Case Study: Germany's Renewable Energy Transition (Energiewende) ... Success, or Failure? (An Overview)

Case Study: Germany’s Renewable Energy Transition (Energiewende) … Success, or Failure? (An Overview)

This guide outlines some key information about Germany’s renewable energy transition, also known as ‘Energiewende’.

We look at the impact it has had on various areas of German society, and the issues encountered.

We also look at potential solutions going forward.

 

Summary – An Overview Of Germany’s Renewable Energy Transition

  • Germany’s energy transition involves moving from an energy mix previously dominated by coal, natural gas and nuclear, to a higher share of solar and wind, and to a lesser extent, bio energy. Nuclear energy has already commenced being phased out, and coal will be next.
  • Some key areas to consider with the transition up to this point might be:
  • Electricity Prices – have largely increased during the transition, with variable renewable energy, carbon prices, and renewable/green energy tax and State imposed costs in electricity bills a likely main cause for this
  • Emissions – emissions have decreased in total from 1990 until 2019, but, Germany are not expected to meet their 2020 emissions target. And, some wonder if transitioning to natural gas first (which is cleaner burning), or keeping nuclear for longer), and transitioning to renewables slower would have been better for emissions. Some don’t think that emissions have decreased enough considering the amount of renewable production there has been.
  • Costs – It can be very hard to estimate all costs (across all areas – direct and indirect), or compare costs of a renewable energy transition compared to a conventional energy system. But, some estimates indicate hundreds of billions have already been spent on the renewable transition, and it could end up costing Germany a trillion dollars in a few decades time.
  • Reliability & Security Of Electricity Supply – Germany has one of the most reliable and secure electricity supplies in Europe, according to some sources.
  • Phasing Out Other Energy Sources – Nuclear is the energy source that has been most heavily phased out so far. Some argue this is a relatively clean low cost energy source that should not have been targeted or reduced before fossil fuel sources (but, these fossil fuel sources are needed for a range of reasons, including as backup/dispatchable energy sources for the intermittency of solar and wind – which is a bit of an irony)
  • Other Issues – there are a host of grid related demand/supply and over/under capacity issues that Germany has experienced. They have also experienced issues with load shedding to other countries. They have also experienced problems in co-ordinating the transmission of power (via transmission lines) from wind farms in the North, to recipients in the South. There are many issues still to be addressed and worked through that have been introduced as a result of variable renewable energy like solar and wind.
  • Solutions Moving Forward – two big solutions going forward might be to regain the trust and support of the German public, and, to better integrate and involve the transport, building efficiency, and industrial sectors in the clean energy transition. There may also need to be more co-operation and less ‘red tape’ and failures to get new investment and projects approved and progressing. 

Overall …

  • Germany has certainly had some issues with their renewable energy transition
  • Major changes to a country like this should carefully consider the economic, social, environmental, technological and other consequences, and pros and cons, beforehand
  • Other countries should look at the scale and speed at which Germany made changes, and see what they can learn for their own energy sector changes
  • We should be asking – why did the problems that arose actually arise, and how can they be prevented in the future with similar transitions by other countries
  • We should also be asking what solutions for high shares of solar and wind for electricity generation other countries and States are implementing, that Germany isn’t and can implement for better results
  • We should also be aware that there might be cost of not transitioning to renewables like Germany has done, such as climate change, air pollution (and other types of pollution), the increased costs of new fossil fuel technology, and other costs – all of which may make renewables in certain shares of electricity generation more favorable in some circumstances. This cost of not transitioning can be hard to estimate.
  • It would be interesting to read studies that outline the benefits that Germany’s renewable energy transition has produced vs the costs and cons – with some hard data and stats. As just one example, have other countries or States worldwide benefited from the investment Germany has made? South Australia might be one example of this (although they have since had to buy an expensive large energy storage battery)
  • We should keep in mind that there are methods to smooth out the negative consequences of variable energy sources like solar and wind, and it’s not clear how extensively Germany is applying these methods right now
  • Technology is also constantly advancing with renewables, so cheaper newer technology, like large energy storage batteries, could soon make things easier where backup dispatchable energy generation from other energy sources is currently being used
  • The good news is that is does still look like there are solutions to help improve Germany’s current energy situation 
  • In the future, it would help if there were very clear reasons laid out for energy transitions like this, along with clear measurables for how the public can track the transition across every area (economic, social, environmental, and so on). Without something clear like this, we may only assess a transition on one factor like say emissions, in which case, Germany not meeting it’s 2020 target would make the transition a failure, when in reality, there are many other measurables by which an energy transition can be tracked and assessed
  • At the moment, we can compare one country to another (such as comparing Germany to Denmark, Belgium, the US, Australia etc.), but, every country (and State within a country) is dealing with different factors and variables with their energy sector, and so every transition is different, even if there are common lessons that can be learned from each. A good illustration of this is for example, there are countries with higher renewable energy shares of electricity generation than Germany, that have lower electricity prices. Just as a couple of examples are – Iceland has a different energy mix than Germany, using more hydropower and geothermal energy. And, Denmark is a world leader in wind energy, with a huge Danish wind company expanding rapidly.

