Germany Rocks The Clean Energy Revolution

While the examples of Japan, China, and India show the promise of rapidly emerging energy economies built on efficiency and renewables, Germany—the world’s number four economy and Europe’s number one—has lately provided an impressive model of what a well-organized industrial society can achieve. To be sure, it’s not yet the world champion among countries with limited hydroelectricity: Denmark passed 40% renewable electricity in 2011 en route to a target of 100% by 2050, and Portugal, albeit with more hydropower, raised its renewable electricity fraction from 17% to 45% just during 2005–10 (while the U.S., though backed by a legacy of big hydro, crawled from 9% to 10%), reaching 70% in the rainy and windy first quarter of 2013. But these economies are not industrial giants like Germany, which remains the best disproof of claims that highly industrialized countries, let alone cold and cloudy ones, can do little with renewables.

Germany has doubled the renewable share of its total electricity consumption in the past six years to 23% in 2012. It forecasts nearly a redoubling by 2025, well ahead of the 50% target for 2030, and closing in on official goals of 65% in 2040 and 80% in 2050. Some areas are moving faster: in 2010, four German states were 43–52% windpowered for the whole year. And at times in spring 2012, half of all German electricity was renewable, nearing Spain’s 61% record set in April 2012.

Efficiency and Renewables Bolster Post-Fukushima Germany

To underscore the remarkable German case, let’s review what happened in 2011, right after Fukushima. The Bundestag—led by the most conservative and pro-nuclear party, with no party dissenting—overwhelmingly voted to close eight of the country’s nuclear plants immediately and the other nine by 2022. (In a double U-turn, a nuclear phase-out agreed in 2000 was first slowed and then reinstated; nuclear output has actually been falling since 2006.) Skeptics said this abrupt shutdown of 41% of nuclear output would make the lights go out, the economy crash, carbon emissions and electricity prices soar, and Germany need to import nuclear power from France. But none of that happened.

In fact, in 2011 the German economy grew three percent and remained Europe’s strongest, buoyed by a world-class renewables industry with 382,000 jobs (about 222,000 of them added since 2004, with net employment and net stimulus both positive). Chancellor Merkel won her bet that it would be smarter to spend energy money on German engineers, manufacturers, and installers than to send it to the Russian natural gas behemoth Gazprom. Germany’s lights stayed on. The nuclear shutdown wasentirely displaced by year-end, three-fifths due to renewable growth. Do the math: simply repeating 2011’s renewable installations for three additional years, through 2014, would thus displace Germany’s entire pre-Fukushima nuclear output. Meanwhile, efficiency gains—plus a mild winter—cut total German energy use by 5.3%, electricity consumption by 1.4%, and carbon emissions by 2.8%. Wholesale electricity prices fell 10–15%. Germany remained a net exporter of electricity, and during a February 2012 cold snap, even exported nearly 3 GW to power-starved France, which remains a net importer of German electricity.

Was this just a flash in the pan? No. In 2012 vs. 2011, official data show that these trends broadly persisted.

Germany generated 617 TWh of electricity in 2012, up 0.3% from 2011. Nuclear generation fell below 100 TWh, the lowest in at least two decades. Gas prices spiked above coal, so gas-fired generation fell 13 TWh while coal-fired generation ticked up 14 TWh or 5%—still near modern lows, but boosted by a record 23 TWh of profitable power exports. Renewables added 15 TWh: they rose from 20% of electricity consumption in 2011 to 23% in 2012, passing every rival except brown coal (lignite, expected to recede in 2013). Renewable output has risen by one-third just in the past two years. And though Germany’s mix of solar, wind, biomass, hydro, etc. wouldn’t all run at the same time, its total end-of-2012 renewable generating capacity impressively rivaled the country’s 82 GW peak demand. Driven by renewables’ competition, wholesale electricity prices continued to plummet. Germany’s grid remained the most reliable in Europe. And while real GDP, damped by the Euro crisis, grew just 0.7%, electricity consumption fell 1.3%. Total carbon emissions rose 1.6%, boosted by an unusually cold winter, but emissions from industry plus power stations stayed constant, and weather-adjusted total emissions probably fell.

Germany’s Electricity Rates and Feed-in Tariff

German renewables’ dual trajectories of declining costs and rising installation rates are sending big ripples through the electricity system. Rating agencies are downgrading major European utilities because renewables—now over one-third of Europe’s generating capacity—have almost zero running cost. They can thus underbid fossil and nuclear plants, making them run fewer hours and earn lower prices, and thus slashing their profits. For example, German wholesale power prices have fallen about 30% just in the past two years to near eight-year lows, putting big utilities that underinvested in renewables under severe profit pressure.

