The Herculean task of transforming the energy system

The Federal Republic of Germany's Energy Industry Act states in the first paragraph: The secure supply of energy to the general public. At the same time, the energy supply should fulfill further conditions: It should be as affordable, consumer-friendly, efficient,  environmentally friendly and greenhouse gas-neutral as possible. Security of supply thus expresses the energy policy goal of ensuring that, as far as possible, sufficient energy is available to every consumer in the energy system at all times and under these conditions.  In order to balance the rapid growth of renewable energies with the simultaneous exit from coal and nuclear power, previous federal governments, as well as the current one in its coalition agreement, relied on natural gas as a supposedly reliable bridging technology. However, since February 24, 2022, when Russia invaded Ukraine, we have been facing a turning point: We currently have to completely eliminate gas from Russian pipelines from our equation for the German and European energy transition. The price at which we  can achieve the shift to other importing countries and completely close the open supply gap by importing liquid natural gas (LNG) is still open.

It is now important to not repeat possible mistakes of the past elsewhere.  One of these lessons is that we need to diversify our energy imports more in the future. This applies not only to natural gas, which will continue to play an important role as a bridging technology for some time to come. Germany will remain an energy importing country in the future, because the potential for generating renewable energies in Germany is relatively low. This is due to the high population density and the corresponding restriction of available areas, but above all the geographical location limits the generation of energy from wind, solar and hydropower. This makes it clear that we need to find European and international solutions for the transformation of our energy system. We therefore need to attract diverse partners for our future supply of green hydrogen, other synthetic energy carriers, raw materials for the chemical industry or renewable electricity at an early stage and support them in setting up production in these countries. The new hydrogen partnership with Norway is a first step in this direction.  However, especially in focusing on the green hydrogen to be imported, it is absolutely necessary to realistically estimate the necessary amounts and volumes in view of possible imports, in order to avoid falling into illusions.

If one considers that of the total primary energy consumption (PEV) in 2021 (approx. 3440 TWh) only about 16% came from renewable energies and approx. 70% had to be imported, one can deduce what a Herculean task we are talking about here. If one further considers that in the same year only about 15% of the PEV was available as usable electricity, the coverage gap is revealed (AGEB 2022).

The utilization of our domestic potential for renewable energy generation should therefore be a top priority. By 2030, Germany will need between 435 and 615 TWh of electricity from renewable sources (in 2021, it was 234 TWh) (Graichen et al. 2021). This target for electricity generation was adopted by the German government for 2030 in spring 2022. We must therefore bring in more renewable energy technologies into play: For example, biomass will play an important role in the transition to power-to-liquid products, but due to its limited quantity, it cannot replace it. Geothermal energy also has potential and can play a role in Germany's energy system in the future. Green hydrogen will certainly play a role, as it makes it possible to use electrolysis to convert the output of fluctuating renewable power generation from PV or wind turbines into hydrogen, an energy carrier that can be stored and transported. Experts are still divided on how large this role will be. The National Hydrogen Council, for example, forecasts about 600 TWh of green-produced hydrogen by 2040 (NWR Action Plan 2021), but 100% of it will be imported. This estimate makes it clear that even hydrogen alone will not transform our energy system.

Against this background, questions such as the following may be asked:

• Is it economically and climate-politically justifiable to buy LNG (which is partly extracted with fracking and requires 20% energy for liquefaction) from the world market and at the same time disregard domestic natural gas reserves that can be tapped with fracking?
• from the point of view of short- and medium-term security of supply and CO2 emissions, does it make sense to take the 3 nuclear power plants still in operation off the grid now and instead ramp up electricity production via coal-fired power plants? What is the energy balance here? where do the resources for the nuclear power plants come from?
• In order to be able to come up with responsible answers and thus recommendations, there is a need for scientific evaluation and monitoring of these and many other complexes of issues relating to the transformation of the networked energy system.

Another important topic concerns the rate of expansion of renewable energies: The Expert Council on Climate Change recently noted in its current two-year report (ERK 2022) how far we are from achieving the expansion targets for 2030: The expansion of photovoltaic and wind power plants on land and at sea would have to increase massively compared to recent years in order to achieve the necessary expansion of renewables by 2030. The experts thus identify a "considerable compliance gap" for the reduction targets for greenhouse gases. In order for the faster expansion to still succeed, approval procedures would have to be extraordinarily accelerated. This key point could become a bottleneck and is rightly the focus of the current German government. In addition, production capacities for solar and wind plants must be increased, and we need skilled workers who can install and maintain the new plants.

