coal plants run at a loss most days.  We will see a thinning of our large thermal plants down to the number that are actually needed to meet demand.

As we add more and more cheap wind and solar we will see more thermal plants go bankrupt.

BTW, 4 cents for wind does not include subsidies.  I have been very clear about that.  The actual average selling price (which does include subsidies) during 2013 in the US was 2.5 cents/kWh with one wind farm selling (at a profit) for 1.4 cents per kWh.

[SATire]

You make it sound like there are only two states of being, one in which the wind is absolutely still and one in which the wind is so strong that they can't export all the power and the price goes to zero. 

jbatteen, for prices please look at the right axis in the pictures attached in above post here: http://forum.arctic-sea-ice.net/index.php/topic,256.msg40749.html#msg40749

You see, the price for electricity varies on (quarter-) hourly basis between more than 10 ct/kWh and less than 0 ct/kWh. Most of the time price varies between 2.5-5 ct/kWh and it is lower during times with wind and/or sun (I gave that 4 ct/kWh example just because Bob named that cost for wind in US - maybe at a different place). Of course nobody is flying blind in respect to weather or climate. But a lot of people are flying blind in respect to the amount of wind to be installed in the future and in the same region - that will reduce the earning of course and people will have problem to refinance their systems. The more successful renewable will be, the less they will earn. But maybe that is a problem related to the liberalized markets in Europe and in US you sell different - as far as I understood Bob with long-term fixed contracts somehow. In that case the private producer is safe and someone else has the risk - the grid company? The consumer maybe?

[Bob Wallace]

Does anyone have linked data on the latest Energy Returned on Energy Invested (EROEI, or sometimes just EROI) for PV? Is it higher than 7:1 now?

(I'm in a bit of a debate with someone on a different forum about it. I hadn't kept up with official estimates, but I had assumed the rapidly dropping prices also had something to do with rapidly improving EROEI. Was I wrong?)
 

There's currently some horse hockey stuff being floated around by nuclear advocates about EROEI and "balancing" that's suppose to show that renewables can't work.

Let's start with this concept of EROEI.  It arose when we started worrying about Peak Oil.  Fearing an end of oil (or at least affordable oil) people starting thinking about whether it was making sense to use as much oil as we did to get more oil.

Since we use very little oil, and could use no oil at all, to manufacture and install wind turbines and solar panels we can disregard EROEI.  What we want to look at is the role energy inputs drive the final price of the energy released.

Now, since the non-subsidized cost of wind and oil are well under 10 cents per kWh it's clear that there can't be an unaffordable amount of energy embedded in the technology. 

How much energy is embedded?  Wind turbines return their embedded energy in 3 to 8 months based on the wind resources where they are installed.  Solar panels return their embedded energy in one (thin film) to two (silicon) years.

Taking a conservative lifespan of 20 years that would mean that wind has, at worse, an eroei of 30 (240 months / 8 months) to 80 (240 months / 3 months).  Solar has an eroei of 10 (20 years / 2 years) to 20 (20 years / 1 year).

Taking more of a real world lifespan of 30 years for wind and at least 40 for solar the eroei numbers take big jumps.  Wind could be as high as 120 (360 / 3) and solar as high as 40 (40 / 1).  Or solar could be still higher, we don't yet know the lifespan of a solar panel.
--

You're likely arguing with someone who has picked their points up from a paper by written by a nuclear advocate named Weissbach and posted on a non-journal web site.

http://festkoerper-kernphysik.de/Weissbach_EROI_preprint.pdf


The "eroei of 7" stuff involves attributing energy inputs to wind and solar which have nothing to do with wind and solar and is based on out of date  manufacturing data.  And the paper that started all that charges wind and solar with storage and backup while not doing the same for coal and nuclear.

[Bob Wallace]

The more successful renewable will be, the less they will earn.

The more successful renewables are the lower their cost will be.

Renewables are already among the cheapest ways to bring new generation to our grids.  Natural gas is in that "cheapest" mix.

The wholesale price of electricity will not fall so low that the least expensive providers will not making a profit. 

Think carefully about my last sentence. 

[SATire]

The wholesale price of electricity will not fall so low that the least expensive providers will not making a profit. 

Think carefully about my last sentence.

But observation of today's prices tell us, that exactly that is the case. Only subsidies make sure, that the 1.4 million producers in Germany with PV on their roof or a wind turbine on their farm can be refinanced. This topic is a real problem observed in Germany today (see link above to Agora) and not just my thought-experiment ...

This situation can be improved with new transmission lines. Maybe the shut-down of nuclear will help a lot in a few years (not following load-renewables and low marginal costs) and the later exit from lignite (only tunable down to 50% and second lowest marginal cost).

[Bob Wallace]

But observation of today's prices tell us, that exactly that is the case.

No they don't.  We see the more expensive producers being shoved out of the market.  We don't see the least expensive providers going bankrupt.

