POWER January 2017 - 50

INDUSTRY REVIEW & PREVIEW
1. The difference a year makes. These data charts from the French grid operator show
nuclear providing a maximum of 75% of demand for October 28, 2016, and a high of 3,262 MW
supplied by imports (of unspecified fuel source). On the same date (a weekday in both years) in
2015, nuclear supplied a maximum of 77% of demand, there were no imports, and there were
substantial exports, topping out at 8,619 MW. (Hovering over pie pieces at http://bit.ly/2boNiZa
reveals percentages, which vary by time selected.) Source: Réseau de Transport d'Electricité
Indeed, the future of said coalition government
depends on the election support of both
coal producers and the tens of thousands of
coal miners whose future is at stake.
Market Changes Advocated. As of
late 2016, in Germany and western Europe,
power prices have surged and will likely remain
high as long as a substantial portion
of France's nuclear fleet remains down. As
coal-fired power plants throughout Germany
fire up to fill in the gaps, Klaus Schäfer, chief
executive of Uniper, the former conventional
generation business unit of European utility
E.ON, used the company's recent third-quarter
earnings call as an opportunity to push for
capacity price supports.
Additionally, while attending the COP-22
climate summit in Marrakesh, Morocco, in
2016, Hollande announced that all of the nation's
coal-fired power plants will shut down
by 2023. These ambitious goals coincide
with already-stated plans to reduce nuclear
dependence to just over 50% two years later.
But can renewables really fill in that gap?
In 2015, installation of new wind power and
solar photovoltaic capacity in France increased
23.3% and 25% respectively compared
to 2014, and it looks like 2016 is set
to be a banner year as well, because installation
costs for onshore and offshore wind
keep falling. But with the ongoing nuclear
crisis, EDF currently is struggling to find,
let alone generate, enough power. As noted
above, officials feared in late 2016 that EDF
may be unable to meet existing demand if
temperatures dip 3 degrees Celsius below average
this winter. To avoid a total shutdown,
Réseau de Transport d'Electricité, the grid
operator, has drawn up an emergency plan
that could involve a series of two-hour-long
power cuts to homes and businesses to reduce
peak demand if the mercury plummets.
Questions about EDF's ability to ensure
domestic power coincide with the company's
struggle to complete, and contain ballooning
costs on, several nuclear construction projects
worldwide. Complicating matters, EDF continues
to deal with fallout from the disclosure that
Areva, its sister company in the French nuclear
industry, falsified safety tests on key reactor
components. Nevertheless, a long-planned
EDF purchase of a majority of shares in Areva's
nuclear reactor business moved forward, with a
contract signing on November 15.
With debts now in excess of €37 billion,
the state-owned EDF is not instilling
confidence. If the lights go out across
France, energy policy reform and EDF's
future may well rocket to the top of the
political debate.
50
Germany's Merkel Hopes to Hold
the Center
Almost immediately following Donald
Trump's victory in the U.S. presidential
election German Chancellor Angela Merkel
announced that she would stand-firmly in
the middle-for a fourth term. Even though
Germany's renewable energy turnaround,
or Energiewende, has been slowing of late,
few in her conservative Christian Democratic
Union party challenge the wisdom of renewables,
though some question the rate of deployment.
But with right-wing populism on
the rise, many in Germany are desperate to
hold the center. As this article went into production,
liberal parties like the Greens and
left-of-center Social Democrats were still
deciding if they should coordinate on a coalition
candidate to challenge Merkel from the
opposite side of the spectrum as well.
Whichever government eventually forms
following the election, energy policy is very
much on the table-particularly the direction
of the Energiewende and the possibility of
meeting even currently agreed-upon emissions
goals. Up until the middle of November,
Germany's current coalition government had
failed to agree upon a Climate Action Plan
post COP-21. But just before COP-22 commenced,
they agreed upon a new deal calling
for an 80% to 95% reduction of greenhouse
gas emissions by 2050. In order to reach this
goal, Germany's government has set intermediate
targets that are to be met by 2030.
Standing in the way, however, is a plan to
stem the largest emissions source: Germany's
coal-fired power plants. Roughly 40% of Germany's
greenhouse gasses come from coal-
and just a little more than 43% of Germany's
power comes from coal. So the new plan calls
for a halving of coal-generated emissions by
2030. That sounds simple, but nowhere in the
new Climate Action Plan is there a concrete
pathway toward shutting down the coal fleet.
www.powermag.com
E.ON and sister German utility RWE were
among the biggest financial losers in the nation
over the last few years. Both companies
have peeled off their renewable assets from
their conventional fleets in attempts to maintain
some shareholder value. Uniper is today
arguing for a different approach to getting paid
for services rendered: receiving money for
maintaining available capacity, whether or not
it's used. Schäfer argues that " capacity market
producers " such as Uniper can take advantage
of Germany's massive cross-border interconnections
and provide energy stability far beyond
central Europe in times of crisis.
So another question before German policymakers
is whether it is necessary in order
to ensure grid stability throughout Europe
to enter into long-term, multi-year capacity
contracts that support older coal-fired plants,
particularly dirty lignite-burning plants, to
provide emergency standby services.
Keeping the System in Balance. Of
course, various options exist for balancing
the inherent variability of wind and solar generation
and ensuring grid security beyond using
conventional power as a strategic reserve
(see sidebar). One option is overall reduction
in energy use. To achieve this, Germany recently
announced a €17 billion ($19.4 billion)
campaign titled Effizienzoffensive, the
ultimate goal of which is to cut the country's
energy consumption in half by 2050. Germany
launched the scheme because officials understand
that renewable expansion alone will
not be enough to meet the country's carbon
emissions reduction targets.
Other solutions include:
■ Building out more baseload renewables
such as offshore wind.
■ Widespread deployment of battery storage
and/or hybrid renewable energy/storage
systems.
■ More investment in demand response
technology.
■ The introduction of virtual power plants
through the use of networked systems.
POWER | January 2017

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POWER January 2017

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