Our guide has only captured a small part of Germany’s energy transition story. In reality, incredibly deep and wide detailed studies are required to properly assess an energy transition of this magnitude. 

 

What Is Germany’s Renewable Energy Transition (‘Energiewende’)?

It is:

  • … [a] planned transition by Germany to a low carbon, environmentally sound, reliable, and affordable energy supply.
  • The new system will rely heavily on renewable energy (particularly wind, photovoltaics, and hydroelectricity), energy efficiency, and energy demand management. Most if not all existing coal-fired generation will need to be retired. The phase-out of Germany’s fleet of nuclear reactors, to be complete by 2022, is a key part of the program.

– wikipedia.org

 

What we can see from the energy transition graph (in the Wikipedia resources), is that, wind power and solar PV are two energy sources that are set to grow significantly to produce electricity during the transition (along with biomass). Nuclear and coal are planned to be reduced as electricity generation energy sources.

 

Germany Energy Source Mix Right Now

 

Electricity Prices

Germany has some of the highest electricity prices in the world.

What we do know about electricity prices, is that renewable energy is one of only many factors that has the ability to impact electricity prices, and is not the sole factor.

What we know with Germany though, at least for retail electricity bills, is that it’s likely renewable energy (via State charges and taxes to support renewable and green energy, carbon prices, and other factors) is responsible in a significant way for the high electricity prices. Some sources report that German electricity prices rose by 51% during its energy transition [to renewables] between 2006 and 2018.

Higher electricity prices impact factories, employment and poor families (wattsupwiththat.com)

Some question the impact of gradually phasing out nuclear from the market (as a low cost and competitive generator of electricity) on electricity prices too. Some point to France, who generates a significant amount of electricity from nuclear energy, but have much lower electricity prices, as a comparison.

Something that has to be asked, is, at what point do taxes and State charges for renewables and green energy reduce? At what point is renewable energy established enough, or providing high enough of a share of electricity generation that taxes can be reduced?

It also should be asked what impact carbon prices are having on emissions vs the economy and affordable and accessible electricity.

 

Greenhouse Gas & Carbon Emissions

Greenhouse gas and carbon emissions have decreased overall from 1990 until now.

It’s hard to tell what emissions would have been if a greater mix of nuclear and fossil fuels, or even more natural gas, was used over wind and solar.

Some sources indicate that emissions are more closely tied to economic activity than energy sources used – so, some question the impact increased solar and wind energy has had on emissions.

Germany aren’t looking likely to meet their 2020 carbon emissions target. But, the question must be asked whether that target and future targets were too ambitious to begin with.

Overall, emissions have decreased, but it’s unclear if the transition to renewables has helped or hindered these emissions either way.

 

  • nuclear powered France enjoys power prices a fraction of those suffered by its eastern neighbour; and its CO2 emissions are tiny fraction of those being pumped out by notionally wind and solar powered Germany.
  • Even coal-powered Poland has managed to cut it CO2 emissions faster than … Germany

– stopthesethings.com

 

  • [Germany has seen a 27% [GHG] decrease between 1990 and 2014. However the country will need to maintain an average GHG emissions abatement rate of 3.5% per year to reach its Energiewende goal, equal to the maximum historical value thus far.

