Reality check German wind industry hits doldrums as government shifts pricing

The buildup of new wind power capacity fell more than 50 percent in 2018. It casts doubts over Germany’s ambitious green energy targets.
Quelle: AP
(Source: AP)

The German wind industry went into the doldrums last year as new capacity fell 55 percent from 2017’s record level of 5,330 megawatts to just over 2,400 megawatts. Only 743 new turbines came onto the grid or were upgraded in 2018, compared with 1,800 the year before, said the Federal Association for Wind Energy, known as BWE. It was the worst year since 2012.

The dramatic decline came as the government shifted in 2017 from paying a fixed price for actual wind energy output to an auction system, rewarding only the bidders which require the lowest amount of subsidies per installed kilowatt hour. The wind energy association also blamed the long time to obtain permits as a reason for the dramatic drop.

Industry group VDMA Power Systems, which represents wind turbine and components makers such as Siemens Gamesa, Nordex and GE, said the drop in new wind farms was at odds with the aim to build up renewable energy sources. It was especially illogical given the intention to eliminate electricity from coal by 2038, as a government commission advised on Saturday.

"It is self-explanatory that the 65 percent target of the Federal Government cannot be achieved by 2030 if the currently foreseeable annual expansion is continued," said Matthias Zelinger, head of VDMA Power Systems.

Grafik

As part of its renewable energy transition, the government wants 65 percent of German electricity to come from renewable sources by 2030. The number currently stands at 38. Since the nuclear meltdown in Fukushima, Japan, Germany has set ambitious targets to wean itself off nuclear power as well as coal in the long run. Banning coal should help to meet the country’s climate targets. Germany has already admitted it would miss its CO2 emission goal in 2020.

This year and next could again see a drop in newly constructed windmills, the Federal Association for Wind Energy said. In 2019, only 2,000 megawatts might come online. Construction of sea-based mills is expected to drop in 2020, said Dirk Briese of think tank WindResearch.

Due to the difficult German market, turbine manufacturers have already been laying off workers. Market leader Enercon is eliminating around 900 jobs. And turbine producer Nordex expects new installations to decline again this year.

To change the tide, the wind energy association BWE said the federal government and 16 states needed to speed up the regulatory process to obtain permits and the expansion of the high-power electricity grid to enable the transport of energy across the whole country. Without an adequate network energy from the north, where the wind blows more often and stronger, green electricity will never reach the users in the south of Germany.

Kathrin Witsch covers politics and economics for Handelsblatt. Darrell Delamaide adapted this story into English for Handelsblatt Today. To contact the author: [email protected].