Why Germany Has No Need for North-to-South Power Lines

Melissa Eddy, writing in the New York Times on Christmas Eve 2014, fails to explain why "Germans Balk at Plan for Wind Power Lines" to bring wind power from the North to the power-hungry South: The North-to-South transmission lines are not needed; they are a waste of money, designed to increase the cost of the Energiewende and thus do discredit it, and to split the environmental community in various ways.  Here is why:

The promoters of these North-to-South "Electricity Autobahns" have you believe that Germany has good wind only offshore in the North, and faces the risk of black-out in the South, when the last nuclear power plants go cold at the end of 2022. (If they go cold; these folks also float the idea of "extending the running time of nuclear power plants beyond 2022" whenever they have a chance.) Their map shows Germany as an island. Look at a map of the European power grid and you understand what nonsense has been planted in the general public‘s and many a politician‘s mind. (On the side: One of the proposed transmission lines was designed to bring lignite power from the East into the South. It was sold as "necessary for the Energiewende" but was in fact the exact opposite.)

The capacity of the existing North-to-South transmission lines is fully sufficient in the (daily) average. More demand management and storage in the South would improve capacity utilisation. Many large industrial power users have ways to become "swing consumers" and reduce their demand when power prices are high. The innovative businesses in Germany‘s South could benefit from even lower average power prices if they put their mind to it. Increasingly inexpensive storage, built up incrementally and flexibly in the South close to demand centers, is way more economical than large-scale and indivisible, capital-intensive, medium-term investment in high-voltage transmission lines, which create strong economic and technical path-dependencies. The German auto industry, which is strong in the South, could take a lead here.

There is wind also in Germany‘s South. Instead of putting turbines into the corrosive marine environment of the North and Baltic Seas, on muddy ground in 40m of water‘s depth in large off-shore parks that need to be connected to the grid in what are in effect vulnerable choke points, the turbines could rise above the forest canopies on the high plains and ridges of Southern Germany. The project sizes and risks, costs of grid connection and system integration would be way lower than with off-shore wind power.

Germany still has a massive problem with atomic power from France, which all too often clogs up the German grid in the West and South-West, including the North-to-South lines, on its way to Switzerland and Italy. It would be way quicker and cheaper to build an underwater cable from Marseille to Rome than to expand grid capacity in Germany just so that it can accommodate that atomic power.

The solution is Tunur, a company that wants to bring 24h solar power from Tunesia via an underwater cable to Italy (near Rome) and thus into the integrated European power market. Tunur power could replace the power currently imported into Italy from the North and reverse the flow across the Alps. Tunur‘s power is already sold in the UK, so the project is fully financed; it would not cost Germany a cent, just a vote for accelerating this private project as part of the 315bn Euro investment stimulus package.

Freeing up the German grid would also help reduce stress with Eastern neighbours Poland and the Czech Republic as "loop flows" would be reduced. A direct transmission line from Germany to the UK, again as part of the 315bn package, would facilitate regional grid integration and reduce France‘s ability to way-lay Tunur‘s power on the way to its customers. (Excuse me for the simplistic description of power flows across Europe and the Mediterranean.)

As a whole, the concept of building all these (8300km of) new power lines in Germany is part of a framing of the Energiewende that focuses on supply-sided expansion of large-scale and distant-from-demand renewable energy, denigrates the potential of more distributed generation and storage in a smart grid that would also enable demand flexibility to help reduce total system cost. Tennet, the transmission grid operator in question here, operates a regulated "cost-plus-margin" business and has an interest in making expensive investments for a regulated rate of return way higher than the current cost of capital.

Melissa Eddy is normally relatively knowledgeable and scrupulous in her reporting, but a number of blatant falsehoods give away some presumably heavy-handed editorial guidance.  Just to examples to prove this point: 1) The nuclear phase-out was agreed in 2000; it didn‘t need Fukushima. 2) Germany has record low power prices for businesses, the larger the user, the lower the price. No-one in German industry worries about any "growing cost" of the Energiewende, because a) the Energiewende costs only a little more than the business-as-usual maintenance of the risky and dirty power supply system that is now being replaced, and b) industry does not pay for the policy but gets all the benefit (in the form of very cheap power in a very reliable grid).

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Related post:
European Energy Policy after the Crimean Crisis: Focus on Flexibility

Chlorchemie – The Bad Business of Halogenated Organic Substances

This post is derived from a fact sheet for ÖkoVision, an investment fund or mutual trust investing in companies that, with their policies, busi­ness model, processes, products and services, are likely to succeed in an equitable and sustainable future industrial society and market economy.

Companies are not compatible with ÖkoVision if they produce, promote, trade, distribute, use (in significant quantities), or enable or promote the manufacture, trade, or use of halogenated organic substances.

As a principle, ÖkoVision does not invest in such companies.  The criterion is very important but not absolute, and attenuating circumstances are considered in judging businesses (see below for detail).

The criterion is about organic chemical substances or compounds, in which one halogen atom or several same or different halogen atoms form direct bonds with carbon.  Of concern are mass products of the chemical industry, such as PVC or halogenated solvents, and specialized chemicals, such as pesticides or biocides.  The criterion does not apply to pharmaceutical and other substances that produce large benefits with the use of small quantities, and for which no practical substitutes exist. 