I think you've got a flawed way of looking at prices.
---

Transmission lines will or will not be built if they are competitive.  In some cases the best economic decision might be to build more transmission. In some cases the best decision might be to over-build generation or to use storage.

In the end it's fairly certain that we'll do some of each. 

[wili]

Bob, thanks for responding to my query, but your logic wrt eroei seems, to put it kindly, flawed.

 Because the concept first gained recognition in peak oil circles, it is irrelevant for renewables?? Isn't that like saying that since an early use of statistics was to figure out how eugenics might work, it is not relevant to anything else??

[Bob Wallace]

If the energy going into wind turbines and solar panels is essentially unlimited/infinite  (wind and sunshine) why would it matter if we used a ton of it to get a pound of electricity?

We can be as wasteful as we wish with wind and sunshine.  We won't run out.

[crandles]

I think you've got a flawed way of looking at prices.

Transmission lines will or will not be built if they are competitive.  In some cases the best economic decision might be to build more transmission. In some cases the best decision might be to over-build generation or to use storage.

In the end it's fairly certain that we'll do some of each.

I don't think that way of looking at prices is flawed. It is particularly relevant if the 'over-build generation' route is used.

Suppose we got to the position that with moderate winds, wind could supply all the electricity needed. Would it make sense to build more wind power electricity generation?

In the absence of an expected big increase in demand for electricity the answer is no and the market should reflect this with a big differential in prices between when there is little wind and when there is moderate wind. Electricity distributors should be very reluctant to enter fixed price agreements because they should expect to be able to buy it from the spot market for very little if anything when there is sufficient wind.

I think it should be clear that the differential in prices paid should be taken into consideration when considering adding more generation capacity.


Looking at the graphs it seems wind can at times generate a substantial proportion of Germany's electricity demand. It may not take much more such generation capacity before Germany should consider removing subsidies for wind. If the subsidies are not removed then electricity users will end up paying for wasteful excess generation capacity. I assume the level of subsidies are constantly reduced as appropriate and will be removed when appropriate.

[SATire]

But observation of today's prices tell us, that exactly that is the case.

No they don't.  We see the more expensive producers being shoved out of the market.  We don't see the least expensive providers going bankrupt.

I think you've got a flawed way of looking at prices.

Bob, that is one possibility. There are always several ways to look at prices e.g. given in the picture attached to my post #551. That flaw could be the way I look at it or it could be the basic behind that numbers, which is the market in the way we designed it in year 2000.

In this German market we see both: The more expensive producers are being shoved out of the market in Germany and also in Netherlands and other neighbours: Unfortunately the energy with the highest marginal cost is gas. This is very undesirable because it is the best fossil energy in terms of CO2 and also load-following ability. Actually gas is the best fossil fuel to be combined with fluctuating renewables but we made the marked in such a way, that gas is kicked out - stupid us, that was easy to see earlier.   

Furthermore we see the conventional energy with the lowest marginal cost being shoved out of the market: Nuclear. But this is not due to the way we set up the market but by the peoples will. So that is not due to the market. And finally we realize (as shown above), that both wind and PV can not refinance themselves without subsidies. No matter how low the costs are - just by the way we designed this market. It is even not oversupply, since there are only a few hours with about 100 % renewables in the grid. It is negative price, that breaks wind & PV. Of course that hurts nuclear to (but that is dying anyway) and also lignite, since it is to expensive to shut down such plant just for a day or 2 - it is more cost efficient to keep it running even if you have to pay someone >10 ct/kWh to take that power...

So what can we do now? We can say it is just me and how I look at the costs. We could lean back and watch our flawed market doing its thing: Wasting money, distressing our neighbours gas plants and producing unnecessary CO2.

Or we could analyse the difference between the market effects and the goal, for which this market was designed and change the rules until it fits the purpose. Please do not misunderstand me - this EEG thing was very successful to bring renewables into the market. And this is not only the German view, since the concept was copied now by 60 countries. But obviously it is not really good for reducing CO2 and to kick coal out of business. Thus there are good reasons to change it now to get to the next level (e.g. 42% renewables in 2023 and >60% in 2033). Those changes are worked out these days in Germany. So this is a good time for such discussions again. 

[Bob Wallace]

Suppose we got to the position that with moderate winds, wind could supply all the electricity needed. Would it make sense to build more wind power electricity generation?

Again, cost will likely be the driver of decisions made.  If we could supply all our electricity cheapest by running wire/super conductors from Galway to Dublin, the long way, then that system may evolve.  It's more likely we'll settle for moderate area grids rather than a world grid. 

Solar will be cheap.  Solar performs when demand is highest.  Rather than ship wind from thousands of miles away locally produced solar (or hydro, geothermal, biofuel, tidal) will sometimes be cheaper.  And storage is likely to be cheaper. 

I think it's the case that from about 1,000 miles away (or some number like that) wind speed/availability is very uncorrelated.  Plus within that range wind systems move across the area with one part falling while another rising.

