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Unreliable German Solar and Wind Forcing New Coal Boom

If you thought that Germany was on the verge of becoming a de-industrialized country, here's the truth: Windmills and solar plants serve just two purposes in Germany now. They enrich green cronies, and impress clueless people abroad.

In September 2005, two days after hurricane Katrina had hit New Orleans, Germany's environment minister, Jürgen Trittin (Green Party), blamed the disaster on America's rejection of the Kyoto accord on carbon dioxide emissions. "America's president," Trittin wrote in the newspaper Frankfurter Rundschau, "shuts his eyes to the economic and human damage that natural catastrophes like Katrina inflict on his country and the world's economy."

Carbon emissions in the U.S. are now at the lowest level since 1994, and the EPA is taking action to effectively ban new coal plants in the United States.

Germany, on the other hand, is becoming more and more dependent on coal.

This month, it was revealed that German coal electricity production is the highest since 1990. And the coal burned in German power plants is not like Appalachia's high-grade bituminous coal with its high-energy content and low sulphur. Most of it is brown coal (lignite), low-density, like that which is used for barbecues.

This rise in coal electricity is not, as some newspapers have written, happening “despite the country’s campaign to shift to green sources of energy." It is happening because of the shift.

The windmills and solar panels are a Potemkin village, an extremely expensive one. Since cheap natural gas is not available, Germany needs more and more coal plants to reliably produce electricity, especially since the remaining nine nuclear plants will be shut down between 2020 and 2022.

An unresolved question: where the capital for the new plants shall come from.

Germany's energy companies are deep in the red. The government has imposed high taxes on them, shut down most of their nuclear power plants, and even made sure that many of the coal plants -- critical for the country´s power supply -- can't be run profitably, since a law grants wind and solar energy priority grid access. For technical reasons, coal plants have to run 24/7. During much of that time, however, the grid is blocked, and the wholesale electricity price at the exchange is at rock-bottom.

The producers of coal and nuclear power provide a valuable good at a loss, whereas the producers of wind and solar provide a good which has little to no value at a high price arbitrarily set by the government.

How long can this continue?

A new government scheme called “demand management” will be introduced during the next four years. The plan is to install so-called “smart meters” in every house, expensive devices which tell you at what time of the day you consume the most electricity. Of course, this is a worthless piece of information unless further measures are taken to balance supply and demand.

Shortages and uncertainty come in the wake of government interventionism. As we have just seen, the result is often the opposite of what had been intended, which triggers even more state-intervention. In Germany, there are already calls for the government to “stop the shocking coal boom.” Maybe the European Commission will outlaw coal, just as it has done with … powerful vacuum cleaners, which will soon be illegal.

This is the green road to serfdom.