Tag Archives: renewable energy

The Chaos of German ‘Renewable’ Energy

I have been detailing the disaster of Germany’s dash for renewables, and the problem is now spilling over to Germany’s neighbours. I picked up this story from a translation of a Die Welt article at GWPF:

Germany considers itself the environmental conscience of the world: with its nuclear phase-out and its green energy transition, the federal government wanted to give the world a model to follow. However, blinded by its own halo Germany overlooked that others have to pay for this green image boost and are suffering as a result.

For example, Germany’s ‘eco-miracle’ simply used the power grids of neighboring countries not only without asking for permission but also without paying for it. Now Poland and the Czech Republic have pulled the plug and are building a huge switch-off at their borders to block the uninvited import of green energy from Germany which is destabalising their grids and is thus risking blackouts.

The problem is detailed further here, under the catchy title of ‘German Renewables Run Amuck’:

Germany allows any family to put a solar power unit on its roof and start feeding its output into its own house and thereby replace public power supply. Initially, the panels on the roofs fed cheap electricity into the grid and brought down the costs. But soon there were too many. On bright, sunny days, those families were generating anything up to 30 gigawatts of electricity and feeding it into the grid. The result was massive surges in the grid. There was not enough demand for the power, and Germany exported power to Poland at such times. That destabilised the Polish grid, and Poland is now installing equipment to stop power inflows from Germany. In Germany itself, the midday surge in power reduced the demand for power from conventional plants, which are no longer profitable, so no one is prepared to invest in conventional power plants.

And more detail again here:

One impact from rising intermittent German wind power generation in the north of the country is of electricity spilling into neighboring networks en route back into southern Germany or Austria, called loop flows.

Another is of rising exports of cheaper, intermittent power, undercutting the economics of baseload power in Germany’s neighbors.

The interesting point here is that the undercutting has been spun as being a result of cheaper German energy prices as a result of them shifting to renewables:

Moreover, by blocking the German access to their grid, they prevent Germany companies from selling their electricity, which is cheaper than that of the Central Europeans, to Austria.

“This is what it’s really all about,” says Rainer Baake, director of the think tank Agora Energiewende and former high-ranking official in the German environmental ministry. “Germany’s increase in clean energy has led to Germany’s wholesale electricity prices becoming cheaper and cheaper. Now it’s less expensive to import electricity from Germany than to produce it in coal fired power plants in Eastern Europe – let alone to build new nuclear power plants.”

I took a look at a translation of the Agora website, and they are a think tank dedicated to advocacy for renewable energy. This is the situation of German energy costs in relation to the rest of Europe:

The global average for the cost of one megawatt hour of electricity is around 23 euros ($31). In Germany, the same runs about 45 euros ($60) – making electricity here the second-most expensive in Europe (after Denmark).

As a note, Denmark has also rushed into wind energy. So it not that Germany is creating cheap electricity, but rather that intermittent energy leads Germany to simply dump their excess on their neighbours, as they absolutely have to remove it from their own grid, or risk a collapse of their own grid. This then exports the problem to other countries, who then have to deal with the consequences of power peaks from Germany, as well as the impact of their dumping on the economics of their own energy sector. It is no wonder that these neighbours are up in arms over the issue. It is a very simple issue; they are importing problems of intermittency that are not of their own making. It seems that if Germany wants to go down their own mad route to renewables, those who are following their own policy of generating reliable energy should not pay the price.

In addition to the fundamental problems of renewables again becoming evident, the reaction of renewable energy advocates is revealing. The claim that the reason for the problems being ‘cheap’ German renewable energy is simply laughable. Nevertheless, it appears in a report on the issue without any reference to the sky high energy prices within Germany. The high energy prices in Germany are now really starting to develop acute problems for the German economy. This is a passage from one of the articles cited earlier:

The path toward an energy policy that everyone can agree on is a bumpy one, which particularly economists are increasingly worrying about. The German industrial sector accounts for 24 percent of the gross domestic product; many of its businesses have high electricity consumption.

Every second one of these businesses associates the ongoing energy sector with a decline in competitiveness, according to Hans-Heinrich Driftman, a businessman and head of the Federation of German Chambers of Industry and Commerce.

Driftman said almost all businesses should expect higher electricity bills for 2013, compared to 2012. He said passing on to the consumers the costs for funding renewable energies his company’s bill will increase from 300,000 euros ($398,000) to 450,000 euros ($598,000).

