Espen Moe “Renewable energy and the politics of grid-line expansion.”

Knowledge for a better world

Renewable energy and the political economy of

grid-line expansionEspen Moe, Department of Sociology and Political Science, NTNU

Knowledge for a better world 2

Grids

• Understudied

• Not sexy enough!(?)

• Politically difficult– FITs and subsidies the easy bit

• Leaving it to private actors

– Coordination, NIMBY, different political levels, powerful vestedinterests, sustained government effort necessary

• Potentially the biggest bottleneck for a renewable energy transition


Solar vs. wind, capacity (MW)

0

50000

100000

150000

200000

250000

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

PV installations

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

Wind power installations


Renewable energy share of electricity

production (2015)

76.3

16.6

3.7

2

1.2

0.47.3

Fossil fuels and nuclear

Hydropower

Wind

Biopower

Solar PV

Geothermal, CSP, ocean


Share of electricity consumption

0 10 20 30 40 50 60 70 80 90 100

Global

Denmark

China

USA

Germany

Norway

Japan

Wind Solar Biomass Geo, CSP, ocean Hydro


Theory• Importance of structural change

• Renewable energy is about more than countries with unsolved energy problems and abundant renewable resources prioritizing renewable energy

• Gridline extensions just another structural component to a renewable energy transition

• Instead: Vested interests. Very strong interests in preserving the status quo. – Joseph Schumpeter, Mancur Olson

– Major structural change always fought by the losers• Few changes bigger than a transition from fossil fuels to renewables; electricity sector hit hard

– Oil, gas, coal, nuclear had decades to build political influence, to get beneficial regulations and shaping the institutional framework.• Industrial giants

• Institutional frameworks, regulations, access to politicians, supporters/allies within institutions, media, politics, etc.

– Renewable energy has no level playing field, but has to rise against the shadow of some of thelargest industrial giants the world has ever seen.• AND against the utility companies!


Role of electric utility companies

• Major vested interest in most national energy systems

• Centralized energy systems challenged by wind and solar– Often fought the integration of wind and solar into «their» grid

– Eroding profit margins• Often priority access for REN

– «Prosumer revolution» in Germany• Disruptive potential of solar PV

– Potential decentralization of the electricity system

• Gridline expansion: Utilities the crucial actor– But their profit margins eroded by the same process that makes

gridline expansion necessary


Germany, wind and PV capacity (MW)

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

1995 2000 2005 2010 2015

Wind Solar PV


The German grid

• Among the best in Europe (= the world)

• But also, renewable installations of the highest in Europe

• Energiewende, nuclear phase-out

• «Prosumer revolution»

• NIMBY problems

• Wind in the north, PV in the south

• Utilities going bankrupt– Becoming maintenance companies


Wind vs. solar in Japan, pre- and post-

Fukushima, annual installations (MW)

0

2000

4000

6000

8000

10000

12000

2000 2005 2010 2015

Wind power Solar PV


The Japanese grid

• 10 regional monopolies, weak interlinkages, 60Hz vs. 50Hz

– (Liberalized April 1, 2016)

• Historically kept wind power out, forced to accept PV

• Powerful utilities in cahoots with METI

– Until Fukushima!

• Unbundling (by 2020)

– But attempts at hollowing out

• PV phased in at such rates that utilities reluctant


Is politics important?

Installations vs. electricity generation

0

20000

40000

60000

80000

100000

120000

140000

160000

2000 2005 2010 2015

China USA Germany


The Chinese grid

• Priority access to the grid– But violations not enforced

• Curtailment problems– Going down, now shooting up again (and for PV as well)

– Lack of coordination, incentives for installation, not generation

– Off-grid capacity

• Central government vs. the provinces– Coal first, everything else second

• UHV grid– Salvation or white elephant?

– State Grid solving the problem or just in it for itself? (SOE)


X-factor: Energy storage

• Grid must be upgraded while utility companies gobankrupt– Paradox: Decentralization of the grid making it even more

important to upgrade it.

– And at the same time: Main actors (utilities) going bankrupt

• Scaling up more or less impossible without energy storage breakthroughs– (Denmark has Norway)

– Scaling up to 20% clearly possible (Germany). But most countries more ambitious long-term targets!


Conclusions

• Utility companies at the core of the process

– Exercizing political influence to slow down the process

• Germany, end of FIT

• Japan, hollowing out of unbundling, continued rejection of wind

• China, State Grid a very powerful SOE fighting for its own interests,

grid companies reluctanctly connecting in the provinces

– Close political connections, and using these…!

– Crucial part of the future system, but not in their present form

– Still a bottleneck!


Relevance for New Zealand?

• Target: renewable 90% of electricity by 2025 (2015 = 80%)

• Hydropower: 57% of electricity generation (2014)

• Wind power: 5% of electricity generation (623MW)– But wind power the most cost-effective option for new grid-based

power in 2015

• Solar power: <0.1% of electricity generation

• Geothermal: 13% of electricity generation (1GW = 5th in theworld, 2nd per capita)

• Vulnerable because of isolation, but energy structure thatmakes grid line extensions less critical than in other countries.

Environment

Espen Moe “Renewable energy and the politics of grid-line expansion.”