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Writing Off Germany's Energiewende as a Failure Is Unwise

German renewables transition

“I think we need to start over,” Germany’s new Minister of Economics and Energy, Sigmar Gabriel, told a popular German weekly newspaper at the close of 2013 (dw.de). Gabriel was referring to Germany’s Energiewende, which translates to “energy revolution,” the country’s push to transform its economy from one reliant on fossil and nuclear generation to one powered chiefly by renewable energy sources.

Gabriel’s about-face shocked those committed to seeing the Energiewende through, but it resonated with those who have anxiously watched Germany’s electricity prices climb amidst widespread operational problems on the nation’s grid. At a recent energy conference in Berlin, Gabriel advised his listeners, “We need to keep in mind that the whole economic future of our country is riding on this…The energy transformation has the potential to be an economic success, but it can also cause a dramatic de-industrialization of our country” (New York Times).

With hopes to reign in runaway electricity prices, Gabriel is grappling with how best to reform the Energiewende’s lifeblood – the EEG, or Renewable Energy Sources Act, passed by the Bundestag in 2000.

Nearly fourteen years ago, the EEG gave electricity from wind, solar and other renewables priority access to the grid over conventional fuels by creating a feed-in tariff. As intended, it yielded the aggressive deployment of renewable energy capacity across Germany’s residential, commercial and industrial sectors. Thanks to this act, the country today boasts more than 63 gigawatts of solar and wind power capacity. It has also become home to some of Europe’s highest electricity prices. 

Germany’s residential consumers shoulder the costs of the EEG, in the form of a surcharge, and over the years their electricity bills have increased steadily to levels three times the U.S. national average. Such surge in prices has pushed some into “energy poverty,” where leaving the lights is no less than a luxury. Stoking further controversy, the EEG exempts some of Germany’s energy-intensive commercial and industrial consumers to avoid hindering their ability to compete in the global economy.

The values underpinning the Energiewende were and remain environmental, social and economic; they are rooted in a desire to address global climate change, foster public ownership of renewable generation assets and stimulate job growth within a clean energy economy. Through this movement, Germany aims to supply 80 percent of the country’s electricity demand with renewables by 2050 while dramatically cutting carbon emissions.

Boldness rarely goes without criticism. The nation’s energy shift receives denigration and praise both domestically and abroad. Those who consider climate change a top priority praise Germany for their leadership in taking action to address it. Those who downplay the implications of climate change, as well as those who value short-term economic prosperity over long-term environmental stewardship, condemn the effort as yet another example of failed government policy.

American energy expert and IHS Vice Chairman Daniel Yergin recently spoke with the Wall Street Journal about Germany’s energy dilemma. He believes the country should consider developing its domestic natural gas supplies through the proven, yet globally controversial, process of hydraulic fracturing, or fracking. IHS estimates Germany could meet 30 percent of its gas demand if it fracked.

In addition to burning cleaner than Germany’s robust reserves of brown coal, gas offers further value through its reliability and flexibility, making it a strong complement to renewables. Despite these benefits, Chancellor Angela Merkel and others hesitate to pursue fracking due to the broad environmental concerns it arouses.

Outside Germany’s borders, countless industry leaders and government officials deem its Energiewende a failure. Such an assertion, though considered reactionary by some, in reality harkens back to the success of the traditional utility business model. Utilities take issue with Germany’s high electricity prices and misalignment between electric generation and demand resulting from a liberal deployment of intermittent renewables. These critiques are valid and should be acknowledged as the EEG is reformed.

Nevertheless, writing off Germany’s Energiewende as a failure is unwise. In the grand scheme of electric system transitions, the Energiewende is in its infancy. Edison’s model was designed and built over more than a century to meet the affordability and reliability standards it offers today. The Energiewende needs time to mature in the hands of motivated, intelligent people with the technology of the 21st century at their disposal.

Let me offer just one example of how Germans have responded to the challenge of renewable intermittency. A recent article from designworld.com covered Germany’s largest utility, E.ON, demonstrating the conversion of surplus renewable power into hydrogen fuel via electrolysis. The hydrogen can be stored in pipelines or containers as physical energy for consumption at a later time. Such ingenuity may not have occurred on its own – it blossomed from the hurdles of 21st century modernization.

