ENERGY SWITCH Germany’s Expensive Power Drain

Playing renewables off against conventional energies is counter-productive. Instead, a common European policy on energy and climate is needed.
A windpark in Lower Saxony.

On the outside, the case for energy transition seems reasonable. It is presented as a battle of “clean” versus “dirty” energy, and “renewables” nourished by wind and sun versus “dirt slingers” in brown-coal regions of the Rhineland.

It is quite simply a matter of black or white, of good against evil, at least that’s the way it seems in disputes over renewable energy inside Germany’s governing coalition.

From a historical perspective, the ostracism of fossil fuels is, of course, unfair. Without anthracite and brown coal, or without oil and gas, sheep would probably still graze along the Ruhr River today, and Germany would still be farmland. In short, the nation’s industrialization and prosperity was made possible by “dirty energies.”

The framework for Germany’s transition to renewable energies is outrageous, and apparently born from a series of misjudgments.

No one expects gratitude for this. But people from coal regions know that mining was and still is difficult and dangerous work. They don’t like it when the federal environment minister, Barbara Hendricks of the center-left Social Democratic Party, treats “conventional energies” with such verbal frivolity — especially since her political ancestors were committed to nuclear power only a few decades ago and once praised the “black gold” that miners extracted from the Ruhr valley.

The framework for Germany’s transition to renewable energies is outrageous, and apparently born from a series of misjudgments.

First, the government wanted to get away from nuclear power and spontaneously decreed an immediate exit. Next, coal too would have to give way, aided by massive financial support for renewables. Finally, it was expected that natural gas could make up the difference until renewables could meet all of Germany’s energy needs.

That last point seemed logical but overlooked the sole remaining free-enterprise gap in the government-regulated reality of energy policy — namely the market where electricity is offered for sale. The price now is so low — along with plunging prices for European emissions trading –that only brown coal can take it into account.

As a result, the world’s most expensive energy transition — which Germany is imposing on itself — is ditching almost carbon-free nuclear power. Meantime it protects “dirty” coal at the expense of relatively “clean” natural gas, and will soon cost more than €30 billion annually in subsidies paid by taxes on citizens and rates for consumers — all with almost no positive effect in terms of climate policy.

This situation will continue as long as there is no sufficient storage of electricity. And that will be the case for a long time. Because of the legal priority given to renewables, we will continue to produce “green” and “black” electricity, sometimes in such great amounts that we will make foreign deliveries of it at “minus prices.”

This sort of negative electricity price can sometimes amount to €60 per megawatt hour. And the longer that renewables are subsidized, the more electricity – regardless of “green” or “black” – will be exported at “minus prices” in the future, at the expense of normal-rate customers!

So the question is: When will politicians put a stop to the proliferating, subsidy-driven development of renewables, and change course toward a genuine, European energy transition?

First, a pan-European energy infrastructure is needed, along with massive private investment.

Second, common standards for promoting renewables should apply to all member states of the European Union, preferably only for supporting research and development instead of marketing.

Third, effective European emissions trading must cover all areas of the economy.

A united European approach is worth working for, if only for clarity and truthfulness in climate and energy policy. Denouncing conventional energies would in any case cease to make sense, if effective climate protection – through emissions trading – really got going throughout Europe.

And with respect to the competitiveness of German industry, that would be a blessing!

 

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