Alone among the major economies, Germany is moving purposefully to phase out fossil fuels while also shuttering nuclear power. Germany’s energy makeover, or “energiewende,” appears to be thriving, as evidenced by the country’s humming economy, low unemployment, robust exports, stable or declining CO2 emissions, and rapid uptake of renewables. Yet the world’s most influential newspaper casts this ambitious program as an incipient failure, even as elsewhere it decries the climate stalemate in Washington.
Here are ten packets of information worth bearing in mind as you sift through coverage in “the paper of record” of Germany’s transformative energy agenda.
1. The German economy is the world’s fourth largest ― after the United States, China and Japan. Of the three dozen highest-population countries, Germany boasts the highest per capita GDP, save for the U.S.
2. Germany has embarked upon a concerted program to transform its energy system from fossil fuels to renewable sources ― wind power, electricity from sunlight, and biological-based fuels. This energy makeover — energiewende, in German — is not an overnight phenomenon but the accumulation of a dozen synergistic laws and policy directives instituted over several decades. The energiewende is now reaching critical mass, such that last year over 20% of German-produced electricity was generated from renewable sources, not even counting traditional hydro-electricity: wind, 8.4%; biomass, 6.7%; photovoltaics, 4.7%; municipal waste, 0.8% (an additional 3.2% was from water power) ― more than triple the comparable percentage for the U.S. (see table), and the highest share by far of any major economy. Perhaps most notably, Germany, with cloudier skies, a more northerly location, and 1/27th the land area, produces more than three times as much photovoltaic electricity as the United States. PV’s share in Germany’s electricity generation mix is 20 times as large as that in the U.S.
3. The most powerful mechanism driving the energiewende has been a 1991 law guaranteeing an investable price for renewable-energy production through a policy known as Feed-in Tariffs (FiT). The intent of this law, as energy authority Hal Harvey noted in his 2013 brief on the energiewende, was not simply to provide more zero-carbon energy but to push renewable energies along their respective “technology learning curves” so that vast amounts of clean energy could become available at affordable prices in the future.
4. Although German authorities have reduced somewhat the rates offered for newer wind and solar production, the FiT’s have caused substantial rises in electricity prices. (Another factor is a tax on electricity, introduced in 2000 as part of ecological tax reform.) These price rises have been decried by some German industrialists as well as the American oil historian and energy consultant Daniel Yergin, whose recent report (available through this link) also took Germany to task for turning its back on the supposed cheap-energy bonanza offered by fracked natural gas. Nevertheless, Germany’s economy, by far Europe’s most robust, has weathered the long global recession better than any other Western country, including the U.S., with 5% job growth and nearly 5% real GDP growth from the end of 2007 to the end of 2013 (see graphs).
5. The Fifth Assessment Report of the Intergovernmental Panel on Climate Change, draft portions of which have emerged in recent weeks, is only the latest (if the most urgent) expert report to express the nearly unanimous view of the world’s leading climate scientists that failure to curb emissions of carbon dioxide, the major greenhouse gas and an automatic byproduct of fossil fuel use, consigns our planet to catastrophic climate change within the lifetimes of most people now living.
6. As if deaf to the drumbeat of such warnings over the past several decades, the world’s three largest economies are doubling down on long-standing policies that have entrenched carbon-based fossil fuels as the bulwark of their energy systems. Under a politically expedient but mutually cancelling “all of the above” rubric, the U.S. subsidizes virtually all energy production, whether from coal, oil and gas extraction or wind turbines; China, its burgeoning megacities encased in life-shortening smog, rocketed past the U.S. as the leading carbon emitter several years ago, while Japan remains mired in paralysis in the wake of the 2011 triple-reactor meltdown at Fukushima.
7. The chief economist for the European Climate Federation (ECF), Thomas Fricke, reports that German exports doubled from 2000 to 2012, evidence that comparatively high energy prices have not dampened Germany’s ability to compete in global manufacturing. In his new brief, Climate and Competitiveness, Fricke cites the low share of energy in German industry’s cost structure (in part because of high energy efficiency), and argues that “factors like highly qualified labor, or the benefits of being integrated into well-functioning clusters, probably play a more important role.” Even Germany’s net exports of electricity reached a new high last year of nearly 34 billion kilowatt-hours, the equivalent of five large (million-kilowatt) reactors running at 75% of capacity.