Flexibility options

Expanding renewable energy generation facilities alone is not enough. Fluctuating power generation from renewables poses entirely new challenges for the energy system: Energy supply from fluctuating renewables can occur with a time lag from energy demand. It is equally important to be able to bridge dark lulls in which too little solar and wind energy is fed into the system to meet demand. So-called flexibility options must therefore be widely installed. These include power conversion technologies (power-to-X) that convert renewable electricity into other forms of energy such as hydrogen, synthetic fuels, or hot water. They also include electricity, heat and gas storage facilities that hold energy for weeks or months. Furthermore, flexibly operable gas-fired power plants and the ability to flexibly switch consumers on or off in the energy system.

The latter requires a networked, "smart" energy system using digital technologies. The central building blocks for this are intelligent power grids, so-called "smart grids," in which power generation, storage and consumption can be orchestrated and actively controlled. This can mean, for example, that the charging time and charging current of an electric car are controlled by the grid or incentivized in real-time through price signals, within previously agreed framework conditions. It should also be possible to automatically ramp up and ramp down flexible, electricity-intensive industrial processes. The aim of these measures is to balance out power fluctuations in the grid in order to ensure its stability. A basic prerequisite for this is the installation of the corresponding "smart" information and communications technology. This includes, for example, intelligent electricity meters known as "smart meters". However, regulatory hurdles and concerns in society have meant that Germany is among the laggards in Europe when it comes to digitizing its energy system. To overcome this state of affairs, the German cabinet passed a bill in January to relaunch the digitization of the energy transition to address the urgent need for "smart meters", the rollout of which is to be simplified in practice.

We must not lose sight of future options such as nuclear fusion, which could precisely cover the missing part of our energy needs and contribute to base load stability. At present,  national solo efforts can be observed in the USA, Great Britain and China, in addition to the common international joint activities such as ITER (International Thermonuclear Experimental Reactor). Germany has a technological lead in this area. This must be used.

The introduction of technical solutions alone is not enough: Another equally important prerequisite for the successful transformation of the energy system is a reliable long-term framework. Wherever macroeconomically efficient use is hampered, financial incentives are needed for consumers and industry to make their equipment and systems available to the market and the grid as a flexibility option. To this end, the market conditions must be adjusted, especially in the electricity market. Here, too, Germany is one of the countries with poor preconditions for the climate-neutral transformation of the energy system (REA 2021) in a European comparison, but the new draft law on the digitization of the energy system can trigger the necessary move towards flexibility: The increased rollout of "smart meters" into widespread use will enable the energy industry to implement dynamic electricity tariffs for households as well. Transparent price signals are a basic prerequisite for leveraging demand-side flexibility potential in an energy system dominated by renewable energies.

However, material energy sources such as green hydrogen and other synthetic energy sources will also play a significant role in the energy system in the future. The transition from fossil to renewable will be accompanied by significant changes in this area. Supply chains, plants and infrastructures will have to be adapted or newly built. So will regulations, norms and standards. On the manufacturing side, there is also a close coupling with the supply of renewable electricity. Taken together, therefore, a high degree of coordination and the pursuit of a common strategy is urgently needed, especially at the European level. It will be the task of politicians to coordinate  and shape reliable framework conditions for industry and society.

Reducing energy consumption

Gas and electricity savings help to counteract the shortage and rising cost of energy in the short term. Both the industrial and residential and commercial sectors achieved about 20% reduction in gas consumption over the last months compared to the average for 2018-2021 as shown by the data of the Federal Network Agency (Bundesnetzagentur 2023). Currently, the savings shrink to about 13%. Households and commerce seem to be more dependent on the weather in this regard and thus show lower savings successes than industry in the colder weeks. On the other hand, the question arises as to how long industry can save gas without endangering its economic existence. For this winter, the savings measures seem to be leading to success. At the same time, with a view to the coming winters, we must make every effort to create sustainable solutions to overcome the current shortage situation.

