Germany is the 4th largest economy in the world. Consequently, when Germany launched its Energiewende to transform its electric industry from fossil fuels to 80 % renewable by 2050, it got worldwide attention. If such a large economy could make this transformation and stay competitive as a nation, other large economies should also be able to follow.

Germany started out with trademark German determination. To make transformation even more aggressive, after the Fukushima nuclear incident, they decided in 2011 to exit all nuclear by 2022. Progress has been impressive. By 2015 renewable energy represented 31 % of all electric energy consumption.

If California was a nation, it would be the world’s 6th largest economy. In an executive order, B-30-15, the statewide goal was set to reduce greenhouse gas emissions 40 % below 1990 levels by 2030. As part of this goal California has set the ambitious goal to transform their electric consumption to reach 50% of renewables by 2030.  At the end of 2015 renewable energy has reached 26 %. However, contrary to Germany this target does not include large hydro! Trying to compare apples and apples with Germany by including large hydro, California was well over 30 % of all electric consumption from renewables.

California has now (2016) about 5000 MW of behind-the meter rooftop solar, which are not included in the California renewables goal. About 50-70 MW are added each month.

Relevant for the greenhouse gas reduction goal California has already eliminated coal, while Germany still gets about 44 % of its electric power from coal. Remarkably Germany increased its production from lignite coal. It has not helped reducing carbon dioxide (CO2), which was a major reason to take on the Energiewende! Since 2009 the CO2 emissions have remained basically flat at about 11 ton per capita. Meanwhile California has come down to about 9 ton per capita (2013, EIA).

By 2015 Germany still got 15 % of its energy from nuclear power plants. Corresponding number for California was 8 %. California has only one nuclear plant, Diablo Canyon, in operation. Earlier this year an agreement was reached to phase it out by 2023/24. Phasing out the nuclear without increasing CO2 will be a challenge for California, but more so for Germany.

California is ahead in terms of PEVs (plug-in hybrid electric vehicles and all electric vehicles). About 200,000 PEVs in California versus 155,000 in Germany (2016 estimates).

In addition, California is ahead in energy storage, in particular battery storage.  Assembly Bill (AB) 2514 approved in 2013 mandates 1 325 MW of battery storage by 2020. There are also incentives for behind-the-meter storage. Losing the large natural gas storage in Aliso Canyon California lawmakers recently voted on a bill (AB 33) to expand bulk energy storage by pumped storage and other technologies.

Comparing Germany and California electric systems it is also important to look at cost of electricity and reliability. In terms of reliability Germany has one of the world’s most reliable electric systems. Using the SAIDI index (System Average Interruption Duration Index) Germany is at about 15 minutes per year, while California is at about 100 minutes per year, which is slightly above the US average.

Regarding cost of electricity Germany is higher, especially for residential customers, since they are the ones paying for most of the Energiewende. Major consumers like large industrial companies can opt out. In 2015 a German residential customer paid about 32 cents/kWh. Half of that amount is taxes. Per EIA a California residential customer paid (February 2016) 17.7 cents per kWh. For industrial customers, the corresponding numbers were 16 cents/kWh in Germany and 10.4 cents/kWh in California.

Both Germany and California advocate and promote energy efficiency as a mean to achieve the transition goals and as a mean to reduce the impact of the higher cost per kWh for the consumers. Thus, California has managed to keep per capita consumption flat at about (annually) 7000 kWh/person for the past 40 years. For the rest of the U.S. the consumption has basically been flat for the last 10 years at 13000 kWh per person. Germany is ranked number one in the world in energy efficiency by ACEEE (American Council for an Energy Efficient Economy). The per capita consumption is also about 7000 kWh (2013, Worldbank data.) As part of the Energiewende Germany has set a target to bring the gross electricity consumption down to the 1990 level. With 1990 at 100 by 2015 the gross national product had grown to 142, while gross electricity was at 108, which is down from the peak of 112 in 2005. (Agora).

Germany and California have taken rather different approaches to drive their transformations. Germany has focused on providing subsidies to wind and solar by generous feed-in tariffs. These subsidies, by and large, have been funded by a special tax, “Umlage”, charged to the residential consumers. For 2017 the “Umlage” will be about 7.3 cents/kWh. California uses mandates as their primary tool to execute ,towards the renewable goals. In addition, there are State subsidies, focused but relatively small subsidies for e g behind-the-meter self-generation, energy efficiency, etc. Federal production tax credits for wind and investment tax credits for solar have helped substantially without burdening the consumers.

The large increase of the variable resources, wind and solar, have been challenging for the grid operators in Germany as well as in California. Both have leaned on surrounding grids to balance the variability. However, there is an important distinction. Germany has ramped up the production from their coal power plants as a first response in managing the variability. However, the coal plants are not flexible for fast ramps up or down. Thus, the surplus power is exported to neighboring countries. The net export has grown to about 10 %. California, which is already a net importer of electricity, has seen an increase of the import to more than 30 %.

Germany is also facing a geographical unbalance. The wind resources are up north, while the most of the load is in the south. The German electric grid originated as regional grids in each State. The philosophy of a regional grid structure with limited interconnections was also seen as military/strategic benefit and was set in a law (Energiewirtschaftsgesetz 1935). With the Energiewende it became a disadvantage and it was early identified the north-south electric transmission system had to be expanded substantially. Three HVDC (High Voltage Direct Current) projects have been proposed but none has been built so far.

Consequently, it should not had come as a complete surprise when Chancellor Angela Merkel earlier this year announced a new framework with the 16 States to curb costs and to reduce the speed of future expansion of new renewable sources, especially wind. See  “Germany’s Energiewende Puts On The Brakes”.

California is in a better position. They have strong ties with surrounding systems, including the 3200 MW Pacific Direct Current Intertie (HVDC) between The Dalles, Oregon, and Los Angeles, bringing access to hydro-power from Columbia River. Another advantage compared to Germany is the large amount of flexible natural gas fired generation. In 2014 it stood for 60% of the power generation in California. Nevertheless, there are serious challenges in Southern California after San Onofre nuclear power plant shutting down and the loss of Aliso Canyon natural gas storage.

Recognizing the value of a large electric grid California has taken the lead in creating a regional Energy Imbalance Market, ultimately targeting to link the entire Western Interconnection, which is presently divided in 39 balancing authorities. If successful, it will go a long way to enable more renewable energy and to balance the variability of these resources and electricity demand on a least-cost basis.

Realistically California will near-term widen their lead over Germany, but it would be a mistake to count Germany out. On the contrary, there are many indications that they are seriously working on removing the presently three big roadblocks: insufficient electric transmission, limited infrastructure for reliable natural gas and energy storage. Germany is building a 1400 MW HVDC link to Norway getting access to the hydro power and storage. Eventually, they will also build at least one of the north-south HVDC links. The gas infrastructure is being strengthened with the Nord Stream gas pipeline between Russia and Germany through the Baltic Sea. Plans are developed to double the capacity of this pipeline as well as expanding connected pipelines in Germany. Through the Netherlands Germany will also get access to liquefied natural gas (LNG). In terms of storage one should also take into account a potentially massive expansion of PEVs. Earlier this month the Bundesrat (the federal council of the 16 States) voted to ban gasoline and diesel-powered vehicles by 2030. The resolution is non-binding, so it is not a done deal, but if it stays, with 61 million vehicles and leading automakers like VW, BMW and Mercedes it could be a game-changing development.