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Home Archive April 2013 Issue Issue Content Germany’s Renewable Energiewende: Pioneering Path or Troubled Turn?

Germany’s Renewable Energiewende: Pioneering Path or Troubled Turn?

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This article will examine the challenges to Germany’s policy of nuclear abandonment. Though Germany has made extraordinary moves away from their nuclear program, a full move will be riddled with trials that other countries contemplating such a move could face as well. Germany’s success or failure will likely set the course for the future of renewable energy in Europe and abroad.

One challenge to Germany’s nuclear turn-about has been the increasing concern and open criticism coming from its neighbors, particularly Sweden, whose environmental minister Andreas Carlgren has criticized Germany’s decision to decommission its nuclear power stations as being “unrealistic” and predicted Germany would have to increasingly rely on coal to meet its energy needs. While Sweden had also decided to slowly phase-out nuclear power in the 1980s, it recently reversed that pledge in 2009 and lifted the ban on building new nuclear reactors. In May of 2012, after Germany began shutting down its eight oldest nuclear plants, Swedish power company Vattenfall filed a request for arbitration against Germany with the International Center for the Settlement of Investment Disputes (ICSID) over revenues lost by the sudden closures of the Krümmel and Brunsbüttel nuclear plants which Vattenfall operates. The Czechs and Poles have also publicly criticized Germany for making such an important energy decision without consulting their neighbors, whom its decision also affects. As of September 2012, Germany imports more electrical energy from Czech Republic than it exports to them, and this export rate is projected to increase by around 5% in 2013 as the Czechs plan to build two new reactors at the Temelin power plant. Many of their nuclear reactors lie close to German borders, so a nuclear-free Germany does not necessarily equal a Germany safer from nuclear energy, as a disaster at any of these Czech reactors would mean a disaster for Germany as well. 

A second challenge to the German energy plan is the extent to which the plan’s costs will be absorbed by energy consuming citizens and how strongly that will test their anti-nuclear resolve. Germany’ nuclear decision has largely been seen as fueled by domestic public concern and negative opinion that has been present since the 1970s but strengthened considerably after Fukushima. Though the plan to swiftly end nuclear was heralded by the German public directly after its announcement, eighteen-plus months later, the reality of who is expected to foot the bill for the switch-over is beginning to sink in. Polling reports that Germans still consistently support phasing out nuclear power, but a poll released in October of 2012 reveals that they are not willing to annually pay more than 50 Euros (€) to finance it, while some reports project that German energy bills, already the second highest in the European Union (EU) after the Dutch, will increase between €185 and €250  annually. 

Germans are already accustomed to paying a monthly umlage, (a renewable energy surcharge) on their monthly electricity bills which amounts to roughly 14% of their electrical costs. In October 2012, the country’s four largest private network operators (50Hertz, Amprion, TenneT, TransnetBWW)  announced that the umlage will increase from 3.6 cents per kilowatt hour (KWh) in 2012 to 5.3 cents in 2013, amounting to an extra €59 on annual bills. As renewable energy production rises, so does the amount Germans will pay to finance new renewable power generation units and networks. The €59 surcharge may have been passable, but the umlage fee is not the only built-in cost in German energy bills. One part of Germany’s plan to increase availability of renewables is a feed-in tariff that entitles anyone who puts a solar panel on their roof or a windmill in their yard and sells surplus energy to the grid to a subsidy financed by energy consumers. Unsurprisingly, renewables grew ten times faster in Germany than the Organization for Economic Cooperation and Development (OECD) average from 1990 to 2010, and with the government’s plan to increase renewable output to 35% of energy demand by 2035, the cost of financing the feed-in tariff as well as the grid expansions to accommodate the added renewable energy being generated will also be passed on to the German consumer. Heavy industry is exempt from these surcharges, a bone of contention among surcharge-paying energy consumers, even though this exemption is designed to protect Germany from a mass-exodus of industries seeking cheaper energy elsewhere in Europe.

