Guest essay by Fred F. Mueller
On April 16th, 2014, a few quite remarkable statements were delivered during a discussion event at the premises of SMA Solar Technology AG, a leading German producer of photovoltaic panels and systems:
“The truth is that the Energy U-Turn (“Energiewende”, the German scheme aimed at pushing the “renewable” share of electricity production to 80 % by 2050) is about to fail”
“The truth is that under all aspects, we have underestimated the complexity of the “Energiewende”
“The noble aspiration of a decentralized energy supply, of self-sufficiency! This is of course utter madness”
“Anyway, most other countries in Europe think we are crazy”
Had this been one of the small albeit growing number of German “sceptics” casting doubt upon the XXL-sized politico-economical scam that has cost the German populace more than € 500 billion since its inception in 2000, it would not have gotten more than a footnote in the local press, crammed somewhere in between “horoscope” and “lost and found”. In fact, the media actually tried to keep a lid on the facts by giving them as little coverage as possible.
But the man at the speaker’s desk was Sigmar Gabriel, acting vice-chancellor of the German government, Secretary of Commerce with responsibility for the said „Energiewende” and chairman of the German social democrats (SPD), the second-largest political force in the country. Since December 2013, he is in charge of taming the runaway costs and growing security of supply risks that are unmasking the financial and technical nightmare of this ill-conceived project. In the past few months, he seems to have gotten some unpleasant insights causing him to admit the above-mentioned inconvenient truths when he was pushed too far by a number of aggressive lobbyists of the “renewable energy” sector. Gabriel, famous for his irascible temper that once already resulted in a heated verbal exchange with a top-dog TV journalist live on air, appears to have become quite candid when he vented his anger during the debate.
He must have realized his own political fate is in jeopardy because the task he has been assigned has conducted him into a situation that will inevitably result in failure. With respect to electric energy generation, Germany has painted itself into a corner. Since the introduction of the “Renewable Energy” law (EEG) in 2000 aimed at replacing coal and gas-fired as well as nuclear power generation by so-called renewable energy sources, the household price for electricity has jumped by more than 200 %. German customers now pay the second-highest electricity prices in Europe. At the same time, the task of stabilizing the grid against the massive erratic influx from solar and wind power plants that produce without regard for actual need has pushed the operators to their limits. Now already, with a combined share of just some 13 % of total electricity production, their unreliable input is massively imperiling the stability of the grid.
Conventional power plants – the most important units able to compensate these detrimental effects – are being pushed out of the market and shuttered at increasing rates. At the same time, Germany’s CO2 output has not diminished because coal-fired units have had to take over from closed nuclear plants. Costs are set to rise further on a ballistic path while security of supply is in free fall. At the same time, Gabriel is subjected to intense pressure from a number of factions of the “renewable” energy sector asking for ever greater slices of a cake that cannot be financed much longer. Together with inconvenient truths about feasibility limits given to him by his technical staff, this pressure seems to have risen to a level that pushed him to lecture his harassers when their clamors transgressed his tolerance limit.
This rare incident where a leading politician loses control of his words to such a degree shows that the “crash boom bang” path the German way of mishandling energy policies has indeed reached a threshold where said politicians feel cornered and unable to uphold their usual “muddling through” approach. Long-ignored financial and technical rules re-emerge and will force the German political class to abandon their “renewable” energy strategy centering on solar and wind power generation. Since the only low CO2 alternative – nuclear power – has been deviled by all political parties and the media beyond any chance of short-term oblivion, Germany will soon have to revert to coal for its power needs. And that in turn implies the country will have to abandon all aspirations to lower its CO2 emissions. German politicians might soon find out that demonizing CO2 is becoming a speedy path to ruining their career. And given the importance of the country within Europe and the pioneering role it claimed in the international crusade against climate change by limiting CO2 emissions, this might well herald the start of a paradigm shift of epochal dimensions in the whole climate change debate.
