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Clean Energy Conundrum in Germany

gutterman, sara, green mediaGermany has been lauded as the leader in distributed, clean energy, its renewable energy strategy touted as one of the most innovative and successful worldwide. The claim certainly has validity—Germany has increased the share of its total electricity production from renewables from 6% to 30% over the past decade; it has the highest per capita installed solar power capacity in the world; and its feed-in tariff (FIT) policy establishes long-term, fixed fee contracts for clean energy producers, encouraging households, cooperatives, and communities alike to produce clean distributed energy.

However, when examining the country’s total energy portfolio, the facts belie Germany’s reputation as “the world’s first major renewable energy economy.” In glaring contrast to its image as a leader in clean energy, Germany is a heavy user of coal and the largest importer of Russian natural gas (over 40 billion cubic meters in 2013).

While a Utopia-like vision has been painted of a country that is utilizing massive amounts of clean energy, in reality, Germany depends on fossil fuel imports for more than 70% of its domestic energy demand. Since nearly 30% of these imports (natural gas, oil, and coal), totaling approximately $103 billion, come from Russia, Germany is clearly in an untoward position as the global community reacts to Vladimir Putin’s aggressive political choices with increasing sanctions and trade restrictions.

Exposed and vulnerable, Germany appears to be at a crossroads. In the short-term, the country could plausibly replace Russian imports with natural gas from Norway and the Netherlands (the other natural gas power players in Europe), or liquefied natural gas (LNG) from countries like Qatar and the US. But neither one of those options is wholly viable in the long-term, as production of natural gas in the North Sea is in decline and the limited supply of LNG has already been allocated to other countries that secured contracts years ago.

Another option, fracking, is being considered—and hotly contested. Germany’s Federal Institute for Geosciences and Natural Resources claims that Germany has access to 2.3 trillion cubic meters of shale gas within its borders, which would satisfy the country’s demand for up to a century. However, pressure from elected officials and environmentalists are blocking forward movement for fracking. In fact, Germany’s Minister of the Environment, Barbara Hendricks, has even proposed a ban on most forms of fracking until 2021.

Critics argue that the proposed ban on fracking will not only inhibit Germany’s ability to reduce its dependence on foreign imports, but will also hinder the country’s economic growth.

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4 thoughts on “Clean Energy Conundrum in Germany

  1. Good article. To bad that in the US “good” (e.g., CHP) has become the enemy of “best” (e.g,. wind & solar). This will harm domestic jobs and the economy.

  2. while that is an opportunity, ask the average German now what they think of their 25-40% cost increase in their electrical bill. Everyone can accept a gradual increase but what has happened in the last 5 years has people fuming, upset and out of pocket; subsidies are now being considered for families to subsidize their monthly cost electrical bill which is yet another additional cost for the government. What most people also do not know is that germany over 40 years ago paid for most of the pipe lines to Russia – in order to have a ‘closer” relationship with them- it was foreseeable that one day the Russians can and will turn of that spigot the Germans paid for !!

  3. My guess is that the recent report stating that most of Germany’s electricity is being generated from solar and/or wind power is nothing more than hyperbole – at best – or a calculated effort to encourage investment in German renewable energy infrastructure – at worst.

  4. A well balanced summary, Sara
    Just a few add ons that will make the set-up a bit more complex but also indicates additional options Germany has at hand:
    (1) Nuclear Energy: You left out that area and I do not know if with intend. Germany may have declared an exit strategy to leave the nuclear age behind. However it is a fragile construct and may collapse easily if economics may ask for it. Delaying the exit may only buy time and not solutions.
    (2) IN line with the nuclear issue goes the question about the roles of the utilities. Germany has a fairly diverse landscape of energy providers, some areas dominated by huge conglomerates other served by local, often comity, owned utilities. Still none of those players have really changed the business model towards the strategic demands of the “Energywende”, may be due to hopes that time and economics play into their favor.
    (3) Politically, Germany appears to be th sonly country where renewable experience public support over all parts of the political spectrum. Very different to the bi-polarity in the US. A conservative government today realizes programs that ten years ago we would have labeled “green”. Yes, the Germans pay a high price for the “EEG-Premium”, but it did not cause a rebellion. It seems the people understand well that change does not come for free. Such public condense is a huge chance for the claim you stated at the end of your article.
    (4) Finally, Germany has always sourced electricity from neighboring countries like France. Again, not right on strategy, as much is produced with nuclear factories that the Germans abandon back home. However it is an option especially when considering that Germany’s electricity needs are significantly different then the ones of their neighbors. Whereas France covers heating and cooling mainly by electricity Germany requires manly oil and gas for it. Thus overcapacity of its neighbors may always been a source to feed the needs of the German grid.
    It appears that with pragmatism and strategic focus Germany may rely on a number of options to push the country into its new energy future.

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