Tuesday, October 22, 2013

Renewables teething problems

As anyone old enough to remember paying $2600 for a 40 meg hard drive can tell you, coming early to a technology party can be very, very expensive.  And so it is with Germany's experiment with green energy.  To get where she is, Germany had to subsidize the R & D and production of the green equipment and then subsidize the installation of that equipment.  Not surprisingly, German green energy is some of the most expensive in the world. And not so surprisingly, those who have trouble paying for that expensive electricity are not happy about this state of affairs—especially when they can look around and see solar panels now selling so cheaply that those low prices are actually triggering trade disputes.

Those with a meaningful grasp of how technology develops see nothing remotely surprising about Germany's green economic dilemmas.  She wanted to lead the way for a wide assortment of reasons and is now paying the bills for being early adapters.  There ARE advantages for being first which is why folks still fight over patents, but that is of little consolation to the poor Germans who can barely feed themselves after paying the electrical bill.  The obvious solution would be for Germany to now subsidize electrical rates for its low-income customers.  Whether or not this is politically possible in today's conservative landscape is anyone's guess.  Germany has already promised to underwrite its inept and corrupt banking sector so is probably feeling apprehensive about now promising to add energy subsidies to its already expensive welfare state.

But pay attention folks.  Being second (fourth, tenth, etc.) to the technology party is only an advantage if the problems encountered by the leaders are studied very carefully.  Of course, cheap solar panels change the whole game in highly significant ways but there are still problems of integrating an energy system that produces power intermittently with a grid that requires and has supplied power on demand for several generations.

It should be noted that even with all the teething problem of Germany's attempts to redesign her society to run on renewable power sources, the polls still show that her citizens still support the effort by wide margins.  It seems like the plan to include a wide swath of her middle class in the investment and installation of much of the green infrastructure has paid handsome political dividends.

Survey finds Germans want shift to renewables

18.10.2013 Author Gero Rueter / sp  DW.DE

A new survey conducted after recent parliamentary polls show most Germans want a quick transition to decentralized clean, renewable energy. But rising electricity prices could dampen enthusiasm for the green plan.

During all the discussions between Chancellor Angela Merkel’s conservatives and other potential coalition partners in Berlin these last few weeks, one topic has remained high on the agenda all along: what direction will Germany’s future energy policy take?

Germany’s energy transition, or Energiewende as it is known domestically, is a long-term plan to slash carbon emissions by replacing fossil fuels with renewable sources of energy. Germany hopes to generate at least 35 percent of its electricity from green sources by 2020; by 2050, the renewables share is planned to surpass 80 percent.

But just how popular is the ambitious green energy plan among Germans? Shortly after the German elections, research institute TNS Emnid surveyed over 1,000 people to get a sense of the nation’s mood on energy issues.

An overwhelming majority - some 84 percent - of those interviewed said they expect the new government to push for a quick switch to an energy system powered 100 percent by renewable sources of energy.

In addition, 83 percent said they want the profits and costs of the energy turnaround to be distributed fairly among citizens and energy companies. Currently, it’s largely private households and small companies that are shouldering a host of "shared costs" for an expansion of renewables. Certain large, energy-intensive companies have in recent years been exempted from paying the surcharge.

Pricing still a problem

Another survey by research group Forsa in summer came up with a similar result. At the time, 82 percent of the respondents said they were in favor of the energy transition but were critical of the way it was being implemented. Rising energy prices for German consumers was cited as the biggest disadvantage.

A fast, citizen-driven energy transition enjoys the backing of voters of all major political parties. Not surprisingly, over 90 percent of supporters of the German Greens back the plan. Among the center-left Social Democrats it’s over 80 percent and over 70 percent of conservative party voters showed their support.

The Emnid survey also asked respondents what they thought of the energy policies of the government led by Chancellor Merkel so far. About 55 percent said the policies tilted too heavily in favor of energy companies, 22 percent said they were happy with the policies while 19 percent said the interests of utilities weren’t sufficiently taken into account.

'A level playing field'

Germany’s energy transition is already visible to anyone traveling through the country. Over a million citizens and farmers already have solar panels installed on their roofs or are joint owners of a windpark and the Emnid survey predicts that could rise to over 20 million citizens in the future.

Around a third of those surveyed said they would definitely like to get financially involved in energy systems in their neighborhoods while a further 30 percent said they would consider the possibility.

"This desire to have a financial stake in the energy transition is especially noticeable among middle-income groups. It’s not just confined to the rich," René Mono, a renewable energy campaigner from Berlin, told DW.

