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
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.
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.
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.
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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.
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