itemscope="itemscope" itemtype="http://schema.org/WebPage">
Investing & Day Trading Education:  Day Trading Academy

Germany Leads The Race In Renewable Energy

220px-WindgermanyAs a result of a unique set of circumstances, Germany the 4th ranking industrial power globally, has taken the lead in the race for renewable energy among the largest developed nations. It is estimated that the country was able to produce 27% of the domestic electrical demand in 2014 through renewables. These would include the traditional hydroelectrically,but also methane (biomass), solar and wind power. Production of these types of energy has increased 300% in Germany during the last decade alone and has involved a tremendous investment, from the nation at large.

Fukushima Daiichi nuclear disaster in Japan

Fukushima Daiichi nuclear disaster in Japan

As a nation Germany has not only made a commitment toward renewables, but at the same time has decided to stop the generation of nuclear power completely by 2022. Of the 17 in operation when their announcement was made in 2011,only 8 now remain. This was in response to the partial meltdown of the Fukushima nuclear power plant, in Japan the same year. This is the reason why the country has been identified, as the world’s first major renewable energy economy.

What makes the effort unique in Germany, is the individual activity at the personal and local level. In what are called energy genossenschaften which are citizen associations, these organizations have made about 50% of the investment in renewables across the country.

German wind and solar in Rhineland-Palatinate

German wind and solar in Rhineland-Palatinate

The drive in what the Germans call energiewende is the national push or revolution towards energy production that abandons most conventional methods. It has not gone forward without controversy. It is no secret, that the big electrical companies in the country are pushing the government to slow down the national effort. So far Chancellor Angela Merkel has refused to do so, but is aware of the constraints the country is facing.

In what would be rare in most democratic countries in the industrialized world, is the national consensus that exists in Germany towards renewable energy. It was first embraced by the SPD after the Russian Chernobyl nuclear accident in 1986. This was the more politically mainstream liberal part (the left) of German society. Later the CDU dominated by the Conservatives have also taken up the cause, as a result of the events in Japan.

The view of Chernobyl Nuclear Power Plant taken from the city of Pripyat

The view of Chernobyl Nuclear Power Plant taken from the city of Pripyat

This governmental alliance has allowed the movement to thrive through large government subsidies. It is also unlikely to change, regardless of which political party is running the legislature. The regime will now pay producers for energy and will guarantee a price level, making renewables cost effective.

For those who are proponents of climate change, the German effort is quite laudable. The country has committed itself to a cut in greenhouse emissions of 40% from 1990 levels by 2020. By the year 2050, the goal is at least 80%. These kind of reductions do not come cheap. German consumers are already paying, the second highest electrical costs in Europe. It is largely due to the renewable energy surcharge of their individual bills.

Chancellor Angela Merkel announced her goal to bring 1 million electric vehicles on German roads at the 2010 Electromobility Summit in Berlin

Chancellor Angela Merkel announced her goal to bring 1 million electric vehicles on German roads at the 2010 Electromobility Summit in Berlin

The expense works out to be about the equivalent of $6.61 USD (United States Dollar) per kilowatt hour. For the average German customer, this equals a bit under $10.00 USD a month. For most consumers, the determination has been that the extra cost is worth it.

Despite the progress, Germany still depends far more on coal for electrical generation than renewables. The other hurdle is home heating and the transportation sectors. These two energy hungry spheres will be harder to tackle because of German consumer tastes, overall expense and the lack of supporting infrastructure.

The BMW i3 led plug-in car registrations in 2014.

The BMW i3 led plug-in car registrations in 2014.

Electrical cars for example, are still far from affordable for most Germans and the government has still not introduced incentives to change that dynamic. Until that happens, the big auto companies will not move to convert the majority of their production away from gasoline and diesel powered vehicles.

At large, Germany is committed to this national effort. Most polls show that over 90% of the voting population, support the endeavor to abandon both fossil and nuclear fuels for their energy needs. The partial explanation for this strong endorsement, is the existing laws that permit citizens and associations to sell their surplus energy to the national grid for a profit. At present almost 2% of the population is selling power. That equates to 1.5 million citizens.