Reasoning:

In chlorine chemistry ("Chlorchemie") or more widely "halogen-organic chemistry", substances are produced or used, in which a chemical bond exists between halogen atoms – fluorine, chlorine, bromine, or iodine – and carbon atoms.  All substances with a halogen-carbon bond and/or their biochemical or physical metabolites and degradation products are highly toxic, eco-toxic, carcinogenic, teratogenic, act as greenhouse gases and aggravate climate change and/or are damaging to the Earth‘s protective ozone layer. 

While some substances can be used in small quantities in medicine, where the benefits for humans outweigh the costs and damages, most such substances are so harmful in their manufacture, use, and disposal that cost-benefit assessments should stop their production, sale and trade.  Even if some halogenated organic substances are not hazardous per se, they become so when they react or degrade, for instance when incinerated, exposed to light or natural ultraviolet rays (in the strato­sphere).  The production of halogenated organic substances is hazardous; notorious large accidents in the chemical industry, such as at Bhopal, Schweizerhalle (Sandoz), or Toulouse, involve, as a rule, this class of chemicals.  Chlorine chemistry is an obstacle to the development of a sustainable and ethical industrial society and market economy. 

Chemical Background:

Halogens, the elements "born from salt" or "forming salt", form a group in chemistry‘s periodic table: Fluorine (F – no. 9 in periodic table), chlorine (Cl – 17), bromine (Br – 35) and iodine (I – 53)[1].

Their high chemical bond energy (or electronegativity or redox potential) is the key characteristic of halogens.  Fluorine has the highest chemical bond energy of all elements[2], and bond energy declines within the group from fluorine to iodine.  Each atom is lacking one electron in its outermost shell; they strongly seek to gain one electron and complete that shell (which charges them negatively or reduces them).  This characteristic makes elemental halogens extremely reactive; they can break up many chemical compounds and form new ones with particular properties of concern.  Some of the newly formed compounds are themselves very stable, while others are not.

Chemical Policy Background:

"Chlorchemie" symbolises a chemical policy controversy, at the heart of which are the manufacture, use, recycling (or better "down-cycling") and the (highly problematical) disposal of polyvinylchloride (PVC) and other mass or bulk products of the chlorine chemical industry.  Ozone-depleting chlorinat­ed or halogenated hydrocarbons are also part of the controversy.  There are also a range of sub­stances for special purposes as industrial chemicals or, for instance, as insecticides or fungicides.

It is known since 1885/1890 how pure chlorine on the one side and on the other potassium or sodium hydroxide can be produced using electrical energy (chloralkali electrolysis), where chlorine and potas­sium viz. sodium are always produced in fixed proportion (combined production).  The objective was (and to a degree still is) the production of potassium and sodium; chlorine emerges as a dangerous by-product (or waste), which has to be chemically bonded and stabilised before it could be disposed of (in landfills).  This was done by bonding of chlorine as chloroethene or vinyl chloride (C₂H₃Cl), which was then used to synthesise long-chained polyvinylchloride (PVC [C₂H₃Cl]_n) for landfilling.  PVC is still quite unstable, and in its decay releases the aggressive and corrosive chlorine.  For this reason, PVC was further stabilised with additives such as cadmium, and through the addition of plasticisers, such as a partly endocrine phthalates, was given properties that allowed PVC to be sold as a product.

The generation of combined products and by-products is a common feature of the chemical industry.  Not all such products can be put to good use.  Often the exact composition of mixtures of such pro­ducts is not known, and the separation of mixtures would be too cumbersome and expensive.  In such cases, initially in the interest of plant safety, mixtures with unknown or uncertain composition and characteristics were "fully chlorinated" or "fully halogenated" and thus homogenised.  This method of waste treatment produces large quantities of mostly short-chained halogenated alkanes[3], the fluoro-chloro-hydrocarbons (CFC), which have known properties and could be marketed as solvents, cooling agents, or propellants for spray cans, for instance.  Fully halogenated hydrocarbons are chemically very stable, no longer reactive, and thus very durable.  However, they rise to the stratosphere where they decay under the exposure to high-energy radiation from space and then damage the Earth‘s stratospheric ozone layer that protects life from the radiation. 

Chlorine chemistry is a history of converting hazardous waste into hazardous yet marketable products. 

Another aspect drives the continuing chemical policy controversy in addition to the history and the dangerous properties of the products of the chlorine chemical industry:  The production of chlorine and other halogens as feed-stock for the halogen-organic chemical industry requires enormous quantities of electrical energy.  For this reason, chloralkali electrolysis plants and nuclear power plants are found next to one another, with the chemical industry benefitting more or less directly from the subsidies and privileges given to nuclear power plants. 

The "Dirty Dozen" and the "Nasty Nine":

Chlorine and other halogens are prominent also in the "Dirty Dozen" and "Nasty Nine" regulated (or banned) by the Stockholm Convention. These are "persistent organic pollutants" or "POPs", namely dangerous insecticides, a fungicide, industrial chemicals and pollutants from combustion plants.

