## Wednesday, October 11, 2017

### New York Times misleads on Germany's "huge" investments in renewable energy

The NY Times ran a piece on Saturday Oct 7 by reporter Stanley Reed, headlined

### Germany’s Shift to Green Power Stalls, Despite Huge Investments

The reporter is puzzled about the failure of Germany to reduce carbon dioxide emissions below the levels that obtained in 2009.

In the last decade or so, Germany has subsidized solar panels and wind turbines. The total bill since 2000 is 189 billion euros or \$222 billion. At first glance, it looks like a huge investment. but to put that amount in perspective, realize that Germany has a population of 82 million. The annual per capita cost is…

(cue the sound effects as I reach for my calculator) \$222 billion/(82 million X 17 years a mere \$159 per person per year. Mathematically, the average German citizen pays \$159 per year, or \$13.25 a month or 44 cents a day. That doesn’t sound like “huge” investments.

Another calculation is to consider the German GDP which is \$3.5 trillion. Divide by 82 million people to get the per capita GDP of \$3.5 trillion/82 million = \$43 thousand.

The annual per capita renewable subsidy as a fraction of the GDP is \$159/\$43,000 = 0.004, so the allegedly “huge” investments are 0.4% of the GDP.

Either way, the investments are not huge.

Reed quotes one 27-year old student who voted for the far-right “Alternative for Germany” party, who says that his family pays an additional 800 Euros (\$936) every year for subsidies for the energy policy. (This number is in agreement with the calculation above if the student’s family has 6 members because 936/159 = 5.9). We don’t know the size of the student’s family, or whether or not that individual is typical.

In addition, not everybody pays taxes at the same rate. Germany has a lot of wealthy people with a strong aversion to paying taxes, who often succeed in shoving off the tax burden onto everybody else. Back in the USA, the hotel billionaire Leona Helmsley famously proclaimed that “only little people pay taxes” and she was accurate. Warren Buffett has remarked that his secretary pays taxes at a higher rate than he does.

To return to the NYT article….

It’s no great mystery why the carbon dioxide emissions have not decreased, Reed has answered the question in his article. Germany’s energy plan is not to phase out coal, but to phase out nuclear power by 2022. Nuclear power plants have very low carbon dioxide emissions, so closing nuclear power plants has meant that Germany has become “more reliant on its sizable fleet of coal-fired power stations, which account for the bulk of emissions from electricity generation.” (as Reed states)

In short, the decision to phase out nuclear power by itself would have caused carbon dioxide emissions to increase. Germany’s investments in wind turbines and solar panels have prevented the total carbon dioxide emissions from rising, but they have not been enough to cause emissions to decrease.

While the costs of the subsidies to wind power and solar panels do not seem “huge”, they may have run up against up a limit of political tolerance, given the lopsided distribution of income in Germany and the opposition of wealthy Germans to paying their fair share of taxes.

https://www.nytimes.com/2017/10/07/business/energy-environment/german-renewable-energy.html

#### 33 comments:

William Connolley said...

> It’s no great mystery why the carbon dioxide emissions have not decreased

Because Germany has made some very stupid choices and spent its money inefficiently.

Fernando Leanme said...

The Germán regime chose to charge households for most of the excess charges attributable to renewables, and keep level electricity costs for industry. Their logic is that a very healthy industry with lower costs can thrive and hire workers who make pretty good salaries, and this keeps unemployment low, which in turn makes sure salaries stay up due to competition for labor.

The solution is very pragmatic, but it does impose a high cost for consumers, and they howl when they see their electric bill. However, since they do gave higher pay this is compensated. The higher electric bill induces efficiency moves (better windows, smart metering, lower thermostats in winter, and super efficient light bulbs). Thus the economic structure works quite well.

Where the Germans are screwing up big time is in the early nuclear plant closures, which requires they build new coal plants, and the insistence on solar panels in a country where winter brings clouds, short days, and snow (generating large amounts of renewable electricity during a three days January blizzard that covers half of Europe is a dopey idea). If they want some solar power they need to subsidize large solar plants in Spain in areas such as Almeria, and let that electricity flow into the Spanish grid, which can transfer to France, and evntually to western Germany.

Nigel Franks said...

The NYT talks about total emissions, not emissions from the electricity sector. You can see here that the nukes have not been switched off and that production of electricity by coal plant has been reduced: https://www.destatis.de/EN/FactsFigures/EconomicSectors/Energy/Production/Tables/GrossElectricityProduction.html

The so-called tax is actually a levy on electricity consumption. It's been about 6 Eurocents per kWh for small consumers for a few years. The average German uses 1,000 kWh per year, so the levy costs them about €60 per year.

