MARKETS

Cost of clean fuel threatens Germany

GERMANY'S economic strength is under pressure by out of control energy prices for private custome...

Sadie Davidson

The country’s coalition government is at odds with its “Energiewende” or energy transformation program, which is said to be the most ambitious in the world.

Umbach said the government failed to consult the European Union or neighbouring countries when it decided to phase out nuclear power immediately after Japan’s Fukushima nuclear disaster in 2011.

The aim is to have phased out nuclear by 2022.

Umbach said the plan to expand wind, solar and other renewable energies to 50% of all electricity by 2030 and 80% by 2050 was quickly introduced without detailed analysis or guidance from the EU.

The scheme is on track to meet only one of its three main objectives.

It is on track to have one third renewables but is failing to cut energy consumption by a fifth by 2020, which in turn will make it difficult to achieve the third objective, a 40% drop in emissions by 2020.

In fact, Germany’s reliance on coal rose to 61% of all energy in 2012, higher than the EU average of 53%.

The government’s feed-in tariff has made Germany the world’s largest and most subsidised solar market.

According to German industrial federation, BDI, rapidly increasing costs of the Energiewende have already gone beyond limits, jeopardising the international competitiveness of the German industry.

Surging costs of subsidising feed-in tariffs under Germany’s Renewable Energy Sources Act have increased to more than €120 billion ($A184.1 billion) between 2000 and the end of 2013, according to the BDI statement.

Germany’s electricity was 40% more expensive for private consumers and 20% more expensive for industrial users than the EU average.

It caused widespread hardship across Germany, with more than 600,000 households having their power switched off in 2012, Umbach told World Review.

In 2013, wind and solar provided up to 60% of Germany’s electricity production.

But the production of more than 23,000 wind turbines came to a standstill in December while coal, nuclear and gas power plants generated an estimated 95% of Germany’s electricity supply for a week.

The German grid has to maintain a buffer of 5% in case of fluctuating supply and demand, caused by the varying outputs of renewable energy.

With a lack of storage capacity to accommodate such fluctuations, utilities turned to cheaper coal over natural gas because of the price difference per megawatt hour, which caused Germany’s carbon dioxide emissions to rise in contrast to its official climate mitigation policies of reducing CO2 emissions by 40% by 2020 compared with 1990.

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