Denmark Faces a Tricky Transition To 100 Percent Renewable Energy

HughPickens.com writes Justin Gillis writes in the NYT that Denmark is pursuing the world's most ambitious policy against climate change, aiming to end the burning of fossil fuels in any form by 2050 — not just in electricity production, as some other countries hope to do, but in transportation as well. The trouble is that while renewable power sources like wind and solar cost nothing to run, once installed, as more of these types of power sources push their way onto the electric grid, they cause power prices to crash at what used to be the most profitable times of day. Conventional power plants, operating on gas or coal or uranium, are becoming uneconomical to run. Yet those plants are needed to supply backup power for times when the wind is not blowing and the sun is not shining. With their prime assets throwing off less cash, electricity suppliers in Germany and Denmark have applied to shut down a slew of newly unprofitable power plants, but nervous governments are resisting, afraid of being caught short on some cold winter's night with little wind. "We are really worried about this situation," says Anders Stouge, the deputy director general of the Danish Energy Association. "If we don't do something, we will in the future face higher and higher risks of blackouts."

Environmental groups, for their part, have tended to sneer at the problems the utilities are having, contending that it is their own fault for not getting on the renewables bandwagon years ago. But according to Gillis, the political risks of the situation also ought to be obvious to the greens. The minute any European country — or an ambitious American state, like California — has a blackout attributable to the push for renewables, public support for the transition could weaken drastically. Rasmus Helveg Petersen, the Danish climate minister, says he is tempted by a market approach: real-time pricing of electricity for anyone using it — if the wind is blowing vigorously or the sun is shining brightly, prices would fall off a cliff, but in times of shortage they would rise just as sharply.

Comments

Home storage

[lorinc]

Seriously. If a car can get a 50+kwh battery in it, why can't every house have it too? That storage capacity is enough for a few days of intensive use.

Real-time market approach

[Anonymous Coward]

Well, some times technology really disillusions people, no? The fact that it is *possible* to provide real-time pricing as per demand-supply, does not automatically imply that this is the preferred approach. If supply-demand cycles need to be connected, that could also happen at the weekly, monthly or even yearly timeframes. In fact, doing so is probably more fair and more manageable for all parties. After all, that's already related to the current trend in many developed (european?) countries: you pay a flat fee per month for utilities and then some correction fee by the end of the year. Why not walk this line?

Re:Real-time market approach

[FireFury03]

It's somewhat like buying a last minute airline ticket. If people were unwilling to pay more for a last minute ticket, all tickets would cost more (fine) but it would be impossible (because the airlines would price tickets to insure every seat was sold - or oversold - many hours before wheels up to minimize the risk of a single empty seat) to get a ticket on a commercial airliner to get to mom's bedside 1500 miles away before she expires.

Airline tickets are an interesting one; and other products that have a relatively inflexible supply - i.e. the costs of flying the plane are basically the same whether or not that seat is sold, and similarly you can't sell more seats than you have, so the supply is inflexible. There are two opposing forces at work here:
1. The airline wants to ensure that every seat is sold, since filling a seat at the last minute increases profit, even if it is sold for below cost (the plane is flying anyway, the costs can't be avoided, selling the seat rather than flying with it empty is beneficial no matter how cheaply you sell it). This is going to tend to push the prices down for "last minute" sales as the airline tries to attract sales.
2. The passengers that need to get somewhere at short notice are willing to pay a premium. This is going to push the "last minute" prices up as the airlines cash in on this willingness to pay over the odds.

Figuring out which of these forces wins is certainly a non-trivial exercise.

By increasing prices when demand approaches the absolute maximum supply, consumers will reduce demand quickly (good, since supply can't be increased quickly). When power gets expensive enough, they will shut off rooms, wear more sweaters, turn lights off, instead of cooking a fancy dinner they will nuke something in the microwave and use disposable utensils (or, just wait to wash them until the next day), they will sit around in a single room and talk instead of playing on their computer or watching TV in individual rooms. Demand is extremely elastic, supply is inelastic at the top end. In extreme cases, they will shutdown their entire house (using winter shutdown procedures as needed) and gather in friends and neighbor's houses (perhaps, splitting the cost of the very expensive power during those times).

I think expecting people to monitor electricity prices on a minute by minute basis and change what they are doing _now_ is (largely) not realistic - virtually no one is going to look at the electricity price before deciding to put the TV on, for example. What is realistic is getting people into a routine - if people know that it's always cheaper for them to put the dish washer / washing machine / whatever on over night, then a reasonable proportion of them will probably choose to do so. In fact we've had this in the UK for decades - you can subscribe to an "Economy 7" tariff, which gives you more expensive than normal power during the day and then 7 hours of cheap power each night. Unfortunately the "more expensive than normal during the day" bit tends to make it an unrealistic tariff for anyone who doesn't use electric storage heaters.

I can, however, see a possibility for automated algorithms deciding when to use power - e.g. telling the dishwasher "automatically do the washing up when it'll be cheapest" and having it sit there monitoring the instantaneous electricity prices and automatically doing the right thing. Or loading the washing machine with instructions like "this washing needs to be done some time in the next 3 days, do it when the power is cheapest". This is essentially the same as having computers doing stock-market trading. The interesting bit will be when many people have the same device and they all decide the power is cheapest at the same time, causing a surge in demand and raising the prices.

Use the money you save

[Anonymous Coward]

Jerk-off "power traders"? You're probably accustomed to the nice consequences of electricity being regulated as a utility however if you do what you propose which is buy/sell electricity as a commodity in an open market those are the exact 100% natural behaviors that occur as a consequence. You can't advocate for a fundamentally unappetizing idea like eating 100% of your food from restaurant dumpsters and then follow up by saying "except for all of the rotten food and unsanitary conditions".