– wikipedia.org

 

  • … coal consumption and CO2 emissions have been stable or risen slightly the last seven to ten years [up to 2018]

– wattsupwiththat.com

 

  • [because of the variability of solar and wind which can be high output one day and low output the next] Most of the electricity that Germany needs is still produced by burning coal [which emits GHGs]
  • [As of 2019, Germany] is far from meeting the targets it set for itself [in terms of future emission targets]
  • [Some point to the US transitioning from coal to natural gas, and look at their emission trend over the last 20 to 30 years, and wonder if Germany went into solar and wind energy too fast, too soon]
  • Even earlier, in 1997, back when she was the German environment minister, Merkel told DER SPIEGEL: “When it comes to reducing CO2 emissions, vehicle traffic is the biggest hurdle.” She could say the same thing today.
  • [Germany has done something about electricity production, but not as much about traffic, industrial and building emissions]
  • [If Germany wants to meet future emissions targets] It is time for Energiewende 2.0, a much more all-encompassing version that integrates all sectors, technologies and markets. In the end, the system must be extremely interconnected and more than just a gigantic machine that produces and distributes electricity generated by wind, sun and water. [With excess energy from variable energy sources, it could be used] to produce methane and hydrogen that could then be fed into the natural gas network, which has 500,000 kilometers of pipelines. Another option would be to turn the wind power into methane or hydrogen and then turn them into so-called e-fuels. Here, too, existing infrastructure could be used: fuel-storage facilities, pipelines and gas stations of the petroleum industry

– spiegel.de

 

There is a graph at https://www.cleanenergywire.org/factsheets/germanys-greenhouse-gas-emissions-and-climate-targets

What this graph shows is that Germany’s overall emissions and energy sector emissions are decreasing from 1990 to 2018, but, some question whether this decrease is enough given the cost and problems associated with the renewable energy transition.

 

Cost Of Renewable Energy Transition, Compared To Using Conventional Energy Sources

Some sources indicate that the transition has been very costly so far – up to the hundreds of billions of dollars, and could stretch to the trillion dollar mark in coming decades.

But, other sources indicate that, in reality, it is very hard to put a monetary figure on pursuing clean energy vs. just conventional energy.

There are many cost related factors that need to be taken into account, and not all of them can be accurately calculated.

What many cost estimates don’t take into account is the cost to address air pollution, climate change, health issues caused by air pollution, jobs created by solar and wind and the flow on effect into the economy, and other indirect factors.

 

  • Some sources indicate that the renewable energy transition could end up costing Germany a trillion dollars so far

– stopthesethings.com

 

  • As of 2013, Germany spends €1.5 billion per year on energy research in an effort to solve the technical and social issues raised by the transition

– wikipedia.org

 

  • [the Energiewende] has cost at least 160 billion euros in the last five years [up to 2019], and the expenditures “are in extreme disproportion to the results”

– spiegel.de

 

  • The cost of Germany’s “Energiewende” (energy transition) is enormous: some 200 billion euros by 2015

– wattsupwiththat.com

 

  • Hundreds of billions of euros have been squandered on subsidies to wind and solar

– stopthesethings.com

 

  • In Germany, around €190 billion has already been burnt on renewable subsidies; currently the green energy levy costs €56 million every day. And, the level of subsidy for wind and solar sees Germans paying €20 billion a year for power that gets sold on the power exchange for around €2 billion.
  • subsidies that will top €1 trillion

– stopthesethings.com

 

Cleanenergywire.org:

  • the costs of the Energiewende and of the transformation of our energy supply could add up to around one trillion euros by the end of the 2030s without policies in place to lower the costs. [the] legal commitments to support renewable energy alone would add up to about 680 billion euros by 2022, and that the costs of grid extension, back-up power generation capacities, research & development, electric mobility, and the modernisation of buildings would have to be added to this figure

A good breakdown of the costs of the transition can be found at https://www.cleanenergywire.org/factsheets/how-much-does-germanys-energy-transition-cost

 

Power Reliability, Security, & Power Blackouts

Some sources indicate that blackouts are a side effect of the variable energy sources like wind and solar, and a grid that isn’t designed to cope with surplus and inadequate power.

But, other sources say that, along with Switzerland and Denmark, Germany’s electricity reliability is among the best in Europe as far as minutes of interruptions to supply per year go.

