When Germany pays a high price for its energy shift

AFP

A leaden sky stalling wind turbines and solar panels, the price of energy that is through the roof … Two “blackouts” of green electricity in Germany have highlighted the conundrum of the energy shift in Europe's largest economy. 

The issue has burst into the election campaign for the February 23 legislative elections, with the leader of the conservative opposition attacking Olaf Scholz this week in front of deputies. 

“Your energy policy is making the whole of the European Union grind its teeth, which is today very angry with Germany,” thundered Friedrich Merz, favorite to succeed the Social Democrat leader as chancellor. 

The Minister of Economy, the ecologist Robert Habeck, responded by denouncing the legacy of the sixteen years during which the conservatives led the country, under Angela Merkel, “blind” to the energy challenges that were looming. 

At the origin of this war of words: a staggering price of electricity recorded twice in November and then in December, for a few hours. On December 12, at the end of the day, it reached a historic record of 936 euros per megawatt hour, twelve times the average of the last few weeks. 

The fault lies in a winter episode without wind – or sun – which shut down the country's wind and photovoltaic farms. 

– Fluctuations – 

Some energy-intensive companies, which buy on the market in real time, have reported having had to limit or temporarily stop their production. 

During this short blackout, Germany bought a lot of electricity on the Leipzig Stock Exchange (east), which plays a key role in the formation of energy prices in Europe, causing the bills of some of its neighbors, such as Sweden, to soar.

However, most individuals and many companies have fixed tariffs, which protect them from these fluctuations. And the situation quickly returned to normal with the restart of renewable production. 

Faced with the controversy, the government recalled the obvious: “There are phases where there is a lot of sun, a lot of wind, where electricity is produced at a very low cost in Germany, which exports it to neighboring countries, and then there are phases where it is the opposite.” 

But the world's third largest economy, already losing competitiveness, cannot afford to depend on fluctuations in prices and volumes of electricity produced, experts insist. 

In line with the objectives, renewables continue to progress, having represented on average 60% of electricity production in Germany since the beginning of the year. 

At the same time, traditional energy sources are decreasing: coal-fired power stations are gradually closing, and the last three nuclear reactors were disconnected in April. 

– Inertia – 

To compensate the intermittency of solar and wind power, it is therefore necessary to increase the storage capacities of renewables and to maintain a second production park, gas-fired power stations convertible to hydrogen, to take over when necessary. 

So many projects that are not progressing quickly enough. 

“If the State establishes the right regulatory frameworks, then investments in energy storage and demand flexibility will help prevent shortages,” Georg Zachmann, an energy specialist for the Brussels think tank Bruegel, told AFP. 

But “there is a big fear that the framework will not be enough to quickly develop” the necessary infrastructure, the expert emphasizes. 

Many obstacles, particularly bureaucratic ones, remain for the deployment of green energy: “it takes on average seven years to build a wind turbine, but only seven months to build a liquefied natural gas terminal. It should be the other way around,” Claudia Kemfert, an energy expert at the DIW institute, told AFP. 

The fall of Olaf Scholz's coalition, which will lead to the formation of a new government after the February elections, has just led to the abandonment of a key bill to build a fleet of gas-fired power stations to replace coal. 

Industrial circles are sounding the alarm: Markus Krebber, head of RWE, the country's main German electricity producer, sees a system that has reached “its limits”. 

The “green outages” at the start of winter would, according to him, “not have been manageable on another day with a higher peak load. For example in January”. 

 

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Natasha Kumar

By Natasha Kumar

Natasha Kumar has been a reporter on the news desk since 2018. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Times Hub, Natasha Kumar worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my natasha@thetimeshub.in 1-800-268-7116