Germany May Lead the Next Clean-Energy Revolution

Germany's decision to throw in the towel on nuclear power by 2022 could shift demand to wind and solar power. The market certainly got excited about the move, shooting LDK Solar (NYSE: LDK  ) , JA Solar (Nasdaq: JASO  ) , and GT Solar (Nasdaq: SOLR  ) higher yesterday, as all three companies rely on solar demand in Germany, directly or indirectly. But this brings up questions about the validity of renewable energy on a large scale, since renewables are already a large portion of Germany's energy production.

Solar power is easy to integrate into a grid when it's a tiny fraction of power generation, like it is in the U.S. But make solar power a large portion of generation, like it is in Germany, and it's a whole new story. Germany's electricity transmission exchange reported the scale that renewables have grown to in Germany on a sample day, Feb. 7, 2011.

  • PV generated 13% of supply at noon.
  • Wind generated a peak of 32% of supply at midnight.
  • Wind and solar generated 29% of demand at noon.

The problems with this from an energy management perspective are obvious. Both solar and wind have the capacity to generate as much as one-third of power in Germany, but neither can be relied upon consistently. Germany will be the first large-scale test case for how utilities will handle renewable energy, and this will push new technologies to develop.

Making the grid smarter
If renewable energy is going to become a larger portion of Germany's power generation, the grid will have to become smarter. Demand response can help pick up some of the slack when demand is high or supply is low.

EnerNOC (Nasdaq: ENOC  ) and Comverge provide that service here in the U.S. They can turn down lights and air conditioning when electricity demand is high, thus reducing load on the grid. A big part of their success is active monitoring of energy usage, which requires more advanced electronic components.

General Electric (NYSE: GE  ) takes the smarter-grid concept down to the meters in our homes. These smarter meters can do things like reduce air conditioning at peak times, maybe not ideal on steamy days in Miami, but these are the choices users will have to make.

Backing up all that power
The biggest technological challenge facing Germany is power backup. Energy efficiency, a smarter grid, and demand response will work to balance supply and demand on an hour-to-hour basis, but what about a calm, cloudy day?

The field of energy storage is full of ideas and void of great solutions right now. So far, battery storage, pumped hydro, and compressed air storage have provided some energy storage in localized markets, but we aren't talking about a national solution. That's why I've called it the hidden key to alternative success.

A123 Systems (Nasdaq: AONE  ) and Ener1 (Nasdaq: HEV  ) are testing grid-level storage now, but expecting a battery to contain days of electrical power isn't likely the answer.

Pumped hydro and compressed air storage are capable of larger-scale storage, but geography will play a role in whether that's feasible.

So what is the answer? That's where Germany comes in. So far, energy storage is in test stages and no real demand has developed for commercial applications. It's similar to where the solar industry stood 10 years ago when demand in Germany took off. Ten years ago, who would have thought we would have even considered building solar plants for $1 per watt in the near future? But that's the way technology works. Where there is demand, engineers will find solutions. Hopefully energy storage takes a similar path.

Solar power needs Germany now more than ever
In 10 years we may look back at 2011 as a turning point in energy storage and the revolution the solar and wind industries needed. Maybe battery technology will improve, maybe caves underground is the answer, or maybe universities will find an effective way to produce and use hydrogen.

Whatever the answer, Germany is the first place where the solution will be needed, and the rest of the world will follow.

Keep track of energy's up-and-coming companies with our free My Watchlist feature. Just add a stock to My Watchlist and we'll find all of our Foolish analysis of that stock.

Fool contributor Travis Hoium owns clean-energy stocks, but none of the companies mentioned here. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

The Motley Fool owns shares of EnerNOC. Motley Fool newsletter services have recommended buying shares of EnerNOC. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (10) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 01, 2011, at 5:28 PM, jimmy4040 wrote:

    This article ignores reality. IF, the big if, Germany is serious about this, the big winners will be coal and nat gas from Russia, not renewables. The output from renewable energy would have to increase about 150% in 10 years to replace the lost capacity in nuclear power. That simply can't happen technologically, even for the Germans who I admire.

    I would play the wind more than the solar, but watch for great volatility as this decision gets revisited.

  • Report this Comment On June 01, 2011, at 6:53 PM, buzzltyr wrote:

    The US use to be the leader of these type of things, those days are long gone. And then we complain because there are no jobs. We need to move this country forward, this is not the 80s folks, get over it.

    FYI, the future is not coal, that would be the past.