What this is not about:

The chemical bonds between halogens and carbon are at the core.  Chemical bonds with other elements of the carbon group or metals are not relevant here.  Not part of the controversy and thus not in focus here are inorganic halogen bonds, mostly salts.  Sodium chloride (NaCl) is cooking salt and on everyone‘s lips, and the halogens are important for human health (fluorine for teeth, iodine for the thyroid gland, …).  Industry lobbyists like to stress that "chlorine is not dangerous", as it is part of food.  The argument is designed to distract from the dangers cause by halogen-organic compounds.

Halogens also form bonds with other elements that are similar to carbon.  An example is silicon, and silicon chloride plays a role in semiconductors and the production of solar panels.  Although such compounds can be problematic, they are not part of the chlorine chemistry controversy. 

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[1]         There is also the rare, radioactive astatine (At – 85) and the artificial or man-made and highly unstable ununseptium (Uus – 117).  These are without practical relevance here.

[2]         As a consequence, no other chemical element can break the chemical bonds formed by fluorine, and physical energy in the form of electricity must be used to form pure fluorine (F₂); producing meaningful quantities of pure halogens requires energy-intensive technical processes at industrial scale.

[3]         Alkanes are chains of carbon atoms, which in their basic form are surrounded only by hydrogen (hydro­carbons); methane (CH₄) and ethane (C₂H₆) are most relevant here. 

Denver Nicks with Serious Falsehoods about Germany‘s Energiewende in Time

Denver Nicks wrote this article in Time!  It must be a a record for serious falsehoods in such a short piece.

It is common for English-language journalists to misrepresent facts and reasons of the energy transformation currently being undertaken in Germany.  Many of them cannot read German and recycle material provided to them in English.  They are easy victims of the hired pens of the incumbent utilities, and the coal and nuclear lobbies.  Denver Nicks appears to be one of them.

Here are my short corrections on the three gravest falsehoods in that article:

1)  The Energiewende is not "state-subsidized"; there have been no subsidies for the last 10 years or so.  The feed-in tariff does not involve government money, and is therefore not a subsidy.  In fact, the Energiewende results in a significant increase in tax revenue (and social security contributions):  The Energiewende policy is fiscally positive, and as such should be replicated by Euro countries with high deficits and debts.

2)  Energy prices (meaning power prices) are not high and not rising in Germany.  In fact, prices on the power exchanges are at record lows, still trending down, and any industrial power user with enough wits can now lock in those low prices until the end of 2017.  Anyone from industry complaining about high power prices is either a liar or has been duped by utilities and power traders.

3)  The "post-Fukushima draw-down of nuclear power" has not led to an increase in the use of coal.  Coal use and emissions went up in 2012 and 2013, but no nuclear plants were shut in those years.  (The last shut-down was immediately after Fukushima in 2011; the next shut down is scheduled for the end of 2016.)  There are reasons for an increase in coal use, all of them bad and avoidable, but the nuclear phase-out is not one of them.

New York Times Editorial Board Draws the Wrong Lessons after Chernobyl

On 1 May 2014, an overtly pro-nuclear op-ed was published by The New York Times.  It is not just another run-of-the-mill op-ed, this is the New York Times Editorial Board itself, with all its majesty.  Collectively, they come out in favor of nuclear power every once in a while, and the mind boggles with speculation what drives them to do it. 

There is, as usual, some nonsense about Germany, which I won‘t bother to address here.

The main message concerns the US; it is a plea to keep the fleet of US nuclear power plants running, against the economic interests of the operators.  (Closure decisions in the US are taken by operators.)

Change the economics?  Stop fracking by giving it equal treatment with other activities under environmental legislation, and tax oil and gas extraction?  Unlikely in the present-day US.  Stop the expansion of renewable power?  The op-ed argues against it, and it would be futile given the downward cost-curves of solar, wind, and likely storage, too.  Subsidize nuclear power even more?  That must be the plan, probably by further increasing the share of utility revenue from capacity payments, which are already high in the US. 

Some US nuclear power plants are shut because they are simply in the wrong location to compete.  More importantly, with age they become more expensive to run, some need repairs some need retrofits, for some even routine refueling may no longer make economic sense. 

The consequences of serious nuclear accidents are too large to insure, and governments have colluded through legal conventions to stop victims from suing for compensation.  Serious accidents are also more frequent that is usually admitted; there was about one core-melt incident every 5 years since the accident in Chalk River, Ontario, in 1952.

The New York Times Editorial Board asks the nation to "extend and pretend", extend operations and pretend it makes economic sense.  It also asks the world to "delay and pray", to delay true reckoning of the risks of nuclear power, and pray that no more serious accidents will happen. 

Donald Tusk of Poland, sadly, has 2 fatal flaws in his argument for a European Energy Union

RAKraemer | April 27 8:41am | Permalink

Donald Tusk of Poland, sadly, has 2 fatal flaws in his argument for a European Energy Union published in the Financial Times:

First, there is no sustainable extraction and use of fossil energies. His equation of coal with energy security is logically wrong, myopic, and reveals his strong bias. Measures Poland has taken to protect the interests of her coal industry, such as keeping cheaper renewable power from entering Poland by installing phase-shifters on the borders, are in violation of the European single market.

