- EWG study believes a 100% renewable energy system with storage in Germany would already be economically competitive now compared to conventional energies
- Drop in prices for renewable energy generation which is to be expected in the future as well forms the bedrock of this argument
- Conventional energy systems will also run into losses as these won’t be able to cover their costs competitively
Berlin based non-profit think-tank Energy Watch Group (EWG) estimates a full supply with 100% renewable energy system with storage for Germany would already be economically competitive today, compared to the current energy system based on coal, natural gas and nuclear.
Modeling their analysis on the development of electricity prices based on current data, the researchers are of the view that by 2025, such an energy system would be significantly cheaper than power generation with fossil fuels, while drawing comparison with the German policymakers’ belief in only 45% renewables in the electricity mix by the mentioned year.
Their contention is mainly supported by the significant drop in electricity generation costs of solar and wind energy since 2017, which they argue is largely dismissed by naysayers as the latter harp on the assumption of higher generation costs for such a system with the addition of storage.
In the future, these costs will continue to tumble, making business sense for all energy sectors to convert to a 100% renewable energy scenario to save on their electricity costs, and that would be the ‘all-important way out of the current and coming energy cost surges’.
The authors of the study explain their conclusions with an example: In 2010, an average zero-emission investment project for full supply (24×7 hours a week & 52 weeks a year) for electricity, heat and transport had costs of €0.032 per kWh, while in 2020 it was only €0.012 per kWh. Costs will average €0.09 per kWh in 2025.
At the same time, costs of conventional power generation are increasing thanks to rising prices of natural gas, coal and carbon prices. In 2028, these conventional energy assets won’t be able to cover their costs competitively. Even existing nuclear energy can stand on its own only till around 2040.
“In the next few years, conventional existing plants will no longer be economically viable to operate due to the lower costs of renewable full supply. This means that a historically favorable extensive self-sufficiency in all energy sources will be within reach in Germany and also worldwide,” shared lead author of the study Dr. Thure Traber. “This revolution in the fundamental conditions of energy supply can be seen as an opportunity and must be used for immediate climate protection. This means that all energy investments must be immediately withdrawn from fossil fuels and directed into renewable energies.”
Renewables too would need some support in terms of accompanying infrastructure matching the pace of current development, and ambitious, clear expansion scenarios, to pave the way for an ‘emission-free, cost-effective, and climate-protecting’ energy supply with 100% renewables supply by 2030.
“Climate protection with 100% renewables pays off compared to climate-destroying conventional energies even if the external damage costs are disregarded and a year-round security of supply is aimed for,” stress the authors of the report that can be found on EWG’s website.
An August 2021 Greenpeace commissioned study by Fraunhofer ISE calculates up to 446 GW solar PV capacity for Germany to reach 100% renewables scenario (see Germany: 100% Renewables Scenario=Up To 446 GW PV).