Outrun Change

We need to learn quickly to keep up with the massive change around us so we don't get run over. We need to outrun change.

Germany’s plans for renewable energy

(Update: Solar #25)

Germany is in the midst of moving toward getting 40% to 45% of its electricity from renewable sources by 2020, which is six years from now. The goal for the whole of EU is 35%. By 2050, the German goal is 80% from renewable. They plan to do this with zero reliance on nuclear energy.

Some of the destructive implications are spelled out in detail by the Wall Street Journal article, Germany’s Expensive Gamble on Renewable Energy. The article more explanation than I’ve seen elsewhere.

Here are a few summarized highlights. If you are interested in reading the rest of my article, you will really want to check out the full WSJ article. It is excellent.

Higher costs

The government is giving massive subsidies to companies to build out a lot of wind and solar projects. In addition, the government is giving companies fixed rate contracts to buy electricity for 20 years. For an idea of the magnitude of subsidy, consider that electricity on the open market is 3.2 cents per kilowatt-hour. The average locked in rate for renewable energy is 17 cents per kWh.

That’s an extra 13 or 14 cents per kWh, for the next 20 years. Wholesale prices have dropped from 6 cents/kWh a few years ago, but even at that, the renewables are 11 cents a kWh higher, for two more decades.

That cost of Energiewende, which means energy change, is passed on to consumers and most businesses in the form of surcharges.  The impact on consumers is their electric bills have soared by 60% in the last five years, according to the article.

Impact on businesses is varied. Select companies and select industries are exempt from the surcharges. Others who didn’t get picked for exemption are seeing their costs soar.

The government says surcharges total €24 billion each year.

No transmission lines

The bulk of the new wind capacity is coming on-line in the northern part of the country. Most of the electricity is used in the south. There are no north-south transmission lines. None.

The government is in the midst of  a huge building project to put in lines to move electricity from the north to the south. Around 4,000 miles of lines are planned.  No mention of the cost, but it will likely be substantial when expressed in additional cost per kWh.

Drag on economy

The impact on the German economy will likely be substantial: a loss of competitiveness and fewer jobs. The article cites multiple large companies saying they will reduce their investments in Germany and move their money elsewhere. That means jobs are already scheduled to be leaving the country.

Estimated cost of Energiewende is in the range of $1.4 trillion through 2040. That is about one-half year of GDP according to the article. Spread 50% of a year’s GDP over about 30 years will slice around 1.7% off GDP each year for two generations. That is a huge amount of lost jobs and foregone wealth.

Coal instead of nuclear

Germany has already closed 8 nuclear power plants. The remaining 9 will be closed within eight years.

To cover the drop in electricity, Germany has increased its use of coal.

Yes, you are seeing an incongruity.  To make up for the cleanest energy source, Germany is using the dirtiest. The article doesn’t quantify the increased carbon output for the country. My guess is that would be a big number.

Bats and birds get one sentence

The impact of all that wind power on bats and endangered bird species is not the focus of the article. The one sentence mention does indicate there are issues with offing a lot of bats and many endangered birds.

Bard 1

A huge off-shore wind project is called Bard 1. It consists of 80 huge turbines that are off-shore up to 60 miles, placed there in order to protect the coastline. They are built about 150 feet above the seafloor. The project came on line three years beyond schedule and at about double the cost (€24B total, or ~$31.7B).

The 80 turbines have rated capacity of 5 MW, so the total field will have theoretical capacity of 400 MW output.

The production capacity for off-shore wind is therefore about $79M per megawatt ( $31,700M / 400MW = $79.25M/MW )

According to Wikipedia, the farm has 80 turbines at 5 MW each. It is located 56 miles from shore in 130 feet of water. There are 200 km of cables connecting the towers to gather the output. Rotor diameter is 400 feet, so each blade is about 200 feet long. The hubs are 295 feet high, so the top of the blade arc will be around 500 feet above sea-level.

Here is a video of a boat going out to one of the towers. Notice the small scale of 2 people standing on the walkway:

After coming on line, a fire in a transmission station meant the whole farm had to be taken off line. The company hopes it will be operating by September although the WSJ article says they don’t quite know what caused the problem

The Feed covers the WSJ article also: Germany’s Energiewende: A Cautionary Tale.

One of the severe consequences of a huge build out of wind and solar at this moment is locking in place the noncompetitive, environmentally destructive, visually polluting, economy-slowing technology that exists at this minute. Walter Russell Mead explains the issue this way:

Incentivizing renewables with government subsidies only serves to prop up technologies incapable of competing with fossil fuels on their own merit.

What would be the more productive approach that might, possibly, maybe reduce our reliance on fossil fuels? How about this:

Policymakers would be much better served diverting those billions (and in Germany’s case, trillions) towards the research and development of better solar panels and more efficient turbines.

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