Large industrial consumers were paying a significantly lower rate of levy: about 0.05 to 0.1 Euro cents (this is not a typo). IIRC this has been addressed in a reform. However there is another flaw: the levy is calculated on the difference between the wholesale price of electrify and the guaranteed feed-in tarifs. As everyone should know, renewables lower the wholesale price of electricity through the merit order effect. So this created a situation that as more renewables came on line, more money was needed to pay the feed-in tarifs, while at the same time wholesale prices were falling, so the gap between them and feed-in tarifs was becoming bigger. Not a good situation. It was exacerbated by the power companies not passing on the savings on the wholesale price to their customers.,. No surprise there.

Nigel Franks said...

BTW, using the figures in the OP if Germany can make the "Energy Transition" for only 44 cents per person per day, then why isn't the supposed most technologically advanced country in the world ashamed of itself for being so far behind? Before anyone starts, an emissions reduction based on burning natural gas is nothing to vaunt.

Greg Wellman said...

Nigel, do you have a cite for "The average German uses 1,000 kWh per year"?
I'm in the US and my household uses about 6 times that. That's for two people, so we're 3 times more profligate than the average German? (And we actually have quite low usage for the US). Are German houses that much better insulated (or smaller)?

Patrick R said...

Where the Germans are screwing up big time is in the early nuclear plant closures, which requires they build new coal plants...

Amen Brother!

Nigel Franks said...

Greg, glad you asked, as it made me dig deeper into the figures. It's actually about 1,700 according to official statistics. http://ec.europa.eu/eurostat/statistics-explained/index.php/Electricity_and_heat_statistics

The 1,000 figure came from using the household Cosmotron and dividing by for. In fact it appears that the average household in Germany only has 2.5 members.

Nigel Franks said...

Please can people so trying to spread the myth that gems is building more coal plant to replace nukes. It just isn't true. Most of the coal plant projects that have been planned for years have either been cancelled or indefinitely postponed.

According to this overview, in German, only 3000 MW of coal capacity is in the planning stage or being built out of a total new capacity of 28,000 MW. https://www.bdew.de/internet.nsf/id/01F2A3585F6F3C43C1257FC40036A115/\$file/13_2%20BDEW-Kraftwerksliste.pdf

Nigel Franks said...

"... using the household consumption and dividing by four."

Betty Pound said...

Energy costs go into every product and service. You didn't account for that. You also didn't account for opportunity cost of using solar/wind vs. others.

Nigel Franks said...

Large consumers,i.e. industry are practically exempt from the EEG levy, as I mentioned above. Do you think that 0.01 Eurocents per kWh is a big issue?

As renewables lower the wholesale cost of electricity via the merit order effect what opportunity costs are you talking about? Why aren't you considering the negative effects of fossil fuels?

Nigel Franks said...

Blast, that should have been 0.1 not 0.01.

Ken Fabian said...

If the conservative right of Germany is anything like that where I live then they would willingly sacrifice support for nuclear to save coal, so long as it appears like it were forced on them; after all, disbelieving the seriousness of climate change means coal is just as good as nuclear - better, because it generates far more income for Germany's mining and electricity sectors than nuclear. Climate denial may be something best not shouted about in the German context but I have no doubt the Conservative right there have been just as taken by the alarmist economic fears as elsewhere. Plus of course, there is the bonus of ongoing emissions from nuclear closures makes Greens look bad.

I seriously doubt it's ever been all about what Greens wanted that produced the compromises. No doubt that element does expect RE to catch up over time and ultimately deliver the emissions reductions.

EliRabett said...

Germany is currently 27% under 1990 emissions. The goal is 40%. This is again letting the perfect be the enemy of the good a tactic of agenda driven political denial.

Yes, there is work to be done to reduce emissions further, and a lot depends on the negotiations to form the new government but a) there is a chance or at worst a horseshoes chance and b) the Energiewende has done a lot of good in spite of the spite being directed against it.

Reminds Eli of the nonsense about how Hillary Clinton is always responsible for the evils of others.

Canman said...

France made it to 80% emissions free electricity in under two decades. No nation has done that with renewables and it's not clear whether it can be done. After 30% or so, there's an intermittency brick wall! Germany has to buy electricity from surrounding states during low times and sell it to them during peak times. As the surrounding states get more renewables, this becomes even more of a problem.

What's Germany going to do to get to 40%? Are they going to use excess peak electricity to mine bitcoins to pay for expensive batteries?

Beakers said...

"Germany has to buy electricity from surrounding states during low times and sell it to them during peak times." You say that like it is a bad thing. Germany can trade power, selling surplus and accessing cost effective top up, better than every grid maintaining sufficient capacity to cover the short periods of peak load.
France sells power at periods of low domestic demand, and buys it in at periods of peak demand. It can also often be selling power to one neighbour while buying from another. Also, they are adding lots of wind power to the French Grid, so they dont seem to see the problem that upsets Canman.
Lastly, well done France for its nuclear surge, but no one would build like that now. One of the issues we have in the UK with the HPC and SZC projects is that the contractor, EDF, is so overstretched with old French (and British) reactors, that it has capacity as well as finance worries over building new ones. HPC is barely started, it was supposed to be commissioned this year. EDF new reactors in France and Finland are sadly massively overdue and over budget, but that aside, they were never going to be built at the rate they did in previous decades, as we have learned that created the current maintenance difficulties.

