Events in Germany may provide insight into the future.
Everyone is aware that Germany has led the world in the development of renewable energy, i.e., wind and PV solar, to replace nuclear and coal-generated electricity.
But has this been good for Germans? Or has it created a quagmire from which Germany will find it difficult to extricate itself?
No one knows the answer to that question, but we should watch Germany to see whether it can help us avoid their mistakes.
Here are a few facts about the current situation in Germany.
- Feed-in tariffs have promoted widespread adoption of PV solar and wind.
- Renewables accounted for 21% of electricity produced in 2011.
- Storage capacity will have to be increased by over 300 times the current storage capacity of 6.8 GW to accommodate the long periods of low production from wind1.
- The tariffs have resulted in Germans paying around 40 cents per kWh for electricity, which is roughly 4 times as much as Americans pay.
- The price of natural gas is based on the price of oil, and has hovered around $11 per million BTU, which is around 4 times as much as natural gas costs in the United States. Germans resist fracking.
- RWE and E.ON are shutting down natural gas power plants because they are unprofitable.
- RWE is proposing to dismantle their power plants and sell them to Turkey.
- Germany has said it will close all its nuclear power plants.
- Southern Germany is most at risk for shortages due to where nuclear plants are located. Over 2,000 miles of new transmission lines to bring electricity from the north to southern Germany will cost around $25 billion.
- CO2 emissions are increasing.
- Germany’s objective is to have 80% of electricity generated by renewables2.
The CEO of RWE said, “This is the greatest crisis our industry has faced for many decades.”
European Union (EU) Energy Commissioner Günther Oettinger has called on Germany to reform its renewable energy law following the elections, noting that feed-in-tariffs for photovoltaics, wind, and biomass are responsible for an unsustainable surge in electricity costs for households in Germany.
Germany’s environment minister’s admonitions to German consumers about high energy prices seem pathetic. He said, “Don’t preheat before cooking; keep lids on your stove-top pots; and turn down the brightness and contrast on your televisions3.”
The Greens have welcomed the situation in Germany, but are concerned about the increase in CO2 emissions due to increased use of coal.
Of course, Germany is not alone in Europe, and can get electricity from the Czech Republic and France, which means shortages within Germany may be offset by importing electricity, which would mask the effects of renewables on the grid.
Germany bears watching.
Only 21% of its electricity comes from renewables, while Germany’s goal is 80%. What will it mean to the price of electricity and grid security to go from 21% to 80%, when there are already problems?
Already Germany’s cost of electricity is 4 times greater than in the United States. Are Americans willing to pay much higher prices for their electricity? Are higher prices good for America’s industry, and job creation?
Renewable subsidies transfer money from the poor to the rich. Is this what Americans want?
And all of this is being done to cut CO2 emissions 80%.
- Jens Hobolm of the European Center for Economic Research and Strategy Consulting.
- Power Magazine, May, 1 2013, Germany’s Energy Transition Experiment.
- Germany Could Face Electricity Customer Revolt, IEEE Spectrum, September 9, 2013.
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