Even so, Germans pay a lot for their household electricity, about $0.34/kWh in 2012. The household tariff includes a “renewables surcharge,” expected to amount to roughly $249 per three-person household this year. That’d be three-fifths smaller if households weren’t subsidizing many businesses, mainly large ones—exempted from nearly the whole renewables charge, allegedly to boost German competitiveness—by 3–4 billion Euros a year. Yet German industry enjoys the lower spot prices that renewables create, so it pays about the same for electricity as it did in 1978, and less than French industry pays today. This cross-subsidy from households to industry, and the size of the resulting household surcharge, have generated lively debate about how much Germans pay for their electricity and why.

The German Renewable Energy Act introduced two key policies in 2000: 1) a fixed 20-year power purchase contract (i.e. feed-in tariff) offered to most renewables, such as rooftop solar PV, which also gain priority access to the grid, and 2) a stipulation that such power purchases not draw on Germany’s public purse. That second piece is notable, because German utilities—required to pay the feed-in tariff for each kind of renewable energy fed into the grid by any producer—recover those payments via the renewables surcharge.

At the beginning of 2013, that surcharge jumped 47%, but only one-ninth of that increase was for renewables; the rest came from calculational quirks, chiefly the generous industrial exemptions. The household surcharge has been rising rapidly because home photovoltaic generation has quadrupled in four years, with 1.3 million rooftop systems producing 28 TWh in 2012—adding at least 1 GW more in 2012 than the government intended. In a German national election year, this prompted calls from various members of government to postpone or reduce payments (even retroactively) or spread the fee to more customers. Those proposals were promptly scuttled. With Germany’s firm commitment to an energy future grounded in renewables, and with clean technologies such as solar rapidly taking off, the renewables surcharge will probably remain widely supported, controversial, misrepresented, and widely misunderstood.

Rocky Mountain Institute is an independent, entrepreneurial, nonprofit, 501(c)(3) think-and-do tank. Co-founded in 1982 by Amory Lovins, who remains an active thought leader as Chairman and Chief Scientist, the Colorado-based organization now has approximately 75 full-time staff, an annual budget of nearly $12 million, and a global reputation. RMI excels in radical resource efficiency, especially via integrative design. We drive progress chiefly by transforming design, identifying and busting barriers, and spreading innovation.

    • Braeden Cowbrough

      Now, I just want to ask one thing… What is your stance on nuclear energy?

      I am getting a vibe already due to certain points made that are slightly misleading. Mainly regarding the Germany-France electricity exchange and France being a Power starved nation….

      France produces the majority of it’s electricity (>90%) from non fossil fuel related sources. Mostly nuclear and hydro. This is comparable to Ontario, Canada, however France is still superior in that respect. Now, http://www.iea.org/stats/surveys/mes.pdf Is the best example I could find for power stats that are recent for France vs Germany (pg 15). Based on that, France actually produces more electricity than Germany. Feel free to chew through my source though… It is quite difficult getting recent data on electricity stats as I am sure you know since you basically took everything from this article from another which had more graphs, but not a lot of explanation as to where the data came from.

      Now, to call France power starved… I’m not sure I understand what you mean. Yes they actually were a net importer of Electricity from germany, however, they were a total net exporter as they have been for a long time, and they also shouldered a substantially lower price of electricity as well as substantially lower GHG emission profile. France adopted nuclear after OPEC, Germany adopted coal.

      What I don’t understand was why Germany wants to phase out nuclear they’ve already bought and paid for that still generates 1/6th of their electricity (100TWh). If they want to not build nuclear any more, whatever, but why not just maintain the reactors you have until they’re lifespan is used. Past reactors have shown us that the lifetime of nuclear reactors tends to increase above original estimates, as well as outputs tend to go up with time.

      Why didn’t they phase out their lignite/coal usage if they wanted to reduce GHG… ?

      I don’t understand why you would call France power starved when they are quite the opposite? Or how you wouldn’t mention GHG emissions of France in comparison to Germany (from electricity production or per capita production).

      It just seems rather wasteful to me germany’s nuclear approach, especially since they have one of the best records of nuclear in the world.