  • Report this Comment On June 01, 2011, at 6:57 PM, purpleluvr4ever wrote:

    Gooooo Germany!!!! <3

  • Report this Comment On June 01, 2011, at 7:09 PM, devoish wrote:

    Travis,

    One thing that needs to get out of our collective heads is the idea that solar and wind cannot supply baseload power. It can. Wind and sun are available ALL the time.

    This report shows that North carolina does have the ability to supply baseload power with solar and wind, and that coal, ng, etc could be feed in.

    http://www.ieer.org/reports/NC-Wind-Solar.pdf

  • Report this Comment On June 01, 2011, at 7:17 PM, buzzltyr wrote:

    No one is proposing using solar for base line power. Think Peak Power, solar works when you need it and has no cost when you don't. It really makes no sense to build a big generator with a big staff that pretty much runs 24/7 when we really only need it on hot summer days.

    Electricity at night is basically free becuse we already have enough baseline sources that can not be stopped

  • Report this Comment On June 01, 2011, at 8:37 PM, jimmy4040 wrote:

    buzz:

    "Electricity at night is basically free becuse we already have enough baseline sources that can not be stopped"

    You meant the panels were donated, as was the installation, as is the labor to maintain them, as are the additional power lines run to them?

  • Report this Comment On June 01, 2011, at 9:00 PM, buzzltyr wrote:

    Solar provides balance, so the the system works to maximize efficiency. We have free electricity at night because we have more than we need and they can not sell it. when we build a fossil fuel generator a lot of the energy is flat out wasted. Solar flattens the demand curve and saves everyone all around.

    The US uses far more fossil fuel than any other country based on population becasue we are in the drill drill drill mentality and are not energy efficient.

    The writing has been on the wall for 40 years, maybe it is time to read it.

    Locally they are spending a billion dollars to upgrade the nukes becasue their 25 year life is up. Its not like the other forms are free. 33% of all fossil plants will require major renovation due to new epa colling requiremnts, who will pay for that.

  • Report this Comment On June 03, 2011, at 12:35 AM, ChangItOrDrownIt wrote:

    One thought for energy might be thorium reactors and Beacon flywheels. Paul Allen ventures with SiOnyx...Maybe Thorium reactors for Bill Gates. Mr. Gates seems interested in saving the world and lately is comfortable with nuclear. His interest is the existing supply chain of uranium and Westinghouse or GE reactor design and not the redesign of the nuclear reactor concept of power generation using thorium as fuel. He seems comfortable with the intensities to come from global warming weather changes. Fukushima Daiichi news suggests the brittle nature of older, heated, and pressure laden cement reactors. American Reactors are designed for earthquakes where prone, tornadoes, and in flight paths (Three Mile Island). But when the weather patterns change and intensify reactors designed with data referencing locality and pre global warming weather intensities suggest the unknown for a 40 year no accident to natural cause design. It seems to trigger that personal alarm.

    Did India just go critical at the beginning of 2011 with their first thorium reactor? Let’s buy a copy. Again if Paul Allen is venturing into exceptional efficiency of c-Si, thank G.. Mr. Gates knows best, just save the citizens in need from global warming. Do not invest on solutions. Seems he is a humanitarian as long as he is being that savior, NIMBY unless he lives close to a reactor, and his comfort with (nuke operational) software is understood by him. Is Bill Gates Irish…is his last name Murphy, does Bill understand that concept? I feel thorium needs the attention of such a savior with a bank roll.

    ChangeItOrDrownIt

  • Report this Comment On June 03, 2011, at 10:28 AM, Aristocrisis wrote:

    Thanks for highlighting one of the key issues within renewables. prices on PV are falling, and efficiency is up, on a constant basis. The question now is how to store all this energy, and flatten the production curve, as stated above.

    Here in Norway we have integrated a system where power from danish windmills directly pumps some of the water in our hydro-plants uppwards. This happens on the days where there's a lot of wind and not enough demand for electricity.

    It might seem primitive, but it's a solution that actually works, although on a small scale.

  • Report this Comment On June 06, 2011, at 9:48 AM, jaketen2001 wrote:

    Germany is also a leader in fuel cells, and hydrogen energy use. Germany has a program called Callux (I believe that is the right spelling) that is preparing CHP units (combined heat energy) units for residential use. These units are more efficient than even the most efficient nat gas units. They use fuel cells. They are also building out the largest by far network of hydrogen fueling stations in preparation for Daimler's introduction of fuel cell vehicles.

    Germany has so much peak load wind power in the east that they are constantly forced to export the power or shut it off.

    There is much more going on in Germany than this article suggests.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1502014, ~/Articles/ArticleHandler.aspx, 10/20/2014 9:12:38 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement