January 29 (Renewables Now) - Sector coupling is the key to a greater penetration of renewables in the energy sector but it still has hurdles to overcome, both technically and on the market side, Prof. Dr. Hans-Martin Henning, Director of the Fraunhofer Institute for Solar Energy Systems ISE in Freiburg, Germany and spokesman of the Fraunhofer Energy Alliance tells Renewables Now in an exclusive interview.
SECTOR COUPLING BECOMES A NECESSITY
Sector coupling is an increasingly popular term used to describe an already well known fact. The switch from fossil fuels to renewable energies does not stop at the electricity sector. Heating, cooling and transport are other areas in which fossil fuels are to be gradually replaced with renewables. This can be achieved either by using renewables directly – for instance, by using solar thermal collectors to heat a house, or by using renewables-generated electricity in other sectors. This transfer of clean electricity into other sectors, where it is used to reduce the amount of fossil energy required, is referred to as ‘sector coupling’.
In Germany and other countries with similar high penetration of volatile renewable technologies in the grid, the moments when the production of renewable energy exceeds consumption are on the rise, especially on the distribution grid level. And more often than not, these situations lead to curtailment of wind and solar power plants in order to keep the grid stable.
"If we, want to continue decarbonising our energy system, obviously we need more renewables. On the one hand, this calls for grid enhancement, but on the other hand, it also calls for bringing more consumers to the grid in order to better utilise the already plentiful generation," Prof. Henning notes.
"Looking at the same system from another perspective, the heating sector and the automotive sector, for example, are mostly using fossil energy sources. Outside electrification or using synthetic fuels such as hydrogen produced with renewable electricity, there are not many other alternatives to decarbonising these sectors. And this is what we mean with sector coupling".
"Energy retrofit of the building sector and other energy efficiency measures may reduce demand, but will not replace the underlying energy source."
SOME ROADBLOCKS ON THE WAY
Yet, sector coupling still has some technical and market bottlenecks to deal with.
For example, if we look at prices of energy carriers in Germany, electricity is quite expensive as different fees and taxes come on top of the pure energy price. For heating oil and gas, it is not as much so.
"This is one strong market bottleneck as there is practically no economic incentive to replace, let's say, a gas boiler with a heat pump", Professor Henning notes.
A possible remedy here could be to adapt regulation, so fees reflect the CO2 price of the energy carrier.
"If we look at the EU Emissions Trading System (EU ETS) today, it only covers the large power plants and the large industry but the heating and mobility sectors are not a part of that. If we want to have a level playing field for all energy carriers in terms of CO2 emissions, then there is a strong argument in favour of a CO2 price to all the energy products. I am hopeful that in the next two, three years, the carbon price issue will be solved," Professor Henning says.
Besides the carbon price, in the mobility sector, the switch from internal combustion engine to electric cars is more of an issue with having the charging infrastructure in place and the still higher upfront cost for buying an electric car.
"In two to five years, this will change since all the major car manufacturers have already announced ambitious plans for electric car models," Professor Henning says.
When it comes to renewable energy integration for heating and hot water in residential or commercial and industrial properties, heat pumps will probably become the dominant technology, in mid to long term view.
Heat pumps can supply the whole range of capacity - from a single family house to commercial building to multi-megawatt applications for district heating networks.
NEW BUSINESS MODELS NEEDED
"We have a strong policy push towards development of energy concepts on a district level, and this is beginning to spawn innovative business models," Professor Henning notes.
Renewables Now has recently told you about one such business model – Lichtblick and its tenant solar roof business.
On the technical side, the increasing share of volatile renewables in electricity generation and sector coupling will make the management of the electricity system and its balancing much more complex, so new business models will be needed.
"Load shifting, storage - heat or battery based, and grid balancing will absolutely need an intelligent management through a smart grid that goes way beyond smart meters. We would need standards on data exchange and cyber security protocols and here, my feeling is there are still a lot of question marks that need to be answered before this smart management becomes a reality," Professor Henning concludes.
Professor Henning will be talking about sector coupling as a key element of the energy system transformation at the Energy Storage Europe event, taking place March 13-15, 2018 at Dusseldorf, Germany. Renewables Now is a media partner to the event. For more information, please visit our event calendar.