All energy savings that are sustainable in the medium and long term increase our energy supply security, because ultimately kilowatt hours of energy saved do not have to be generated or imported. If this is not simply a matter of relocating industrial production abroad, for example, energy supply security and climate protection really do go hand in hand. If we want to achieve the ambitious climate protection targets for the energy system in 2045, energy savings will be an important tool. Extensive efficiency measures must be implemented here in all sectors. These include, for example, changes in industrial processes, refurbishment of the building stock, consistent use of waste heat, for example, with heat pumps, or more efficient vehicles in transport. However, efficiency gains are often swallowed up by so-called rebound effects, i.e., increased consumption due to prosperity effects and the resulting change in consumer behavior. The transformation of the energy system must be understood in broader terms: Ultimately, the entire life of the global community must become climate-neutral.

Reducing raw material dependencies

We should definitely apply the lesson learned from the overly one-sided supply of natural gas to our supply of other raw materials as well. Technologies for a renewable energy system require a significantly greater variety of raw materials than technologies for a fossil energy system and will accordingly play an increasingly important role in the future. We can only economically extract a fraction of these in Europe. The European Union has therefore maintained a list of "critical raw materials" since 2011. For the raw materials listed on it, the EU sees both an outstanding economic importance for the European economic area and an increased supply risk. These include rare earths for wind turbines, graphite and lithium for batteries, and platinum group metals for electrolyzers. The list has grown since 2011 from the original 14 to 30 critical raw materials (EUR-Lex - 52020DC0474 - EN 2020). The People's Republic of China is the world's largest producer of 19 critical raw materials, . A shortage or even a loss of supply would massively jeopardize the implementation of the energy transition.

Domestic raw materials from Germany and Europe will not be able to close this supply gap. Therefore, Europe should pursue a common strategy to d diversify future suppliers of resources that are urgently needed for the industrial sector. Hope has been raised by the discovery of what is probably Europe's largest deposit of rare earths in Sweden. They lie dormant in the depths of the Arctic Circle and could lead Europe into a leading role in industrial production. In addition, we must develop processes to recover raw materials from scrap and waste in an energy-efficient and economical way, to feed them back into production, thus closing raw material cycles.

What research must achieve

Energy research makes decisive contributions to the transformation of the energy system in all of the aforementioned fields. The major goal of energy research is to understand the challenges of the energy transition as comprehensively as possible, to show ways to implement them and to offer additional options at the crucial points through technical or systemic innovations.

Within energy research, a subdivision between systems research and technology and materials research can be identified as a rule of thumb. Systems research uses computer-based models and simulations to help policymakers and industry understand the energy system both in part or as a whole. With this knowledge, decision-makers can plan appropriate steps to transform the energy system. It is important not to focus solely on technology and economics. The transformation can only be implemented within a functioning social framework. It is therefore of great importance to better understand social contexts and aspects such as consumer behavior and acceptance, and to incorporate them into the energy scenarios.

Closely linked to system research is the development of grid technologies (electricity, gas/H2, heat grids towards CO2 grids). A renewable energy system places completely new demands on transport and distribution networks in terms of networking and control. Energy research can simulate these energy networks of the future in real laboratories. This allows new types of components and control tools to be tested without endangering existing grid operations.

In addition, researchers in engineering and materials science are developing solutions to the many technological challenges that exist along the energy system from resources, generation, conversion, transportation and storage to efficient consumption and recycling. In doing so, researchers often work very close to the application and in close cooperation with industrial partners in order to support a rapid transfer of research results into application.

The energy transition is a Herculean task, the solution to which still holds many questions until climate neutrality is achieved. That is why we must make use of the full technological diversity and find European or international solutions for the energy system that arise from a holistic view of the energy system with and for society.

As energy researchers, we see it as our responsibility to make a significant social contribution to the success of the energy transition in general and to securing the energy supply in particular, through close cooperation with industry and politics.

Many thanks go to Dominik Soyk and Katharina Schätzler from the Helmholtz Energy Office for their technical support in preparing this article.

Literature:

Evaluation Tables on the Energy Balance for the Federal Republic of Germany 1990 to 2021. (10.02.2023)

Bundesnetzagentur (2023): Cur­rent sta­tus of gas sup­ply in Ger­many,(12.02.2023)

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COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability (13.01.2023)

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NWR Aktionsplan (2021): Wasserstoff Aktionsplan Deutschland 2021-2025. Nationaler Wasserstoffrat, 07/2021. (13.01.2023)

REA (2021): Energy Transition Readiness Index 2021. Association of Renewable Energy and Clean Technology (REA), 2021.