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Energy Change : Germany’s Energiewende #1

I recently attended an event entitled “The Energiewende: A close look at Germany’s renewable energy revolution”. This was hosted by PRASEG, the Associate UK Parliamentary Renewable and Sustainable Energy Group, and supported by the German Embassy, and held at the Boothroyd Room of Portcullis House, Westminster, 6th March 2013 between 2pm and 4pm.

The main speakers were Rainer Baake, State Secretary at the Federal Environment Ministry in Germany between 1998 and 2005, and Andreas Kramer, Director and CEO of the Ecologic Institute in Berlin – a well-regarded think tank. Alan Whitehead MP also gave comments, and Simon Hughes MP also attended and shared some points.

Tom Heap, the well-known Radio 4 presenter, was on hand to chair.

What follows is not verbatim, but is transcribed from scribbled notes.

[Tom Heap] “Germany is a live pilot experiment [in transitioning out of fossil fuels to renewable energy]. That’s not meant to be patronising. [Whilst recording a programme there before Christmas I was] hearing comments from right-of-centre government I wouldn’t hear in the UK. On wind turbines, German and British conservatives are poles apart. There wind power is not seen as an imposition. We heard “our energy, our village”. The technologies are similar, but the politics are different…”

[Rainer Baake] “In Germany, energy policy holds past and future challenges. In June 2011, we ended a long and very controversial debate on energy policy. We ended up with very ambitious goals. The almost unanimous vote was historical. It was almost impossible to believe. We had always had a very diverse debate since Chernobyl [the catastrophic nuclear power accident in Ukraine in 1986 that necessitated the total evacuation of the city of Pripyat and the surrounding districts]. With the major change in government in 2008, with a Green and Social Democrat [SPD https://www.spiegel.de/international/germany/where-do-they-stand-a-quick-guide-to-germany-s-political-parties-a-651388.html ] majority, we got Phase 1, then the Renewable Energy Act (EEG, Erneuerbare-Energien-Gesetz https://www.bmu.de/en/service/publications/downloads/details/artikel/renewable-energy-sources-act-eeg-2009/) – which was also controversial at that time.”

“[We] created the Feed-In Tariff [FIT] – an incredible success story. Over roughly ten years, the Renewable Energy share stands at 25% of power generation as of today. And of that 25%, 50% of that is in the hands of private people and farmers. This is why it has received political support. The owners of the windmills, biomass generators […] are not only producers, they are also voters. At the start, there was opposition from Conservatives [German conservative right-of-centre politicians – CDU https://www.spiegel.de/international/germany/where-do-they-stand-a-quick-guide-to-germany-s-political-parties-a-651388.html], but companies in their own constituencies said, “We can earn money with this” […] Renewable Energy receives very wide support. This is very different from nuclear power.”

“The Conservatives and Liberals [German free market neoliberal politicians – FDP https://www.spiegel.de/international/germany/where-do-they-stand-a-quick-guide-to-germany-s-political-parties-a-651388.html ] promised that after the 2009 elections if the coalition won there would be lifetime extensions [on existing nuclear reactors – allowing them to continue operating after their originally designed safe lives]. But they didn’t have a plan ready. They made [announcements] in December 2010 [extending reactor lives out to 2045 https://www.world-nuclear-news.org/IT-German_plant_life_extension_law_passed-2911107.html ] but this was against the public [opinion]. It only lasted for a few weeks, because Fukushima happened [ https://www.bloomberg.com/news/2011-03-14/germany-suspends-plan-to-extend-life-of-nuclear-power-plants-merkel-says.html ]. Our Government realised what it meant for their own policy. They were able to explain Chernobyl [the meltdown accident at Pripyat in the Ukraine in 1986] as Communist [regime] mismanagement, but the meltdown of three reactors at Fukushima, in a technologically advance country…the Government immediately changed position, and it led to a very big [wide] consensus. In June 2011, the opposition and the Government [decided for] Renewable Energy.”

“In the original [Energiewende] plan of 2000, phaseout of nuclear was to be by 2022, and in the next decades, the fossil generators would convert to Renewable Energy. When created the FIT in 2000 – all Renewable Energy [technologies] had the same starting line [the same levels of subsidy]. The FIT is not a permanent subsidy – it helps these technologies to be introduced to markets. The winners are clearly wind power and solar power – others maybe [remain] too expensive. Biomass is now reaching a sustainability limit [not enough feedstocks for expansion]. It is not going to be posssible to increase biomass or hydropower much over today. Geothermal energy – never came up. Wind and solar power prices decreased dramatically. We have enough of that. The features – have to deal with […] weather-dependent and solar power is not flexible to demand. Second – also very variable. Very capital-intensive [for investment phase] but marginal costs [of operation] are negligible. One you’ve invested, put all the money you need on the table, there are no costs over the following decades.”

“These features [of Renewable Energies] mean it is going to be a complete change in energy systems over the next decades. 25% of demand – happened much faster than anticipated in 2000. The first 25% is one story. The next 25% is another story. 25% is easy to integrate. Very robust. The next 25% – as you can imagine – 50% of the system – this is the real challenge of the Energiewende – synchronising production of solar and wind with demand of customers. How to balance demand and supply ? How to minimise the costs [of that] – [reduce] in a free European Union energy market ? There’s the technology – and on the other hand, the market. On the technology side need much more flexible supply. With FIT […] Baseload is not a word that describes supply – it describes demand. With marginal costs of zero, they [utilising power from renewable energies] come first – they are pushing traditional fossil fuels out of baseload. The operating hours of traditional baseload generators are decreasing. [We will need] not only adjustments to demand, but also the variable sources. Ten years ahead we will not have any baseload. We will still need 6,000 hours a year generators. They’re there – that’s gas. [We also need] a market design to enable [this].”

“Second – we need [new/larger] transmission lines. That’s something that really needs to happen. The bigger [wider] the area you connect, the bigger [better, more even] the balance. Not only talking about Germany – also Denmark, the Netherlands, Scandinavia – the better we’re connected, the better to balance. [The history of] the market in almost all countries – generators [power stations] were built under state regulation on the basis of monopolies. After the deregulation in the 1990s, the [power sector changed to work] on the basis of least operating costs. [The power was supplied] always by those generators of least operation cost – makes sense. All these have marginal costs – that is, fuel. When you introduce lots of Renewable Energy with a marginal cost of zero, the prices on the wholesale market have come down significantly, from 95 to 50 Euro per MWh. This has been caused not only by Renewable Energy – but it has been mainly Renewable Energy – pushing out the more expensive generators.”

“This creates a problem, as you need backup capacity – when the sun isn’t shining and the wind isn’t blowing. There have been arguments/debates about the capacity market we need – an intelligent system – not very expensive – to make sure to backup when wind and solar are not available. We also need a system to support the Energiewende over the next decades. FIT was good for 15 years, but answers of the past are not necessarily correct for the future. It is always argued very strongly that for Germany this is not to renationalise energy policy. This Energiewende is much less costly if we do it with our neighbours. It’s too controversial at the European Union [EU] – but [we are/having] encouraging discussions with neighbouring countries – to the benefit of everybody – to put into reality the EU energy market. We need flexibility of generators, but also flexibility of demand side. [We have asked the German] States [Länder] – are you able to shift your peak [demand] by six hours – a real part of the solution. [We need to] move away from switch [on] and forget. [To those detractors of the Energiewende] if look at the opposition [views] there is no reasonable balance of money in and out. One day we will be using all our renewable electricity generation – for example, using electricity for transport, but for now [we need to export].”

…TO BE CONTINUED

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