Though German opinion polls consistently indicate that Germans support the switch from nuclear to increased renewables in theory, the polling information is unclear as to exactly how willing Germans are to finance the switch over and at what price point their resolve to pursue the path of renewable energy will flag. For many households this price increase will be affordable, but fuel cost increases often disproportionately affect those in a society who may already find it difficult to pay electrical bills, which are sure to rise during the German winters. In February of 2013, Germany’s environmental minister Peter Altmaier announced that the German energy reform could cost upwards of one trillion Euros by 2030. Even German politician and EU Energy Commissioner Günther Oettinger has been quoted as saying he doubts "whether German consumers will accept rising electricity prices resulting from the energy turnaround in the long term."

A third challenge to Germany’s energy plan regards the practicalities of implementing a large-scale expansion of renewable energy sources in a short period of time. Germany’s strategy to continue meeting energy demands while also reducing carbon emissions has been to aggressively pursue wind and photovoltaic (solar-based) energies. By 2020, wind farms in the German Bight area of the North Sea are expected to have a total output of 10,000 megawatts, or the equivalent of ten nuclear energy plants, and output expectations will only increase. A Harvard study released in February of 2013 found that the capabilities of large-scale wind installations have been “overestimated”. While previous estimates placed a large wind-power installation’s generating capacity at between 2 and 7 watts per square meter, the more realistic expectation is that these wind turbines will peak at between 0.5 and 1 watts per square meter.

Even if the expansion of wind capability in the North Sea is possible, the capability to transport this energy from the North to the densely-populated southern regions such as Bavaria and Baden-Württemberg, where two nuclear power plants are scheduled to soon be shut down, will have to significantly improve. In May of 2012, the same four private electrical grid operators announced a plan to build roughly 2800 miles of new power lines connecting the north to the south, a move that would better ensure against power outages in the south but has been met with local public concern over quality of life, safety, and loss of tourism revenues brought on by more power lines stretching across the country. Creating the adequate infrastructure to support significant increases in wind-generated energy is going to be a popularly controversial move, again with the cost being shouldered by energy consumers. Politically speaking, with the next German elections coming up in 2013, Chancellor Angela Merkel’s Christian Democratic Union is going to be treading water carefully, trying to strike a balance between a path that pursues renewables (and gives them leverage over the Greens, a party to which they have been losing ground) yet does so in a cost-effective and publicly popular manner.

Further complicating this switch to renewables is the reality that, though wind and photovoltaic both provide renewable energy with no carbon output, they are unpredictable energy sources that cannot be stored the way oil or gas can. As Kevin Rosner noted in September of 2011 and based on the United Kingdom’s experience with wind power in December of 2010, evidence suggests that wind and solar cannot provide reliable base-load electricity. In Germany, For example, photovoltaic production ranges from a high of 4.1 Terawatts per hour (TWh) in the sunniest months to lows of .54 TWh in winter months, based on 2012 monthly averages. Similarly, wind at its most productive provides 7.0 TWh of energy to 2.2 TWh at its least productive. On windy days, the energy that is produced can be significant, but it must be consumed because, despite various design propositions for storage wind panels, the energy currently cannot be stored for later use. Wind surges in northern Germany cause sporadic gluts of electrical energy that the current grid system is having a difficult time processing, and rumors abound that the excess on windy days is being dumped through Czech and Polish lines that are having difficulties handling the surges, too. The head of the German Energy Agency Stephan Kohler recently admitted that these fluctuation cause problems for industry as well as for neighboring countries, and stated that he is aware that Poland is currently installing equipment to keep out Germany’s surplus electricity. Though rumors say that the Czechs will begin building massive transformers that will allow them to shut dumped German energy out of their systems, in March of 2012 the Czech Prime Minister Petr Nečas vowed to strengthen the Czech system rather than shut Germany out of it. They claim this energy came close to devastating their grid system last winter, though this could also be a move by the Czechs to block cheaper German electrical energy from monopolizing the European market.

