Ukraine and Germany cease to sponsor renewable energy revolution

На Украине и в Германии перестают спонсировать ВИЭ-революцию

© RIA Novosti / stringer
The pace of renewable energy growth is slowing in China, Germany, and soon in Ukraine. Every story has its own characteristics, but a common one: against the background of increasing the total volume of green energy and reducing its cost to the most favored sector is gradually disappearing.Proponents of renewable energy is regularly noted that the price of electricity derived from wind and solar, in recent years, multiples have fallen and as a result, many countries have caught up with the prices of traditional energy. But one of the logical consequences of this process — the gradual abolition of subsidies for green energy.Recall that the reduction of support for RES can go in two similar ways. First, a gradual decrease in guaranteed repurchase price of green electricity. Second, the transition from such “designated” price to the auction system where participants, competing, doing below the final price. Reducing the fixed price of redemption for the new projects were continuously and synchronously with a reduction in the cost of renewable energy. In recent years many countries have begun the transition to the auction system.Does the transition to auctions automatic reduction of volumes of input of new capacities? In the General case — not necessarily. If the initial price of the auctions close to the old prices of redemption, the investor in renewable energy did, in fact, not changed, just in the worst case there will be competition and further reduce prices. But if the initial price of the auction below the old fixed price of redemption, the interest in new projects will weaken. But life, as always, more complicated schemes.
In this context, a very interesting example of Germany. In this country there has been a dramatic decline in the installation of ground-based wind turbines. This year, their new capacity will be 1.5 GW compared to 2.4 gigawatts in 2018 and a record 5.3 gigawatts in 2017. Even the traditionally benevolent of renewable energy, Bloomberg notes that the decline in new wind turbines can create problems to achieve the stated objectives for the share of green energy, as the plan involves the installation of 4.6 gigawatts of ground-based wind turbines annually.Interestingly, some industry representatives attributed the crisis in land-based wind energy with the transition to the auction system. However, if such an impact is, it is moderate, although the prices on past auctions is still low in comparison with the old system of support. The major problems are regulatory. In addition, wind turbines have become too much, and the new proposed regulations that prohibit the construction closer than one kilometre from residential areas will create more complications with the placement of new facilities. Anyway, the sum of the factors of the German terrestrial wind energy is in a difficult situation.Another recent example is Ukraine. Here, as you know, next year will be introduced a system of auctions is set by the regulator of the repurchase price of green energy. But in this case, most likely, the initial price of the auctions will be significantly reduced in comparison with the existing tariffs as the current repurchase price of green energy are obviously high. Even considered an option retrospective reduction of these tariffs. Of course, reducing the price of redemption even without auctions will lead to a decline in the launch of new capacities. Not really hiding the fact that the boom of launches of renewable energy facilities current year is largely associated with the ability to jump into the last car on the old high rates. Moreover, the discussion and the introduction of quotas for new capacity. As a result, some estimates suggest that next year (in the case of quotas) will be running power in the amount of 15% (!) from the inputs of the current year.
Why the Ukraine from the relentless stimulation of the sector a high rate have to move to artificial restrictions through quotas? The sharp rise in renewable energy has created several problems. This deficit in the electricity market to pay for expensive solar and wind, and, most importantly, the problem of integration of changeable green energy in the system. The share of RES in Ukraine is much smaller than in Germany, but also the power system was much less flexible.For the Ukrainian energy system have already arrived, “California duck”: the problem is named for the shape of the curve load traditional capacity required in order to integrate into the network of solar energy. And already fixed the first off renewable energy-generation because of the impossibility of the balancing of the power system in traditional power plants, and next year the problem will only increase. “Ukrenergo” has already announced that further rapid development of renewable sources in the coming years need two gigawatts of highly maneuverable capacities and up to one gigawatt of systems of frequency control.
Finally, the third story is China. Here some interesting news: recently it became known that China will cut the subsidies to renewable energy sources in 2020 to 806 million dollars, the decline in support will be exactly 30 percent. While it is difficult to say to what extent this will lead to a fall in the rate of growth of the sector, remains to be seen.But this is not the first reduction in support for renewable energy in China: the China has reduced support (through the transition to auctions from fixed tariffs), which is believed to have led to a drop in investment in the sector in the first half of this year (which is affected including the global dynamics). Watching the development of events. By the way, China also regularly receives reports on forced outages of generation green due to the inability fully to incorporate this energy into the network.
What are the results?Renewable energy company finally turned into the development of the electricity sector. For market participants this is and the pros and cons.Green energy is really cheaper. As a result, it began to meet more stringent requirements on prices and subsidies without regard to price disappears. The redemption price of green energy has become more Mature and because the share of RES is increasing, and thus increasing the total collection.And where are aggregate estimates of the cost of green energy, which are often used for comparison with the prices of conventional generation? One of the sources of studies appropriate analysis centers. But, for example, the data of Lazard and IRENA, two major sources of information on prices for renewable energy are markedly different from each other. This is understandable, a lot depends on the assumptions: tax regimes, climate conditions, cost of money. And inside each source varying prices are great. The more interesting to follow the specifics.Recall that all these estimates come from the fact that green energy as a priority of delivery to the network. But the problem of incorporating intermittent energy is not completely solved, what part of green energy regularly disappears (although you have to pay for it). At the same time increasing the downtime of thermal generation reserve (losses for these companies), investment is increasing the load on the network of the company. Currently, the production of electricity from renewable energy sources in the world already accounts for about ten percent of the total generation. In Europe the numbers are much higher. This is an essential volume to a responsible approach to the issue of payment of green energy and the cost of its integration into the grid.Alexander Sobko

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