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Unreliable German Solar and Wind Forcing New Coal Boom

Behind Germany's Potemkin Village of an energy grid.

by
Stefan Frank

Bio

January 25, 2014 - 12:45 am
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Not surprisingly, a wind farm operator is at the center of Germany’s latest major financial swindle.

With 1,300 employees, Prokon is a relatively small company. Yet its advertisements were well-known to Germans. They always had three parts: pictures of a wind farm; a vague message that “something” had to be “changed”; and a request to make a loan to Prokon. In return, one was promised nothing less than “a future worth living,” and 8 percent interest per annum.

One of these propositions must have been alluring to many Germans, for the company successfully gathered about 1.3 billion euros (2 billion dollars) in borrowed capital. That’s small money compared to Enron, Lehman Brothers, or Greece, but in the case of Prokon, no banks or equity funds were involved. All of the capital came from retail investors, some of whom gave a big chunk of their lifetime savings, according to media reports.

Now, we know that the whole operation was a Ponzi scheme. The interest was paid with the money from newcomers. Journalists are adding insult to injury, asking how Prokon´s creditors could have been so naïve with such an “extraordinarily high” interest rate being promised. Some coverage has mentioned that many of the investors were allegedly “elderly people.”

According to this media, one has to be well beyond the peak of cerebral activity to believe that a windfarm could generate enough profit to pay an 8 percent interest. Very well, then. But if so, how can it possibly be wise that windmills are supposed to become the backbone of the German electricity grid?

Is Germany a gigantic Prokon?

In his “climate change speech” at Georgetown University in June 2013, President Obama said:

Countries like China and Germany are going all in the race for clean energy. I want America to win that race, but we can’t win it if we’re not in it.

If it were up to the majority of the German people, however, they would rather opt out and let someone else win. According to surveys, only 18 percent approve of the current energy policy. Sixty percent of Germans reject the push for so-called “green” energy if it leads to higher prices, and the same amount think it inevitably does.

They are correct: the electricity price in Germany has doubled between 2000 and 2013. It is now about three times pricier than electricity in the U.S. because staggering amounts of money were channeled into solar and windmill companies. Last year alone, German households paid 20 billion euros (27 billion USD) for a “renewable energies surcharge,” which amounts to 240 euros (325 USD) for every citizen. More than 100 billion euros have been sunk into solar energy, which is the least efficient source and contributes only four percent to German electricity production. Germany has as many solar panels as the rest of the world combined — in a country where the sky is usually overcast.

Outside of the urban areas, there are windmills everywhere. Residents complain about the destruction of the landscape, the health hazards of infrasound, and plummeting real estate prices.

Electricity prices rise further with every windmill and solar panel installation because of how the “renewable energies surcharge” is calculated. The law is based on the idea that the owner of a windmill or a solar panel deserves a fixed return on his investment. Owners are guaranteed a long-term feed-in tariff — which is way above the market price. The consequence has been a massive overbuilding of “renewables” at the expense of consumers (industrial companies with high electricity consumption are exempted from the surcharge). This has triggered a debate about families with low incomes who have to spend an ever-growing segment of their budget on electricity.

Common sense suggests that nobody should pay for unsolicited goods. Unfortunately, common sense has no jurisdiction here. Instead, statist remedies are being discussed to cure an illness caused by statism.

Last year, Peter Altmaier – then the German minister for the environment — proposed that the state provide the poor with new refrigerators. Next, he said the unemployed could be trained to become advisors on energy saving. Like members of a Soviet Komsomol brigade, they would go door-to-door telling people to put a lid on the pot when cooking. Nobody embraced Altmaier´s ideas, but nobody offered a different proposition. So the question was dropped altogether.

