Renewables in Germany: Consequences of Growth

In 2017, Germany set a new record as renewable energy accounted for 36.1% of all electric power consumed in the country. Reports indicate that, however, this has not brought the German Government anyway closer to its goal of cutting CO2 emission by 40% against the 1990 level

According to Agora Energiewende, a think tank supporting the country’s transition to a low-carbon economy, the figure of 36.1% indicates the fastest ever growth in renewable generation (+3.8% year-on-year). Wind turbines account for the most of recently commissioned ‘clean’ capacity. The share of coal-fired and nuclear power plants fell to its lowest level in 27 years, as estimated by Agora Energiewende. According to the IAEA, German nuclear stations generated 11.63% of electric power consumed in the country.

Despite the record set by renewable generation, Agora Energiewende admits that CO2 emissions in Germany remained flat for the past three years. This does not allow the country to meet its 2020 emission reduction goals.

“If the current trend continues, Germany will only achieve a 30% reduction in its emissions by 2020 as compared to the 1990 level, instead of 40% as planned,” says Dr Patrick Graichen, Director of Agora Energiewende.

According to the think tank, the German energy industry ‘cut some of its emissions as the share of coal-fired stations decreased”. At the same time, CO2 emissions increased in the transportation, construction and processing industries on the back of growing oil and gas consumption. Nothing is said in the English part of Agora’s report as to why the consumption has grown.

Electricity prices in Germany are also on the rise. According to Agora’s estimates, the price of electricity for households in 2018 will for the first time ever exceed 30 eurocents per kilowatt-hour. The end price is growing despite large subsidies for the renewable energy industry.

A larger share of renewable power stations intensifies price fluctuations on the German wholesale power market. The negative market price of electricity (when an energy company pays consumers for the power consumed) in 2017 was registered during 146 hours only. This has been the longest period since Germany began its transition to renewables. Agora Energiewende also admits that there were ‘many hours’ (no exact numbers given) when the price was higher than 10 eurocents per kilowatt-hour. It should also be noted that wholesale prices are always several times lower than those paid by end consumers, particularly households. To make price differences less radical, advocates of the renewable power expansion suggest establishing power and heat storage systems. Nothing is said, however, as to how construction and operations costs of such facilities will be compensated.

The general public in Germany is overall positive about the energy transition policy, Agora Energiewende reports. At the same time, the think tank’s experts admit that ‘many see the renewable pricing as unfair already now’.

According to Agora’s forecast for 2018, the total installed capacity of wind and solar power stations in Germany will reach 4 GW and 2 GW respectively. Also in 2018, Germany will permanently shut down Gundremmingen Unit C (the plant’s total installed capacity is 1.344 GW) and decommission coal-fired power units with a total installed capacity of 1.1 GW. New gas and coal-fired stations will replace 1.8 GW more of the same type generation capacity.