      • Braeden, statistics on power production, etc., are not at all hard to find in Germany (nor is it much of a problem in the EU). The preliminary figures for 2012 were available on January 2, 2013: http://www.renewablesinternational.net/german-energy-consumption-up-adjusted-co2-emissions-down/150/537/59443/

        Why call France power-starved? Because they need electricity from Germany to avoid blackouts: http://www.renewablesinternational.net/time-to-celebrate-the-energiewende/150/537/57821/ (The French themselves know that they need to build new capacity)

        France exports a lot of power to its neighbors (though it is a net importer from Germany), but it exports at times of low consumption so it doesn’t have to ramp down its nuclear plants. Germany exports at times of high consumption: http://energytransition.de/2013/02/german-energy-transition-and-its-neighbors-part-2/

        Why doesn’t Germany wants to maintain its reactors they’ve already paid for? Because nuclear plants don’t ramp down well, and when you have as much wind and solar, you need flexible conventional capacity: http://www.renewablesinternational.net/offsetting-conventional-power-a-taste-of-whats-to-come/150/537/61965/

        “If they wanted to reduce GHG”: The goal since the 1970s is to move beyond monopolists energy corporations; http://www.renewablesinternational.net/wyhl-the-birthplace-of-energy-democracy/150/537/61963/ and http://energytransition.de/2013/03/time-for-a-coal-phaseout/

        Germany’s nuclear record is a joke (and so is everyone else’s – at least the Germans didn’t dump their nuclear waste into the English Channel like some countries…): http://www.renewablesinternational.net/germany-takes-step-towards-final-nuclear-repository/150/537/61570/

        Finally, if you want to count carbon emissions, let’s also count nuclear waste production. Germany’s is down.

        Follow me on Twitter @PPchef

        • Braeden Cowbrough

          First, can you please site the preliminary information sources for these articles…I attempted to do you the same credit. Most of the articles you sent me don’t link to the information, and I don’t get my information from media posts. Period.

          Now, this one I actually thought would be funny to bring up. In particular the nuclear waste production is down… Well yes. And no. Nuclear waste from nuclear plants would technically be down in the sense that no more is produced, but then again, the unspent fuel is being considered as waste and burning it would reduce the actual “amount”… then there is the issue of the replacement of that nuclear by and large by coal lol. Now since coal emits more radiation per unit of energy than nuclear, you’re sort of wrong in this sense. http://www.scientificamerican.com/article.cfm?id=coal-ash-is-more-radioactive-than-nuclear-waste&page=2 I can’t actually get a copy of the original scientific article in question, but it has been known for a relatively long time coal ash produces more radiation as the end product.

          This dumping of nuclear waste into the english channel? I am not actually familiar with this as your link didn’t actually say anything about that but rather about germany nuclear phase out mostly. Now, based on the IEAE, Germany has had essentially two events in it’s history of nuclear accidents where nuclear material was released or something malfunctioned. Neither resulted in human life loss and were handled well.

          The dumping of barrels I have only seen from news sources, but I will give it the benefit of the doubt. I’m not saying in the past there wasn’t problems, however, the IEAE was developed to prevent these types of things. Also, with developing reactors we can expect spent fuel, which still contains a large proportion of fissionable material to be reused and reduced in amount and radiation. Nuclear reactors actually make more fuel in a sense… As well, nuclear fuel is often constituted of diluted weapons grade fissionable material as the weapons are decommissioned.

          If you want to reduce GHG, stop using fossil fuels, or find a way to capture more than you produce. Now, It has been supported that nuclear has prevented a large amount of GHG into the atmosphere… As well I am not actually sure what is the life surplus of carbon production from solar panels production :/ I have always wondered about this figure because I know batteries often end up taking more energy to produce than their lifetime they re-emit.

          I’m not anti-alternative, I just accept nuclear as an option as well… I am devoted to reducing GHG and hopefully throwing a wrench into the positive feedback cycle that is gonna be our climate. We need lots of solutions to one problem. This means taking advantage of solar, wind, nuclear, hydro etc where best situated. Hydro likely won’t develop much further so the real development will come from solar and nuclear, probably not much more from wind.

    • RussellLowes

      France has to import energy. In fact, contrary to its plans in 1973, when it mistakenly decided to go with nukes (less than 80% of its electricity, but only 16% of its energy), the government projected plenty of domestic uranium for many decades. In fact, it ran out of uranium a long time ago. It now imports 100% of its uranium. It gets less than 10% of its nuclear fuel from its reprocessing programs, contrary to its plan of getting multiples of that. It has to reduce its nuclear energy output when it has heat waves, because the plants can’t be cooled well enough when its water temperatures rise enough. It is at these times the country is the most power-starved.