It has become clear that “renewable” energies cause problems for the grid. There are no viable means for storing the electricity; it has to be consumed as it is produced. Production and consumption have to match. The larger the percentage of production coming from fickle solar and wind energy, the more difficult the job of the grid operator is. When Germany doesn’t produce enough electricity, it needs to import it from its neighbors, like it did in 2011 and 2012, when Merkel’s decision to immediately shut down eight nuclear power plants (out of fear that a tsunami like in Japan could strike them) would have caused a blackout. Austria and France stepped in to fill the gap. Sure enough, nobody ever thanked Germany’s friends. Instead, German environmentalists bragged about Germany’s record electricity exports.

They miss an important distinction. There are two kinds of goods: those which are desired and valuable, and those which are unnecessary and worthless. Germany imports electricity when it really needs it: During calm nights there isn’t much wind energy, and no solar energy at all. Then, there are sunny and windy afternoons in the summer when Germany floods the European market with electricity, and the wholesale prices at the exchange drop to zero (or even turn negative). This supply is not caused by demand. The electricity is produced regardless of whether anybody needs it. It’s not a boon, it’s a problem, for the glut can overload the European grid and cause blackouts in Germany as well as in other European countries to which the superfluous electricity is dumped.

The Czech Republic and Poland have already complained. Pavel Solc, Czech deputy minister of industry and trade, said:

Germany is aware of the problem, but there is not enough political will to solve the problem because it’s very costly. So we’re forced to make one-sided defensive steps to prevent accidents and destruction.

Besides the risk of a total blackout, there are growing concerns about the stability of frequency and voltage. The following report was published in Der Spiegel:

It was 3 a.m. on a Wednesday when the machines suddenly ground to a halt at Hydro Aluminium in Hamburg. The rolling mill’s highly sensitive monitor stopped production so abruptly that the aluminum belts snagged. They hit the machines and destroyed a piece of the mill. The reason: The voltage off the electricity grid weakened for just a millisecond. Workers had to free half-finished aluminum rolls from the machines, and several hours passed before they could be restarted. The damage to the machines cost some €10,000 ($12,300).

There are two reasons why such accidents don’t occur more often:

1. Many major companies have already detached themselves from the grid and produce the needed electricity themselves. About nine percent of the electricity consumed in Germany is produced onsite, usually from natural gas. Even private households have been installing micro power plants in their basements.

2. German electricity providers have built new coal-fired plants.

Comments are closed.

Top Rated Comments   
The eco-religious don't care about costs. They don't care about the impact on the rest of the citizenry, either. We call them "watermelons" for a very good reason: they are all about power for themselves, academic and political prestige, and perks. They believe themselves "superior" to normal mortals - BS, of course - but they do believe it. In the U.S., and much of the rest of the world, they are supported by the slimestream media and whatever is the left wing political party de jour.

The question to ask is: Does climate change exist? The answer is: Always has and always will since the climate is not a static system. Next question to ask is: Is the change principally caused by Man? The answer is: Never has been and never will be since we are not now and never will be more powerful in our impact on the climate than the sun.
33 weeks ago
33 weeks ago Link To Comment
Part of the problem is the media. German TV pushes every event that can possibly be related to the environment as a way to scare the population. After Fukushima, I was in a supermarket and listened to two women agonizing whether it was safe to buy broccoli for their families because of the radiation danger. One woman was practically crying. I was never aware that the region around Fukushima was the world's prime exporter of broccoli, but what do I know? You can be sure that TV news programs will never inject much information to counteract the hysterical positions of the Greens. They are much more into feeding the moral superiority of the people who fall for this BS.
33 weeks ago
33 weeks ago Link To Comment
Both windmills and solar have their place.

* Windmills can be great for pumping water for agricultural uses. All a farmer or rancher needs to do is have a tank big enough to store water for those times when the wind isn't blowing.

* Solar works fine for backup power when commercial electricity goes down for several days after a storm. In that situation, it'd doesn't need to power your entire home, just charge a battery for some lighting and a way to recharge devices such as cellphones. And in the long periods when the commercial power isn't down, it can run as a separate power source and be used (in an independently wired system) to charge a laptop or provide background or night lighting. That little bit of power all the time will cut down on the electric bill and at least partly recoup the cost of the solar gear.