I mean you CAN, but it's essentially equivalent to wanting to have your cake and eat it too. You can't have a diet composed 100% of cholesteral, nicotine, and amphetamines and then expect to "hold the heart disease".

"Power traders" waiting to sell power is the fundamental driving ideal behind the "buy low, sell high" mantra of an open market's mission statement. The goal is price efficiency at the expense of, oh... IDK: just the collapse of civilization as we know it.

Our entire modern day society was built on the foundation of the cheap electricity which resulted from the discovery of hydrocarbons. First with coal, and eventually with oil.

Modern day civilization as we know it today(globalization and specialization of national economies fueled by cheap international freight transport) would grind to a halt almost overnight if Goldman Sachs were allowed to do the same thing to piston-banger peaker-plants/natural gas turbine megawatts of production capacity that they have been doing with the warehouses of Aluminum COMEX futures. Source: http://www.bloombergview.com/articles/2014-09-03/the-goldman-sachs-aluminum-conspiracy-lawsuit-is-over

You can't just cherry pick the nice benefits from a proposal and ignore the negative consequences. In this case, as ENRON demonstrated: even the "nice parts" translate to the government delivery cash handouts to Wall St investment bankers private bank accounts straight from the Treasury. How? Because when Kenneth Lay drives the price of a kWh to $.50 right after crashing it to $.05 for a year straight(driving all the green energy competition out of business), they now have an effective monopoly on keeping infants and pension collecting grandmas from freezing to death in Detroit. They can hold a gun to the head of voters and demand things like tax breaks. If Congress doesn't play ball: they claim that they're laying off 25% of the workforce in Houston Texas until the governor makes a stink about the mutiny in the upcoming midterm elections.

Small businesses and the working poor doesn't have big fat capital war chests they can sit on as cash buffers to protect them from market volatility. When you remove the low pass filters and subject those parties to crazy volatility they can't forecast market forces with the required stability to justify capital investments. This leaves the driving forces of economic growth sitting on the sidelines while Fortune 500 companies beer bong Uncle Sam's champagne out of a deflated soccer ball.

When we handed investment bankers deregulation dynamite at the beginning of the decade, they turned around and used that "blasting charge" to undermine the capital foundation of the working class and threatened to blow up the real estate equity dam if we didn't hand them TARP cash-money in the middle of a liquidity crisis. Rather than burn their war engines and back-fill the trenches, they then used that money to buy government treasuries with the governments own money.

Now that the middle class class has lost their home equity line of credit cash buffer: you want to give those same people(the "Flash Boys") the ability to "flash crash" the national energy grid like they were able to so demonstrate on a much less frail and elastic system like mortgage balance sheets?

Are you fucking stupid?

Temporary

[zmooc]

This can only be a temporary problem. If those guys have a properly functioning electricity market, energy storage companies will bite. Obviously, this would work much better if end-users/suppliers were actually billed the actual electricity price instead of some kind of average. That way, they could change their behavior to match it or even consider storing their self-produced electricity. This could get a major boost if the electricity prices would be available in real-time to your fridge, washing machine, car charger and solar batteries.

What could also help tremendously, is if the countries around them shared the same ambition. If not, they will keep stuffing the hole until a major electricity dip comes around sometime mid-winter and the Danes will blackout.

Re:Are renewable energy generators up to task ?

[jklovanc]

The think you both miss is that on January the sun is much lower on the horizon causing solar panels to produce much less electricity. From these real like German numbers solar panels produced 0.8TWh in January and 4.9TWh in June. The production capacity in January was only 16% of June.

Replacing all roofs is not that great as north facing roofs would only get indirect sunlight and east/west facing roofs would only be viable half the day. Then there are the roofs that are in the shade of other buildings or trees. Just because light is hitting a solar panel does not mean that it producing anywhere near capacity.

Also, do you have any idea the cost of that many PVs?

Ok but that's electricity, not energy

[Sycraft-fu]

Guess what? Cold places use MORE energy than warm ones. While people like to hate on ACs as some excess, they are actually quite efficient. Since they move heat, they can move more energy than they use. A good AC can easily move 3-5 watts of heat for each watt of energy it requires to operate. No such luck with heating systems, they at best get you 1 watt of heat for each watt they take.

Then there's the issue of temperature delta. If we take 25 degrees (C) as a target room temperature, well then you can see why cold places have it even worse. The hottest inhabited places on Earth only tend to reach 40 degrees regularly and peak at 50 rarely. So a 15-25 degree delta from normal. The cold places? Hell, even a "mildly" cold place hits 0, and they generally drop a good bit below that. Denmark sees 15-30 degrees below zero. So a 40-55 degree delta. Of course the bigger the delta, the more leakage you have, the more energy you need, etc.

If you intend that heating energy to be renewable, that means no oil, gas, etc furnaces. You can use electric, so long as the electricity is from a renewable source. I guess depending on your definition wood might be ok too. That's about it, unless you happen to live near some hotsprings and can get some geothermal heat.

So re-run the energy calculation when all the district and local heating has to stop using anything non-renewable.

Re:Are renewable energy generators up to task ?

[radl33t]

modules are very cheap (cheap enough and getting cheaper, but this is now a minor variable in PV system costs). it costs 3x their price to install them on a roof.

module quotes in china right now are on the order of 0.46 EUR/W or 0.58 USD/W, total eqpt costs are under 1 USD/W, install costs 1.20 to 1.60 at utility scale and 1.80 to 2.50 on residential roofs.

We need robot installers and a large competitive market to reduce customer aqusition costs