“With these amounts of money, as a businessman I have to think about where I can make some cuts,” Driftman said.

Indeed, I have posted on this subject several times. In many of the posts, it is apparent that there is increasing alarm over the cost of Germany’s renewable energy policy by businesses in Germany. I recently posted on renewable cost exemptions being made to certain businesses, but this just hides the kind of business closures that garner headlines, rather than the gradual erosion of competitiveness that comes with renewable energy. For every Euro not paid by the exempted businesses, someone somewhere is making up the difference:

Since Spenner’s company is registered as an “energy-intensive business,” his electricity bill is exempt from the rollover costs of renewable energy production. These costs are made up of government-guaranteed reimbursements to the energy producers based on the amount of electricity they feed into the grid coming from renewable sources.

These extra costs, which shall be passed on to consumers, are estimated to amount to 23 billion euros ($31 billion) for 2013. This means that each electricity consumer will pay an extra 5.28 cent per kilowatt hour.

But Spenner wonders how long the government can afford sticking to its promise of exempting businesses such as his from the extra costs. “We’re worried when we see how private households are being maneuvered into opposing energy-intensive sectors. This should not be the case, because if we weren’t exempt, we’d be facing an existential problem.”

In addition to Germany facing problems, the problems are broader than Germany. The push towards renewable energy and the anti-fracking policies throughout Europe are now seeing interest from European companies to relocate to the US, where the fracking revolution has seen diving energy costs. This from the New York Times:

LONDON — On Dec. 19, Voestalpine, an Austrian maker of high-quality steel for the auto industry, announced that it would build a plant in North America that would employ natural gas to reduce iron ore to a kind of raw iron that would then be used in the company’s European blast furnaces.

Asked whether he had considered building the plant in Europe, Voestalpine’s chief executive, Wolfgang Eder, said that that “calculation does not make sense from the very beginning.” Gas in Europe is much more expensive, he said.

High energy costs are emerging as an issue in Europe that is prompting debate, including questioning of the Continent’s clean energy initiatives. Over the past few years, Europe has spent tens of billions of euros in an effort to reduce carbon dioxide emissions. The bulk of the spending has gone into low-carbon energy sources like wind and solar power that have needed special tariffs or other subsidies to be commercially viable.

“We embarked on a big transition to a low-carbon economy without taking into account the cost and without factoring in the competitive impact,” says Fabien Roques, head of European power and carbon at the energy consulting firm IHS CERA in Paris. “I think there will be a critical review of some of these policies in the next few years.”

Both consumers and the industry are upset about high energy costs. Energy-intensive industries like chemicals and steel are, if not closing European plants outright, looking toward places like the United States that have lower energy costs as they pursue new investments.

Germany has now grabbed the lead in the transition to renewable energy. Unlike a country like New Zealand, they have been able to export their problems to their neighbours, at least for the moment. New Zealand has no such neighbours. However, in addition to Germany’s neighbours bearing the price of the intermittency of German energy, they have to deal with their own problems; an increasingly uncompetitive energy industry in Europe overall. This is down to the ‘green’ objections to fracking and renewables policies, and they will pay a price in jobs and their manufacturing output.

As I have said in previous posts, the ‘green’ renewables future is not now just in the future, but is becoming a reality. That reality is very straightforward. It is an increase in the cost of living and a declining economy. It is folly beyond belief, and New Zealand is endorsing this madness in its own dash for ‘renewable’ expensive, intermittent, and economically damaging energy. When is the New Zealand government going to wake up from its disastrous and politically correct dash for renewables? I simply despair.

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More on the Cost of Renewables from Germany

It is very curious how the ‘Greens’ occasionally let the cat out of the bag regarding the real cost of renewable energy. I just found one such article on Spiegel online. Here, it is their desire to take a swipe at business that creates the revelation. As regular readers will know, I have been detailing the shocking costs that are being loaded on German households and firms as Germany dashes for a renewable future (e.g. see here).

The German government will exempt some 1,550 industrial companies from electricity cost increases in 2013, SPIEGEL has learned.

The Federal Office for Economics and Export Control informed the firms in mid-December that they won’t have to pay a special charge imposed on electricity customers under the country’s Renewable Energy Act to help cover the cost of expanding the production of energy from renewable sources.

The opposition Green Party estimates that the companies will save up to €4 billion ($5.3 billion) as a result. The electricity bills for private energy customers and smaller businesses will increase by a commensurate amount.

