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WILLIAM TUCKER: How to Ruin an Electric Grid — Germany Shows Us How

By William Tucker

"Renewables set record in a Germany," says the headline this week.  "Windmills and solar panels produced 35,905 megawatts, the equivalent of 26 nuclear plants."

Renewal advocates were hailing it yet another landmark in Germany's march to an all-renewable economy. "For the first time, more than 50 per cent of Germany‘s workday energy load was derived from wind and solar power," said Norbert Allnoch, the director of the Munster-based International Economic Platform for Renewable Energies. 

Yet there was another side to the story in Bloomberg:    

Germany’s Chancellor Angela Merkel said the country’s system to spur clean-energy generation needs to change, including reducing green subsidies paid by consumers, to ensure gas-fired plants are able to operate at a profit. . . . “We have to think about how to slow down the dynamics so that we get a sensible expansion of renewable energies but not a situation in which no gas-fired power plant can be operated profitably anymore and each gas plant has to be subsidized so it provides baseload capacity,” she said late yesterday.

You see what's happening here.  German officials are so eager to make renewable energy work that they have laid down a rule which says grid operators gave to accept wind and solar power wherever it is available in preference to coal or gas and other traditional sources.   That means when wind and solar come on-line, coal and gas don't get paid.  But that doesn't mean those plants can close down.  They have to be available continuously in case the sun goes behind a cloud or the wind stops blowing.  With gas turbines this is at least plausible because as jet engines bolted to the ground they can be started almost instantly. But coal plants need at least 40 minutes to get up to speed so you have to run them continuously to make them available.  

It's as if you're waiting tables in a restaurant and the boss's daughter is allowed to come in take your job any time she wants.  You have to sit there collecting any tips while she subs for you.  But you can't go home because she might suddenly decide to go to a party and you have to step in again.  You can see how that would work out.  

So Germany's coal and gas plants are losing money hand over fist while pampered renewables are collecting "feed-in tariffs” and all kinds of subsidies – and are still more expensive.  As a result, their utilities are talking about putting some of fossil fuel burners in mothballs.  

Now Germany certainly can't allow that because there wouldn’t be anything left to run the grid.  So Chancellor Angela Merkel has come up with another idea.  She wants to pay the coal and gas plants a "capacity fee" that will pay the just for standing by to generate electricity even when it’s not needed.  She said yesterday:

“We have to think about how to slow down the dynamics so that we get a sensible expansion of renewable energies but not a situation in which no gas-fired power plant can be operated profitably anymore and each gas plant has to be subsidized so it provides baseload capacity.” 

So that means Germans will be paying twice for their electricity – once when it is generated by renewables and again when it isn’t generated by something else.  Renewables already added a 47 percent surcharge to electric bills at the beginning of this year.  Now we’re going to see something worse.  The big, power-consuming manufacturers have been exempted from these charges so they can stay competitive with the rest of the world, but everyone else is going to bear the brunt.  

And so the effort to find some unwitting scapegoat is in full gear.  This week the national government called a conference of the state governors to see if they could find a way to dump the costs on some unknown party.  But the whole thing quickly fell apart.  Now it looks as if energy costs will be the major issue in the coming elections.  

The interesting thing is that, because of high natural gas prices in Europe, all this is creating a return to coal. Cheap coal is proving more capable of weathering the price pressures than gas and so the utilities are expanding their coal output.  The same thing is starting to happen in the United States.  Natural gas prices have suddenly started rising again – a 33 percent year-over-year increase in the last month.  So many utilities are now switching back to coal, quickly undoing some of the "progress" that has been made in recent years in cleaning up utility emissions.  This week the Energy Information Administration reported a 12 percent decrease in gas consumption by utilities, matched by a 7 percent increase in coal so far this year.

All this tells us that the "bridge" of natural gas we are supposedly constructing across some unnamed chasm into a Renewable Future is nothing but a Bailey Bridge that can be taken away next week.  As soon as natural gas prices firm up again, probably driven by world demand, all the progress we have supposedly made in transitioning away from coal and toward cleaner sources of energy will disappear.  

What that means is this.  No one is going to make any progress in transitioning away from coal or reducing carbon emissions until we start taking another serious look at nuclear power.

 

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2 Responses to “WILLIAM TUCKER: How to Ruin an Electric Grid — Germany Shows Us How”

  1. stevek9 Says:

    “Renewables set record in a Germany,” says the headline this week. “Windmills and solar panels produced 35,905 megawatts, the equivalent of 26 nuclear plants.”

    It would be interesting to know how long that lasted …. 15 minutes?

  2. Glaucus Says:

    15 seconds.