Original TV clips (in German):
http://www.1730live.de/sigmar-gabriel-nimmt-in-kassel-stellung-zur-energiewende/
http://www.hr-online.de/website/archiv/hessenschau/hessenschau.jsp?t=20140417&type=v
Germans need a “Götterdämmerung” to reconsider. They just can’t fathom that a propsal/scheme/idea invented by German scientists and engineers can be wrong and they will continue on the primrose path until a cataclysmic event of some sort stops them. To some extent this has to do with Germany’s tendency towards “uncertainty avoidance” as defined by Geert Hofstede (Dutch social psychologist).
The politicians believed the scientists would save them. There is this belief that if you ban something it will act as a spur and the scientists will come up with a new solution. When they banned DDT I am sure they expected it would soon be replaced with something better. They found wonderful new biodegradable surfactants when detergents were banned, was this not the way forwards. If you force them to see science as a problem rather than a solution, while demonising the free market because it creates a rich minority, the only path left is some kind of religion. Gentlemen, I give you our charismatic new leader, Chicken Little.
“Energiewende” sounds a lot like “die Endlösung” to me, sorry.
Bad vibes …
“stephen richards says:
April 28, 2014 at 1:09 am”
Yes. Not sure how much the UK buys from France, but when France ditches Nuclear and DRAX goes fully wood fired, the power blackouts of the 70’s will pale in comparision.
Come back Richard. Alles ist vergeben.
http://en.wikipedia.org/wiki/Gotterdamerung
Perry says:
April 27, 2014 at 11:50 pm
“Heads are going to roll; possibly literally as well as figuratively. I see Merkel as Widukind, but other may have other candidates?”
You won’t find a more opportunistic and cunning Realpolitiker than Merkel, so, no.
BTW she’ll ramp up the nukes in no time if that’s what’s expedient.
re Gabriel’s utterances: Just before this SMA speech he reformed the German renewables act – the reformed version being identical to the version before, only with more central planning regarding the installation of new capacity. He’s a social democrat. He will rather chew off his right hand before letting the market determine prices.
Insanity rules the day. Talk is cheap. No energy price reductions are in sight; quite the opposite: a continuation of the exponential price explosion.
Keep in mind that all , even the most lunatic, ruling politicians want to sound as if they were sane – we are a month away from the EU parliament elections, and while the EU parliament has no power whatsoever, the parties still want the fat wages.
That’s what Kerry said about the disaster in Spain a few years ago.
“About to falter?”
Massive understatement. The faltering started years ago. Economically, this hasn’t ever been working. The SPD Minister makes is clear that it no longer works politically, either. The day of reckoning is now at hand.
When Gabriel, the economics & energy minister (An SPD – Socialist Party – politician in Merkel’s coalition government) explains in plain language to stakeholders in Germany’s solar energy industry that the current subsidy system has the solar industry receiving 50% of the renewable energy subsidies yet only providing 5% of the total (yet will continue to cost Germany’s economy some €23B annually), he is informing the benefactors of existing policy that the system is beyond just broken — it is grossly flawed in its conception and is in dire need of reform. “We underestimated the complexity” is a euphemism for SNAFU. Remember, this is a leftist politician.
Everyone knows this. The solar industry has had several very tough years, with bankruptcies on all continents. Investors are extremely hesitant to even touch solar power currently, as more and more governments are belatedly discovering both the economic and POLITICAL folly of the generous and wasteful feed-in tariff system. Gabriel wants to have all power consumers (including those producing their own power) pay a surcharge for grid upgrades. This is because the burden is already far too heavy on the average consumer (who typically does not have solar panels installed).
The invitation to have Gabriel speak at SMA HQ is an effort at damage control in the branch. The industry is lobbying for alternate subsidies (e.g., in R&D) as the brakes are being pulled on the largesse heretofore extended via the Renewable Energy Law to foment new solar PV installations.
