Grid Cost and Renewable in Germany

This is another post discussing the latest weirdness from Barry Brook.

He just posted an article claiming that the “system cost” for solar is the highest of all alternatives, and cited a “new report from the OECD” as his source. The “high” estimate from that report for solar is 83 dollars per MW at 30% market share, while nuclear has only 2.8 dollars.

You wouldn’t know it from reading Brook’s article, but if you click through you find out that the “OECD report” is actually from the OECD-NEA (Nuclear Energy Agency). I find it rather odd that he would not mention that little detail. Does he think that the credibility of the study might be diminished if readers knew that it comes from the nuclear lobby? Does he think it is appropriate to mislead readers about who exactly is his source here?

The link goes to an “Executive Summary” of about 10 pages. People can buy the full report, if they are so inclined, for $84 at the OECD Bookshop here.

I have not done so and only read the “Executive Summary”. Judging from that, here is how they base their extraordinary claim of solar being much more expensive in “system cost”.

For starters, the term system cost is not usually employed, so we need to make sure how they define it. I have read the first 4 pages of the summary where they want to tell readers what they mean with this term, but I have been unable to extract any meaningful content from those four pages. It seems that grid development costs are included (for example extra grid development for offshore wind power), but apart from that, it’s anyone’s guess what they want to call “system cost” exactly.

Actually, one could get the impression that they want to include the cost from conventional power plants getting less capacity factor, since wind and solar eat their lunch and dinner, in these system costs. That would be rather cheeky, in my opinion. While it is true that higher wind and solar shares are one of the reasons that the economy of nuclear doesn’t make much sense right now in Western countries, I would think it highly inappropriate to include this in the cost of solar.

On the other hand, maybe it is appropriate if you work for the pro-nuclear lobby.

Anyway, they give the “system cost” for solar at 30% share in Germany as $82.95 per MW. They break that up in “grid reinforcement and extension” ($47.40), grid connection ($9.44), “balancing cost” ($6.41) and “back-up cost (adequacy)” ($19.71) to get to that fantasy number.

Now, the funny thing is that in Germany in 2012 the higher renewable share has been estimated to actually reduce electricity transmission costs by EUR 437 million. That makes sense especially with solar, most of which right now is on rooftops in Germany. Only 15% of solar in Germany is from solar parks over 1 MW, and the electricity from about 98% of the solar installations in Germany is delivered over local networks (Fraunhofer, March 2013, page 27). You can’t do that with nuclear, which always needs large scale distribution.

I conclude that this study of the OECD Nuclear Energy Agency is completely bogus.

Far from increasing network cost, solar will decrease them. That may change if large scale Desertec projects take off in Africa and the Middle East. But right now, this is just another case of pro-nuclear voices spreading easily refuted anti-solar propaganda.

Going back to Barry Brook, the last thing he should want is counter the recent Bloomberg article that reported that wind energy now beats coal in Australia. But that is exactly what he is doing with this particular post.

Anyone in Australia who favors coal over wind does not seem to be contributing to bringing that country’s not very impressive CO2 emissions record down.


Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003,

One thought on “Grid Cost and Renewable in Germany

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