Great Idea for U.S. Energy Policy: Let’s Follow the Example of Germany!

Francis Menton

As readers here well know, Germany has long sought the mantle of world leader in the march to save the planet by eliminating fossil fuels from the production of energy. This has been the strategy: induce, via large government subsidies and tax credits, the construction of vast amounts of wind turbines and solar panels to generate electricity; and as more of those come online, gradually phase out facilities that use fossil fuels, and also phase out nuclear.

Unfortunately, the Germans have been so blinded by their religious fervor to save the planet that nobody bothered to figure out how much energy storage would be needed to back up these intermittent technologies and keep the grid functioning 24/365 in the absence of fossil fuels and nuclear. Now Germany has an excess of wind and solar facilities that, however, are incapable of providing reliable power on their own; and it has inadequate back-up other than natural gas from Russia. Thus Germany is facing an imminent energy disaster.

Meanwhile, back here in the U.S., the word is that the Senate Democrats have finally gotten their black sheep Joe Manchin on board with a big “green energy” bill to take the U.S. to its own energy nirvana via a big reduction in carbon emissions. And how will that be done? Basically, we’re now going to follow the strategy of Germany! Lots and lots of tax credits and subsidies to build more and more wind turbines and solar panels, without any serious consideration of what will be needed in the way of storage to provide back-up for the intermittency and build a fossil-fuel-free grid. Is anybody around here paying attention to what is going on in the world?

Let’s check out the latest news from Germany on the energy front. On Wednesday, July 27, the Guardian reported that Russia had reduced the flow of natural gas to Germany via the Nord Stream pipeline to 20% of capacity. It’s still July, and we’re several months from heating season, but Germany is rapidly realizing that its energy jig is up. Just one day later, on July 28, the Guardian had another article reporting that the energy rationing in Germany has already begun:

Cities in Germany are switching off spotlights on public monuments, turning off fountains, and imposing cold showers on municipal swimming pools and sports halls, as the country races to reduce its energy consumption in the face of a looming Russian gas crisis.

Meanwhile, Germany in June adopted an “energy emergency plan” that involves jacking up consumer prices to force less usage:

[A]n energy emergency plan initiated in June enables utility firms to pass on high gas prices to customers. . . . On Thursday, Germany’s government confirmed that a planned gas surcharge on customers could be much higher than previously expected, to save energy companies from going bankrupt in the coming months.

And Spiked on July 27 reports on various other energy rationing measures that Germany is adopting, well in advance of peak energy usage in the winter:

Germany is already having to make drastic cutbacks to energy use. Town councils are dimming or turning off street lights and even traffic lights. Large landlords and housing associations have started turning down the heating on their residents and rationing their hot water. Some local authorities are considering setting up ‘warm rooms’ for elderly people to gather in the winter.

But hang on a second. After more than a decade of a crash program to build wind turbines and solar panels, doesn’t Germany have more than enough of them to supply all of the electricity it could ever possibly use? You would think so, but unfortunately it doesn’t work that way. According to the U.S. Energy Information Agency, in 2020 (latest year given) Germany used 500,000 GWh of electricity, which would mean that its average usage (divide by 8760) was about 57 GW. Its peak usage (according to Montel) is about 100 GW. So if it had dispatchable generation resources (fossil fuel, nuclear, hydro) of about 120 GW, Germany should have a more than sufficient 20% margin and plenty of electricity. Instead Germany has vastly more generation capacity, 248 GW (again from the U.S. EIA for 2020). Of that, 54 GW is solar and 62 GW is wind, a total of 116 GW between those two, well more than its entire peak usage, and more than double average usage. But you can’t count on any of it when you need it. The small amount of nuclear (8 GW) is on the way out. So they can’t get rid of the natural gas as backup, and with fracking banned in their own country and also throughout Western Europe, they are left completely dependent on natural gas from Russia.

The price to German households for electricity at the end of 2021 stood at an average of 32.16 cent per KWh, which is before any further recent increases. That is about triple the average U.S. consumer electricity price. For that you get shortages and rationing.

So what is the U.S. energy strategy going to be under the new Senate bill just negotiatied by Manchin and Majority Leader Schumer? The answer is, it’s basically the same as the German strategy. In a few words, massive subsidies and tax breaks to incentivize the construction of vast amounts of wind turbines and solar panels. From E&E Daily, July 28:

Huge win for clean energy. . . . Clean energy tax credits are the centerpiece. Under the deal, existing renewable credits would be extended. After 2025, they would become technology neutral and based on greenhouse gas emissions reductions.

Is there any deeper thinking behind this than just that wind and solar are “clean” so we should build more of them? Doesn’t look like it. So give us a few years of this, and we’ll be right where Germany is: vast excess capacity of wind and solar panels, none of which is there when you need it, and electricity rates tripled to pay for the redundant excess capacity and subsidies to the people who built it.

Read the full article here.