Note the number of companies and the cost quoted by the Green Party. The really curious part is that the government believes that it is necessary to exempt companies in the first place, if renewable energy is a viable plan for an economy. Implicit in the subsidy is a recognition that, in some way, the industries being exempted are threatened by the soaring costs of energy. Of course, the Green Party are right about the increase being diverted to other energy users, but the key difference with other energy users is that they are presumably smaller, and there will be no headlines as major businesses shut down due to higher energy costs. The German government has good reason to be concerned. Their next door neighbour of Poland is one of the least ‘green’ in Europe:

Poland is the 10th largest consumer of coal in the world and produces 92 percent of its electricity from coal, according to the World Coal Association. And despite EU targets for curbing greenhouse gas emissions, Poland is pressing forward with plans replace old coal plants with massive new ones.

Incidentally, the article that this quote comes from is one in which carbon dioxide is termed a pollutant; a curious description for a gas which is essential to all life on earth. However, returning to the main point, it is possible to guess why the exemptions were given. The companies granted the exemptions probably simply said that, with such high costs, they would decamp from Germany to a more business conducive economy such as Poland.

If I were German, I would not so much be worrying about the exempted companies, but rather the companies that are not exempted. These are presumably smaller concerns, and ones without the scale and resources to lobby the government. For these companies, the higher costs will go ahead, and for higher energy users they will undoubtedly give consideration as to whether they wish to continue to operate in Germany. This will not happen overnight; moving is a complex and expensive business. Rather, when it is time for the next major investment, for example a major capital expenditure, this is when the factories start to relocate.

The impact on lighter energy users is less dramatic, but is still there. The added energy costs will appear in their prices, and that cost will then be passed on to consumers as higher prices, and those consumers will already be paying higher prices for their own energy usage. Furthermore, each firm engaged in exports, or competing with imports, will be less competitive. That will mean less sales, and less sales means less jobs. Furthermore, the increased cost of living will see pressure for higher wages to make up for the inflationary effects of higher energy costs, and this will further dent their ability to compete.

The simple point is this. Energy costs can have a major impact on the competitiveness of an economy. Moving to renewable energy, as is being clearly demonstrated in Germany, creates a huge increase in energy costs. The ‘green’ dreamers have long claimed that ‘green’ energy is good for the economy; it is an absurd idea, and Germany continues to provide the evidence.

German Wind Energy

I have unusually added a second post today, and if you have not seen it, you may wish to see my post on the Monckton-Doha affair. The article that has prompted this post is one I have just stumbled upon at Spiegel, in which Spiegel interviews Stephan Kohler, the head of the German Energy Agency. I will quote the early part of the interview:

SPIEGEL: Mr. Kohler, according to the government’s plans, the last German nuclear power plant will go offline in 2022. What will the domestic power supply look like at that point?

Kohler: It will be interesting. It’s easy to shut down a nuclear power plant, but that doesn’t mean you have something to replace it with. We know today, for example, that we don’t have enough reliable power plant capacity in southern Germany to be able to offset the loss of nuclear energy.

SPIEGEL: Solar and wind aren’t enough?

Kohler: According to the generally accepted opinion, the transition to renewable energy sources means that we will give up nuclear power and rely on wind and solar instead. The reality is that we’ll need conventional power plants until at least 2050, even if we do create massive renewable energy sources. Many people dispute this. They say that we could replace power plants operated with fossil fuels by adding more renewable energy sources. My response to them is: It won’t work.

SPIEGEL: What’s the problem?

Kohler: When a new wind farm is opened and we’re told how many thousands of households it can supply with electricity, that number applies to only a quarter of our demand. In Germany, 75 percent of electricity goes to industry, for which a secure supply — that is, at every second, and with constant voltage — is indispensable. Neither solar nor wind power are suitable for that purpose today. Both fluctuate and provide either no secure supply or only a small fraction of a secure supply. Solar energy has a load factor of about 1,000 hours a year. But there are 8,670 hours in a year.

SPIEGEL: But on some days solar power is already enough to supply all of Germany with electricity.

Kohler: Photovoltaic systems are distributed across hundreds of thousands of small power plants, which sounds nice. But when the sky is blue over Germany, these hundreds of thousands of decentralized plants act like a single, large power plant. All of the sudden we have 30,000 megawatts coming into the grid, which, in many cases, we can’t use.

