The German coalition government in planning to withdraw from its 2020 climate change goals. Notwithstanding public protests the Federal Economics Minister, Sigmar Gabriel, has abandoned the requirement of cutting 40 percent of CO2 emissions compared to 1990 levels by 2020. "It's clear that the 2020 CO2 target is no longer viable," said the vice-chancellor. "We cannot exit from coal power overnight." (1)
Experts had doubted for some time that German climate targets would be met. According to the Ministry of Environment, Germany would have had to cut 62 to 100 million tons of CO2 every year in order to achieve its goals. Shutting down old coal power stations would only reduce CO2 emissions by 40 million tons. (2)
And rather than shut down coal power stations, coal usage is on the rise. Germany used coal, the dirtiest fuel, to generate 45 percent of its power last year, its highest level since 2007, as Chancellor Angela Merkel is phasing out nuclear in the wake of the Fukushima accident in Japan three years ago. (3)
The Germans went into wind power harder and faster than anyone else--and the cost of doing so is catching up with a vengeance. The subsidies have been colossal, the impacts on the electricity market chaotic and--contrary to the purpose of the policy--CO2 emissions are rising fast. (4)
Some 800,000 German homes have been disconnected from the grid--victims of what is euphemistically called 'fuel poverty'. In response, Germans have picked up their axes and have headed to their forests in order to improve their sense of energy security. (4)
The subsidization of renewable energy has not led to a significant increase in jobs. Only about 0.86 percent of the nearly 42 million workers who are employed in Germany work in the highly subsidized sector of renewable energy. Much of this employment is limited to the maintenance and operation of existing facilities. As Bob Greene observes, "So, the green job market is less than 1% of the workforce. How often have we heard about 'investment in the green jobs of the future'? No one seems to look at the number of green jobs as a percentage of the labor force." (4)
BASF, the world's largest maker of chemicals, has been investing more of its money and management energy outside Germany, especially in the United States. And the company's reasons for doing this help illustrate why the German industrial economy has been losing momentum--and why German risks tipping back into recession. BASF executives say that German and European policies toward industry, particularly when it comes to energy, prices have jumped as a result of the government's big push for renewable energy sources--a policy that the government of Chancellor Angela Merkel has labeled the Energiewende, or energy transition. (5)
Energiewende has so far added more than 100 billion euros ($134 billion) to the power bills of households, shop owners and small factories as renewable energy met a record 25 percent of demand last year. Consumer rates are soaring to fund new plants. Germany's 40 million households now pay more for electricity than any other country in Europe except Denmark. (3)
BASF is not alone in looking beyond the country's borders. Since 2011, the chemical industry over all--Germany's third largest industrial sector after automobiles and machinery--has not increased production or investment in the country. And nearly a quarter of all companies in heavy industry are considering reducing production in Germany. (5)
Wacker Chemie, based in Munich, is building a $2 billion plant in Tennessee to make polysilicon, a material that is used to make solar panels. German industrial giant Siemens has agreed to buy Dresser-Rand, a Houston-based maker of equipment for the energy industry for $7.6 billion. (5)
There are lots of claims on how successful Germany's renewable energy program has been. Feed-in tariffs mandated by the government guaranteed profits for wind park investors and operators. You couldn't lose. So it seemed at first. Unfortunately, outputs promised by wind turbine manufacturers and proponents have fallen short of expectations. Moreover, high maintenance costs have in many cases eliminated profits and resulted in losses for investors. As generous as the subsidies may be, profit from wind can be elusive. Two-thirds of all wind park projects are running very badly. (6)
With Germany's renewable energy feed-in act, and with the very volatile sources of sun and wind, today's German power grid has become a precarious balancing act, and keeping it from collapsing under the load of wild fluctuations has become a real challenge. Already in 2014 there have been 3500 emergency grid interventions. More than a couple days of blackout would be a national catastrophe. The frequency of emergency grid interventions has skyrocketed since renewable energies started coming on line. Thus the power supply in Germany is no longer secure enough. It is even highly vulnerable. A blackout could occur on any given day. Up to now they have been successful at averting grid collapses by taking lightning speed action, but the number of emergencies has increased massively and is still rising. (7)