Second, Donald Tusk fails to mention, and possibly does not understand, the degree of integration already achieved by the European Union on energy matters. The single-market and competition disciplines alone would be sufficient to break the clauses in gas contracts that prohibit the subsequent sale of gas to entities or regions without the consent of the original supplier, Russia. Such clauses are anti-competitive, and the matter could be cleared up under existing EU law.

Sadly, the good points of his argument are thus fully discredited, and he has disqualified himself as a leader of Europe‘s search for stronger cooperation over energy and the response to Russia's aggression.

There is a better way to proceed, one that can be started immediately, as it does not require changes in EU policy and law, or the creation of a new European institution: Understand that gas is important not so much for the energy it carries but primarily for its versatility and flexibility. Then, focus on linking the electricity and gas systems more and make them more flexible through storage and economic incentives in a smart grid. I have sketched it in my blog post "European Energy Policy after the Crimean Crisis: Focus on Flexibility" here:
http://raandreaskr...after-crimean.html

European Energy Policy after the Crimean Crisis: Focus on Flexibility

With Russia‘s taking of Ukrainian territory in a way reminiscent of the times before the 1648 Peace of Westphalia set the current order in international relations, the focus in Europe is shifting from admonishing Russia for its behavior towards diplomatic and economic sanctions.  The "dependence of Europe on Russian gas" is moving into focus, and Europe is contemplating how to live with little or no Russian gas.  Russia exports fossil energies: coal, oil, and gas; but gas dominates discussions; for background, see http://www.eia.gov/countries/cab.cfm?fips=rs). 

In the wider picture, the following changes are likely:

• The little coal Russia exports will simply go elsewhere; the world market geometry will adapt.  Total cost will go up slightly because of "dislocation" from the current market equilibrium.  No great impact,
• Oil will be redirected in part, as far as possible given the pipeline and shipping infrastructures in place.  In the short and medium term, expect lower exports from Russia, slightly higher world market prices.  Over the long term, as additional infrastructure may be built, more oil might flow East and South from Russia; Russia will want to reduce its dependence on the European market and develop its markets in Asia.
• Gas is the most interesting, because it is largely pipeline-bound.  (Russia has increased export of LNG notably to Japan, and this may increase in importance.)  In the short run, expect significantly lower gas exports from and revenues going to Russia.  This will cause some general economic dislocation in Russia as well as more limited adjustments in the European energy systems.

Nuclear Nonsense

In Germany, the prospect of lower gas supplies from Russia has already resulted in calls to reconsider the nuclear phase-out.  That was to be expected from the nuclear die-hards, but their arguments are nonsense:  Nuclear power and gas occupy very different parts of the energy market and -- with very few exceptions -- cannot substitute one another. Nevertheless, European utilities and policy-makers will not focus on the costs and risks of nuclear power as much as their attention is drawn towards gas.

Reflexive Focus on Gas

Europe will develop responses in the gas market, and in its policies on energy transition. The short to medium-term response in the gas market can be to: 

• Use strategic reserves to cushion market effects and avoid panic, and prepare to change gas flow directions to provide "Western" gas to countries in Central and Eastern Europe, and the Baltics;
• Expand supplies from indigenous sources, but that is limited;  
• Import more gas from Norway (as first choice) and other neighbors, notably Algeria (second choice, because of Abdelaziz Bouteflika‘s regime and Russia‘s role in the Algerian gas industry); 
• Save gas; use it more efficiently, and substitute gas with (renewable) power wherever and whenever possible (which requires marginal retrofits in many gas-using installations);
• Build up the biogas industry (which has limited potential but still some room to grow);
• Try to frack Europe while events in the Ukraine may muffle opposition to fracking for fossil methane for a while, even if it is a deviation and distraction from rational energy policy; 
• Invest in power-to-gas conversion as a domestic source of synthesized gas.

The impact on energy transformation policies can be significant.  Policies needed for reducing dependence on gas have not been in focus so far, but they are essentially the same as for phasing out nuclear and coal power.  The EU and the Member States might accelerate the rollout of policies modeled on Germany‘s Energiewende.  (It is worth noting that Germany is not a leader here, neither in technologies across the board, nor in terms of growth or market share of renewable energies.  Yet, Germany is seen as the trailblazer in the development of effective policy frameworks.)

From Gas to Flexibility …

So far, gas has been billed as a "friend of renewable energies" because gas-fired power plants can ramp up and down quite quickly and thus compensate for the predictable fluctuation in the supply of some renewable energies, notably wind and solar energy.  (Others, such as biogas-to-power are dispatchable, as is a part of hydropower.)  Together, renewable energies and gas could displace nuclear and coal power more effectively, more economically and quicker than either could without the other.  With gas as the "flexible friend" of renewable energies taking a smaller role, the flexibility will have to come from 1) storage and 2) demand response:

… through Storage and …

The more storage in the system the easier it can evolve to 100% renewable energy.  Put simply, storage comes as:

• "Pre-power storage" -- for instance of biogas, water head behind hydropower dams (pump and flow), or as heat (in the form of molten metals from concentrated solar energy installations;
• "Power storage" in batteries, for instance in electric vehicles, but utility-scale batteries are also coming onto the market;
• "Interim or side storage" with conversion from power and back to power, such as flywheels, compressed air storage etc.;
• "Post-power storage" -- such as ice (for subsequent cooling) or heat (in hot-water tanks, for instance). 

