Germany’s Lost Decade

Germany appears intent on doing three things faster than almost any developed country: expanding renewable power, closing nuclear power plants, and building new coal power plants. The first two are much praised by those who drink the Energiewende Kool Aid, while the third is often treated as some kind of myth by the same people. Germany’s Environment Minister however recognizes it is not a myth, but appears to believe in magic instead. After the opening of 2.2 GW coal power plant earlier this year, he absurdly stated the following:

“If one builds a new state-of-the-art lignite power plant to replace several older and much less efficient plants, then I feel this should also be acknowledged as a contribution to our climate protection efforts.”

Now, one would have hoped that such statements would kill off Germany’s hopes of being a model Green country. After all it could easily build gas plants instead, and get half the emissions. Instead prominent figures such as Bill McKibben continue to peddle wishful thinking about Germany’s energy plans, apparently with no regard for the actual carbon dioxide Germany will be pumping into the atmosphere.

What, however are the actual emissions impacts of Germany’s over praised Energiewende? More important, for those countries considering copying Germany, is whether its nuclear phase out will have negative implications on the Energiewende. Many Greens believe that it won’t. An illustrative example is Damian Carrington of the Guardian newspaper, who fumbled around in the dark “busting the carbon myths” of Germany’s energy policy.  Some argued that shutting 8 nuclear reactors in 2011 would lead to Germany importing more electricity, to which Carrington responded that Germany instead simply exported less. This is sophistry of the highest order. He then explained away any rise in emissions by claiming that they would be magically offset by reductions elsewhere due to the workings of the European Emissions Trading Scheme. A fine piece of special pleading, curiously absent when the possibility of the UK building new gas plants is discussed.

The plain truth is that Germany’s nuclear shutdown means that its carbon emissions from electricity are going precisely nowhere in the next decade. Before March 2011 Germany got 40% of its power from low carbon sources (23% nuclear, 17% renewables.) What is it targeting for 2020? 35% renewables (though they may push this up to 40%). This leaves fossil fuels where they are today. So, the arithmetic is clear: Germany is spending vast amounts of money on renewable energy and putting big increases on regular consumers’ electricity bills, while phasing out nuclear energy, all so that they can stand still.

Simply calling this a lost decade for Germany, however, may be overly optimistic. The continued increase in consumer electricity bills is almost certain to dampen the enthusiasm for clean energy, and Germany’s already fond appetite for coal may be increased all the more.

About these ads

27 thoughts on “Germany’s Lost Decade”

  1. The total emission will then rely entirely on the investment in existing plants to make them more efficient or in new plants. As the life time of all those is more than 30 years, it bodes ill indeed for the long term success of the policy, because success would require that, by the end of the 2030s, the electricity sector be decarbonized.

    On the ETS argument, in my view it is true, but it does not make the policy desirable. It is true that the ETS puts a european ceiling on industrial emissions, to which the electrical sector belongs. But in arguing that the effect of the exit from nuclear policy will be nil, they are saying 2 things:
    * The favors the electrical renewables get will get us nowhere, for exactly the same reasons. The only they could work is by causing a massive undershoot of the ceiling.
    * The german exit-from-nuclear policy will be paid in part by all the europeans, who will have to incur higher costs because the german policy will make demand for allowances stay flat in face of a diminishing supply. This is a typical free rider behavior; not something we want to serve as an example.

  2. Proteus

    I remain unconvinced that the ETS will have the mentioned effect. Currently it is a completely ineffective system, with price signals being an absolute mess. There are current efforts to increase the carbon price, but that simply raises the question of why it isn’t just a carbon price in the first place.

    However, as a general point, I agree. If the ETS works as intended it makes a lot of policies a total waste of time. Spending huge stacks of money on roof top solar will deliver zero emissions cuts, but will increase electricity bills. Governments appear to want it both ways: keeping the ETS in place, while implementing policies that won’t work if the ETS works.

    1. In fact, a normative intervention can have a bigger effect than an emission market. So in essence you are right.

      The proof is the SO2 emission trading in the US. It started by woking as intended, with a price well above 0. But then the price for refurbishing the coal plants and the use of coal with less sulphur (switch to coal from Wyoming) has transformed the SO2 allowance market into a museum object. Now the SO2 emissions are driven by norms edicted by the EPA. And by the way, reductions of SO2 emissions have been much bigger in Europe with the LCP directives.
      see for example: http://conversableeconomist.blogspot.fr/2012/10/when-tradeable-pollution-permits-fall.html

      The carbon market is irrelevant in part because of the recession. The other part is the policy towards renewables. That makes the point about the ETS really disingenuous: you can’t have it both ways. Either it’s the main tool to reduce carbon emissions and everything you do around that is a waste. Or it’s a sidekick, and normative policies are what really matters. And if normative policies are what matters, a carbon tax does not change the story a lot as it must be high to have an effect.