I can see us getting to the point at which one may be able to trace a line of connection from the west coast of Ireland (or Iceland) to Japan by way of local grids that connect with their neighbors.  But I'm skeptical of the ability to move massive amounts of power along that route.

Electricity distributors should be very reluctant to enter fixed price agreements because they should expect to be able to buy it from the spot market for very little if anything when there is sufficient wind.

PPAs benefit both sides.  Obviously for the seller, since they have a contract in hand that ensures them both a market and a selling price that ensures profitability.  But also for the buyer.  They have a contract with a determined price that protects them from market fluctuations.  In the case of some solar (I don't know about wind) PPAs the contract price has no inflation factor.  A contract signed for 5c/kWh today means 5c/kWh in 2034, paid with deflated 2034 dollars.

If you can lock in costs which are acceptable to your customers and are unlikely to be badly undercut (worst case) later on then that's good business.  When you're contracting for 2.5 cent wind or 5 cent solar you aren't taking a large chance that wholesale costs will drop significantly lower.

Perhaps when fusion comes on line in 20 years.  Or 20 years after that....

Looking at the graphs it seems wind can at times generate a substantial proportion of Germany's electricity demand. It may not take much more such generation capacity before Germany should consider removing subsidies for wind. If the subsidies are not removed then electricity users will end up paying for wasteful excess generation capacity. I assume the level of subsidies are constantly reduced as appropriate and will be removed when appropriate.

I don't know about Germany, but subsidies for wind and solar probably won't last much longer in the US.  If they do it will be more about job creation than making wind and solar more affordable. 

Wind subsidies are about done in the US.  We haven't had subsidies for wind since 12/31/13.  They may be put back in place for a year, but perhaps not.  Solar drops from 30% to 10% at the end of 2016 and the 10% goes away two years later.  (I think those are the correct years.)

Wind is already our cheapest (non-subsidized) new capacity.  Solar is close to being number two, give it year or two.  Neither will need subsidies to help them compete in the market. 

Further subsidies would serve to increase installation higher than simple replacement and new market demand.  The goal of further subsidies would be job creation and carbon reduction.

[Bob Wallace]

we realize (as shown above), that both wind and PV can not refinance themselves without subsidies

New wind and new solar are less expensive than new coal and new nuclear.  If the grid needs more power it is unlikely to pick the most expensive source.

Actually gas is the best fossil fuel to be combined with fluctuating renewables

Yes, but being expensive in Germany, NG will not play as large a role as in the US.  Your new coal plants can load-follow to some extent.  Because NG is more expensive we'll probably see Germany move more to storage for load-following, again the market....

Furthermore we see the conventional energy with the lowest marginal cost being shoved out of the market: Nuclear.

That is due to a decision made by German citizens to move the danger of nuclear energy out of their backyards.  Yes, it does kill off some affordable generation, but the decision has been made.  (And I both understand and respect the decision.)

Now Germany will have to push a bit harder with efficiency and renewable installations.

It is negative price, that breaks wind & PV.

The negative price periods are due to fossil and nuclear plants committing suicide in an attempt to stay in business.  If they lose money during low demand hours then they have to look for times to make up those losses.  Wind and solar, having lower operating costs, can make up their losses easier during higher demand hours. 

this EEG thing was very successful to bring renewables into the market.

 But obviously it is not really good for reducing CO2 and to kick coal out of business.

You seem to contradict yourself here.  Germany has installed quite a bit of solar and wind.  Coal plants are losing money.  Had the decision not been made to close nuclear (but that's a done deal) and if Germany was not selling coal-electricity to other countries coal use would be down far below what it is today.

[crandles]

Again, cost will likely be the driver of decisions made. 

If storage was available very cheaply maybe. While it storage is expensive and the situation was such that there is a need for more generation when it isn't windy but no need for more generation when it is windy?

More wind in such a situation wouldn't make sense. The market would clearly point this out with zero or negative prices when it is windy and high prices when it isn't. To ignore the prices that the market is pointing out is ludicrous.

OTOH

that both wind and PV can not refinance themselves without subsidies.  No matter how low the costs are

This is also nonsense. It does matter how low the costs are. The first part looks true with current costs and prices but renewables costs are likely to fall further.

[SATire]

While we are still waiting for EEG 2.0 in Germany, Agora is already working for the next modification scheduled for 2016: Especially the problem, that renewables can not refinance the investment in an "energy-only spot-market". The capacity market is the thing they will introduce in EEG2.0 to pay someone for delivering capacity for the case that there is no wind nor sun.

So Agora suggests to include such a capacity bonus for renewables installation which are "system appropriate". It is not translated yet so here is only the link to the German version:
http://www.agora-energiewende.de/fileadmin/downloads/publikationen/Impulse/EEG_30/Agora_Energiewende_EEG_3_0_KF_web.pdf

In case you do not know Agora Energiewende: That is not some esoteric green people club but some kind of "energy think tank". The person responsible to construct EEG 2.0 is the former head of Agora - so it is save to assume they have some real impact.