Germany’s boldness should be fairly criticized but absolutely recognized. Gabriel and other policymakers should welcome ideas and collaboration as they address tough issues and reform their approach. And finally, if nothing at all, we should all observe Germany in the coming decades, as it could show the world how to power a vital economy in a clean way.

Photo Credit: Energiewende a Failure?/shutterstock

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Recent Comments

Gary Tulie's picture
Gary Tulie on March 30, 2014

Ammonia may well be part of the solution, however I would suggest that it is best suited to remote areas with exceptional wind / solar resources e.g. Wind farms in Mauritania or Namibia, and to times and places where the value of electricity gets very low. In my view, making ammonia should be given a lower place in the “merit order” of demand response than actions like adjusting the operation of water distribution pumps, installing heat pumps on district heating networks and tweeking the operation of refrigerated warehouses (allowing a slight temperature drop when excess power is available and using this “inertia” to avoid some power use at times of peak net demand).   

A European Supergrid would not just be for Germany but would offer a huge infrastructure benefit for Europe and North Africa – whether it’s viable or attractive depends just how much infrastructure cost would be incurred as compared to alternatives, and the design life of the infrastructure. Much of the supergrid already exists though not necessarily at high enough capacity. This would be a project taking decades with links built as they become desirable.  

Phil Hughes's picture
Phil Hughes on March 30, 2014

Yes. And the Power Backbone and Carbon Dioxide Manifolds can be combined in a single solution by using the pipe as conductor. In fact, the 42 inch diameter of the pipe reduces requirements on the dielectric strength of the insulator and allows 800 KVDC which is not possible with a 2 inch copper conductor.

Then as in the following link, Europe can redirect the steam from Coal Boilers to produce Gas to Liquids and use power from the Power Backbones in normal operations. Then if the Backbone Power is interrupted, they can switch the Coal Plants back to electric power mode. This also allows for diversity of gas contracts which keeps suppliers honest.

Phil Hughes

http://hughessynergies.com/hughessynergiesconsultingdivision.html

Bas Gresnigt's picture
Bas Gresnigt on March 30, 2014

No baseload plants needed, as those cannot compete at all when a substantial part of the electricitiy is generated by wind+solar (e.g. 30%). That is one of the reasons German utilities replace the old coal baseload power plants by new more flexible, fluidized bed plants.

At the moment NPP’s capacity factors are still determined by their technical capability.
That will change.
Market circumstances will define the capacity factor of power plants.

Studies by Denmark show that with only 50% of Danish electricity generated by wind turbines (=situation in 2020), those wind turbines generate more than 100% of what is needed during ~27% of the time.
So a baseload nuclear plant then has to sell its electricity for <$1/MWh, generating losses.

German studies show that power plants will have a capacity factor of ~50% when wind+solar generate ~30%…

Robert Bernal's picture
Robert Bernal on March 30, 2014

Meet the new boss (I mean coal). Same as the old boss (won’t get fooled again)???

Robert Bernal's picture
Robert Bernal on March 30, 2014

Clearly, the world will require lots of coal replacements. Here is the picture (and these countries have developed LOTS of hydropower already).

To disclude the awesome potential of nuclear is to promote the continued use of hydrocarbons on a massive scale (which I still insist will be at least 70% even with full blown global renewables).

Continued coal usage can ONLY lead to the death of an entire planet.

Phil Hughes's picture
Phil Hughes on March 30, 2014

Again, the Coal Plants will have at least 90% Carbon Dioxide avoided and even if there is no market for it, Coal will still come in under what Natural Gas would have. When CO2 is sold to oil producers and used in Algal Fuels at $35 per ton there will be no increase over the present cost.

Phil Hughes

HughesSynergies.com

Phil Hughes's picture
Phil Hughes on March 30, 2014

In our case, we do not exclude Nuclear at all. 

What we are advancing is putting Carbon Capture on existing Coal plants, put new plants in sparingly where sentiment is not there for nuclear, and use them in dual modes of both GTL and Power Generation Functions so that they can serve as an alternative to backbone power in case of disruption.

Phil Hughes

Robert Bernal's picture
Robert Bernal on March 30, 2014

I don’t believe that coal will ever be clean, especially, if there’s no market for the excess CO2. It will simply be combusted. Sure, there will be instances when large percentages of its CO2 is either recycled (just once) or actually put back into the ground, but these efforts will surely be dwarfed by the emissions from ever increasing coal as usual.