Firms Going Under
A group of 60 limited partners near Ettenheim southwest Germany have decided to dissolve the wind turbine operating company they had set up in December 2000. (6) The woes were not only unique to this firm, but to many wind park developers in Germany. In courts around the country, complaints from wind park investors weren't receiving a dividend disbursement in years or parks went belly up. (8)
Germany's largest offshore wind park, Bard 1, hasn't delivered any power since March due to 'baffling faults' in the power transmissions system. (9)
Germany's sole plant for producing electric cars, owned by Daimler, is shutting down adding to the doubt Germany will reach its ambitious target of putting 1 million electric cars on the road by 2020. The move by Daimler is another setback for electro-mobility in Germany and represents the latest obstacle in preventing Germany from reaching its target of cutting CO2 emissions by 40% compared to 1990 levels. (10)
Conclusion
The Institute for Energy Research concludes, "After pouring billions of Euros into renewable energy, the Germans are left with spiraling power prices, energy market chaos and collapsing companies. Deriving a large proportion of energy from renewables is proving extremely costly; the government indicates that is could cost one trillion euros by the end of the 2030s. Its renewable energy program has devastated its utility companies, whose profits from power generation have collapsed. Germany's coal renaissance and its increasing carbon dioxide emissions should be a cautionary tale in what happens when expensive intermittent renewable technologies are being promoted and nuclear energy is being phased out without the economic realities of the transition being properly assessed." (11)
With the debacle now clear to the rest of the world, one would think other countries would sober up and be more cautious about following a similar path. They aren't. Indeed, it is truly astonishing that other countries, like the USA for example, are ignoring it all and are now attempting to put themselves on the very same ruinous path to repeat the German debacle, and to do so on an even grander scale, reports Pierre Gosselin. (12)
Gosselin isn't off the mark for both the UK and USA. Regarding the UK, Allister Heath recently reported that Britain's energy policy is a catastrophic mess. (13) And for the USA, in his 'climate change speech' at Georgetown University in June 2013, President Obama said, "Countries like China and Germany are going all out in the race for clean energy. I want America to wind that race but we can't win it if we're not in it." (14)
If you look at what's happening in Germany you would decide that we should not be in that race.
References
- "Germany plans to withdraw from binding 2020 climate targets," Speigel Online, November 16, 2014
- Anthony Watts, "Germany abandons their climate target, as their Chancellor sings to the crowd," wattsupwiththat.com, November 17, 2014
- Julia Mengewein, "Merkel's taste for coal to upset $130 billion green drive," bloomberg.com/news, September 22, 2014
- Bob Greene, "Just like Germany?", junkscience.com, October 17, 2014
- Stanley Reed and Melissa Eddy, "BASF, an industrial pillar in Germany, leans abroad," The New York Times, October 24, 2014
- P. Gosselin, "German wind turbine investors dissolve operating company after 13 years of poor returns," notrickszone.com, July 19, 2014
- P. Gosselin, "EIKE: German power grid more vulnerable than ever...on the brink of widespread blackouts," notrickszone.com, September 24, 2014
- P. Gosselin, "75,000 see their investments shrivel...spectacular $1.9 billion German wind energy company insolvency," notrickszone.com, July 23, 2014
- P. Gosselin, "Renewable energy mega-flop! Germany's largest offshore wind park hasn't delivered any power since March!", notrickszone.com, July 31, 2014
- P. Gosselin, "Germany's sole electric car battery plant to be closed...yet another setback for Germany's CO2 reduction target," notrickszone.com, November 16, 2014
- "Germany's renewable energy transition misses carbon reduction goals," Institute for Energy Research, Canada Free Press, September 30, 2014
- P. Gosselin, "German's blame 'missing wind' for their wind power debacle," stopthesethings.com, September 24, 2014
- Allister Heath, "Britain's energy policy is a catastrophic mess that will keep prices high," The Telegraph, November 26, 2014
- "Unreliable German solar and wind forcing new coal boom," pjmedia.com/blog, January 24, 2014
