Grid integration of renewable energies - Acceptance is the key for the grids of the future Speech by Parliamentary State Secretary Katherina Reiche

- Check against delivery -

Ladies and gentlemen,

I. Welcome

Innovation and acceptance are the keys to the successful expansion of renewable energies. The Federal Environment Ministry, which I represent, has had responsibility for renewable energies since 2002.

This leads me directly to the German government's highly innovative Energy Concept, adopted just two months ago. Federal Chancellor Angela Merkel has made it clear that the aim of the Energy Concept is to make our energy supply the most efficient and environmentally friendly in the world. She refers to the 2050 target horizon as a revolution in the field of energy supply.

II. Introduction: Energy Concept objectives

The Energy Concept outlines the road towards the age of renewables we are striving to achieve. Along this road, we must reduce our greenhouse gas emissions by 40 percent by 2020 and by least 80 percent by 2050 compared to 1990 levels. We can only accomplish this if we massively increase energy efficiency and switch our energy supply to renewables.

Targets for the expansion of renewable energies in the electricity sector are a 35 percent share in 2020 and an 80 percent share in 2050. This requires a radical transformation of our electricity system. Wind energy plays a key role here. As visitors to the GRIDS 2010 Conference, organised by the European Wind Energy Association (EWEA), this will be of particular interest to you. For ultimately, the expansion of renewable energies and grid expansion are mutually dependent.

But today we are at a conference for the whole of Europe. May I simply urge you, therefore, to look at the English version of the Energy Concept in order to learn more about the innovative measures in Germany. In this speech I will focus primarily on the points in the Concept with relevance for Europe, and will conclude with a few comments on the measures being taken in Germany.

III. European level

The energy scenarios of the Energy Concept have shown that in 2050 wind energy will play a key role in electricity generation. This calls for a massive expansion of onshore and offshore wind power capacity. If the growing share of renewable energies is to be integrated effectively, the expansion of German and European grids must follow closely.

Moreover, stronger competition and competitive structures will be promoted by accelerating the establishment of a functioning market network with other European electricity markets, in particular by upgrading cross-border connections. There are already some promising regional approaches. The relevant legal framework must be further improved in the course of implementing the EU’s third legislative package for an internal energy market.

Continuing liberalisation and further strengthening competition will remain an important goal for the German government in the future. The design of the electricity market of the future, i.e. the interplay between a growing share of renewable energies, the new role of conventional energy sources, the regulating and balancing energy markets, energy storage and incorporation into the European and non-European network must have a market-based focus. To enable the market to develop its forces, the foundations need to be laid today and a future-oriented framework needs to be defined.

IV. Upgrading the grid infrastructure

Today's electricity grid is characterised by generation structures with specific historical origins. Electricity generation takes place relatively close to the centres of consumption. In future, electricity generation will see a marked increase offshore and in the coastal regions. Thanks to its geographical location, Germany will increasingly take part in the exchange of energy within Europe.

The massive expansion of renewable energies in the electricity sector (especially offshore) requires the planning of a German overlay grid ("electricity highways"), which will in turn be integrated into an interconnected European grid. Building on the existing grid and the new lines planned under the Power Grid Expansion Act, the emphasis will be on using innovative technologies to transport electricity over long distances with minimal losses. Most urgent is the construction of north-south routes which can carry electricity from the wind farms of the north to the consumption centres in the west and south. Furthermore, the German government will develop a concept for nationwide strategic planning of the 2050 target grid.

V. Target Grid 2050

In 2011 the German government will develop a concept for a target grid for 2050, incorporating both the existing grid and the necessary expansion defined by the Power Grid Expansion Act, in order to assess what additional infrastructure is required for the future. The target grid concept should cover all essential relevant aspects, notably

• further development of the existing grid,
• planning for an overlay grid and possible pilot routes,
• North Sea grid and clustered offshore connection,
• integration of the German grid into the European network.

VI. Increasing acceptance

The German government is establishing framework conditions for the rapid expansion of the grid infrastructure needed to integrate renewable energies.

We consider it very important to strengthen public understanding and acceptance for the expansion of electricity lines. To this end, the German government will launch an information campaign called "Grids for environmentally sound energy supply".

Of course - as I said at the beginning - one important element is to apply innovative technologies. Here are just a few aspects to think about:

1. For improving existing infrastructures there are at least two technical options available, offering substantial capacity increase without building new lines.
2. For new infrastructure I would like to highlight the following innovative technologies:
   • Transmission cabling
   • HVDC transmission
   • Power electronic devices for load flow control (FACTS)
3. Furthermore, new operation strategies are available which can be combined with most of these technologies:
   • Wide-area monitoring and protection systems
   • or Demand-side management.

Bearing in mind the impact of grid charges, the German government will examine to what extent the regulatory framework needs to be updated and amended for the purposes of grid development. Investing in the modernisation and expansion of the German electricity grid must be financially attractive if grid operators and other investors are to provide the necessary capital. This can also be achieved by reducing the risks of such investments.

A comprehensive review will notably include

• direct recognition of the costs of grid expansion,
• improved investment returns for establishing an overlay grid and using innovative technologies, also by reducing the risks of projects,
• setting quality criteria that reward innovative grid development and stimulate neglected grid upgrades,
• incorporating north-south routes into requirement planning as initial components in the overlay grid when amending the Power Grid Expansion Act. A first step should be public tender of two pilot routes in order to test new technologies for the "overlay lines".

VII. Smart grids

In future, demand side load management should adapt energy demand more closely to supply. This calls for state-of-the-art intelligent grids and suitable incentives within the electricity pricing structure. These "smart grids" will manage electricity generation, storage, users and the grid itself using state-of-the-art information technology. To support the development of smart grids, the German government will create the necessary legal basis for installing smart meters and for the dynamic networking and management of electricity producers, storage facilities, consumers, grid installations and infrastructure.

VIII. Conclusion

I welcome the conference statement from the organizers EWEA, ENTSO-E, BWE and VDMA underlining the urgency and importance of major grid investments.

I fully understand the need to speed up permitting while not compromising environmental protection or ignoring public concerns: this is needed in order to achieve integrated electricity markets and ensure that new infrastructure can be supported.

The German government has clearly declared its support for the expansion of offshore wind energy and the development of an innovative grid infrastructure.

Ultimately, however, these steps must be taken by many European countries. To achieve our joint renewable energy targets, therefore, we rely on your cooperation.

And may I say especially to the representatives of the renewable energy sector: it is absolutely vital that you in particular advocate the expansion of the grids, for in future they will form the basis of your business to a far greater extent. Please help to significantly raise acceptance for grid expansion, whether through public relations or public participation, which of course can also include investment. Grid operators too, can contribute to this by using innovative technologies.

Thank you very much for your attention!