Bas Gresnigt's picture
Bas Gresnigt on March 30, 2014

A more up-to-date picture would be nice.
Here you find the German data.

Phil Hughes's picture
Phil Hughes on March 30, 2014

Why don’t we get the European Carbon Dioxide Manifold, East and West Branches, into place and let all of these concerns about excess CO2 drive the placement of Algal Fuel Cultivation on non-arable land?

For every Saudi capacity output it will generate 2 million jobs at $15,000 each

Phil Hughes

HughesSynergies.com

.

Nathan Wilson's picture
Nathan Wilson on March 30, 2014

“…wind turbines generate more than 100% of what is needed during ~27% of the time. So a baseload nuclear plant then has to sell its electricity for <$1/MWh, generating losses.”

Surely you can see that a wind farm will generate losses for a larger percentage of the time in that situation than a nuclear plant?  Wind farms generate nearly all of their output at the very times that other wind farms are also generating power, but the nukes generate some of their output when there is no wind.  Nukes also go off-line for refueling and scheduled maintainence during the spring and fall, when winds are strongest and electrical demand is the lowest.  In the US at least, winds are weakest in the summer when electrical demand is strongest.

But I agree that a grid that has 30% wind and solar will be less likely to build new nuclear, and more likely to stay addicted to fossil fuel (supported by studies by NREL and the EWITS study in the Eastern US).  That is a major disadvantage for a civilization which is trying to reduce CO2 emissions and become more sustainable.

Robert Bernal's picture
Robert Bernal on March 30, 2014

That is a good point, to get as much use as possible from coal, I mean if we’re going to burn it anyways. If all the coal plants could do this, at least we would have more time to deal with the excess CO2. Eventually, we’ll have to literally suck it out of the ocean and sink it for good. 

Bas Gresnigt's picture
Bas Gresnigt on March 31, 2014

…a grid that has 30% wind and solar will be … more likely to stay addicted to fossil fuel…
Look around.
The Danish grid has reached that percentage, and is now moving to 50% wind in 2020 and 100% renewable in 2040.
Germany now ~15% wind+solar is moving towards ~25%  in 2020, ~45% in 2030, etc.

Paul O's picture
Paul O on April 4, 2014

Stubbe,

 

1) When you say “a third of our energy comes from wind power. ”  Did you mean ENERGY, or were you refering to Electricity only?

How do you heat your homes, power your cars, and run your factories

 

2) How long will your wind farms last, and is Denmark saving for replacement and decomminssioning of all those ofshore turbines and Masts?

Bas Gresnigt's picture
Bas Gresnigt on April 4, 2014

…difficulty … in summer, if solar keeps growing, capacity could soon exceed demand on sunny summer days, whilst only making a very modest contribution on dull winter days…
So on those days wholesale market prices are near zero or negative and power-to-gas/fuel plants that are starting up convert the electricity into renewable synthetic gas / fuel. That can be used in winter, in addition to burning waste/biomass and the 35 pumped hydro storage facilities in Germany as well those in Norway, Austria and Switzerland.
Germany has cavities in the earth to store gas, and if needed nearby Netherlands has enough space in the big gasfield near the German border. We would be happy to store a lot of German gas, as it would reduce the small earthquakes caused by emptying the field.

Note that scenario studies show that such storage is not needed until wind+solar reaches ~40% share.

To reach 80% there is a need for … Baseload renewables … European Supergrid…
Baseload plants are then a millstone around the neck. Only flexible power plants can compete in a 80% renewable environment. That is also one of the reasons German utilities replace old coal plants by new far more flexible ones. In such environment electricity prices will be near (or even below) zero a substantial part of the time.

German planners / scenario doesn’t include a European wide supergrid. They do not like the idea being dependent on other, more far away countries since Belarus threatened to stop the flow of Russian gas through their country.

Gary Tulie's picture
Gary Tulie on April 5, 2014

Hi Jens, some of your figures are out of date.

The UK currently has 3.653 GW of operational offshore wind power compared to Denmark’s offshore capacity at the end of 2013 of 1.271 GW. Denmark therefore certainly does not have 70% of the world’s offshore wind capacity. 

Wind power in Denmark is not expensive, and whilst providing 33% of Danish electricity, feed in tariffs for wind power only makes up 4.6% of Electricity bills. This is in my view money well spent as the wind industry is responsible for around 28500 jobs in a small country, and 7 billion Euro per year in export revenues. What’s more, most of the money spent on wind power recirculates within the Danish economy generating tax revenues and economic activity within the country – unlike buying fossil fuels which sends money out of the country.  