  3. Thank you. Good post. In case you are interested in what capacity is being build in Germany data is here: http://www.bundesnetzagentur.de/cln_1932/DE/Sachgebiete/ElektrizitaetGas/Sonderthemen/Kraftwerksliste/VeroeffKraftwerksliste_Basepage.html.
    The first excel file is about the current mix and the 2nd gives the plants that come online by 2015 as well as those that are retired. If I summed correctly, about 9GW of new coal power will appear by 2015 and about 3GW is retired.

    1. Thanks for the link. I was actually planning on blogging on that soon. There have been claims that Germany is decommissioning coal faster than building it. I’ve seen other stats before that showed that claim was nonsense, but these seem more useful.

    2. Many of the coal plants are already beeing built, but whether we can really decomission any capacity, I have my doubts. There is an article that sums up the madness pretty well:

      http://www.spiegel.de/international/germany/energy-turnaround-in-germany-plagued-by-worrying-lack-of-progress-a-860481-3.html

      Concerning the long term targets, these are coming from the same person that promised, only a few months ago, the feed-in-tarif for renewables (paid per every kWh by consumers) would not rise anymore. Now we were told it will increase from 3,6ct/kWh to 5,3ct/kWh plus VAT, and things like grid expansion are not even included.

  4. You write: “After all it could easily build gas plants instead, and get half the emissions.” Any thoughts on why they don’t?

    1. The simple reason I suspect is cost. Gas is more expensive than coal in Germany. However the costs for saving those emissions would be much lower than for those saved by solar. Worth remembering that solar is displacing gas, whereas gas would presumably displace coal in this gas. So, a bargain compare to solar fits.

    2. Too much dependance on Russia for energy needs simply isn’t a good idea (remember how they treated other customers in the past), that’s probably an important part of the reason.

    3. Of course, the least cost option, by far, is just to keep 2.2 GW of nuclear operating. That option also emits no CO2 (vs. half CO2 for gas).

  5. You should check the renewable vision of Germany in the next 50 years. They want to harness not just Germany but the whole Europe in clean energy just to satisfy their own goal. The numbers are crazy.

    The report is called “Langfristszenarien und Strategien für den Ausbau der erneuerbaren Energien in Deutschland bei Berücksichtigung der Entwicklung in Europa und global” (the title is self-explanatory, it’s not just a vision for Germany or Europe but for the World) and made by the DLR and Fraunhofer IWES, specialists in this field but very influenced (in my sense) by the doctrine and world view of Hans-Joachim Schellnhuber of the WBGU which wrote and even more interesting report about its own Weltanschauung.

    Actually a majority of people in Germany and abroad is lured into what I call the Island Myth, that Germany will become independent from other countries with renewable energies (as some small islands are doing without, without any complex consumption patterns, industries, etc. like any other advanced countries) a kind of bigger Swiss that will get a little help from friendly countries such as Norway, Switzerland and Austria to store renewable energies.

    But the reality of the plans are much different. One funny thing for example is to build a huge grid across Europe, especially a line through France from south-west to north-east from Spain (and surely the Sahara desert with DESERTEC) to feed Germany renewable hunger.

    More generally Germany will become more and more dependent in the future: immigration to finance its structural and disastrous demographic trends (they take it on a joyful note in the RE report: finally energy demand is falling!), Europe economy to satisfy its exports which is the second hand to finance its aging population and Europe energy resources and networks.

    Just to expand the German energy lock-in into an German ideology lock-in.

    PS: Proteos, always there ;)

  6. You have to wonder if these renewable targets will be met. They are already getting pushback from Poland and the Czech Republic on German dumping of electricity when the wind happens to be blowing hard. Poland and Czech plan to install switches to cut this off as they claim it is destabilizing their grids and is an abuse of the system by Germany.

  7. During the sales I invested in a affordable igloo rolling cooler and it is extremely handy –
    not too large, although significant enough to carry 58 drinks or perhaps a couple of
    litres. It is good to bring around in the car, even to simply
    bring home “doggy bags” from dining out. It holds the
    large Styrofoam pots that lots of dining establishments give away.
    The rollers work smoothly on pavements or yards.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s