The boom is long past its prime and the bust has already started. Bear Market in solar ahead for the foreseeable future.
Germany and Spain are excellent case studies on how NOT to conduct national energy policy.
May others learn from their mistakes. Ignore them at your own peril.
Kurt in Switzerland
rogerknights says:
April 27, 2014 at 6:10 pm
This needs to be copy-edited:
“Since the only low CO2 alternative – nuclear power – has been deviled by all political parties and the media beyond any chance of short-term oblivion, . . . .”
E.g., change “oblivion” to “resuscitation”.
No need for copy editing. The original is quite correct. “Beyond any chance of short-term oblivion” means “beyond any chance nuclear power will be out of favor for only the short term.” In other words, nuclear power has been so vilified it will be a long time, if ever, before it will be considered a feasible alternative.
On BBC’s Start The Week programme this morning there was an interview just after 9 am with Jeremy Rifkin. He said that he was an advisor to Angela Merkel and that German energy policy was a wonderful success, with ordinary people using solar panels to generate their own energy. I gave up after about 30 seconds as my daughter doesn’t like me shouting at the radio while I’m driving .
http://www.bbc.co.uk/programmes/b041vvvf
ralfellis says:
“Is someone going to create a huge zener-diode-resistor arrangement in Switzerland (measuring about ten miles across), to drain away all that unwanted energy? And how hot would it get? Will we fry all of Switzerland on a windy day? Will it add to Global Warming? Could you see it glowing in the dark, from Berlin?”
Excess wind / solar power energy is sold by Germany to Switzerland and Austria at spot market prices and used by them to pump water uphill in their significant pumped hydro systems. In extreme cases the spot market price goes negative; takers are paid to take the energy. Later they can sell the electricity generated in the pumped hydro system back to Germany at high prices.
This is one of the “unintended consequences”.
Kurt in Switzerland says:
April 28, 2014 at 2:56 am
“Gabriel wants to have all power consumers (including those producing their own power) pay a surcharge for grid upgrades. This is because the burden is already far too heavy on the average consumer (who typically does not have solar panels installed). ”
a) no he doesn’t. He has already arranged with Brussels new legal exemptions for big electricity users. (His “reformed” renewables subsidation law)
b) the “burden” as expressed in electricity bills is only one third of the true subsidation; i.e. a 3 person household might pay 300 EUR more per year but in fact pays 900 EUR more (nearly exactly 300 per capita). Why? Because only 1/3 of electricity goes to private consumption. The other 2/3 go to private companies, and public sector. So you pay that part via higher taxes and higher prices.
German media are great at never mentioning that. Maybe too complicated for a journalist brain.
In the meantime, here in the UK, our unfathomable Secretary of State for Energy and Climate Change has just announced a whole new raft of ‘renewables’ – solar and wind, which he – get this – states will help to provide ‘RELIABLE’ power….
Yes – he actually used the word ‘reliable’…
I know – its sad, isn’t it..?
Got my little standby genny ready…)
The situation Germany finds itself is unique. State-guaranteed price for 20 years and preferential treatment of renewables mean that solar and wind spikes drive wholesale price down. Since subsidies = guaranteed price – wholesale price, subsidies will increase in the future as long as wind and solar generation increase and drive wholesale price lower.
Low wholesale price (even lower in the future as renewable generation increases) means that utilities will shut down more fossil-fuel plants but they are needed for those days when wind does not blow or sun shine. RWE chairman Terium compared fossil fuel generators to a fire brigade and insisted that they should be paid like a fire brigade – not just for action during the fire (when there is no renewable generation) but also when they are kept on standby. In other words, Terium wants capacity payments. They are being discussed in Germany right now.
If Germany doubles wind and solar generation and gets rid of nuclear as planned, it may well end up with a system with three major generator components (fossil fuels, solar and wind), all of which run intermittently (two by nature intermittent, the third because it is used to fill the gaps left by the intermittent ones)) and are subsidized by consumers.