Biogas production in Germany

Biogas production in Germany

What the future holds for the country, was quite evident on what is referred to as Green Day. This occurred on July 25th of this year. It was unusually sunny in the southern part of the country and quite windy in the north. For that day alone, 75% of all the electrical needs of the nation were derived from renewables.

Before 2011, Germany derived 25% of electrical needs from nuclear power. As this source is closed off renewables seem likely to take up the slack. The bigger problem will be how to reduce the need for fossil fuels, especially coal.

Geothermal power plant in Neustadt-Glewe, Germany

Geothermal power plant in Neustadt-Glewe, Germany

In 2014, it is estimated that 44% of electricity produced in Germany came from coal. Of this 18% is from hard coal, which is mostly imported. This source has declined dramatically in the last two decades. It has been a substantial savings for the country over the years. However, lignite provides 26% of the amount. Herein, lies the problem. This resource is produced domestically and in great abundance, rather cheaply.

Germany remains the largest global producer of lignite. It is the least expensive of all fossil fuels. It is cheaper than both hard coal and natural gas. As renewables continue to flood the market and must be purchased by the electrical companies, natural gas although cleaner is often too expensive to compete. The same is true for hard coal which costs less than natural gas, but still more than lignite.

Strip mining lignite at Tagebau Garzweiler near Grevenbroich, Germany.

Strip mining lignite at Tagebau Garzweiler near Grevenbroich, Germany.

Discarding lignite completely remains unlikely, given that the big utilities in Germany have been losing money over the last few years. These companies often deal with the problem of too much energy production, depending on weather conditions. This will continue to be a problem, even as the last nuclear power plants are shut down.

The problem with solar and wind, is in storage of the energy produced during ideal conditions. Lignite will remain as the backup, until new infrastructure is developed to store renewable energy. That is in the form of batteries or other presently unknown technologies.

Recently, the German government has been investing heavily in off shore wind production. The expectation is that at least one third of future generation of electricity from wind, will come from turbines that are situated in the seas to the north of the country. Further wind production on land is becoming too cost prohibitive, given the scarcity of available property.

Wind Park in Bernburg, Germany

Wind Park in Bernburg, Germany

An additional challenge will be how to transmit the surplus power generated on the Baltic and North Seas, to the more industrialized southern parts of the country. Heavy power lines built over the countryside are not popular with residents and placing the cables underground, makes the costs far higher in the construction of these energy highways.

Making Germany more energy efficient is another issue that has a number of problems. The country as a whole, does not build a large stock of new buildings that can be installed with the latest energy conservation features. The emphasis instead, has been on retrofitting old buildings with insulation and new windows. Low interest loans make this possible but it is a relatively slow process. Only about 1% of all German buildings are being remodeled each year, with these cost and energy saving features in mind.

German Levelized cost of electricity in 2013

German Levelized cost of electricity in 2013

Germany’s renewable energy sector, is among the most innovative and flourishing in the world. Every third solar panel and every second wind rotor worldwide are made in Germany. This is in spite of the recent advances made in this sector by China. In addition, German turbines and generators for hydroelectricity remain among the most popular globally.

Nearly 800,000 Germans are employed in the environment technology sector. An estimated 214,000 individuals work with renewables, an increase of 36% since a decade ago.

Renewable Energy In Germany

Renewable Energy In Germany

The main competition to Germany in the solar industry are the nations of China, Japan and the United States. In the wind power industry, national competitors are comprised of Denmark, Spain and again the United States.

It is important to note that almost half of the German renewable power capacity in 2013, was still owned by private citizens. Another interesting fact is that 20 million Germans out of 82 million now live in areas of the country that are totally renewable energy regions.

In addition to the environmental benefits of renewable energy, it has been making an enormous benefit to the German economy. The jobs created in the industry are high paying and are increasing. The savings to the nation at large, with fewer fossil fuel imports from abroad have not been inconsequential. Germany will continue to benefit from both of these trends. The country will also eventually benefit with lower energy costs, as the technical innovation continues to progress in renewables.35a158a8a17711c1f59acd64f1eb66f6

Post a Comment

Your email address will not be published. Required fields are marked *