8. Nevertheless, these considerations did not deter energy consultant Yergin from telling a New York Times reporter last month that “There has been a kind of waking up to the fact that the premises of the Energiewende, however well-intentioned they are, no longer hold because the world has changed” ― the insinuation being that pursuing renewables rather than fracking was a luxury Germany could no longer afford. The Times story, ominously headlined German Energy Push Runs Into Problems, warned dutifully that “The rise in energy prices has already cost Germany $52 billion in net exports and could prove even more damaging if steps are not taken to keep prices in check, according to the [Yergin] study.”
9. The negative slant of the Times’ story was of a piece with the paper’s ongoing reportage. Enter “energiewende” in the Times’ search engine and here’s what comes up, in reverse chronological order:
- German Energy Push Runs Into Problems, March 19, 2014 (just cited)
- Germany’s Clean-Energy Plan Faces Resistance to Power Lines, Feb. 5, 2014
- German Energy Official Sounds a Warning, Jan. 21, 2014
- Germany’s Effort at Clean Energy Proves Complex, Sept. 18, 2013
- Energy Price Increases Pose Challenge for Merkel, Oct. 16, 2012
As their headlines suggest, the articles are replete with negative comments such as “Germany’s plan to convert to renewable energy sources is running into problems in execution that are forcing Germans to face the costs” and “A year and a half later, the costs of that plan, known here as the Energiewende, or energy transformation, are becoming painfully clear.” Nowhere does the Times see fit to mention the dual service the energiewende provides to the world: helping contain emissions of greenhouse gases, and driving down the price of renewable energy worldwide by propelling wind and solar technologies further along Hal Harvey’s “technology learning curves.”
10. A related current running through the Times’ coverage is that Germany’s accelerated closure of nuclear power plants in the wake of the 2011 Fukushima meltdowns is causing a surge in carbon emissions through increased usage of existing coal generators and decisions to build new ones. But the new coal-fired plants were set in motion prior to Fukushima in order to replace older, obsolete ones; moreover, from 2010 to 2012 ― a period encompassing Fukushima and Germany’s shutdown of six reactors ― Germany actually held constant its use of fossil fuels to make electricity, as the loss in nuclear generation was made up by growth in solar-photovoltaic and wind generation and increased energy efficiency.
The Times is not alone in its simplistic coverage of the energiewende. See, for example, Sunny, Windy, Costly and Dirty in the Economist, earlier this year, and, just yesterday, in Bloomberg News, Coal Rises Vampire-Like As German Utilities Seek Survival. One expects better, though, from the paper that sets the tone for other outlets and whose coverage of coal-burning’s climate consequences and immediate health costs is often hard-hitting, as evidenced by the links to potent stories sprinkled through this post.
For an alternative model, the Times could turn to another Establishment redoubt, Foreign Affairs. In a compact (1,700 words) yet comprehensive report published last September, Power Hungry: Will Angela Merkel Complete Germany’s Energy Revolution?, Berlin-based writer Paul Hockenos chronicled the energiewende’s achievements without skimping on the challenges it poses, not just for Germany’s electric grid but for the whole of society.
“Germany’s switch to clean power is nothing less than a new industrial revolution,” Hockenos wrote, “which is forcing Germans to contemplate uncomfortable changes to their entire society, including everything from mobility to urban architecture to farming to finance.” Precisely. Weaning an advanced industrial economy off of fossil fuels and nuclear power goes way beyond just flipping a different switch. But Hockenos also credits the energiewende’s “booming industrial and service sector based on renewables,” the increased tax receipts, the development benefits to Germany’s lagging eastern sector, and the boost to exports — none of which has been fit to print in the Times.
Whether makeover, transformation, revolution, or all three, the energiewende is the most hopeful development in energy and climate policy this century. It, and our planet, deserve thoughtful coverage.
Notes for Table
Electricity data for Germany are from Table 5 of file, Entwicklung der Energieversorgung 2013.pdf, provided by German Association of Energy and Water Industries (BDEW) except for these minor modifications aided by data from Christian Bantle of BDEW (email, 14-April-2014): (i) Geothermal is a nearly negligible 0.2 TWh; (ii) Municipal Waste (here labeled Waste) is split evenly between renewable and non-renewable; (iii) Other has been reduced from 25.4 TWh in BDEW’s Table 5 by 5 TWh of Waste Non-Renewable just noted. For those interested, Coal is 124.0 TWh and Lignite 162.0 TWh.
