Germany’s Renewable Gamble
With our Net Zero Nest project, we are working to control our energy usage at the micro-local level, our own home. At the regional, national, and international level, there are many exciting and bold efforts to reduce GHG emissions by transforming the way electricity is produced.
In Germany, this process is called Energiewende, or the energy transition. According to a recent New York Times article, Ernergiewende amounts to a dramatic shift from fossil fuels to renewable sources of energy
production – Germany is aiming for 30%. For comparison, the U.S. is about half that. California has set 33% renewables as a state goal by 2020, and by some accounts will reach it. Germans are credited in the Times article with driving down the cost of renewable power generation for the rest of the world. The estimated cost to the average German family is $280 per year.
Renewables can’t power the grid on their own. Wind and solar produce power at certain times of day and are somewhat unpredictable. To reliably power all users 100% of the time, fossil fuel power plants must fill in the gaps between the renewable sources. I didn’t fully understand this until playing a game from Siemens (also from Germany), called Power Matrix. This game will suck you in with all the standard Zynga tricks of points and levels and quests, but in the process you realize how unreliable renewable sources can be (except hydropower), and how judicious use of coal- and natural gas-fired power plants can provide a reliable base level of power production. Overlay a diverse set of renewables on top and you have reliable grid supply with reduced GHG emissions. The game is a great example of how gaming can be educational, and how a company can teach about its products without turning off the consumer.
Where the NY Times article is glowing about Germany’s efforts, a recent Wall Street Journal article is more nuanced, even negative in tone. The Wall Street Journal article cites a 60% increase in electricity costs for companies operating in Germany over the past 5 years, to the point that German electric costs are twice what American companies face. There is fear in Germany that the Energiewende costs are making German companies less competitive in world markets, which has traditionally been a German strength. The ambitious renewable goals in Germany (33% by 2020, 40% by 2025, and 80% by 2050) go beyond those of the rest of the world, at a projected cost of over 1 trillion Euros. Add to that the planned exit from nuclear power prompted by the Fukushima disaster, plus the difficulty transmitting electricity from the wind farms in the North to the large German cities in the South, and the Energiewende is defintely a calculated risk for Germany… a bet that investment in renewable energy production will eventually drive down electricity costs, build the German industry for renewable power technology exports, and ultimately not harm German businesses competing on the world stage.
These are hard challenges for countries across the world, just like they are hard challenges for the average family at the household level. Play Power Matrix and let us know what you learn. We plan to act on a small scale on our single home to live on renewable power, motivated in part by a 30% US federal tax credit on solar electric panels. The U.S. is taking a more gradual approach to transforming its energy sector than Germany. Time will tell whether the U.S. or German approach is best.