SPIEGEL: Is that so dramatic? It’s better to have a surplus than a shortage.

Kohler: I don’t want to bore you with the details, but a surplus and fluctuations lead to very unpleasant systemic effects. We have voltage fluctuations within the grid that create problems for industry. Or we overload the grids in neighboring countries. Poland is in the process of installing technical equipment to protect its grids by keeping out surplus German electricity.

SPIEGEL: So far the prognoses that anticipated possible blackouts during peak load times have not come true. Weren’t the concerns, including yours, exaggerated?

Kohler: We were lucky in the winter of 2012. By 2015, we will manage to secure the current power supply with old power plants. Then a number of large power plants in southern Germany will gradually go offline, starting with Grafenrheinfeld in Bavaria. If we don’t act very quickly now, the reality will show us that we face real problems.

And so the article goes on, detailing the problems associated with intermittent energy provision, and making points that skeptics have been making for so long. The simple and plain fact is that these so-called renewable sources of energy are simply a disaster. An expensive and pointless disaster. I have written on several (e.g. see here) occasions about the dangers of the move to renewable energy, and German experience trumps the sunny and rosy predictions given for a ‘renewable future’. If Germany cannot make it work, what on earth makes people think it can work in New Zealand. After all, we are looking at the example of Germany, which is famed for great engineering and efficiency.

More on the Reality of Living with Wind and Solar Energy

A while ago, I discussed that the future has arrived, and that we can see the real cost of ‘green’ energy policies in the case of Germany. If you are a business owner, or just and ordinary electricity bill payer, you should read the earlier post. The sudden retreat in Germany from nuclear power has left the country reliant on renewables, and energy shortages, energy unreliability and skyrocketing energy costs are the result. Just to serve to emphasise the point, Spiegel online has yet another news story that tells of the many problems being experienced in Germany. All the ingredients I long ago discussed are there.

  • Problems concerned with the intermittent power provision
  • High costs associated with connecting renewables to the grid
  • High costs associated with storage of energy
  • Hight costs associated with keeping backup online from conventional sources for when the wind does not blow / sun does not shine, including inefficient use of conventional capacity
  • High costs of investment from the necessity to build conventional plant backup for each renewable sources (capital expenditure)
  • Rationing of power, in this case, having large business energy users being paid to shut down their factories – paid to produce nothing

I may have missed a couple of points, but I am sure you get the picture. The consequences of renewable energy in Germany are now not the bright hypothetical future painted by ‘green’ propoganda, but are now very real and dismal. I have long admired Germany as an industrial power, but even Germany cannot be immune from the consequences of their mad ‘green’ energy policy. If the quotes I give below later are not enough, read the whole article. It is very clear and very simple to see the consequences of moving to ‘green’ energy.

Countries that follow a green energy agenda are putting an economic gun to their own heads, and pulling the trigger. In the case of Germany, the abandonment of nuclear has made the future now. We have yet to see the full consequences of energy based upon renewables; they will be seen in the next few years, but right now, the situation for energy provision is already dire. It is already very, very bad. It is a disaster, and even the ‘green’ Germans are starting to choke on the consequences. I will now quote at length from sections of the Spiegel article and let the quotes speak for themselves.

With the government driving up the price of electricity, Rösler seems to feel an urge to make himself useful by dispensing advice on how to save money and energy. On Monday, grid operators announced a significant increase in electricity prices in Germany, prices that are already the second-highest in Europe.

The price hike is the result of an assessment under the Renewable Energy Act (EEG), a sort of green-energy solidarity surcharge that is automatically added to every consumer’s electricity bill. Under the agreement reached in the last round of negotiations, the assessment will increase from 3.6 cents to 5.4 cents per kilowatt hour.

With the new rates, German citizens will be paying a total of more than €20 billion ($25.7 billion) next year to promote renewable energy. This is more than €175 for an average three-person household, a 50 percent increase over current figures. And then there are the additional charges a consumer pays for the electricity tax, the cogeneration assessment, the concession fee and value-added tax.

[and]

The rising cost of electricity is also a burden on businesses. According to Oettinger, energy costs now represent the biggest liability for Germany as a place to do business, especially in light of the marked increase in the number of blackouts and voltage fluctuations in the grid.