Every time a factory closes in Germany due to high electrical prices, a replacement plant opens up in Texas. Go on, Germany! Keep on doin’ what you been doin! We salute you!!! (while we take all of your jobs, heh heh)
That goes for you too, California.
Our man in Germany has much covered on this. I hope this helps a bit.
In Germany Energiewende may not go out with a whimper, rather a bang.
Next step: Coal plants shut down in Germany this summer (German demand is winter peak), will push the spot price for electricity in Europe to record levels in October/Nov/Dec 2014. Then the remaining money losing coal plants will stop losing money, and blackouts will ensue.
Background:
The German coal plants struggle to make money, as they are contracted for base load at a modest price, but get shoved aside 20 – 30% of the time by renewables. The Greenies love this – that the base load is losing money due to competition from (5x subsided) renewables. The coal plant owners have had enough. Germany will learn its lesson in Physics this fall.
To Jake J.
Given the very long planification, permission and erection periods of typically more than 10 years, a number of plants is still being built or has recently been commissioned. But the pipeline for new projects is largely dry.
A few sources, albeit (unfortunately) in German, but English language publications are hard to come by.
“Plans for a state-run power plant for fear of a blackout”
http://tinyurl.com/mdw3s2o
“Energiewende: Backup power plants will cost Billions”
http://tinyurl.com/nt5aotk
Power production statistics since 1990, also available in English:
http://tinyurl.com/m2qeguk
Fred
Actually my view is this. The Germans are good engineers. Build cars, check. Build autobahns check. Build submarines, check. Understand the big picture. Not capable.
Very nice, but Germany has forced its model on weaker EU nations, like Greece and Portugal who are struggling to regain competitiveness while straddled with exorbitant energy costs. The only real beneficiaries are non EU nations that advanced because the rest of us were held back by nonsense German inspired dogmatism.
The U turn is displaying the full effect of the law of unintended consequences and Germany, if it wants to remain credible, should state clearly that the CO2 policy’s untenability is EU wide. This is not a “Germany only” problem.
I admire Germany and most of the Germans. Really. Greatest Tech-nation of the world (next to Japan) But when it comes to political or ideological stuff they are on the level of a hilltribe.
That’s already been done, in Spain. But the lesson wasn’t learned. Sometimes you have to hit them with the clue bat more than once.
The really sad part is that all of this is for a non existent problem.
Lol, meanwhile the Alberta government gives AIMCO the unbridled use of the public’s sovereign wealth fund to invest in unproven green technolgies. Public service pensions are also managed by AIMCO. I see a bust in the not to distant future and a big shift politically in the province. “Absolute rule corrupts absolutely”.
http://mobile.bloomberg.com/news/2014-04-24/aimco-pension-to-invest-in-tech-to-cut-oil-sands-impact.html
wws says:
April 28, 2014 at 6:29 am
“Every time a factory closes in Germany due to high electrical prices, a replacement plant opens up in Texas. Go on, Germany! Keep on doin’ what you been doin! We salute you!!! (while we take all of your jobs, heh heh)
That goes for you too, California.”
Well maybe a copper affinery here or an aluminum smelter there, and that’s that. In practice exemptions from FIT contributions and ramp up of lignite power plants keep the machines chugging along, the enormous cost of renewables notwithstanding.
Throughout the entire Eurocrisis unemployment has been going down in Germany; we produce what the bankrupt South of Europe doesn’t produce anymore; in some cases German Mittelstand companies buy their suppliers in Italy just to make sure future supplies of intermediate products stay available at all; an involuntary expansion.
The entire affaire is not really costing jobs; it just reduces the standard of living. Our red-green journalists do their very best to not tell this story. The statistics make it clear though.
Meanwhile mass immigration of asylum seekers from North Africa and Syria has even lead to a record population – the territory currently occupied by Germany has never been as densely populated as now. House and land prices are at record levels.