Business Leaders Call Energiewende Threat to Germany’s Energy Future

In this political correctness and aversion to controversy, business leaders rarely publically express their frustration about political decisions.

by Heather Johnstone, Power Engineering International

German energy sector might become uncompetitive under current policy.

In this political correctness and aversion to controversy, business leaders rarely publically express their frustration about political decisions. So it was refreshing to hear Bernhard Fischer, head of Germany’s E.ON Generation GmbH, talk candidly about how German Chancellor Angela Merkel’s and her government’s radical post-Fukushima energy policy affects his business.

Fischer spoke during the opening keynote at POWER-GEN Europe Conference & Exhibition in Cologne. He said the policy change, known as the “Energiewende,” is a “political wish that is without a realistic view of what is achievable” by the power industry. The Energiewende, which translates in its simplest form as “energy transition” or “energy transformation”—became law in summer 2011. It will phase out Germany’s nuclear power by 2022 and significantly boost renewable energy capacity, doubling its share in electricity consumption to 35 percent in 2020. The output from renewable resources such as wind and solar is intermittent, however, and creates volatility. Conventional power generation resources, Fischer said, already are being stretched to support the country’s existing renewable energy installed base.

Many believe this effect has been exacerbated by Merkel’s decision to shut down nearly half of Germany’s operating nuclear power stations immediately after Fukushima, with the loss of 8 gigawatts (GW) of key, baseload capacity.

Fischer emphasized that with the expected surge in renewable capacity before 2021, these conventional plants would face an even greater challenge in coming years to compensate for intermittency. Germany’s growing renewable energy base also challenged the grid and created the need for a massive grid overhaul. For the first time, this was driven by pure need and restrictions rather than profitability, which is not good news, Fischer said. He called Germany a world “pacemaker” of the past 10 years, but after Fukushima, everything that had been achieved regarding the German nuclear fleet’s life extensions had been undone.

“No risk was reduced,” Fischer said. “No new strategy was implemented.”

All that was achieved, he said, was that “politicians proved that they could make a decision ... and the public appreciated this.”

Fischer said the German energy policy was not technically impossible but it was necessary to do so in the right way.

This has not been achieved, and the withdrawal decision was not thought out fully, he said.

“No expert was asked. No risk assessment was done,” Fischer said.

Thorsten Herden, managing director of German engineering federation VDMA, participated in a plenary panel discussion at POWER-GEN Europe.

The Merkel government’s decision to pull out of nuclear was made “without a proper consultation process” involving the industry or other stakeholders, he said. Herden called the Energiewende “irreversible.”

Also participating in the panel, which was moderated by journalist and broadcaster Stephen Sackur, was Werner Gotz, a member of the board and chief technology officer of German utility EnBW Kraftwerke AG. Gotz said the Enegiewende is needed worldwide for a transition toward a low-carbon future. Germany’s energy transition, however, was too quick, he said.

Two of EnBW’s four nuclear power stations shut down immediately post-Fukushima. Gotz said the move is hitting his bottom line severely.

Unlike private energy utilities such as E.ON, which seeks $10 billion in damages from the Merkel government for the accelerated nuclear phaseout, publically owned EnBW is left swallowing the sizeable costs of owning stranded nuclear assets.

People within and outside Europe have long seen Germany as an energy trendsetter, but its rapid Energiewende might be a step too far. For any country looking for a low-carbon transition of its power sector, it is fundamental that infrastructure and capacity are developed together, said the VDMA’s Herden. This has not happened in Germany, so there is a mismatch between demand and supply.

“Germany is a perfect example of what not to do,” Herden said.

Fischer said the German energy policy needs “coordination, coordination, coordination” to achieve its aims, as well as time, money and acceptance.

Gotz emphasized the need for all interested parties to come together.

This concern over the lack of coordination follows recent comments from Fulvio Conti, CEO of Italian power company Enel and president of Eurelectric, the body representing Europe’s utility companies. During Eurelectric’s annual symposium, Conti told delegates that Europe’s power sector was “uninvestable” at the moment because of uncertainty and a lack of coherence. Bridging the gap between Europe’s power industry and the politicians to bring them together might be easier said than done.

Author

Heather Johnstone is chief editor of Power Engineering International and conference director of POWER-GEN India & Central Asia, Russia Power and COAL-GEN Europe events. Reach her at heatherj@pennwell.com.

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