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Germany's shift to clean power: fast or slow?

Germany's minister of energy, Sigmar Gabriel, wants to slow down the country's build-out of renewable electricity. His stance is opposed by the energy ministers in most of Germany's 16 states. Here's why.

Sigmar Gabriel, who is vice chancellor as well as energy and economics minister, wants to cap the annual build-out of wind power at 2,500 MW, and thereby deliberately slow the transition away from coal-fired power generation. The motivation he cites in his speeches has to do with the nation's electricity grid, which the energy ministry says needs major improvements in order to handle additional renewable power - improvements that will take years to make.

"We've said we want security of electricity supply and stable prices, but we also naturally want a rapid build-out of renewable energy... What will it mean to combine these goals, step by step?" Gabriel asked in a speech last week in Berlin, in which he criticized the failure of the previous federal government - which his Social Democratic Party did not participate in - to have reformed Germany's electricity market.

"We've got into an absurd situation," Gabriel said. "We produce cheap electricity in the North [of Germany] and cannot bring it to the South [because of insufficient transmission capacity], then we buy the electricity a second time from other [fossil-fuelled] power generators as a result, and then offload the redispatch costs onto end-consumers."

Gabriel's point related to the fact that under existing "feed-in tariff" regulations, owners of wind turbines - of which there are a great many in the flat plains of northern Germany - are paid for the electricity their turbines generate, but also for the electricity their turbines would have generated on a windy day, even if the turbines were turned off in order to avoid overloading the transmission grid. In this way, electricity can in essence be paid for twice over.

Wind and coal power juxtaposed

Wind power has been growing fast in Germany, but coal power - seen in the background - still provides more than half the nation's electricity

Much of Germany's industrial manufacturing capacity, and hence a big share of the country's total electricity demand, is situated in the South, far away from the fields of wind turbines in the North.

"We then push our electricity into our neighboring countries' transmission grids," Gabriel continued. "The Poles must consequently shut down some of their power stations. They write us letters saying they'd had a different vision of the European Union... I think it's incumbent on this legislative period to end this situation and to see to a systematization of the Energiewende [clean energy transition]. I think we're on a good path to get there."

Poland and the Czech Republic have grid interconnections with eastern Germany, and when the wind is strong in northern and eastern Germany, surplus power generated by German wind turbines - which cannot reach southern Germany due to a lack of sufficient southward transmission capacity - is often "sold" at a wholesale price of zero to customers in those countries. This is good in the sense that clean renewable power displaces coal power, as Poland is almost entirely powered by coal. However, it ruins the financial balance sheets of Polish power stations, which the Poles resent.

Slowing the winds of change

Setting up wind turbines entails relatively high equipment costs, but once the equipment is in place, it's very cheap to run. In economic jargon, the "marginal unit cost of production" from installed wind turbines - i.e. the variable production cost per kWh of electricity - is extremely low. Solar power is even cheaper to run - in fact, it's nearly free.

Wind turbines and power pilons near Hannover

The federal energy ministry says it's necessary to build major new power transmission routes from North to South to shift wind power to where it's needed. Clean power advocates disagree

This is why surplus renewable power tends to have an extremely low price on electricity spot markets. It's also why companies with large sunk costs in a portfolio of coal- or gas-fired power stations resent the growth of renewable energy. When the wind is high or the sun is strong, clean electricity is sold at wholesale at prices that routinely underbid fossil-generated power. That ruins those companies' balance sheets - which is why they've been lobbying Sigmar Gabriel intensively for years in an effort to get him to slow down the transition to a renewable energy powered future.

Germany's opposition Green Party suspects that's the real reason why Gabriel is intent on slowing the build-out of wind power in the country.

"The state premiers must protect the Energiewende and climate protection efforts from this federal government," said Anton Hofreiter on Tuesday, adding that making future progress on building more wind farms dependent on progress in building new transmission lines left Germany's climate safety policies vulnerable to NIMBYism. Wherever new transmission lines are planned, local residents organise to oppose them on a "not in my backyard!" basis, for aesthetic reasons. They're often the same people who oppose new wind farms, for the same reason.

Too much wind, or too much fossil power?

A new study released on Tuesday, commissioned by Greenpeace and prepared by "Energy Brainpool," a consultancy, claimed that adequate transmission capacity already exists in Germany to bring wind power from North to South - but it's being "stopped up" by excessive production of coal-fired and nuclear power.

High-capacity underground power cables

Along some parts of the North-South route, high-voltage cables are being buried underground, even though it's much more expensive than building power pylons above ground. It's a testimony to the power of NIMBYism

The energy minister of the northern state of Schleswig-Holstein, Robert Habeck (Green Party), told DPA press agency: "We don't have too much renewable electricity, rather too many coal-fired and nuclear power stations that are stopping up the grid. If they disappeared from the grid, we'd have plenty of room" to export wind power from his state to southern Germany.

While the Green Party isn't in power federally, it's the junior coalition partner in many of Germany's 16 states. Ten state energy ministers are Greens, and all of them are intent on defeating Gabriel's attempt to slow down the transition to a low-carbon future.

In 2015, 33 percent of Germany's electricity was produced from renewable sources - mostly wind, hydroelectricity and solar PV. By 2025, if Gabriel's go-slow schedule wins out, it'll be 40 to 45 percent.

But Germany's renewable energy industries, which by now employ - according to Anton Hofreiter - about 450,000 people, want much more clean energy in place by then, as do Green Party energy ministers, environmental advocates, and other citizens who are concerned about climate change.

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