Looking Under Germany’s “Green” Hood
Germany has tripled its renewable power production over the past decade. But how green is its energiewende, really?
There’s no denying that the energiewende — Germany’s much ballyhooed and supposedly green energy transition—has accomplished a great deal in recent years, but whether the country (and the environment) is better off for it requires a closer examination. Let’s start with the good news and focus on the extraordinary growth of renewable energy in Germany over the past decade.
According to data compiled in a recent briefing by the U.S. Energy Information Administration (EIA), “[e]lectricity generated from renewable sources has tripled in Germany over the past 10 years.” Most of that added capacity has come from new wind and solar farms (a direct result of energiewende policies) and Berlin hopes to rely on renewables for more than four-fifths of its power by 2050—a remarkably ambitious goal.
But as much of a reach as that mid-century target appears to be, what Germany has already accomplished is nothing short of striking. Most of the time when we hear about the growth of renewables, the numbers only look impressive when you discuss them in terms of growth, and tend to pale in significance when you place them in the wider context of an energy mix.
For example, there have been plenty of headlines recently about the stellar year renewables had here in the United States in 2015, with wind and solar respectively accounting for 41 and 26 percent of new electricity generation capacity. But looking under the hood, we find that after all of that growth, renewable energy sources still account for just 7 percent of our nation’s overall power generation (wind is at 4.7 percent while solar produces a measly 0.6 percent), a pittance next to real green workhorses like nuclear power (20 percent) or natural gas (33 percent).
However in Germany, renewables contributed to a whopping 31 percent of electricity generation in 2015, and on particularly windy or sunny days that number spiked much higher. Environmentalists around the world are jumping up and down, pointing at this progress as evidence that renewables’ day has finally come. Still, most other countries aren’t exactly chomping at the bit to replicate energiewende strategies. Why is that?
The growth of renewables didn’t occur because of market forces—wind and solar aren’t out-competing fossil fuels on price. Rather, Berlin had to subsidize their growth through the use of feed-in tariffs, which essentially guaranteed wind and solar producers privileged grid access and long-term, above-market rates for their power. The costs of these feed-in tariffs have been passed along to German consumers in the form of a green surcharge on their electricity bills.
You don’t have to be a beltway insider to see how politically poisonous a policy predicated on higher power bills might be to leaders looking at their own energy mixes elsewhere in the world. At a time when oil and gas markets are fairly flooded with supplies and prices are correspondingly low, it’s an even harder sell for policymakers: “never mind that cheap (and relatively clean burning) natural gas. Here, have some expensive wind power.”
These aren’t nominal price hikes, either. Feed-in tariffs double the average German household’s power bill, and according to the EIA, they’re spiraling up:
[O]ne surcharge for renewable electricity increased from 8.8% of the residential electricity price in 2010 to 17% in 2013…In 2014, the average sales-weighted retail price for residential consumption in Germany was about 35 cents/kWh, while the average residential retail price in the United States was about 13 cents/kWh. Along with Denmark, Germany has among the highest residential electricity prices in Europe.
Cheap energy is foundational for economic growth, and expensive electricity can be seen as a regressive tax on poorer households. Upper class homes might not notice their power bill doubling as a result of green surcharges because it makes up a much smaller slice of their monthly budget, but for working class families the cumulative effect of paying off that eco-premium can be devastating.
And that’s just the beginning of the energiewende‘s problems. Wind and solar power are by their very nature intermittent energy sources, meaning they can only supply the grid when the wind is blowing or the sun is shining. That’s a big problem for grid operators, because above all else, society needs its electricity supply to be dependable.
Moreover, wind and solar farms tend to be much smaller and more numerous than coal- or gas-fired power plants or nuclear reactors (more on those later). The inconsistency of these renewables and their more distributed siting pattern both pose big challenges to grids, and Germany hasn’t updated its electricity transmission systems at the same pace as it has incentivized the development of green energy.
As you might expect, that’s proving problematic. As seems to be the case with any new energy project, NIMBY-ism reared its head. Local German communities vigorously protested the construction of high-voltage transmission lines that would have brought power from offshore wind farms in the Baltic and North Seas southward.
Grid problems extend beyond the country’s borders to Germany’s neighbors, too. The Czech Republic and Poland have had to spend hundreds of millions of dollars to protect their own grids from surging German power on those especially sunny and breezy days. As the Czech Permanent Representative to the EU, Martin Povejšil, put it last summer, “if there is a strong blow of the wind in the North, we get it, we have the blackout.”
As Germany’s energiewende leads it down that road to 80+ percent renewables, these intermittency issues will become even more extreme. To get an idea of just how unreliable the German power supply has become, intraday energy trading in the German power market is now too volatile for humans to keep up, so traders have to rely on algorithms to do their jobs for them.
But wait! There’s more. In some bizarre twist of tortured green logic, Germany’s “clean” energy transition also included the shuttering of the country’s only source of baseload (read: consistent) source of zero-emissions power: its fleet of nuclear reactors. This move was hastened by the 2011 Fukushima disaster, despite the fact that Germany, unlike Japan, straddles no tectonic boundary and therefore faces none of the same environmental challenges that the island nation does.
Whether you ascribe Berlin’s decision to snub nuclear power to fear or base political pandering to clueless environmentalists that have long held an anti-nuclear bias, the end result has been a loss of clean power, and most of that lost capacity has been replaced by the dirtiest fossil fuel around, coal—and not just any coal, but one of the dirtiest varieties of the sooty rock called lignite.
Coal accounted for a plurality of Germany’s power production last year, a whole 44 percent of it, and until researchers discover a technological fix for the intermittency of wind and solar power, there’s not a great deal renewables can do to encroach on Old King Coal’s fiefdom.
If Germany was really serious about working towards a clean energy mix, they’d be spending less on propping up today’s generation of renewables and more on the research and development of the next generation of wind turbines, solar panels, and energy storage options that could allow those green energy sources to compete with fossil fuels on their own merit.
If Germany was really interested in acting as an eco-friendly example for the rest of the world, it would be embracing nuclear power (and investing in the next generation of nuclear technologies) with both arms, rather than shunning it in favor of lignite coal.
Berlin hoped to set an example for the world with its energiewende, and there’s no denying that it has done just that—ten years ago, most would have scoffed at the notion that Germany could grow its renewable power generation as quickly as it has. However the German example isn’t a positive one, but rather a cautionary tale to world leaders of what can happen when you let environmentalist biases guide strategic energy planning.
We can applaud the motivations of the energiewende — creating a sustainable energy mix is going to be a top priority not just for Germany but for our species over the coming decades—while still criticizing the tools it has tried to use to accomplish that goal. Regrettably, for all the impressive (and costly) progress Germany has made growing its renewable energy sector, it hasn’t seriously committed itself to the pursuit of an actually sustainable energiewende, hype be damned.