Here are more inconvenient stories for the lovers of Expensive-electricity-ok-so long-as-they're-from-renewables movement, focus on Germany's experience.
(1) From Wall
Street Journal, Oct. 16, 2013:
Last week the CEOs
of Europe's 10 largest utilities finally cried uncle and called for a halt to
wind and solar subsidies. Short of that, they want subsidies of their own. They
want to be paid, in essence, not to produce power.
The root cause of
all this is the Continent's so-called feed-in tariffs for renewable energy,
which began in Germany in 1990. A feed-in tariff is a form of mandate that
gives solar and wind installations a guaranteed price, usually well above the
market price, and ensures that any energy they produce gets priority on the
electrical grid. When solar and wind plants are producing, their energy must be
taken first, ahead of other kinds of power.
By requiring
utilities to take this power—and requiring consumers to pay for it—Germany has
increased renewables to 25% of its overall capacity. Berlin wants to push that
to 35% in 2020 and 80% by 2050. Not every country in Europe has been as
ambitious as Germany, but the European Union's renewables target across the
entire Continent is also 20% by 2020.
(2) From WSJ,
June 11, 2014:
Wind? Merely to
keep pace with the global growth in electricity demand would require the
installation of about 280,000 megawatts of new wind-energy capacity every year.
According to several academic studies, the areal power density of wind
energy—that is, the amount of power that can be derived from a given amount of
land—is about one watt per square meter. This means that installing the
requisite additional wind capacity would require covering about 280,000 square
kilometers (108,000 square miles of land)—an area nearly the size of Italy—with
wind turbines, every year. (For comparison, the areal power density of nuclear
power is more than 50 watts per square meter. The productivity of oil and gas
wells vary, but even marginal wells have power densities of about 27 watts per
square meter.)
(3) From Reuters,
Aug. 27, 2014:
Germany will
continue to need coal-fired power plants, its energy regulator said, warning
that Europe's biggest economy should not rely solely on renewables or risk
increasing exposure to Russian gas as it shuts down nuclear plants.
"Those who
call for an end of coal power generation don't have much interest in a reliable
energy policy," Jochen Homann, president of the Federal Network Agency
(BnetzA), told an energy industry conference on Wednesday.
"We will close
further nuclear plants; these capacities need to be replaced," he said,
adding that coal power was vital to achieve this…
(4) From The
Telegraph, Sept. 02, 2014:
Germany's flagship
green energy policy is in tatters, according to a new report by the consultancy
firm McKinsey which says many of its goals are "no longer realistic".
But the McKinsey
report says Germany is so far behind its key commitment to cut CO2 emissions
that it is no longer realistically achievable…
A major factor in
the failure to achieve targeted cuts has been Germany's increased use of
"dirty" brown coal, or lignite, to make up the shortfall in power
generation caused by its decision to phase out all its nuclear power stations
by 2022.
The aim is replace
nuclear energy with renewable sources, such as solar and wind power, but they
have not yet been able to plug the gap, and the McKinsey report says that while
solar energy is on track, the country is behind schedule in developing wind
power.
(5) From Mining.com,
September 22, 2014:
Only last year the
share of electricity generated from coal in Europe’s biggest economy hit the
highest in 24 years. The country also opened more coal-fired power plants in
2013 than any other time in the past 20 years as it moves towards a target set
three years ago, which aims to have all nuclear power stations shut down by
2022.
Germany’s energy
revolution —or “Energiewende”— has come at a high price.According to Bloomberg,
it has so far added more than $134 billion (100 billion euros) to the power bills
of households, shop owners and small factories.
But falling coal
prices seem to have wet the government’s appetite for the fossil fuel, to the
point that Chancellor Angela Merkel’s governmenthas recently announced it
considers coal-based power plants as “indispensable” for the foreseeable
future.
(6) From Wall
Street Journal, Sept. 24, 2014:
Berlin’s “energy
revolution” is going great—if you own a coal mine. The German shift to
renewable power sources that started in 2000 has brought the green share of
German electricity up to around 25%. But the rest of the energy mix has become
more heavily concentrated on coal, which now accounts for some 45% of power
generation and growing....
Greens profess
horror at this result, but no one who knows anything about economics will be
surprised. It's the result of Chancellor Angela Merkel 's Energiewende, or
energy revolution, a drive to thwart market forces and especially price
signals, that might otherwise allocate energy resources. Now the market is
striking back.
Take the so-called
feed-in tariff, which requires distributors to buy electricity from green
generators at fixed prices before buying power from other sources. Greens tout
the measure because it has encouraged renewable generation to the point that
Germany now sometimes experiences electricity gluts if the weather is
particularly sunny or windy.
Ordinary Germans
foot the bill for these market distortions, having ponied up an estimated €100
billion ($129 billion) extra on their electricity bills since 2000 to fund the
renewable drive. The government estimates this revolution could cost a total of
€1 trillion by 2040.
(7) From EurActiv,
Oct. 22, 2014:
German companies
are concerned about the extra burden they fear will come with a new, higher
climate protection target for 2030.
Utz Tillmann, a
spokesman for the Energy Intensive Industries of Germany (EID) - which includes
chemicals, steelmaking, cement and others - said he supported an ambitious
agreement at the Paris UN climate summit in December next year.
But these goals
should include strong and comparable commitments for both industrialised and
newly industrialised countries, he stressed.
BASF executives say
that German and European Union policies toward industry, particularly when it
comes to energy, are forcing big companies to look elsewhere as they seek to
expand.
Energy is perhaps
BASF’s biggest cost. Tremendous amounts of electricity are required to produce
chemical raw materials like ethylene, propylene and butadiene for a range of
products like plastics, pharmaceuticals and rubber. And oil or natural gas are
the basic feedstocks from which these chemicals are produced.
Especially in
Germany, energy prices have jumped as a result of the government’s big push for
renewable energy sources...
(9) From No
Tricks Zone (NTZ), Nov.11, 2014:
Gabriel, who is also head of Germany’s SPD socialist
party and has strong ties to trade unions, also told the GP protesters:
Afterwards I’ll be at the Estrel-Hotel to meet with the
Union Councils of Vattenfall, who are fighting to keep their jobs in brown
coal. My suggestion is: See if you dare to show up over there.”
At the end Gabriel again requested the activists to “stop
simplifying everything … if we continue on this course, where we keeping
pushing illusions and in the end wind up with high electricity rates, that is
the only way of getting the energy transformation to fail.
(10) From NTZ,
Nov. 16, 2014:
Spiegel reports:
The only German
plant that produces battery cells for electric cars will be closed. The company
Li-Tec in the German state of Saxony will produce batteries only for one more
year. Daimler Manager Harald Kroger told Spiegel that the current production
numbers make it far too expensive to produce the batteries.”
Daimler was banking
on higher production numbers, which are necessary for producing economically.
But the quantities never materialized. Kroger told Spiegel that the company
realized that “an automaker does have to produce the batteries itself.
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See also:
Energy Econ 26: Dealing with Power Deficit in 2015, September 19, 2014
Energy Econ 27: Expensive Electricity, FIT and Europe's Renewables, October 09, 2014
Energy Econ 28: Germany's Renewables, Collapsing Windmills, October 22, 2014
Energy Econ 29: UK's Renewable Problems and Expensive Electricity, November 24, 2014
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