The reason for the "overwhelmingly high approval of the energy transition" is the success of Germany’s Renewable Energy Act (EEG), according to Mono. The law allows ordinary citizens without specialized knowledge to invest in renewable energy systems and also allows owners of solar panels and wind turbines to sell their electricity to the grid at a fixed price over 20 years. That makes the investment safe and easy to calculate. The EEG "has created the framework so that citizens also have a level playing field," Mono said.

Other experts like Hubert Weiger, chairman of the environment group BUND, are urging the German government, currently involved in coalition talks, to take citizens‘ wishes into account and not put the brakes on the pace of the energy transition. Gerd Billen of the Federation of German Consumer Organizations warned lawmakers against jeopardizing the high popularity and support for the green energy revolution. "Consumers are paying for the energy transition," Billen said. "Energy prices simply cannot be allowed to rise further." more
And the views of someone who is not happy with either the progress or the costs of Germany's attempts to run on green energy.  And while his complaints are accurate and therefore valuable, they are often besides the point.

Grid pro quo: Green power not green light for citizens’ pockets

October 21, 2013

The popularization of green power is leading to energy price growth and extra charges for EU citizens, at the same time not solving the problem of carbon emissions, Fred Roeder, director of Young Voices international advocacy group, told RT.

Overgenerous subsidies for green energy are driving the EU towards an energy-crisis, the Europe's top utilities firms warned in September.

The problem, they say, is that billions in taxpayer hand-outs are killing innovation and competitiveness, and as a result Europe’s energy security is no longer guaranteed, carbon emissions are on the rise and fuel bills are rising.

RT: The biggest argument here is that Green energy is pushing power prices up. Just briefly, how does that work?

Fred Roeder: Yes, so let me try to explain the simple example. Imagine you have various consumers going to a grocery store. One them wants to buy a bottle of beer for 1 euro. Other would like to buy a bottle of champagne for 30 euros. In normal life people would just pay 1 euro for the beer and the other will pay 30 euros for champagne. German energy markets actually are different: people wanting the champagne would pay 2 euro for it and [those who] want the beer would also pay 2 euros. They subsidize the champagne buyers.

The same is in the energy market. If you buy energy from the legacy energy carries such as core nuclear power you subsidy those who demand energy for much higher price, that is renewable energy such as wind or solar power.

RT: Transitioning to new power sources was never going to be easy... surely a few hiccups were to be expected?

FR: I wouldn't call it a hiccup. The German Minister of Environment even who is a big fan of this transition into renewable energies even put the price on this change of 1 trillion euros. One trillion euros means that all companies and all individuals in Germany have to work 180 days just to pay that sum. In these 180 days they earn no money to pay for their healthcare, to pay for their food, or housing.

RT: As for costs... German green energy taxes amount to roughly an Irish bailout per year. That's a lot of money, isn't it? And why is Germany so adamant? France, the UK have no problem with conventional and nuclear power. Why does Berlin?

FR: It happens when policies especially energy policies conducted with ideological beliefs not commonsense understanding how actually supply and demand works. Let me explain that: if you produce renewable energies in Germany you have a guaranteed price the consumers have to pay for this energy. That means you can produce even if no one wants to have your energy. You are obliged and entitled to sell it. And that created in Germany the so-called energy bubble. A lot of people like farmers or municipalities are producing energy no one actually needs, but they are entitled to sell it. And in the end consumers pay for it. It was reported that the industry has to pay higher costs, but at the end it’s consumers that have to pay for the higher costs. Products will be more expensive if the energy to produce these products is more expensive.

RT: Who is profiting?

FR: It’s a bulletproof investment at the moment to build a windmill in your yard or put some solar panels on the roof. The government is subsidizing the loans you need to afford these things and then you get a guaranteed price for every kilowatt you produce. It is a bulletproof investment and a lot of people are doing this because it is a good way to make money. But at the end it is us consumers who pay for it.

Germany actually has all the supply of energy at the moment. There’s often way too much energy in the power grid, so Germany has to get rid of this energy. And they pay other countries to actually accept this energy. Countries like the Czech Republic and France have to take Germany’s energy, especially when it is very windy or sunny. And in other days, for example in the winter, the more we get rid of fossil power or nuclear power there may be even no wind, so Germans have to buy French nuclear power to actually light a Christmas tree. So it’s not getting rid of nuclear power, it’s actually outsourcing it. more

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