The legal frameworks for storage have to evolve rapidly to enable new technologies and business models to be introduced.  There is much pent-up invention waiting to be brought to market.

… Demand Response

Demand response has not been used much in any of the EU Member States; the current energy grids and regulatory frameworks are "hard wired" against it.  Yet the potential is enormous when you consider the ease with which power demand can be shifted by a few hours or days. 

Trimet, a German aluminum recycler, has developed the skill of ramping its processes up and down so as to "surf the weather systems bringing cheap wind power to Germany".  It has become a "swing consumer" of electricity with a business model that has allowed it to push a Dutch rival company into bankruptcy.  The process innovation could be replicated in other industries, notably steel and chemicals. 

For households and small businesses, electricity tariffs giving real-time incentives depending on the grid load and supply, could stimulate sufficient flexibility to compensate the loss of gas in the system.  But that requires changes in the tariff and taxation policies: Taxes (and charges) must be expressed in percentages of the basic (market) price rather than as fixed amounts expressed in Euro cents per kWh as is currently the case.  (Tariffs must stop muffling the price signals and rather amplify them.)

Hope from the Ukraine

With the right narrative and conceptual framework, and with principled and forward-looking policies adopted by the European Union and its Member States, the Crimean Crisis might hasten the transformation of Europe‘s energy systems towards 100% renewable supplies in a smart grid, a system that stimulates and provides for dynamic efficiency with many economic and social benefits.  This hope does not belittle or excuse anything Russia is doing in its neighborhood, but Europe should still make the best of a bad situation.

The Energiewende is about Democracy and Technology (but not Fukushima)

Much hash is made of the Fukushima 2011 catastrophe in trying to explain the Energiewende, Germany‘s energy transition to 100% renewable energy. It is time to put events and policy decisions into their historical context.

The period 2009-2011 is at the heart of frequent misrepresentations and misunderstandings.

The CDU/CSU/FDP won a majority in the 2009 elections to the German federal parliament on a platform including an extension of the running-times of existing nuclear power plants, but the election was not fought over that. The "nuclear question" was a side-issue that no-one took seriously in a contest over economic and social policy during the Euro crisis.

The legislation extending the running time was introduced and adopted in parliament as part of a legislative frenzy in 2010; there was no time for public or adequate parliamentary debate: it constitute "Legislative Ambush". The new law was challenged as being unconstitutional on (at least) two separate arguments by the Länder as well as the federal opposition parties; the cases were dropped when the law was repealed but the constitutionality of the law may be tested in possible future cases over compensation for nuclear plant operators for the 2011 phase-out law. The legal challenges meant that no significant investment was made to the nuclear plants even after the law was adopted.

As a consequence of the legislative ambush, the old "Grand Societal Conflict" over the nuclear question, that had been settled with the negotiated phase-out agreement of 2000, was re-opened. The Greens a few months later polled just under 30% and were threatening to overtake the CDU as the most popular party across Germany. The running-time extension was a complete blunder, not only in terms of industrial and energy policy but also electorally. (I had the pleasure to attend a Mittelstandsforum in Munich a few days after the law was adopted, with about 300 predominantly conservative owners and managers of SMEs in the room.  Even when it would have been perfectly safe and acceptable to speak out for nuclear power, no-one did.  Not one!  Some were scathing about the new law, and most of the (average millionaire) participants simply shook their heads in disbelief over the federal government's evident stupidity.)

Had the CDU defended the nuclear extension much longer, they might have lost all electoral chances for a generation, thus was the power of the nuclear issue in the politicization of young people (teens and twens). It was clear to observers that the running-time extension would be reversed, whether by the then government, through the courts on the basis of the constitutional challenges, or as a result of the next federal election (which might then have produced a Green chancellor!). Fukushima provided a face-saving opportunity for Angela Merkel to regain control over events, do the right thing (by the majority on the conservative part of the political spectrum as well as elite opinion), and re-instate the nuclear phase-out approximately as it was before.  The nuclear plant operators had reason to be happy; they actually won additional running hours and power output to sell to the grid, as is shown by comparing the 2011 law with the terms of the nuclear phase-out agreed in 2000.

The Energiewende is successfully reducing greenhouse gas emissions in Germany, and stimulates the development of technologies and business models that may be used for energy transitions also in other countries.

It must be said and put in context that the industrial decline of Eastern Germany also helped reduce emissions, but that process had a steep price in economic, social, and political terms. It was not a wind-fall. Germany used the opportunity to rejuvenate the productive capital stock. If about half the emission reduction is the result of Eastern Germany‘s industrial collapse, the other half is due to public policies since unification.

For historical reasons, there is too much lignite in the German energy system, including for power export.  Lignite mining and its conversion into electricity has a nasty habit of forming strong path-dependencies, in the case of lignite on the basis of laws essentially unchanged since the 1930s.  The way to drive out lignite is to improve energy efficiency, build up renewable energy supply and storage, and shift to a smart grid.  In addition, at least some large (continuous) industrial power users need to become "swing consumers" like Trimet did in aluminum recycling, but BASF is refusing to contemplate for its multitude of processes requiring steam or power or both.