      • blackyheather@live.com

        France actually exports energy to Germany when “renewables” fail to produce enough load to power Germany, and at a lower cost than German producers. Germany exports to France in order to balance load when there’s excess energy. Nuclear can be ramped back to help Germany balance its load. Get your facts right.

      • Braeden Cowbrough

        Wha? 80% of its electricity but only 15% of its energy. What exactly do you mean by this? Are you talking about sheer production in Joules? Also, France gets about 17% of their fuel from recycled fuel. This is still a developing technology… France doesn’t have much uranium reserves in comparison to countries like Canada and Australia. That is just sort of a luck of the draw really.

    • blackyheather@live.com

      I can’t believe there are people in the world that actually believe the lies that this site is posting?? No wonder North America, and parts of Europe, is going down the tubes (and taking the rationale ones down with them). Can you people go to a nuclear conference and listen to reality please. Spreading misinformation amongst yourselves just perpetuates stupidity!

    • blackyheather@live.com

      What’s missing in postings like this is the negative aspects of renewables where you need fossil fuel to power generating stations to back up wind and solar when they don’t provide power – which is most of the time. Germany has been polluting the country endlessly since ramping down nuclear

      • Do you have data to back that up? In fact, in 2004, nuclear power accounted for 27.2 percent of Germany’s electricity generation. By 2012, nuclear’s contribution had declined to 17.7 percent. At the same time, GHG emissions fell by 10 percent.

    • fore seti

      The Rocky Mountain Institute founded by Lovins has a known anti-nuclear agenda. A better question for those questioning the rationale of the article is why even bother? If you zoom in on the first black graph which has been around the web to 10′-13′ you will see a marked increase in coal generation. If you burn coal you pollute, simple math. If you use renewable you must have some source to back those up and provide a consistent (x) number of MWs for base load, night time, windless summer days, etc..

      I believe in Germany they will commission 5300MW of new coal in 2013, while phasing out 1000MW. It could be higher but that is the stat that I see via this new tool called google. If you use it without bias you can find some pretty interesting tidbits on there. Whether they keep nuclear or not, the fact is pretty clear that their emissions targets will not be met by producing ‘weather permitting’ power.

      • Bob_Wallace

        Germany is in the process of changing out their coal plants.

        By 2020, 18.5 gigawatts of coal power capacity will be decommissioned, whereas only 11.3 gigawatts will be newly installed.

        Furthermore those plants will be more efficient, releasing less CO2 per unit electricity produced than are the ones they are replacing. And the new coal plants are partially load-following.

        Germany gets its natural gas from Russia. It would be politically dangerous to build their fossil fuel component around an undependable supply. Furthermore their new coal plants are capable of load following to some extent, which will further reduce the amount of CO2 they produce.

    • France is a huge net exporter of electricity, not “energy starved” as claimed by this article. Figure 23 on Page 27 of this authoritative reference shows the net electricity flows between European nations (European Commission. “Quarterly Report on European Electricity Markets: Third and Fourth Quarter 2012.” Accessed April 1, 2013. http://ec.europa.eu/energy/observatory/electricity/doc/qreem_2012_quarter3.pdf). While France does net import electricity from Germany, it exports far more–about two nuclear power plants worth–principally to Italy, Switzerland, and Belgium. The many other claims and statistics in this article are equally fallacious. I was once led to believe Amory Lovins was a genius, but he has doubled down on proven false positions so many times and continues to actively promote them that he and RMI now deserve no credibility.

      • Bob_Wallace

        France didn’t do so hot in 2012. Germany had a net export level of 41,850 million kWh and France only 19,210.

        France’s net export numbers have been falling since 2005.

        http://www.indexmundi.com/g/g.aspx?v=83&c=fr&l=en

        • Electricity is a commodity whose value is tied to time of use. At night it is typically 10 times cheaper than at noon, for example. The Danes and Germans have enacted policies that they have to accept all the power generated by their wind turbines and solar panels, whether it is needed at the time or not. That, plus their policies to keep expanding subsidized wind and solar generation capacity, while still having to maintain full conventional capacity as backup and baseload, results in them having a huge surplus at odd hours that they must offload to their neighbors. What looks like fat exports are actually involuntary power subsidies of other countries, who accept the power on condition of massive price discounts. The Danes and Germans are not only giving away electricity paid for by their citizens, but are hemorrhaging Euros because it is delivered at below cost prices. It would be very informative to put the Euro cash flows alongside the power flows to see what is really happening. I’m on another project right now, Bob. Do you want to do this research?

          • Bob_Wallace

            Post the euros for Germany’s and Denmark’s average export and import Cliff. And your source. I’m not your research assistant.