BERLIN (dpa-AFX) - More and more electricity from wind and sun, more and more heat pumps and electric cars: this has consequences for the electricity system. Reforms are necessary. The Ministry of Economic Affairs and Climate Protection has now presented a comprehensive paper for an "electricity market design" for the future. The aim is a secure, affordable and sustainable electricity system.

The conversion will cost billions, for example for the expansion of electricity grids and investments in new gas-fired power plants. The costs should be kept as low as possible, according to the paper. A public consultation on the proposals for the new electricity market design will initially take place until the end of August.

Electricity system in transition

Germany's electricity system is in the midst of a comprehensive modernization, according to a paper from the ministry of department head Robert Habeck (Greens). Germany is to become climate-neutral by 2045. The proportion of electricity consumption from renewable energies such as wind and solar is to increase to 80 percent by 2030. According to industry figures, this figure was 58 percent in the first half of this year.

According to the paper, the phase is now beginning in which it should be possible to fully cover the electricity supply with renewable energies - and in which a "massive electrification" of the energy supply in heating and transport is imminent and coal, oil and gas will finally be phased out as fossil energy sources.

A new "operating system"

The paper talks about a new "operating system". Weather-dependent, "variable" electricity generation from wind and photovoltaics (PV) is leading to a paradigm shift. "While generation used to follow demand, in the decarbonized electricity system demand is more closely aligned with supply." Large parts of demand - for example e-mobility or certain parts of industrial processes

- would place their consumption in time windows with a high supply of

renewable energies and low prices. "The electric car will use the midday period when the supply of PV electricity is high and the car is stationary anyway."

Back-ups

However, there are times when there is no wind and no sunshine

- the "dark doldrums". Even at these times, however, a secure

power supply should be guaranteed. To this end, a "technology mix" is planned, also to compensate for seasonal fluctuations in the generation of renewable energies.

On the one hand, this involves "flexible loads" such as heat pumps or electric cars, which could shift their electricity requirements to a certain extent, as the paper states. Storage systems are intended to compensate for short-term fluctuations in wind and PV generation. In addition, there are "controllable" back-up power plants - they are to step in when wind and PV as well as short-term storage and flexible loads are not sufficient.

The German government has been working for some time on a strategy to build new gas-fired power plants as back-ups, as operators need to be able to make their investments worthwhile. A state requirement is planned for the new gas-fired power plants, which will later be operated with hydrogen.

New mechanism

A new pillar of the electricity system is to be introduced by 2028: a "capacity mechanism". In the paper, the ministry presented various complex models for this. Essentially, the idea is that providers will be rewarded for making so-called controllable power plant capacities available - even if the power plants may only run for a few hours a year. A competitive approach is planned, including pumped storage, battery storage, bioenergy plants and back-up power plants.

A capacity mechanism is to supplement the existing wholesale market. This is based on the merit order principle. Essentially, this means that the most cost-effective power plants always generate electricity to cover the demand for electricity.

Consequences also open for electricity consumers

What exactly this mechanism should look like remains to be seen. A "central capacity market" is possible, in which a central body determines the need for controllable capacity and puts this out to tender by auction. However, according to the paper, this mechanism would require costs to be passed on to consumers by way of a levy.

The Ministry of Economic Affairs also favours a combination with a "decentralized capacity market" in order to reduce the levy. This would give suppliers the responsibility of securing their electricity supplies through capacity. For example, they could use incentive models to reduce their customers' consumption during peak load periods with little wind and PV power.

More flexibility

Overall, the Ministry of Economic Affairs names four areas of action in the paper on restructuring the electricity system. These include a reform of the demand for renewable energies. The current system, which essentially provides for a market premium in addition to the boron price achieved, is still approved under European law until the end of 2026. There are now plans to switch to an investment cost requirement, among other things.

There will also be more flexibility in the use of electricity. This also involves incentives so that users can charge their electric cars when a lot of wind and solar power is being produced and electricity prices are low. Consumers could also be rewarded for this with lower grid charges, as outlined in the paper.

Making better use of green electricity

According to the paper, the aim is to make better use of "green" electricity locally instead of shutting down plants - which happens when there is a threat of power shortages. Measures to prevent overloads in the electricity grid cause high costs. Background: Wind power, which is mainly produced in the north, has to reach large consumption centers in the south, which requires thousands of kilometers of new power lines.

Digital electricity meters, or "smart meters", are a prerequisite for more flexibility in the electricity system. Their deployment is to be accelerated. The Federal Network Agency is responsible for structuring the grid fees /hoe/DP/zb