It must also be admitted that there is still enormous energy wastage in Germany, including in energy-intensive industries; energy efficiency is not a successful field of public policy. The focus is too much on (capital-intensive) retrofits rather than (smart and inexpensive) policies stimulating energy-efficiency in behavior.  The technology-forcing power of standard-setting is not being used enough. That could not be changed as long as the Federal Ministry of Economic Affairs is responsible, with its senior officials believing that energy-saving is bad for the national economy, depresses GDP, and reduces tax-take.

My bet is that the "Federal Ministry of Energy", currently being incubated in the Federal Ministry of Economic Affairs under the leadership of State Secretary for Energy Rainer Baake, will become independent and enlarged after the next federal election in Germany in 2017.  The country will then be able to break with the inherited totalitarian or state-monopoly-industry reflexes in its energy system and policy-making, and will be free to shift further towards a distributed energy supply structure with real-time price signals stimulating changes in supply and demand.  Then, the power-and-gas system, more tightly linked to the transport sector than today, will become efficient in its dynamics, in the aggregate behavior of all its users as befits a democracy and market economy.

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I have written an earlier essay entitled "Germany, Fukushima and Global Nuclear Governance": http://www.ecologic.eu/7436.

More background: http://www.ecologic.eu/4140 and http://www.ecologic.eu/2984. 

The 3+1 Objectives of the Energiewende in Germany

The German Energiewende -- or Energy Transition -- has 3+1 key objectives:

1.     Phase out nuclear power, sooner rather than later, avoiding expropriation of assets that would result in an obligation to compensate owners;

2.     Phase out fossil energies to protect the climate, as soon as possible bearing 1) in mind, while meeting obligations under the Kyoto Protocol and EU burden-sharing; and

3.     Expand the use of renewable energies, as a solution for 1) and 2), and as a contribution to the economic and social well-being of Germany.

Since Chernobyl in 1986, the Energiewende has majority support across the political spectrum, and is favoured by public opinion generally as well as that of elites -- e.g. business, media, public administration.  There is broad cross-party consensus on the first three objectives, but some disagreement on the fourth: 

4.     Breaking the power of the incumbent "Big 4" utilities, which have for decades dominated energy policy-making and milked their customer, including the Mittelstand industry (SMEs), the innovation and employment backbone of the German economy.

For an overview of the economic and social benefits of the Energiewende see:
http://raandreaskraemer.blogspot.co.uk/2014/02/the-economic-or-competitive-advantages.html

The Distributive and Social Consequences of the Energiewende

The German "Energiewende policy" in support of renewable energy:

1. Takes money, in the form of a "renewable energy levy" of 5.3 Euro cents per kWh, from households and small businesses, and
2. Gives to

• Operators of renewable power generators, in the form of the feed-in tariff as a reward for the successful operation of their plants,
• Large industrial power users via significantly lower wholesale prices for electricity, and
• Governments (at federal, Land, and municipal level) in the form of additional tax revenue and contributions to social security funds.

The policy also makes power plants redundant in nuclear and fossil energy.  Where these have been depreciated -- and the costs been passed on to electricity users via power prices -- there is no "real economic loss", just a "loss on paper".  However, there are also new assets, notably in fossil power plants, that are now "stranded" part of the time and unlikely to earn enough revenue to return a profit to their owners.

The policy induces a net flow from urban to rural areas, and leads to surplus in the South, e.g. in Bavaria which has large photovoltaic capacity, the North, e.g. Schleswig-Holstein with much onshore wind, and the East, where rural areas took advantage of the Energiewende and "reinvented themselves" as energy regions with wind, solar, and biomass power after unification of Germany in 1989.

Wholesale power prices are about 4 Euro cents per kWh.  That is what large industrial power users pay if they are clever. 

Prices are predicted to stay at this level for the next few years. 

Households pay far more, because they don‘t have the negotiating strength of industry, taxes and charges are high, and because household and small business customers pay for the grid and the expansion of renewable power, while large industrial users not only don‘t pay for that but also benefit from ever-lower wholesale power prices. 

I pay about 22 Euro c/kWh for renewable power from an independent generator.

With a basic connection fee and VAT of 19% on top, that translates into 80 Euros per month or 960 Euros per year for a 4-bedroom home with all normal appliances.

Electricity prices are rising above the rate of inflation but below the increases in other forms of energy, notably petrol or heating fuel (2012).

"Energy Poverty" is not a term in the German debate.  There is no such thing.  If an individual or a family is poor, they may be unable to pay for rent, telephone, food, or power.  They are poor, and need support.  That is the role of social policy, not of energy policy.  Yet there are a number of people who are hard hit by rising energy prices.  The government helps by sending energy advisers into such households. 

