The phasing-out of fossil sources of energy leads to a higher demand for electricity and more volatile supply. How we can secure a base load for supply and safeguard the stability of the power grid? As a bridging technology, natural gas could have a key role in making Germany’s energy transition a long-term success.

COP26 is history, but the debates about climate policy are raging on, including the one about the EU’s “taxonomy” of sustainable economic activities. Exactly which technologies for power production should be classified as “sustainable”? The answer will have profound implications for financial markets and the investment decisions of large corporations and funds. Eastern Europe’s coal countries want gas-fired power plants to be included in the list of sustainable activities, while France is planning no fewer than six new nuclear plants, to the chagrin of the Greens in the European Parliament. The European Commission did not issue a final statement at Glasgow, but plans to do so by the end of the year.

A fundamental dilemma
At the heart of this conflict is a fundamental dilemma in decarbonising our industrial societies. Exiting fossil sources of energy does not lead to less, but much more consumption of electric power, especially because of the electrification of the heating and mobility sectors. Producing (green) hydrogen on a large scale through electrolysis will further raise demand.

By 2030, 65 percent of Germany’s gross energy consumption is to be supplied by renewable sources, according to the Climate Change Act (revised in 2021). Yet the forecasts on national energy consumption in 2030 vary greatly, as they put different weights on the expected degree of electrification and integration of energy systems (“sectoral coupling”). The highest estimate with up to 886 TWh comes from the German Energy Agency (dena). The German Renewable Energy Federation (BEE), an industry lobby, forecasts 740 TWh, the think tank Agora Energiewende expects 650 TWh. The federal government recently raised its forecast to this level of 650 TWh, after having assumed a maximum of 582 TWh for years. By way of comparison, Germany’s power consumption in 2019, prior to the pandemic, amounted to 575 TWh.

Drastic expansion of renewables required
To cover this additional demand of at least 80 but up to 300 TWh in 2030 while making sure two-thirds of the power supply come from renewables, a massive expansion of solar, biomass, and wind power plants is necessary. According to the German Association of Energy and Water Industries (BDEW), hitting this target requires 100 Gigawatt (GW) from onshore wind power plants, at least 150 GW from photovoltaics (on roofs and open spaces), and 11 GW from biomass. These levels are about a third higher than the ones currently set by the Renewable Energy Sources Act. Simply put, a wind park that is to contribute to the energy transition from 2030 on needs to be planned by 2022 at the latest.

The responsibility for speeding up the expansion of renewables will fall primarily on the next federal government. This is an enormous challenge given the arduously slow processes for planning new plants and getting them approved, which also hampers infrastructure projects like the urgently needed expansion of the power grid. The only solution is a comprehensive cutting of red tape. According to a recent study by the World Wind Energy Association (WWEA), planning a power plant takes 70 months on average in Germany and the subsequent approval process further two years.

The central challenge: securing the base load
In addition to speeding up renewable expansion, the issue of how to secure a base load for the energy supply poses a major problem. In the past, nuclear and coal-fired power plants reliably made sure that fluctuations in the power grid could be smoothed out. Yet the feed-in of wind and solar plants cannot be controlled by simply pushing a button – no sun and no wind means no power generation. Today, battery technology is not sufficiently advanced and there is not enough capacity from pumped-storage hydro power plants to supply sufficient power when needed. Experts from the non-profit Stifung Energie und Klimaschutz expect a maximum total supply of 0.06 TWh from batteries and pumped-storage stations, compared to the expected 20 TWh required for compensating deficits in the supply from renewables1.

While excess supply from renewables can be absorbed through sectoral coupling (e.g. by transforming power into heat), making up for a temporary supply deficit still requires high-capacity power plants. The Social Democrats, the Greens, and the Free Democrats therefore declared their intention to build new gas-fired power plants in the final communiqué concluding the preparatory talks before the formal coalition talks. These plants are supposed to be ready for the switch to climate-neutral gases (“H2-ready”). For the Greens, this agreement amounts to a change of paradigm, as they had categorically refused any form of energy production from fossil sources (and the import of Russian gas via “Nord Stream 2”). The agreements puts the spotlight on a strategic approach that can not only safeguard the energy supply, but also make the transition to renewables a long-term success: the use of transition (“bridging”) technologies.

A key role for natural gas
Natural gas in particular could play a key role. The pipelines and (modern) plants could be gradually switched to hydrogen or green (bio-)gases. The ramping up of hydrogen technologies can be accelerated by using “blue” hydrogen in order to make sure value chains are “H2-ready” once there is sufficient capacity for importing and producing “green” hydrogen. Recently the National Hydrogen Council (NWR), an advisory body for the federal government, announced the preparation of a study of hydrogen’s potential in the heating sector. The benefit is that the existing transport (a total of 40.000 kilometres) and distribution grids (510.000 kilometres) for natural gas can be switched to hydrogen2. The use of blue hydrogen, however, requires the expansion of carbon capture and storage so that the carbon dioxide can be recycled in a kind of circular economy. In cooperation with the private sector, the state government of North Rhine-Westphalia published a roadmap on such “carbon management” in October3.

Yet here too the arguments of those who are critical of using fossil energy sources to any degree should not be ignored. They fear a “lock-in” of bridging technologies following long-term investment decisions that could needlessly extend the lifespan of energy production from fossil sources. Moreover, the threat posed by methane should not be underestimated. To meet the twin challenges of rising energy demand and fluctuating supply, bridging technologies and an open-minded attitude to various technological approaches should be embedded in a smart strategy that keeps its eyes fixed on the target of limiting global warming to 1,5° Celsius, as set by the UN’s 2015 Paris Agreement. In energy policy, the incoming coalition will have no lack of urgent issues to tackle.