Add to this numerous concerns over the current grid system’s problems prioritizing renewable over conventional energies. Under the current Renewable Energy Sources Act, grid operators have to prioritize energy coming in from renewable sources, whether it is wind on a particularly gusty day or photovoltaic on a sunny day, over conventional sources such as coal or gas. That requires a system that can quickly reduce and switch from one energy feed-in to another in a complicated process that does not always work efficiently. As recently as April of 2012, the power grid on the border of Lower Saxony and Saxony-Anhalt was forced to take drastic measures in response to a massive and rapid energy surge from wind farms in eastern states. The two largest pumped storage power plants in the area were quickly converted into energy consumers to relieve the over-taxed east-west network. Last winter, as consumption rose in southern Germany and northern France, there was a similar incident in the north-south lines. The recent increase in wind and photovoltaic capacity without significant improvements to the grid system coupled with loss of supply from shutting down nuclear plants will create an environment in which the grids are likely to be critically over-taxed.

A final challenge to Germany’s nuclear phase-out will be its potential increased reliance on coal and the setback that will pose to its long-term clean energy goals. Since the announcement of the nuclear phase-out, and as of November 2012, Germany has at least ten new coal-fired power plants under construction, many of which were commissioned after the turn from nuclear to compensate for energy lost from reactors.  German coal consumption has grown an estimated 1.2% compared to 2010, and EU overall coal imports from the United States (US) have increased by more than 50% in the same time period.

                                Figure 1: German coal consumption and production, 1981-2011 

Source: Data compilation by the author from BP Statistical Review of World Energy, 2012

 

Figure 2: German coal imports, 1981-2011

Source: Data compilation by the author from BP Statistical Review of World Energy, 2012

 The explanation for this turn to coal can be found by looking to the American gas market, which is currently glutted with cheap natural gas from the shale boom. As a result, American coal is being sold to European markets at low prices. The carbon permits sold under the current EU Emissions Trading Scheme are also cheaper than shouldering the cost of switching to renewables, so utilities companies have been closing gas-fired plants in favor of the coal-fired ones. While these coal plants are cheaper alternatives than gas-fired plants, they generate almost twice as much CO2 than the gas plants, even if they are designed to be “clean coal”. During the most recent February cold snap in Europe, France, a long-time supporter of nuclear energy, turned to Germany for imported electricity on an almost hourly basis, for electricity generated from resurrected idle coal plants. If coal plants are consistently chosen over gas, the incentive to build new gas plants or continue operating current gas-fired plants will decrease, and Germany’s environmental goals will not be furthered. This preference for cheap coal over gas may change if and when the US decides to export natural gas on a large scale, but until then, it seems coal is the most cost-efficient choice during a cold winter, for Germany and its neighbors.

This is not to say that Germany has not made immense strides in the field of renewables, more than any other European country, to be sure. Deutsche Bahn, Germany’s railway operator announced they will use 30% renewable energy to power their trains by 2014, and will run on 100% renewables by 2050. The country’s CO2 emissions have already fallen 2.4% from 2010.The increase in renewable demand will also provide jobs to the many who will need to build new wind farms, solar farms, and connecting lines.

However, Germany’s road to renewable energy will not be without challenges, especially after completely phasing out nuclear energy. Their energy plan requires cooperation from their neighbors, especially from those who they import and export energy. Improvements to the grid system and method of energy transport across the country will also have to improve, though this may be met with opposition from local communities in a sort of “not in my backyard” movement. Finally, the most significant challenge Germany will face will come from its citizens. It remains to be seen how willing they are to pay the exponentially increasing costs of the nuclear switch-over and expansion of renewable energy, or to what extent they will continue to support renewables as more and more connecting power lines and wind farms begin crossing the country. If the nuclear phase-out was about safety issues, the Czech plants may negate any benefits gained. If it was about the environment, substituting coal for nuclear does not seem to be the way to go, either.

Contributor Lauren E. McKee, is a Ph.D. candidate in Old Dominion University’s Graduate Program in International Studies, Norfolk, Virginia, USA

 
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