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The Ups and Downs of German Green Energy

The ups and downs of renewable energy production in Germany are causing big problems for the country’s grid. To even out this volatility, the world’s self-styled green energy leader is paying its utilities record amounts to adjust their contributions in real-time to help the country’s energy supply meet its demand. Bloomberg reports:

Twenty power companies including Germany’s biggest utilities, EON SE and RWE AG, now get fees for pledging to add or cut electricity within seconds to keep the power system stable, double the number in September, according to data from the nation’s four grid operators. Utilities that sign up to the 800 million-euro ($1.1 billion) balancing market can be paid as much as 400 times wholesale electricity prices, the data show.

Germany’s drive to almost double power output from renewables by 2035 has seen one operator reporting five times as many potential disruptions as four years ago, raising the risk of blackouts in Europe’s biggest electricity market while pushing wholesale prices to a nine-year low. More utilities are joining the balancing market as weak prices have cut operating margins to 5 percent on average from 15 percent in 2004, with RWE reporting its first annual loss since 1949.

Germany’s green energy experiment has been a catastrophe. To spur wind and solar energy development, it had to guarantee above-market prices to producers, and the costs of these guarantees—called feed-in tariffs—have been passed along to consumers in the form of green surcharges to their electricity bills. That’s bad for German industry, and has many businesses looking elsewhere (say, to shale-rich America) for cheaper prices.

But we’re not done yet with the litany of mistakes made in the name of Berlin’s energiewende. Just as it boosted renewable energy sources, Germany also phased out its nuclear reactors from its energy mix, nixing a zero-carbon, dependable source of baseload power over emotionally-charged fears of meltdowns in the wake of the 2011 Fukushima disaster. To replace nuclear, Germany is now burning more coal today than it has in more than two decades, hardly a proud accomplishment for a so-called green energy revolution.

And as today’s story shows us, there’s another obstacle German green energy policy seems incapable of overcoming: intermittency. Solar panels and wind turbines can only produce electricity when the sun is shining and the wind is blowing, and lacking cost-effective, large-scale energy storage solutions, that means renewables can only be counted on to supply peak energy demand. To supply baseload energy, Berlin must still rely on fossil fuels. But the constant dipping and surging of renewable energy contributions to Germany’s national energy grid is taking its toll, and utilities are being handsomely rewarded for “balancing out” the energy network.

Greens love to advocate for efficient and sustainable solutions, especially when it comes to energy, yet seem blind to the irony when they hold up Germany’s energiewende as some green success story when it is, in fact, neither. We need energy storage solutions, turbines and panels efficient enough to compete with fossil fuels on their own merit, and grids capable of handling the unpredictable contributions of renewable energy sources. The pace of technological change is accelerating, and it’s not crazy to think we might see such advances in the near future. In the meantime, we’d be much better off investing in the research and development of these breakthroughs, than the propping up of unworkable “green” policies built on today’s technologies.

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  • Fat_Man

    An excellent article from Der Spiegel, the leading German newsmagazine:

    “Germany’s Energy Poverty: How Electricity Became a Luxury Good” By SPIEGEL Staff 09/04/2013 07:15 PM

    “Germany’s aggressive and reckless expansion of wind and solar power
    has come with a hefty pricetag for consumers, and the costs often fall
    disproportionately on the poor. Government advisers are calling for a
    completely new start.”

    And from the Financial Times:

    “Germany’s energy policy is expensive, harmful and short-sighted” By Bjorn Lomborg

    “Berlin is failing the poor while protecting neither security nor the climate, writes Bjorn Lomborg”

    “Germans told of billions lost to trade due to energy policy” By Jeevan Vasagar in Berlin February 26, 2014 11:03 pm

    • Andrew Allison

      Yes, the sheer lunacy of energiewende has been obvious for quite some time. The question is: Why hasn’t the government reversed course and why are the German people putting up with it?