* For locations that use a lot of hot water (i.e. a restaurant), a solar-powered preheat system for hot water tanks may also make sense. On sunny days, the hot water heater doesn't have to work as hard. On cloudy days, the hot water heated takes over completely.

The problem is that approaches that make sense as auxiliaries have been treated as if they were ultimate solutions. They aren't.

--Michael W. Perry, Across Asia on a Bicycle
33 weeks ago
33 weeks ago Link To Comment
All Comments   (18)
All Comments   (18)
Sort: Newest Oldest Top Rated
>>Common sense suggests that nobody should pay for unsolicited goods. Unfortunately, common sense has no jurisdiction here. Instead, statist remedies are being discussed to cure an illness caused by statism.<<

nails it !
32 weeks ago
32 weeks ago Link To Comment
We have to understand that the greens are motivated, above all, by a desire to reduce the human population drastically. These green ambitions are directly descended from the eugenicists of the past and they are siblings to the "one-child" policy in China and the enforced sterilisations in India and parts of Africa.

The greens DON'T CARE if the lights go out. They actually want the lights to go out. Be assured: they'll find a way to ensure that the lights which go out aren't their own.
32 weeks ago
32 weeks ago Link To Comment
Re: "Merkel’s decision to immediately shut down eight nuclear power plants (out of fear that a tsunami like in Japan could strike them) would have caused a blackout." Indeed it's true that "Austria and France stepped in to fill the gap." But with what, one might ask? Why, with power generated from their nuclear plants of course! So Germans can comfort themselves that they've gone nuke-free; but they've just shifted the nuclear burden to others.

Japan and Germany are both starting to realize what a bone-headed idea it was to abandon nuclear in the aftermath of Fukushima. Let's set aside for a moment the fact that not all their facilities reflect the technology of the 1960s. But both are seeing unintended consequences for their decision.

In Japan's case, they're moving to natural gas, of which they have essentially none. So it's all got to be imported from unstable sources like the Persian Gulf, resulting in a substantial shift in their balance of trade - not something their stagnant economy can easily afford.
33 weeks ago
33 weeks ago Link To Comment
There is a tremendous amount of cheap natural gas available from North America.
32 weeks ago
32 weeks ago Link To Comment
There is a straight-forward solution to the problem of variable power, and I believe it is a properly free-market-based solution. To the national power grid, simply add one more wire to the power transmission lines (use an existing line for the return phase). No right of way has to be purchased. Modify the "standard" service entrance, and all receptacles, to allow for a (backward-compatible) additional conductor that is intermittent. Meter separately ("dual-channel" electric meters) so that use of the intermittent power can be charged at a lower rate. Then, stand back and allow the industry to make appliances that switch to the intermittent line when it's available. The additional cost for most appliances would be about $3 for a power switching chip. People will buy these, producing a market, for both ideological and financial reasons.

Problem solved. No unobtanium-based storage facilities necessary. We will get used to the plugs that have four pins instead of three.
33 weeks ago
33 weeks ago Link To Comment
"simply add one more wire to the power transmission lines"

There are so many technical issues with this statement that an entire post is needed. The first and most obvious is the fact that our electrical system is AC (Alternating Current)...There is NOTHING to return...electricity is a bungi cord, bouncing in and out of your home and 'pushing' whatever it is connected to...
32 weeks ago
32 weeks ago Link To Comment
I have been designing, building, financing and operating co-generation and other 'alternate' energy plants for 30 years.
I told ya then, what I'm telling ya now...solar (photovoltaic) and wind....you can't get there from here.

Entropy lives.
33 weeks ago
33 weeks ago Link To Comment
Production and consumption have to match. The larger the percentage of production coming from fickle solar and wind energy, the more difficult the job of the grid operator is.

