Technology as a key issue
At the moment, the focus of the Energiewende in Germany is on the power sector alone. Little progress has been made with renewable heat and energy efficiency, and the transport sector. Fortunately, the problems with all three sectors can partly be addressed by connecting the power sector with the heat and transport sectors. Electrification is one example of sector coupling. For instance, solar and wind power are the two fastest growing sources of renewable energy worldwide. Eventually, a growing number of countries will begin to have excess amounts of this green electricity when the sun is shining and the wind is blowing. At that point, electricity will be inexpensive on wholesale markets, so it will increasingly be used to generate heat for use in buildings and industry. This option will be used first because it is highly efficient and requires no expensive equipment.
Next comes electric transportation. It already exists largely in form of trains and trams, but increasingly electric bicycles and electric cars will be on the roads. Batteries are still quite expensive, however, and most countries (including Germany) lack price signals to encourage people to charge their battery vehicles when excess renewable power is available. But as more citizens use electric vehicles, the need to coordinate charging with wholesale power prices will increase. For instance, power consumption in Germany generally peaks in the evening when people get home from work and start making supper or watching television. If these people also plug in their electric cars at that time, power demand will skyrocket at a time when the grid is already pushed to its limits. Smart meters would be one way by which vehicles can charge overnight as power demand subsides.