With England’s humiliation at the feet of Germany’s Nationalmann-schaft still lingering in the memory, there are other areas in which the industrial powerhouse has a more forward-thinking attitude, not just football.
One of these is the development of renewable energy. Despite Britain’s bountiful resources of wind and wave, the country lags far behind Germany when it comes to the deployment of green power. More than 16% of Germany’s electricity was generated by renewable sources last year, compared to just over 6% in the UK.
Germany, after the US, is the second largest consumer of electricity generated by wind power and its installed base of solar photovoltaics dwarfs the UK’s. Notable recent solar projects include the 12MW Solarpark Gut Erlasee photovoltaic (PV) system near Arnstein in Bavaria, the world’s largest PV system when it opened in 2006. The 40MW Waldpolenz Solar Park, meanwhile, said to be the world’s largest thin-film photovoltaic power system, became operational at the end of 2008. At the end of 2007, Germany had an installed capacity of 3,830MW of solar power. By contrast, Britain had a paltry 13MW at the end of 2006.
Solar power continues to enjoy considerable support in Germany with US and Canadian firms specialising in PV technology announcing plans to expand their operations in the country. Perhaps the most significant recent example of this was Nasdaq-listed First Solar’s decision to expand its manufacturing plant in Frankfurt (Oder) in eastern Germany, doubling local production capacity to approximately 446MW of thin-film solar modules and creating several hundred jobs. The company claims its investment in the plant is the largest foreign direct investment in German sustainable energy this year. Also notable is last month’s announcement by Canada’s Day4 Energy that it has begun to construct a 1.8MW ground-mounted solar photovoltaic plant in Niedereschach-Fischbach.
It is not the case that Germany’s climate is any more suited to solar power than the UK’s, say experts, but the development of the industry there has been spurred on by economic incentives. German renewable energy has enjoyed the support of feed-in tariffs for 20 years, whereas the UK’s were only introduced in April. Germany’s feed-in tariffs have been restructured over time and are said to have provided one of the most effective mechanisms globally for the development of renewables such as solar. Since it has been the most successful, the German policy provides a benchmark against other feed-in tariff policies.
Producers of solar energy in Italy benefit from a feed-in tariff that is among the highest in Europe, although it is set to be reduced next year. Managers at Pisa-based renewable energy firm Acta say an average rate of 35 cents/kWh is paid in Italy, promising investors in solar that they can recover their costs and make a profit reasonably swiftly. The Italian rate compares with a 29.3p/kWh level for solar PV projects in the 100kW to 5MW size in the UK under the recently introduced feed-in tariffs. More generous rates are available for smaller projects and those that involve retrofitting existing buildings with PV panels.
The expansion of solar in Italy has been boosted by a reliance on imported electricity generated by nuclear power stations in France and a dependence on oil-fired power stations at home. Paolo Bert, chief executive officer at Acta, suggests that, energy-wise, “you could say Italy is in a cage”.
“Our internal production of energy is totally dependent on oil and oil prices are rising again. Importing energy is obviously expensive and nobody wants new power stations in their territory. When you combine high electricity prices with our climate and latitude, you have a compelling argument for photovoltaic technology.”
Bert’s company recently trebled the size of an already substantial contract to provide PV parks in Italy for renewable energy investor SPF Energy. The value of the deal has soared from €8.8 million to more than €30 million to install 10.6MW of solar park. Bert and Acta chief financial officer Paul Barritt admit they were surprised by the scale of SPF’s expansion of the original agreement but add that conditions in Italy are favourable to such large-scale investments. Bert says: “It comes back to the point that once you demonstrate to investors the high profits that are possible as a result of Italian feed-in tariffs you tend to get more on board. This allowed SPF to consider increasing the investments it would make, which now stands at €80 million in total for the year.”
Even with the reduction in feed-in tariffs in Italy next year the investment climate for solar should remain strong. Acta says it will shortly be able to announce details of other PV projects, including more work with SPF. “The tariff in Italy remains high and essentially covers a return on investment on financing solar panels,” says Bert. Barritt adds that the cost of panels is set to drop, which will offset the reduction in the tariff.
Closer to home, it seems the British feed-in tariffs are having some effect. Romag Holdings, a specialist in architectural glass and photovoltaic modules, won a £10.2 million contract in June to provide PV technology and roof mount kits to Community Energy Solutions (CES), a not-for profit-organisation based in the North-east that is attempting to encourage the uptake of micro-generation renewable technology in social housing in the region. The contract was something of a coup for Durham-based Romag, and the UK PV industry, after the company beat 12 bidders in a European tender.
Managing director Kevin Webster says the deal is the company’s largest and perhaps one of the largest in the UK. “I’m not aware of any contracts of this size. It provides us with a baseload of work in the last quarter of this year and the first quarter of 2011 to build on.
“As I understand it, the introduction of the feed-in tariffs made it possible for CES to consider this type of move into PV technology.”
Webster argues that although the UK lags behind Germany in the development of solar, there are no technical factors holding back development of the industry here. “There might be country-specific cost issues or cultural factors that make a difference. But on pure performance terms there’s no reason whatsoever,” he says.
“The level of solar radiation in southern Germany is not dissimilar to the south coast of Britain.”
Webster argues that for PV to take off in Britain, wider dissemination of its benefits is necessary. “The man on the street needs to understand that you can put solar panels on your roof and get paid for it. That will come, although it may take a little while.”
There are also issues in terms of the speed in which solar panels are connected to the grid. Romag has installed a system on its own building but has been told it will have to wait more than 2½ months to be quoted on the cost of connecting it.
“Then we could wait a further two months for the work to be carried out. The network operators need to be far more responsive,” Webster says.
Romag is talking to two organisations similar to CES to secure more orders for PV systems. Webster says: “As far as the UK versus Europe, we’re now at the point where Germany was a few years ago. This could potentially have happened earlier.
“But there is now the opportunity to catch up rapidly. And if demand eases in Germany, that will free up a lot of PV production capacity that is being used.”