Germany’s Defective Green Energy Game Plan

A Commentary By Alexander Neubacher

Germany pretends to be a pioneer in the green revolution. But its massively
expensive Energiewende has done nothing to make the environment cleaner or
encourage genuine efficiency. One writer argues: Either do it right, or
don’t do it at all.

So, perhaps you’ve heard about Germany’s heroic green revolution, about how
it’s overhauling its entire energy infrastructure to embrace renewable
energy sources? Well, in reality, our chimney stacks are spewing out more
than ever, and coal consumption jumped 8 percent in the first half of 2013.
Germans are pumping more climate-killing CO2 into the air than they have in
years. And people are surprised.

Why coal, you might ask? Aren’t Germans installing rooftop solar panels and
wind turbines everywhere? What’s being done with the billions of euros from
the renewable energy surcharge, which is tacked onto Germans’ power bills
to subsidize green energy and due to rise again soon? This is certainly not
how we imagined the Energiewende, Germany’s push to abandon nuclear energy
and promote renewable sources, which Chancellor Angela Merkel’s government
launched in 2011 in the wake of the Fukushima disaster.

This same government acts as if this coal fever were merely a growing pain
or transitional problem. But that’s not true. Instead, it stems from
structural flaws in the Energiewende. Renewable energy and the coal boom
are causally linked. The insane system to promote renewable energy sources
ensures that, with each new rooftop solar panel and each additional wind
turbine, more coal is automatically burned and more CO2 released into the
atmosphere.

Counterincentives Galore

Indeed, Merkel’s Energiewende is morphing into an environment killer. It
burdens the climate, accelerates the greenhouse effect and causes
irreversible damage.

Take the fluctuation/storage problem: Sun and wind sometimes provide an
abundance of electricity, and then nothing at all — depending on the time
of day and the weather. When they are pumping out lots of power, however,
very little of the surplus can be stored because there is a lack of
appropriate technology and the incentives to develop it.

German law stipulates that renewable energy always has priority in the
grid. When gaps emerge in the electricity supply, though, they have to be
bridged by conventional power plants. Unfortunately, these are usually not
gas plants, but ones burning cheaper coal. As long as there are no storage
facilities for green electricity, every wind turbine and every rooftop
solar panel will cast a dark shadow.

And then there is the brake on investments: The price of electricity at
noon used to be particularly high due to the large demand. Today, it’s
often particularly low because large amounts of solar power are flowing
into the grid. Subsidized and privileged solar electricity is forcing other
power plants out of the market. Only cheap coal can compete on price.
Nearly all plans for the construction of new, better and more efficient
power plants have been shelved. Nobody invests in facilities that don’t pay
off. Instead, the energy companies are drawing as much electricity as
possible from their power plants that are slated to be phased out.

Likewise, there is the dilemma over the right to pollute: Germany’s efforts
to promote green energy are colliding with the European emissions trading
system. Every kilowatt hour of renewable energy frees up emissions allowances.

These allowances are regrettably not discarded, but are instead sold and
used elsewhere to offset pollution by the Spanish cement industry, Polish
lignite plants and German steel mills, for example. All of the wind
turbines, rooftop solar panels, hydroelectric and biogas plants in Germany
have not reduced CO2 emissions in Europe by a single gram. On the contrary,
they have helped lower the price of emissions allowances on the European
carbon market — much to the delight of Europe’s dirtiest industries.

And let’s not forget the bureaucracy monster: German bureaucrats have come
up with over 4,000 different subsidy categories for renewable energy,
apparently adhering to the principle that what is particularly expensive
has to be lavishly subsidized. As a result, a large proportion of the
subsidies are used to support highly inefficient technology, such as solar
parks in regions of eastern Germany that receive relatively little sunlight
and wind turbines far off Germany’s North Sea coast.

The bureaucratic system also puts the brakes on innovation. Little research
is conducted in areas in which no subsidies beckon. Technical progress is
hobbled by the ploddingly predictable imagination of civil servants.

Change It, or Ditch It

Unfortunately, the debate on the Energiewende revolves almost entirely
around costs. Germany is about to get a new coalition government — and one
without the business-friendly Free Democrats. But the future government has
to do much more than just continue to squabble over the financial details.
It has to remedy the fundamental design flaws; and, if it doesn’t, the
Energiewende will lose its legitimacy.

Granted, it’s annoying that switching to renewable energies is driving up
the price of electricity. But it can’t be avoided. Still, if the
Energiewende turns out to be a climate killer, it would be better to call
the whole thing off.

Translated from the German by Paul Cohen


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