Ken Fabian said...

Beakers - I agree. It's common to claim credit for nuclear that was built with no consideration of it's emissions profile - built for other reasons, under very different circumstances - as an emissions policy success story. To be that it needs to be new build nuclear for emissions reductions purposes. I'm not sure that Canman - from posting elsewhere - even accepts the reality and seriousness of the climate problem or of real need for a transition to low emissions.

Russell Seitz / Bright Water said...

What a waste of neptunium.

Ken Fabian said...

But there is never a shortage of ineptunium.

Beakers said...

Germany was daft to shut working nuclear plants wit plenty of safe years in them. You may or may not support new ones, but junking a working one is nonsense.
I quite agree that we need to build nuclear, but the pity of it is that in the UK for example we have been dead set on lots more new nuclear since the 2007 Energy White Paper. From that starting gun, the first new nuclear was going to be Hinkley Point C, and EDF said it would be generating to cook our 2017 xmas dinners. Well its quite late in 2017 now, the original partner (Centrica) ran a mile from the project and we replaced them with the ... Government of China. Along with this came an increase in the price per KWh, substantial loan guarantees and a commitment that we would commit to build another reactor built by a contractor of China's choosing. Still the project only got clearance to proceed late last year, including caveats that we could drop out if EDF dont manage to fix their headache at Flammanville. EDF are struggling under the burden of two prior builds of the same reactor in Europe that have gone way over budget and over time. On top of that the burden of maintenance of their existing fleet in Britain and especially France, is growing and capacity simply rules out making any meaningful progression on Sizewell C. There are of course other Nuclear developers, but RWE E-ON dropped out to be replaced by Hitachi, that thankfully dont seem to be as troubled as Toshiba Westinghouse, who now certainly will not be building three reactors in Cumbria. As with Hitachi, another developer may come along but the delay just gets worse and we are running low on alternate competent providers.
All this is of course compounded by the horror in the UK of the State buying anything tangible. The reactors are financed by giving 35 years operation of a guaranteed price, a deal that the attractiveness of is eroded by delay, rising costs and the continued fall in cost of low carbon alternatives that are much faster to deploy.
The UK will most likely get the EDF plant HPC, and the Hitachi one at Wylfa, but these are horribly behind schedule. Meanwhile the UK gov actively obstructs onshore wind power in England, and hampers continued development in the devolved admins. Not because wind power is unpopular (survey after survey shows it is not) just because it is unpopular with a small but tactically important demographic. I want the reactors we decided to have in 2007, but more than that I want the government to stop obstructing the faster and cheaper to build tech that has emerged since then.
If you are a nation with no nuclear now, the current low cost of renewables takes most of the rational away for building your first reactor.

Canman said...

Breakers, I say it like it's a bad thing because it IS a bad thing. The rest of my comment explains why:

After 30% or so, there's an intermittency brick wall!
...
As the surrounding states get more renewables, this becomes even more of a problem.

Canman said...

Ken Fabian: It's common to claim credit for nuclear that was built with no consideration of it's emissions profile - built for other reasons, under very different circumstances - as an emissions policy success story.

Just because France's nukes were built for other purposes doesn't change the fact that it was a success at reducing emissions.

Trying to achieve these results with renewables is a waste of the gaseous form of unicornium.

Ken Fabian said...

I think that with renewables the emissions reductions should not be expected to follow in a direct relationship to their proportion of production - when fossil fuel plants are a primary means of smoothing supply and are burning fuel to remain available at short notice, (at less than their best efficiency) the proportion of renewable energy will be greater than the emissions reductions. As well, the proportion of emissions from energy during manufacturing will reflect the overall emissions profile of the networks they get the energy from.

But I expect to see the overall emissions profile to change significantly in response to storage - which is just approaching cost effectiveness - taking over the role of smoothing fluctuations and providing the time window that allows fossil fuel plant like gas to spend more time fully shut down, ie to shift into the role of backup to renewables. Reductions in embodied emissions from manufacturing will follow.

If nuclear can't be successfully built for it's emissions reductions then relying on it being built for other reasons - with emissions reductions being a mere spin off benefit - then I don't see that it's being much help.

Commitment to emissions reductions cannot be an afterthought in this and the proof that without that motivation it can't be built at scales to displace fossil fuels seems clear in the current situation in the USA; pro-nuclear Republicans in House of Reps, Senate and White House, having no commitment to emissions reductions, are incapable of supporting nuclear enough to result in new build nuclear displacing coal and gas. Their commitment to not displacing coal and gas looks quite firm.

