Two years ago, I wrote a report about electricity. The report was called Switched On!, a title so bland even the exclamation mark could not save it. I will always regret not going with two exclamation points.
The report opened with the story of Germany’s energy policy. Nearly two years later, this story is the one that has stayed with me because it suggests the only limit on pure waste some areas of public policy may be bankruptcy.
Germany’s energy policy is called Energiewende. It launched in 2010 with a goal to replace Germany’s coal-fired electricity with solar and wind generation. Germany committed over €500 billion to produce first a boom in solar and a second boom in wind turbines.
The scale was extraordinary. In 2013, nearly half the world’s installed solar capacity was in Germany. Further investment in transmission of up to €1 trillion was necessary to cope with intermittency of solar and wind, and because much of the new generation was located a long way from urban centres.
All told, the policy will cost every German household between €12,000 and €37,000. That is the main reason why households in Germany pay the among the highest electricity prices in the world.
But Germany is doing its bit to save the environment, right? No. Emissions from Germany’s electricity sector have been static for the last ten years. Brown coal remains the largest source of electricity generation. Germany has retired some of its nuclear fleet, which has forced more of its emissions-heavy coal stations to remain open. Nevertheless, Germany’s attempt to lower emissions using solar and wind as a replacement for coal and nuclear has delivered at best only a marginal improvement in emissions.
What disturbs me about Germany’s experience is that it was predictable. The right person could have forecast the results of Energiewende in Excel. The huge cost of the programme should have led to analysis which steered policy makers in another direction for emissions reductions. Yet somehow the usual feedbacks did not apply when they were most needed.
Each of the following should have sunk Energiewende:
- Germany receives the fourth lowest number of sunshine hours of any country (and solar produces almost no energy on cloudy days)
- The same solar panels built in Spain would have produced three times more energy
- Germany has access to only limited energy storage capacity (e.g. hydro lakes and pumped hydro), so intermittent solar and wind could not possibly replace baseload nuclear and coal
- Coal plants can take more than a week to go from a cold start to full capacity. This meant that even when solar and wind were generating electricity, coal stations had to keep running in the background, ready to step in when solar and wind generation fell away.
Worse, with the failure of Energiewende now clear and with households in Germany paying among the highest electricity prices in the world, the policy is still popular. Somehow, the fact that the policy didn’t work does not count against it in public opinion.
There is value in analysis before the political commitment to a policy. After that point, analysis will not be enough to change direction, at least until a new government is elected. There was no way Chancellor Merkel was going to back off Energiewende after she had doubled down on the policy the day following the Fukushima event in Japan in 2011.
One of the goals for this blog is to be an early warning. I want to offer ways into problems that might not otherwise have been considered. The goal is to be constructive, which I will not always achieve in the current environment.
Another goal for the blog is as error correction. Much as I dislike mistakes, I will make them. They will be honest mistakes, always: there is nothing to be gained from defending a position that defies reason or evidence. I will post corrections as soon as I become aware of an error, and be transparent about it.
I want to hear other points of view, and find new authors, new reading and new ideas. And I want to write better by writing a lot.
On content, I will cover things I work on including climate policy, energy, and RMA. Some crypto. And maybe a few thoughts on space, rugby and cricket.