Electricity data for USA are from U.S. Energy Information Administration, Monthly Energy Review, March 2014, Table 7.2a: Electricity Net Generation,Total (All Sectors), except (i) Lignite is subsumed under Coal; (ii) Water (Hydro) Power has been netted by 4.424 TWh consumed by pumped-storage facilities; (iii) reported net electricity from Waste, 19.957 TWh, has been split evenly between renewable and non-renewable to match the German convention; (iv) Other has been added to true up calculated sum to reported Total.
Population, land area and GDP are from Wikipedia’s Lists of Countries (by population, by area, by GDP). Population is as of 30-Sept-2013 (Germany) and 15-April-2014 (USA). GDP is per International Monetary Fund.
Mark Tabbert says
Germany trying to do the right thing is the World’s success story. America is failing humanity. Americans are the lemmings.
Is it a telling fact that much of the NYT article is based on a study by IHS Inc., a company based in Colorado, US which owns a reservoir engineering software company and a consulting firm specializing in the oil and gas industry?
Mike Aucott says
Your piece makes the point that Germany continues to have a robust economy, and that it has made great progress in wind and solar. However, I fear that you gloss over a couple of things: 1) Germany’s prosperity is not due to its focus on renewables, but is the reason it has been able to heavily subsidize them, and 2) shutting down nuclear really has made it necessary for Germany to burn more coal; its coal consumption is now increasing, as are its greenhouse gas emissions. Germany is now ramping down its push for solar. See the following:
In my view, Germany is making a tragic mistake in accelerating a phase down of nuclear. I was one who marched against nuclear power in the 70s but I am taking another look. 3rd and 4th generation nuclear is different and far superior to the light water reactors that the U.S. rushed into building in the 60s. Nuclear power has tremendous potential, and needs to be explored rationally. An excellent documentary on the subject is Pandora’s Promise, which I encourage people to watch.
Leslie Downey says
Some here in the U.S. seem to take perverse pleasure in bashing the efforts of countries which are more progressive in renewable energy production. Bold programs like those in Germany are bound to experience setbacks at times. These are immediately pounced upon by press members who apparently have given up any hope that the U.S. will muster the will to compete and lead.
Charles Komanoff says
You would do well to go past the relentless propaganda barrage from the Energy Collective and examine the underlying data, as I did here and in my November post documenting that Germany was able to keep fossil-fuel generation constant despite its six-nukes shutdown — a remarkable achievement given the tight time frame. (The link to that post is in my Point #9 above, see “held constant.”)
I don’t think I argued that German prosperity is *because of* the energiewende, as you imply I did, but, rather, that the energiewende has *not hindered* German prosperity. Is not Germany’s Feed-in Tariffs subsidizing renewables preferable to the U.S. “policy” of throwing money at anything and everything that makes Btu’s, regardless of its impact on health and climate?
I’m surprised you feel that Germany’s accelerated phase down of its reactors is “a tragic mistake.” If an advanced economy can equably transist to all-renewables without the expense, distraction and distrust that have riven nuclear power since its inception, wouldn’t that qualify as triumph, not tragedy?
Chris Robertson says
Germany’s early and prolonged financial support for solar energy has indeed driven costs down the learning curve. In Oregon, utility scale solar power plants (UPV) can now produce energy at less cost than gas turbines. Recently three 10 MW UPV plants were contracted in Eastern Oregon, with revenue streams based on PURPA avoided cost rates. Many more of these plants are in the development phase, and well financed developers are scouring Oregon for the best sites to interconnect to the three investor owned utilities.
The cost reduction curve is not nearly over yet. The US DOE SunShot initiative should reduce costs by a factor two by 2020. The president of US manufacturer SolarWorld reported at a Feb. 2014 meeting that his company fully expects to hit the SunShot targets.
Given the cost reduction trends, if Oregon committed to build a large scale solar resource over the next 15 years it could produce 20% of its electricity, reduce the net present value of the utility system by $2 billion, and reduce GHG emissions by 100 million tons.
A raft of market barriers and related policy improvements, particularly a German style FIT, will need to be considered in order to achieve a resource at the scale suggested by this scenario. But crucially, the economic issues are now supportive.
Philip Kahn says
A quick look at the 2007 and 2008 data shown at “http://en.wikipedia.org/wiki/Natural_gas_by_country” shows that at that time Germany had proven natural gas reserves equal to 2.6 years of consumption, the UK had 4.5 years of consumption, France had 0.17 years of consumption, Japan had 0.2 years of consumption, the US had 9.4 years of consumption (which has dramatically increased due to fracked gas exploration and production), and the World had 55 years of consumption.