The Economic or Competitive Advantages of the Energiewende for Germany

The energy transition in Germany is "pragmatic", moderately paced, and produces benefits that far outweigh the costs:

• This new industry worth 40 billion Euro per year employs about 400,000 people, which drives up tax revenue and stabilises the social security systems.  The lesson that well-designed policies for energy transformation can help governments with high deficits and debts is sadly often lost in the debate about public finance in the Euro-zone.
• The employment is across skill levels -- from highly specialised technicians to farm hands -- and geographically spread, particularly useful to stop the economic decline of rural areas and the migration to towns and cities. 
• Import substitution reduces the cost of imported fuels and strengthens the balance of trade and payment.  This is not just a short-term fix but implies the development of a broad and deep value chain on renewable energies, smart grids and storage within Germany. 
• Security of supply and grid stability improved due to fuel mix diversification, but Germany still largely depends on foreign imports of fossil fuels.
• Wholesale electricity prices, the prices paid by large industrial power users and utilities that buy electricity to distribute it to their customers, are very low in Germany -- at around 4 Euro cents per kWh -- and projected to remain there for the next few years.  This is attracting inward investment, or the expansion of some electricity-intensive industries, such as aluminium recycling.
• The renewable industry is driving innovation and acts as an automatic stabiliser, as seen in 2008-2009 when the wind industry, for instance, took off on the back of lower steel prices. 
• Once the last nuclear power plant has gone cold at the end of 2022, Germany will no longer be adding to the already high (and largely unfunded) legacy costs of nuclear power, and can address the issue of long-term nuclear waste storage.
• At that point, Germany will also no longer risks the devastation of a nuclear catastrophe, at least from nuclear power plants on its own territory; the consequences of such accidents have the potential to bankrupt a country.
• Germany will still be exposed to the risks emanating from plants in other countries.  (I am advising the German government to explore ways to leave the international agreements that would currently stop Germans that suffer damages from nuclear accidents from suing nuclear plants operators in other countries.  These agreements are in violation of the polluter-pays-principle, and Germany's adherence loses its rationale once it no longer operates any such plants.)

The overall, macro-economic assessment shows that the total cost of electricity supply to end users in Germany, expressed as a percentage of the Gross Domestic Product (GDP), representing the size of the German economy, has not changed much as a consequence of the Energiewende.  In essence, the benefits listed above are being obtained at low net cost to the German economy, and domestic controversies are the result of and about distributive and social consequences of the Energiewende.

Bemerkungen zum 2013 Global Think Tank Ranking aus deutscher Sicht

Anlässlich der erstmaligen Vorstellung des jährlichen Berichts in deutschsprachiger Fassung am 22. Januar 2014 in Berlin

Prof. R. Andreas Kraemer
Direktor, Ecologic Institut – www.ecologic.eu

Man könnte sagen: "Beim jährlichen globalen Think Tank Ranking gibt es immer viel Aufwand und Aufregung, und am Schluss gewinnt die Brookings Institution."  Auf im Jahre 2013 stand dieser amerikanische Think Tank wieder unangefochten an erster Stelle weltweit, und das ist durchaus verdient. 

Das Think Tank Ranking gab es erstmals für das Jahr 2006 und nun zum 7. Mal in Folge.  Jedes Jahr gibt es Verbesserungen in der Methode, neue Kategorien, besser geographische Zuschnitte, und einen wachsenden und immer kompetenteren Expertenpool, der am Ranking mitwirkt.

Das Ranking ist ein "offenes und demokratisches Verfahren"; der Verantwortliche, Prof. Dr. James McGann von der Universität von Pennsylvania, hält nichts von Bewertungen in kleinen Gremien hinter verschlossenen Türen und strebt eine weltweite Beteiligung an.  So gab es Tausende von Think Tanks, Wissenschaftlern, Journalisten, politischen Entscheidern, Direktoren von Think Tanks, Förderern und Sponsoren, die mitgewirkt haben. 

Die dem Ranking zugrundeliegende Datenbank enthält derzeit (Januar 2014) insgesamt 6826 Think Tanks global; alle werden für das Ranking angeschrieben, was mit weiteren Kontakten in der Summe über 9000 Experten ergibt, die zur Teilnahme eingeladen werden. 

Wichtiger als die Zahl von 6826 der zur Beteiligung eingeladenen Think Tanks sind vielleicht die über 1950 Sachgebiets- und Regionalspezialisten in "Expertengremien", die auf S. 13 der deutschsprachigen Fassung des Rankingberichts aufgeschlüsselt werden.  In einer Art "Crowd-Sourcing" kontrollieren sie die Arbeitsschritte, prüfen Plausibilität und identifizieren so Fehler, die sich einschleichen können.  Auch die (etwa 30-40) Forschungspraktikanten im Think Tanks and Civil Societies Program (TTCSP) an der Universität von Pennsylvania sind wichtig; das Ranking hat nur ein kleines Budget und ist auf die Hilfe von zahlreichen Studenten angewiesen.

Das TTCS-Programm der Universität von Pennsylvania hat Aktivitäten in 83 Ländern und begleitet jetzt den Aufbau von regionalen und globalen sowie thematischen Think-Tank-Netzwerken als Schritt zu dauerhaften Partnerschaften.  Die hier geschaffenen weltweiten Verbindungen helfen nicht nur bei der Stärkung und Professionalisierung von Think Tanks sondern auch bei der Datensammlung und Einwerbung von Teilnehmern beim Ranking.

