From MANHATTAN CONTRARIAN
Francis Menton
Many great places (New York, California, UK, Australia) want to compete for the mantle of “climate leader”. But let’s face it, at least among the most populated places, nothing beats Germany. In Germany, they started building wind and solar power plants in the early 1990s. By the end of 2023, they will have a total capacity of 148 GW of wind and solar power plants, which is about 2.5 times the average demand (about 60 GW) and about 1.5 times the peak demand (about 100 GW). So, Germany’s fossil fuel days are numbered.
Time for another update on Germany’s progress towards energy nirvana. The bottom line is that, like the Red Queen, Germany is running faster and faster to stay in place. In the meantime, it destroys its economy.
The last update from Germany was on June 15, and includes the latest data for 2023. The news is that Germany has finally surpassed the benchmark to get more than 50% of its electricity from “renewable energy.” The news has been heralded with glee in many news outlets, including Reuters, which has the headline “Renewable energy share in Germany’s electricity grid to reach 55% by 2023.” Are you fooled by that headline into thinking that 55% is from wind and solar? Actually, as I noted in my June 15 post, of the 55%, 8.4% comes from “biomass” (that is, wood chips imported mostly from the US), and 3% from “hydro” and “other,” leaving only 43 ,6 % from wind and solar. The capacity of biomass and hydro generation facilities, at only 12.9 GW, means that they produce about 25% more electricity than wind and solar facilities with less than 10% capacity. No surprise there.
Well, now the numbers are out for Germany for the first half of 2024; plus other related economic news continues to pour in. Let’s check in the update.
Clean Energy Wire on July 18 has electricity consumption data for the first half of 2024 from Germany’s UBA (Federal Environmental Agency). The percentage of “new power” has risen again, now at 57%!
Renewable energy sources will account for around 57 percent of Germany’s gross electricity consumption in the first half of 2024, opening figure published by the Federal Environmental Agency (UBA) has been shown. Generation from renewable sources reached 147 terawatt hours (TWh), an increase of nine percent compared to the same period of the previous year.
Once again, of course, they have mixed up “biomass” and hydro with “renewable energy.” Should we back off?
In the first six months of 2024, wind power accounted for the largest share of renewable electricity generation (about 51%), followed by PV (24%), biomass (15%) and hydro power (8%).
So biomass and hydro up to 23% from 57%, or 13.1%. That leaves at least 43.9% that comes from wind and solar, up from 43.6% for 2023. Actually, the percentage of wind and solar rises due to rounding errors.
The problem is when Germany increases its wind and solar power generation capacity. According to the chart on this page, also from Clean Energy Wire and sourced to UBA, Germany’s solar generation capacity will go from 67.6 GW by the end of 2022 to 79.2 GW by the end of 2023 — an increase of more than 17%; and wind generation capacity from 66.1 GW to 68.8 GW, an increase of more than 4%. That’s more additional capital invested in wind and solar to gain an additional 0.3% market share in power generation.
And now let’s look at the big economic picture for Germany. First, how do electricity prices compare to other places? Here is a very useful chart from the Energy Policy Research Foundation, comparing consumer electricity prices in the second half of 2023 between EU countries and US countries:
Germany is way to the top of the list, at more than 38 cents per kWh, more than twice the US average.
Next, here’s Germany’s GDP data from the Fed St. It peaked in Q3 2022 at $770.6 billion, with a slight decline since then. Some may call it a recession, and it’s a bit long. The latest quarterly figure (Q2 2024) is $766.4 billion. This is serious stagnation. In contrast, the US GDP in the mediocre Biden-Harris economy has grown in the range of 2-3% per year. If the German economy had only grown by 2% over the past two years, it would now be around $800 billion per quarter, instead of the reported $766 billion.
Let’s just say that high energy prices may not be good for an economy known for its large manufacturing sector. You may have seen recent news about Volkswagen. From Reuters, September 2:
Volkswagen. . . has been considering closing the factory in Germany for the first time, in a move that shows the increasing price pressure the top European carmaker faces from Asian competitors. . . . VW is considering one major vehicle plant and one component plant in Germany to become obsolete, its works council said as it vowed “fierce resistance” to the executive board’s plan.
In related news, a German-speaking friend sent me an English translation of this August 12 piece from Die Welt. The title is “German electrical fault.” Quote:
Clean and cheap electricity is the big promise of the energy transition. It has been said for years that there will be “miracle jobs” for free. But now it is expected to collapse. . . . (In the first half of 2024), the Central Association of the German Motor Vehicle Industry reported a 47 percent drop in orders for electric cars. A drop of 54 percent in sales of heat pumps, reports the Federal Association of the German Heating Industry. What, on the other hand, increases: demand for combustion cars and oil heaters.
“Will the current energy transition be cheap? yes it is. Period,” promised Patrick Graichen, then the chief planner of the federal government and head of the Agora Energy Transition think tank, in an interview with WELT in 2017: “The harvest years of the energy transition are now visible. ” Fossil fuels will become unaffordable, while green electricity becomes cheaper and cheaper. . . . But the narrative that’s been circulating for years has been fueled by growing skepticism — and not just by consumers. . . . “The certainty of older forecasts, according to the electrification of the industrial, transport and building sectors is more economically desirable and the increase of renewable energy will lead to the price of end customers, currently fragile,” said Constantin H. Alsheimer, Chairman. from the Board of Directors of Thüga Public Company.
“Fragile”? I would say that those old “certainties” have been broken. But maybe this is just a translation problem.
Let me end with a message from Dirk Messner, head of UBA, as quoted in the July 18 Clean Energy Wire piece (emphasis added):
“It is a success that shows that renewables in electricity production continue to grow,” said the head of UBA Dirk Messner. However, Germany still needs to accelerate its renewable capacity expansion to meet its climate and energy targetsespecially in the solar photovoltaics (PV) sector, he warned. Messner asked for security planning and to be more careful in developing subsidy mechanismsit is also a way to keep grid costs in high renewable areas.
Build more and more wind and solar, add more subsidies, and drive Germany over the economic cliff. It will continue until the voters finally wake up. I don’t know when that will be.
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