Since nuclear plants take so long to build and there is stronger political resistance to them in Germany and in post-Fukashima Japan), it is not surprising that Germany, Japan and UK are embracing renewables. The alternative for Germany and UK is to rely on imports of natural gas from Russia and the Middle East. The geopolitical situation is driving Germany to renewables and their manufactured export oriented economy is cleaning up.
Interestingly, China is pursuing an all of the above energy strategy but with strong support for the growth of solar and wind manufacturing industries and they are taken big global market share. The U.S. is too beholden to the oil and gas lobby to really support renewables to the point of having a truly competitive domestic industry in solar and wind manufacturing. However, a carbon tax will still create a lot jobs installing and servicing wind and solar in the US even if it produced by Germany (wind and solar), China (wind and solar) and the Danes (wind).
Charles, very timely article. Your point about the NY Times not acknowledging the economic impact of the greenhouse gas reductions embodied in Germany’s energy policy is spot on. The globe’s surface temperature increase over pre-industrial levels will have to reach 5 degrees C before those morons will realize that reducing greenhouse gas emissions has real economic value worth trillions.
Yergin is a shill for the oil & gas industry (that’s who’s paying his bills). I much prefer Kjell Akelett (Peeking at Peak Oil), he’s an academic living in a country with a carbon tax.
Mike Aucott says
Germany may be exemplary in many ways, but they are not currently holding their greenhouse gas emissions constant; these emissions increased in both 2012 and 2013. Had they not accelerated their decommissioning of nuclear plants in favor of more coal, it is very likely their emissions would have decreased significantly over this period due to their progress in renewables. Had this happened, they would indeed be setting a good example.
Nuclear technology has evolved considerably since the 70s. I encourage you to take a fresh look.
Thomas Sterner says
Charles, your article is too good and too important to remain only on this blog. I wonder if it would not be possible to get it published in NYT or some other media. I wrote an Op-Ed for the Times and was very impressed by how conscientious they were about checking facts. I am sure they care about their reputation and they should be sensitive to this. Probably there is a concerted lobby effort by utilities and coal industry that are threatened by this development and NYT is too good a paper to let itself be conned. We should try to write them a letter …
Juliet Schor says
I agree with Charles about the attack on the German successes. I might note for Mike that without anti-nuclear protests there probably wouldn’t have been a FIT–or at least that’s what the history I’ve read suggests. The other key point is that the expansion of wind and solar has been via small-scale, even household producers and the bigger energy companies made a huge mistake by sitting it out. They’re in trouble.
Jeffrey Michel says
As perhaps the only American who has been evicted from a German village (www.heuersdorf.de) before it was destroyed by lignite mining, and who testified in German parliament against CCS, I have been confronted with many questionable premises that cannot be excluded from any comprehensive examination of the Energiewende. That begins with journalists who discovered the topic only recently and write as though nothing of merit occurred before they began selling their articles to international publications, which despite all astute observations conspicuously labor under deficiencies of engineering rigor and historic perception. In actuality, as several readers have variously observed, energy transitions have always been taking place in Germany and indeed throughout the world. Yet West Germany was the free-world country that received the highest fallout from the Chernobyl reactor catastrophe of April 26, 1986. Only then did it establish an environmental ministry, but it did not immediately elect to phase out nuclear power because it was still involved with lowering emissions from conventional power generation: those contributing to acid rain and those associated with climate change. Its original resolution to reduce CO2 by 25% by 2005 was expanded after national reunification 1990 by a separate target of even greater reductions in eastern Germany. During her term as environmental minister several years later, however, Angela Merkel decided to combine the targets, so that by 2005 three small eastern German states had accounted for 72% of all German emissions reductions. The Energiewende then relied chiefly on CCS and prolonged nuclear deployment for climate goal fulfillment to at least 2030, until both were disallowed in parliamentary proceedings of 2011. Yet there is still no political majority for changing the German Mining Act with disenfranchisement provisions that originated in the Third Reich, allowing the licensing of both new lignite mines and shale gas exploration. My research at the government agency BstU has verified that former Stasi agents have been the very corporate managers in charge of forced lignite mining evictions in eastern Germany since the 1990’s, but that finding remains inappropriate to the antiseptic considerations of energy policy sustained in productive symbiosis between political parties and the media.