Denmark is fortunate geographically to be next to Norway and Sweden, both of which have extensive hydro capacity which can be up or down regulated at a moment’s notice – so balancing supply and demand with a lot of intermittant power on the system is manageable and affordable. What’s more, with the country using district heating for >70% of space heating and hot water, there is capacity or potential for capacity for a great deal of energy storage in the form of heat with which to balance future increases of wind capacity – so displacing combustion and CHP generation for the supply of heat.  

Bas Gresnigt's picture
Bas Gresnigt on May 19, 2014

@Nathan,
“…my point was really that the owners of solar systems weren’t paying any taxes on the power they self-generate…”

One of the reasons behind Gabriel’s declarations that the Energiewende is almost collapsing, is his intention to start a tax on all self-generated electricity. ~3.1cent/KWh (starting this summer).

So he needs to create a positive climate towards such a tax, which he does by mortgaging on the huge goodwill regarding the Energiewende.

Btw.
Last week there were demonstrations regarding the Energiewende involving ~30,000people. No single banner against, all urging to increase the speed of it!

Note that last autumn some increase was decided (not 50% renewable in 2030 but 55%-60%).
Apparently not enough. Merkel’s new coalition partner, SPD (the party of Gabriel), had/has a bigger increase in its party program.

Bas Gresnigt's picture
Bas Gresnigt on May 19, 2014

@Willem,

We talk about electricity generation, not about general energy consumption.
NPP generate only electricity and wasted heat which contributes the the warming of the earth only. Your figures consider all energy consumption (~70% is transport+heating).

Here you find an article (with comments) which concludes that even the relative cold 2013 delivered a decrease of CO2 emissions regarding German electricity.

Btw.
The Energiewende levy is predicted to decline after ~2023, as the FiT’s for solar (and to lesser extend wind) will then become very low due to the cost decreases of new installations…
May be FiT’s are by then even not needed for solar to continue with the projected installation rate of ~3GW/year.

 

Bas Gresnigt's picture
Bas Gresnigt on May 20, 2014

Chernobyl infoThe New York Academy of Scientists (NYAS) publishes a book that states after referencing thousands of scientific studies regarding Chernobyl:
“one million death before 2007”.

We know from medical studies and the LSS studies regarding the Hiroshima bomb victims that the damage of low level fall-out / radiation occurs after decays (up to 50years thereafter as LSS shows; check report no.14).
Similar as with smoking (lung cancer typical occurs after 20-50years of smoking), asbestos, etc.

2006 is only 2 decades after Chernobyl, so the great majority of the death still have to come. Considering that roughly 300million people got Chernobyl fall-out, a final figure of a few million seem logical.
However I am optimistic, so I estimate just a million.

Note
that the 2006 IAEA/WHO Chernobyl forum is a shame as they decided to restrict their study to only the direct involved people within some miles from Chernobyl (and even ignored important parts of those according to Ukraine government), while many sound scientific studies were published in scientific journals showing substantial health damages in areas >1000miles away. E.g. this one.

It is such a shame that important parts of the European scientific radiation community started its own organisation summarizing western research.
The book published by NYAS summarizes also East-European research (incl. Russia), the area more near to Chernobyl where most victims occur.

Bas Gresnigt's picture
Bas Gresnigt on May 20, 2014

@Robert & Paul

Your questions rearding the bad CO2 performance of nuclear (point 2).

A new NPP cost ~$8billion and takes 10 years. If that same money (incl interest during the building period) would be spent to install e.g. PV-panels it would deliver far more electricity and it would do that within a year during at least the same time as the NPP*)
In addition the NPP has high operational costs compared to solar.

So for the same money, the population gets far more CO2 free electricity, and they get that within a year (not after 10year as with a NPP).

*) Quality solar panels have 25years yield guarantees; check Sunpower.
As no moving parts those may easily last a century.
No NPP builder delivers production guarantees. Not strange as many NPP’s need major upgrades inbetween and stop prematurely…

Big PV-solar installation cost now <$1million/MW installed capacity, about 8 times less as the NPP.
If installed in e.g. Arizona such installation delivers substatial more electricity per invested $ than the NPP, while much lower operational costs (so those saved $ can be used to install more PV).

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