Without that essential motivation and commitment the large body of support for nuclear within conservative right politics - or at least it's tolerance for nuclear - cannot be mobilised in any meaningful way.

Nor can that of the significant element within climate action advocacy that would support it's use and who consider renewables to be less than ideal be mobilised without any clear path forward for it; they should vote for climate science deniers who clearly show they will fight for fossil fuels for the sake of their half hearted support for nuclear? Too many realise nuclear advocacy is so inextricably entwined with climate science denial and anti-environmentalist sentiment that they cannot support it.

So, Canman, are you one of those who deny the seriousness of climate risks simultaneously with telling people who accept them how to do something about it? And do you seek to undermine support for what may be less than perfect whilst offering no means to deliver anything better?

The key to mobilising support for nuclear-for-climate is through emphasising climate risks, not attacking renewable energy.

Beakers said...

"Breakers, I say it like it's a bad thing because it IS a bad thing. The rest of my comment explains why:" But it does not does it. Your claim of a brick wall is actually the porous trading of power between Germany and its neighbours. Adding intermittent renewable generation in Germany cuts use of fossil fuels in Germany and beyond. Had the Germans not prematurely terminated working nuclear plants then these would also be displacing fossil fuel consumption at home and abroad. And were German coal not seen as an insurance against Russian Gas supply blackmail, the profile of German fossil fuel use would be further over to gas, further cutting emissions.
Desperate to see problems where there are none, and to what end? No wonder you endorse shysters like Ridley.

Canman said...

Michael Shellenberger declares victory in South Korea!

https://twitter.com/ShellenbergerMD/status/921201261642264577

Canman said...

"Shysters like Ridley"? Breakers offers evidence for an aphorism I've run across:

Conservatives think liberals are stupid, while liberals think conservatives are evil.

Ken Fabian said...

Again, Canman, do you accept the reality and seriousness of anthropogenic climate change?

Canman said...

Ken, I'm not convinced, but I don't completely dismiss it. I don't even completely dismiss Hansen's claim that we'll turn into Venus. If it's serious, it's a long-term problem. 20 years makes little difference.

Beakers said...

Ridley has a science training and background, quite a good one in fact. Yet he engages in dishonest arguments over climate change and renewable energy. After his "Rational Optimist" case was caught with its trousers down in Ridley's role in the failure of the Northern Rock Bank, he strolls away from the hugely expensive mess that the state has to take over responsibility for, to advise his relation Owen Patterson on Climate Change and energy. This is important as Patterson has no scientific training, is far from the sharpest tool in the box, and was for a while the UK Environment Minister (Defra) - a pompous, ignorant climate change denying Environment Minister who could not recall how many times he took advice from his own Department's Chief Scientific Officer - should have been easy to remember as he declined to even meet with the CSO, one of his most important advisors and based in the same building.
That Ridley is a shyster is also clear as he is a prominent member of the GWPF. I do not say that he is evil, just repeatedly, enthusiastically, egregiously wrong. Mind you, I suppose that rules him out from being 'good'.

Ken Fabian said...

Canman - your "not convinced" views are as much denial of the validity of mainstream climate science as those who believe it to be false.

By it's nature it is a cumulative long term problem, that is made worse, in non-reversible ways, by delaying strong emissions reductions. 20 years more of continuing strong planetary climate altering actions on top of the previous 30 years, on the basis that delay is our friend can only be deemed reasonable on the presumption that mainstream science on climate change is wrong. Nuclear, without deep and enduring commitment - the sort that only emphasis of climate risks can engender - becomes a political means of undermining support for the emissions reduction actions that are within our current reach.

Canman said...

If CO2 is a existential problem, then I see two opposing solution strategies: Malthusianism vs cornucopianism.

The Malthusian approach means an eco-elite limiting energy use and deciding what's best for the rest of humanity. This looks like a recipe for tyranny. And it may not even work! Maybe it's not possible to prevent CAGW by reducing emissions.

I say cornucopianism is a better approach with more energy use, more economic growth, more consumerism (with people deciding for themselves what they want to consume), more wealth and more resources that can be used to mitigate the effects of too much CO2 and maybe even to remove it.

Beakers said...

Well thats lovely, you just enjoy yourself with a cornucopia of donuts and booze. I for one can not see any problem with that petulant approach, and you should push back hard against any attempt to show you evidence of harm, because that would just be an 'eco-elite' deciding whats best for you. Go on, Fight the Tyranny with several trays of donuts and a bottle of whisky every day, and show them all you were right - or die trying, die in tremendous distress, on a pointless and childish mission to gainsay the overwhelming weight of evidence.

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