 

  • Germany still has one of the most reliable electricity grids in the world … Germany’s security of supply is among the best in Europe
  • … actual power blackouts are increasingly caused by extreme weather events, rather than by the transition to renewable energies
  • Generally, security of supply strongly correlates with the share of underground electricity cables.
  • In Germany, 80 percent of its 1.8 million kilometres of cables are buried, whereas in the US – with around 40 percent – and Australia and many Southern European countries, this share tends to be lower. This makes the grid more vulnerable to being disrupted, for example by fallen tree branches.
  • The sources of energy generation so far have little impact on security of supply. But grid operators in Germany have to go to great lengths to balance asymmetric production of green electricity across their networks.
  • The amount of so-called “re-dispatch measures” has risen strongly. Redispatch is when the grid operator forces a power station to lower production in a region with oversupply, and directs another plant in a low-production region to higher output. The cost is passed on to consumers.

– reneweconomy.com.au

 

Phasing Out Of Other Energy Sources

There has been a phasing out of certain energy sources like nuclear energy.

This has had many potential implications such as eliminating competition for affordable (and clean in several ways) energy sources, decreasing nuclear sector jobs, and consequently decreasing total income and opportunities in certain communities where power plants are being shut down.

 

Other Power Grid & Energy System Issues

There are a range of grid operations, technological, engineering and other types of issues being created from the change of energy sources.

 

  • [Germany’s power grid has been strained in the past due to too little energy being fed into the system … it’s not clear whether variable renewable energy is a cause of this]

– cleanenergywire.org

 

  • [Due to strong flows from variable solar and wind energy, there can been problems with over capacity of German grids, and excess power can be offloaded/transmitted to Poland and Czech Republic]
  • … the Czech Republic and Poland are currently installing four phase shifters at their borders with Germany that can block unwanted currents
  • [Variable flows from solar and wind can also cause too little power (under capacity) to be going into German power grids]
  • [Grid stability issues also causes electricity bidding and trading problems with countries like Austria, where existing bidding zones may have to be split]

– cleanenergywire.org

 

  • [Variable renewable energy like wind power creates problems with re-dispatch issues and costs
  • In a nutshell, this is fluctuating renewable energy sources … creating different challenges for the country’s grid operators, such as congesting transmission lines, consumers and businesses not getting their electricity, conventional power plants having to turn their supply off, and other power plants having to abruptly ramp up supply]

– cleanenergywire.org

 

  • [solar and wind can introduce problems related to producing too little power, too much power, power system frequency imposing limits on solar and wind production, having to disconnect wind and solar sources at certain times, forced power exports (load shedding) at negative electricity prices, allowing to AC frequency to drift too high or too low and risking blackouts like what happened in South Australia, and other issues]
  • [a lot of these costs can be passed onto electricity consumers]
  • Germany has a target of getting 60% of their total energy consumption from renewables by 2050, [and] they must multiply the current power production from solar and wind by a factor of 15 [to get there]. They must also expand their output from conventional power plants by an equal amount, to balance and backup the intermittent renewable energy. Germany might import some of this balancing power, but even then the scale of this endeavor is enormous.

– wattsupwiththat.com

 

  • [As of 2019 Germany has] a lack of grids and electricity storage

– spiegel.de

 

Other Issues

Other issues might include:

  • the amount of non sustainable material that certain renewable energy technology requires for construction and operation
  • the fact that fossil fuel and dirty energy sources still need to be kept in operation for now (without effective energy storage options in place like batteries for example), and they may be running inefficiently and still contributing to pollutions and emissions
  • there is a lack of agreement and co-ordination between political parties, the public is starting to lose faith in the transition, and there is a lot of system inefficiencies that are keeping progress from being made with the transition
  • impacting on other energy sources like coal, and natural gas, that have to turn on and off or idle when there is an over or under supply of power to the grid. This can impact investment in energy technology (due to uncertainty), and impact profit and revenue of certain energy sources
  • the government or producers having to pay consumers to take electricity when there is a surplus, or prices rising sharply when there is a lack of electricity – both caused primarily by the variability/intermittency of solar and wind
  • large energy storage batteries currently being very expensive

 

  • [to meet Germany’s 2050 energy target] the amount of land, concrete, steel, copper, rare earth metals, lithium, cadmium, hydrocarbon-based composites and other raw materials required to do this is astronomical. None of those materials is renewable, and none can be extracted, processed and manufactured into wind, solar or fossil power plants without fossil fuels. This is simply not sustainable or ecological.
  • [For other countries that rely primarily on fossil fuels and nuclear power currently, if they want to match Germany’s production from renewables] … such countries will be able to replace only about one quarter of their fossil and nuclear power, because these power plants must remain in operation to ensure frequency regulation, balance and back-up power [and this has a range of implications]

– wattsupwiththat.com

It’s worth read this resource for a full range of the issues experienced by the German power system in lieu of increased variable solar and wind reliance – https://wattsupwiththat.com/2018/12/21/germanys-green-transition-has-hit-a-brick-wall/ 

Note though – what this resource may or may not take into account, is increased implementation of measures (or advances in technology or solutions) to deal with the variability and intermittency of solar and wind in the future.