Consumer advocates view the electricity price as a social issue, not unlike the price of bread in ancient Rome. The Paritätischer Gesamtverband, an umbrella association for social-welfare groups, estimates that about 200,000 recipients of benefits under the Hartz IV welfare reform program for the long-term unemployed saw their power shut off last year because of unpaid bills. The VdK, Germany’s largest welfare organization, uses the term “electricity poverty” and is sharply critical of what it sees as a “glaring violation of basic social rights.” According to the VdK, it is unfair that citizens are being asked to bear much of the burden of costs and risks associated with the energy turnaround.

[and]

Unfortunately, the electricity is not needed as urgently along the thinly populated coast, but rather in the distant southern states of Baden-Württemberg and Bavaria. The two states have large populations and industry, as well as a number of nuclear power plants scheduled to be shut down soon. For this reason, the federal government’s decision to expedite the expansion of offshore wind power means that new power lines will have to be built, at a cost of €20 billion to €37 billion — the most expensive infrastructure project since German reunification.

[and]

Franken is part of the so-called cold reserve of the German energy supply. As long as there isn’t enough storage capacity, virtually every solar plant and every wind turbine has to be backed up by a conventional power plant. Without this double structure, the power supply would collapse.

At the same time, however, the boom in subsidized renewable energy is ensuring that conventional power plants are no longer profitable. Since the law requires that preference be given to green energy, if it’s available, gas-, oil- and coal-fired power plants frequently have to be shut down to avoid overloading the grid. This reduces their revenues while increasing costs because powering plants up and down consumes a lot of fuel and inflicts additional wear and tear on the equipment.

In the past, power plant operators were able to charge higher electricity prices around midday. But now there is more competition from solar plants at this time of day. On days when there is a lot of wind, the sun is shining and consumption is low, market prices on the power exchange can sometimes drop to zero. There is even such a thing as negative costs, when, for example, Austrian pumped-storage hydroelectric plants are paid to take the excess electricity from Germany.

The prospects are so poor that energy providers have little interest in building new power plants. Under current conditions, even the most modern and efficient combined steam and gas power plants are not recovering billions in investment costs.

[and]

With extremely cold temperatures gripping large parts of Europe, there was a spike in power consumption. Hamburg was on the verge of a blackout, says plant manager Lutz Bandusch. To keep the lights from going out in the city, he shut down the blast furnaces and rolling mills in Finkenwerder.

Instead of making money by producing steel, the plant operator was compensated for not producing it. It was a profitable arrangement for the steel mill. “It has to be worthwhile from an economic standpoint,” Bandusch admits, even though he felt that it was somewhat odd to be getting paid to do nothing.

[and]

Batteries are also part of the government’s plans, and €400 million in public funds have already been earmarked for related R&D. The industry also has high hopes for battery technology. But it this realistic?

For the fun of it, Florian Schlögl, director of the regenerative power plant department at the Fraunhofer Institute for Wind Energy and Energy System Technology (IWES) in the central German city of Kassel, calculated how large a battery would have to be to supply a city like Munich (pop. 1.38 million) with electricity for two or three days.

The answer, says Schlögl, depends on which battery technology is available. A cube-shaped lithium ion battery, such as the ones used in cell phones and laptops, would be 53 meters (174 feet) long on each edge. This would make it as tall as the roof of the Allianz Arena, where FC Bayern Munich plays its home games, and it would weight 250,000 metric tons. The dimensions would be even larger in the case of a lead acid battery, such as those used in cars. A cube-shaped battery would be 93.3 meter long on each edge — and Munich would have a new signature landmark.

[and]

In the next few years, electricity consumers will pay for more than €100 billion in subsidies for solar power. Additional billions will follow. Like its predecessor, the current CDU/CSU-FDP government has also bowed to the solar lobby. The latter’s business model is still based on collecting as many subsidies as possible rather than on feeding as much usable electricity as possible into the grid.

This is not the future. It is the ‘now‘ in Germany. It is the future being embraced by most of the major political parties in New Zealand. They are embracing economic decline, and telling you the future is bright. It is not bright, but a future of darkness in which the lights go out, and you pay ever more for an ever less reliable energy system. It is job losses, a lower standard of living, and energy poverty. It is time to wake up. We can now see the future. When you hear ‘green’ platitudes and arguments, point their attention to Germany. When you hear a politician wittering about the benefits of going ‘green’ point the politician’s attention to Germany. When you hear the ‘green’ platitudes and arguments for the wonders of renewables, paint the picture with the now of Germany.