      • Pete

        I thought Germans were suppose to be highly intellegent

        • Andrew Allison

          Nope, they work hard but are inclined to put too much faith in their leaders. Of course, given the unfolding disaster in this country, we’re in no position to throw stones. :<(

  • Andrew Allison

    “feed-in tariffs—have been passed along to consumers in the form of green surcharges to their electricity bills. That’s bad for German industry, and has many businesses looking elsewhere (say, to shale-rich America) for cheaper prices.” How are the surcharges passed on to business bad for industry? You neglected to point out that Germany is currently in trouble with Brussels for exempting “large-scale” industrial user from the tariffs. Industry will be hurt if and when this subsidy of industry by consumers is stopped, not before. Furthermore, as TF has noted in the past, the record amounts of coal being burned include a lot of super-dirty brown coal. What I don’t understand is why German voters are putting up with this nonsense.

    • Duperray

      Renewable heavy surcharges are not massively invoiced to Industry, there are diluted into consumers’ bills.
      German Industry absorbs about 400TWh electricity per annum, while only 50% of industrial users (small ones) regularily pay their pro-rata surcharges. Thence the 180TWh consumer consumption is overcharged of their own pro-rat altogether with the missing “protected Industry” 200TWh, ie consumers pays the double for each KWh.
      This is anti-social and dishonest but there is no other excape way for Merkel unless charging Industry its full pro-rata and losing export share as well as industries delocalization to next door (France, US, ..).
      Energiewende is a black hole installed by ignorant, dishonest consultants, media, lobbying industry and overall by politicians who own a great fraction of investments, so great is RONA.
      Why Obame is going to do the same?

  • S.C. Schwarz

    Coming soon to the US, if we keep electing democrats.

  • CaliforniaStark

    Adding to the catastrophe is the relatively small percentage of energy that wind and solar are producing in Germany, despite billions of dollars in annual subsidies. In 2013, wind generated an estimated 8.4%, and solar 4.7%, of Germany’s electricity.

    Wind, solar and hydro together amounted to a total of 8.3% of total energy use in Germany in 2013; compared with 5.2% for the same three sources in the United States. Because of the increased use of coal, carbon emissions have not been substantially reduced, and in 2012 actually rose.

    Yet Germany shows no signs of pulling back from its energy Stalingrad.

  • Fat_Man

    I note that you are repeating your ritual call to spend more money on research. Please consider me to have repeated my claim that there is nothing to research that would help make wind or solar economically viable.

    • Pete

      Exactly right.

      • secryn

        Wind, solar, and hydropower (the energy of falling water) are old, very old energy sources. Man has known of them and been trying to utilize them for thousands if not 10’s of thousands of years, pushing sailboats around and making adobe bricks from straw and mud. Hundreds of generations of the smartest human minds worked on the problem. Yet they were unable to develop them into any serious larger-scale energy sources because those types of energy have very low energy density. It was only when coal, and later petroleum were discovered and utilized that the modern world arose. People were lifted out of the mud from short brutal lives of endless toil, to the modern relatively affluent society we have now. All that we have now, from our household labor-saving devices to modern communications to space flights to the moon, is the result of cheap and avialable energy. What enviros don’t realize is that things could swing back again.

    • LarryD

      Wind and solar are both mature technologies by now, the patents on wind turbine design and solar cells expired over a generation ago.

      What you see is what you get.

      • Fat_Man

        Yes and the Dutch used wind powered machines to drain the Netherlands in the Middle Ages. Not much mystery there.

  • Duperray

    @Walter Russel: “renewables can only be counted on to supply peak energy demand” This is a physically totally wrong statement! Peak demand is forecastable, everybody knows this. While erratic renewables peak at random. How would you want renewable to be present for peak demand? Can you rely winter 7:00pm peak when it is night?
    Renewable is the largest “pseudo scientifc” hoax in History. Shame to its initiators, inclusive Al Gore.

  • Joseph Hall

    Solar and wind is going to eat fossil fuels for lunch folks. Get over it. Digesting lies about the most successful renewable energy program in the world isn’t going to help you.

    Our addiction to fossil fuels cost us trillions and trillions in Iraq for nothing. So stop your whining about money going to renewables. It’s money well spent.

    • LarryD

      Demonstrating the first sentence in the last paragraph of the article.


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