 

  • … [aside from the technical side of things, there is a lack of co-ordination between political parties, between wind park builders and those responsible for grid connections, and between planning authorities, municipalities or even individual citizens]
  • [these things are making it hard to progress with an improved renewable energy systems]

– spiegel.de

 

How Might Germany Approach The Future When It Comes To Their Energy Systems?

Spiegel.de offers this brief summary:

  • [Firstly] Policymakers must ensure that people are on board. Voters must begin to understand what the transformation means for them and that it is vital that they change their behavior. Without sacrifice, it won’t work. The second, more difficult, part of the Energiewende — the intelligent interlinking of different sectors — is bringing the Energiewende closer to ordinary people. It is influencing how and where people live, how they travel.
  • Technologically speaking, it’s possible to make the energy system free of fossil fuels by 2050, especially in a high-tech country like Germany. Everything is ready: the studies, the strategies, the facilities. ESYS, the association of scientists, has formulated recommendations for how politicians, businesses and society can reach their goals.
  • According to ESYS, Germany needs to increase its solar- and wind-facility capacity by a factor of five to seven, make synthetic fuel a pillar of the energy system and introduce a CO2 tax in all sectors. According to ESYS predictions, the transformation would cost 2 percent of the country’s annual GDP. Currently, that would be about 70 billion euros.
  • By 2050, the costs would add up to 2 to 3.4 trillion euros, depending on the scenario. Other forecasts fluctuate between 500 million and about 2 trillion euros. One way or the other, the second part of the Energiewende will be expensive and exhausting, a project as demanding as German reunification.

Read their full resource to see the full list of challenges and potential future solutions: https://www.spiegel.de/international/germany/german-failure-on-the-road-to-a-renewable-future-a-1266586-2.html

 

Sources

1. https://www.bettermeetsreality.com/does-renewable-energy-make-electricity-cheaper-or-more-expensive/

2. https://www.bettermeetsreality.com/causes-of-high-or-increased-electricity-prices-in-different-countries-states-around-the-world-case-studies-examples/

3. https://www.bettermeetsreality.com/electricity-prices-in-countries-that-use-the-most-least-renewable-energy-for-electricity/

4. https://stopthesethings.com/2019/01/06/germanys-renewable-energy-fail-german-co2-emissions-10-times-higher-than-nuclear-powered-france/

5. https://en.wikipedia.org/wiki/Energiewende_in_Germany#Status

6. https://stopthesethings.com/2018/08/13/germanys-renewable-energy-disaster-part-1-wind-solar-deemed-technological-failures/

7. https://stopthesethings.com/2017/02/02/germanys-monumental-environmental-fail-co2-emissions-rise-despite-etrillions-blown-on-subsidised-wind-solar/

8. https://www.cleanenergywire.org/news/german-power-grid-strained-several-moments-june-cause-unclear

9. https://reneweconomy.com.au/germanys-electricity-grid-stable-amid-energy-transition-13244/

10. https://www.cleanenergywire.org/news/grid-authority-considers-split-austrian-german-electricity-market

11. https://www.cleanenergywire.org/factsheets/re-dispatch-costs-german-power-grid

12. https://www.bettermeetsreality.com/energy-sources-energy-mix-by-country-where-major-countries-in-the-world-get-their-energy-from/

13. https://wattsupwiththat.com/2018/12/21/germanys-green-transition-has-hit-a-brick-wall/

14. https://www.spiegel.de/international/germany/german-failure-on-the-road-to-a-renewable-future-a-1266586.html

15. https://www.cleanenergywire.org/factsheets/germanys-greenhouse-gas-emissions-and-climate-targets

16. https://www.cleanenergywire.org/factsheets/how-much-does-germanys-energy-transition-cost

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