Just to be clear, production and consumption have to match LOCALLY. It is VERY difficult to send power back upstream into the grid. If your home solar panel produces more power than YOUR house needs (and charges any batteries you have, and I gather few solar houses have ANY), the rest is probably discarded.

I gather wind farms are in a similar bind, they can be combined into a source and that source routed to one or two places, but if those one or two places don't need it, then nobody needs it. The power grid is not like the Internet where you can bounce things around almost anywhere in neat packets.

I too like wind and solar for pumping water - or for desalinating it! Even that has a cost, in slow periods you're not amortizing your fixed costs as well and I'm guessing you can never really make that up even when you have lots of extra free power - especially since that free power too costs extra money to build, nothing is really free.
33 weeks ago
33 weeks ago Link To Comment

Plus the need for rolling reserves for all the solar and wind. Conventional generation has to be ready instantly when the wind dies or if a storm cloud rolls over the solar panels, and it must be paid for as well as the solar and wind installation, making the things even more expensive than is generally acknowledged.

I love the idea of solar power in particular, and I have a building that I intend to install panels on, but it's really not practical. And I am hearing some rumblings that the local utilities want to backcharge the solar producers on the grid for what is costs them to back up that capacity with conventional reserves.

Even with all the subsidies solar power just barely breaks even. With some kind of surcharge for reserve generation capacity, it will completely collapse.


33 weeks ago
33 weeks ago Link To Comment
The real lesson is that "progressivism" never makes sense.

It's as if they say "let's throw everything we know about nature, science and humanity out the window and design a world totally from wishful thinking".

Unless, of course, you subscribe to the other theory of "progressivism", which is that the fantasy worlds their leaders create are only developed to sucker the rubes.

I subscribe to the second explanation, although the lower you go in the hierarchy of idiocy, the more likely you are to find true believers.
33 weeks ago
33 weeks ago Link To Comment
While most people do hope we will have good, cheap wind and solar energy available someday, today isn't that day.

A few years back I worked on a $40,000 US government project to produce 200 Watts of solar electricity. For $40,000 they could run 2 light bulbs on sunny days. The solar panels will wear out before they pay for themselves. I think this grant was part of the Stimulus Bill. What a ridiculous waste of money.
33 weeks ago
33 weeks ago Link To Comment
Who here is actually surprised that German political initiatives are whacked?

I do notice that in the nations that have large electrical generation manufacturing corporations, (USA with GE and Westinghouse, Germany with Siemens and AEG), the "Green Energy Renewables" cult seems to have taken hold the deepest.

Frankly, this smells to me like an indirect subsidy to build more generators and switchgear and protective devices.

But it couldn't be THAT...right?
33 weeks ago
33 weeks ago Link To Comment
I do find this surprising. Angela Merkel is a physicist, isn't she, and a very pragmatic person in many ways. The German economy and political system have really performed remarkably in the last twenty years. Integrating the people and moribund infrastructure of East Germany into the whole has been a tremendous accomplishment. It looks like this renewable energy experiment is going to be very costly indeed for the Germans.
33 weeks ago
33 weeks ago Link To Comment
You have to understand Germany's multiparty system. One staged hysterical outrage can bring down the government. The Greens are playing that game now with Snowden, led by Ströbele, who once smuggled info from the RAF prisoners he was representing. Merkel is again walking on eggshells.
33 weeks ago
33 weeks ago Link To Comment
The eco-religious don't care about costs. They don't care about the impact on the rest of the citizenry, either. We call them "watermelons" for a very good reason: they are all about power for themselves, academic and political prestige, and perks. They believe themselves "superior" to normal mortals - BS, of course - but they do believe it. In the U.S., and much of the rest of the world, they are supported by the slimestream media and whatever is the left wing political party de jour.

The question to ask is: Does climate change exist? The answer is: Always has and always will since the climate is not a static system. Next question to ask is: Is the change principally caused by Man? The answer is: Never has been and never will be since we are not now and never will be more powerful in our impact on the climate than the sun.
33 weeks ago
33 weeks ago Link To Comment
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