Über die Jahre gab es eine Reihe von Verfeinerung in der Methode, in den technischen, vor allem datentechnischen Grundlagen sowie in den geographischen, thematischen und sonstigen Kategorien.  Im 2013er Ranking namentlich (s. S. 11 der deutschsprachigen Fassung):
•    "Asien" wurde in 3 Regionen unterteilt
•    "Sicherheit und internationale Angelegenheiten" wurde in 2 Kategorien unterteilt
•    8 neue Kategorien wurden eingeführt

Weitere Schwachstellen bestehen und sollen in den nächsten Jahren angegangen werden (s. S. 11 des deutschsprachigen Berichts):
•    Einige Regionen sind unterrepräsentiert (auch weil es dort weniger Think Tanks gibt)
•    Besonders USA aber Nordamerika insgesamt und Europa sind überrepräsentiert
•    Möglicher "Bias" (Verzerrungen, die trotz der breiten Teilnehmerbasis bestehen)
•    Technische Probleme und Umständlichkeit (die mit der Zeit abgebaut werden)

Deutsche Think Tanks im Rankingergebnis 2013
Bezogen auf die Zahl von 194 Think Tanks liegt Deutschland auf dem 5. Platz.  Das ist Ausdruck der politischen Offenheit und Meinungsvielfalt hierzulande.  Herausragend ist die Stellung der politischen Stiftungen, auch aufgrund ihrer internationalen Engagements.  Diese belegen in der entsprechenden Kategorie die Plätze 1-3, 6, 8, und 20; sie sind in vielen Kategorien gut vertreten. 

Erste Plätze werden auch belegt von
•    Max-Planck Institut in der Kategorie "Wissenschaft und Technologie"
•    Transparency International in "Transparenz und gute Regierungsführung"
•    Münchner Sicherheitskonferenz in der Kategorie "Think-Tank-Konferenz"

Zahlreich "im Feld gut vertreten" sind deutsche Think Tanks auch in den Kategorien:
•    Weltweit
•    West-Europa
•    Wirtschaftspolitik
•    Umwelt
•    Think-Tank-Netzwerke
•    Innovative Ideen
•    Einfluss auf Politik

Neben den politischen Stiftungen sind weitere deutsche Think Tanks öfters gerankt:
•    Stiftung Wissenschaft und Politik (SWP)
•    Deutsche Gesellschaft für Auswärtige Politik (DGAP)
•    Deutsches Institut für Entwicklungspolitik (DIE)
•    IfW Institut für Weltwirtschaft, Kiel
•    IfO Institut für Wirtschaftsforschung (auch CESifo)
•    Deutsches Institut für Wirtschaftsforschung (DIW Berlin)
•    Transparency International
•    Ecologic Institut
•    Bertelsmann Stiftung

Bei der Betrachtung des Ranking im Ganzen entsteht der Eindruck, dass diejenigen Think Tanks im Vergleich besser abschneiden, die
•    auch oder vorwiegend in englischer Sprache publizieren, was auch den Einfluss stärkt,
•    ausserhalb des eigenen Landes oder in internationalen Netzwerke präsent sind,
•    kurze Namen haben und dabei auf Sonderzeichen verzichten, und vor allem
•    konsistent eine unverwechselbare englische Namensentsprechung führen ("Branding").

Hier sind deutsche Think Tanks im Schnitt besser als andere in nicht-englisch-sprachigen Ländern, können aber sicher noch mehr tun.  Das Ranking gibt Ansporn dazu.

Does Europe really want to block UK wind farm subsidies?

Here is my response to James Kirkup and Bruno Waterfield
writing in the UK Telegraph on 2 January 2014 at
http://www.telegraph.co.uk/earth/energy/renewableenergy/10548157/Europe-wants-to-block-UK-wind-farm-subsidies.html

No taxpayer money is involved (since 2004 or so) in the policies in Germany and elsewhere granting renewable energy priority access to the grid (and the market) and rewarding the successful operation of renewable power plants through "feed-in tariffs".  The funds come from electricity users, not taxes.  That is a safe option also for the UK.  So far, the European Commission has not objected to this policy instrument in principle.  As on-shore wind, solar, and biomass-to-power become competitive at the wholesale price point, such support is being phased down and will eventually stop.  In fact, just over half of all renewable power in Germany already survives "on the market".

The UK debate is marred by the "strike price" support to new nuclear power plants being planned.  It is a similar sort of mechanism, but granted via a governmental body (an "emanation of the state") to the very mature but still not competitive nuclear industry.  Even if the funds can be raised from electricity bills, UK taxpayers will still guarantee the very large payments to nuclear power plant operators for decades to come.  The EU state-aid assessment will most likely address that, and may find the UK at fault of EU state-aid rules.

There are additional complications with new nuclear, of course.  The "Generic Design Assessment" (GDA) for Hinkley Point C flagged 724(!) concerns that have yet to be addressed and for the most part are not yet reflected in the "strike price".  The regulatory homework in the UK being thus flawed, the environmental impact assessment (EIA) required under EU law may not stand up to scrutiny, and may have to be redone (once the open concerns from the GDA have been settled).  This will most likely add to the requirements to make new nuclear plants less unsafe, and raise the costs.  Then there are the "Lessons from Fukushima", which have not yet been taken into account in the design of the new nuclear plants planned in the UK, even if the Office of Nuclear Regulation says otherwise.  (Just look at the timing of the regulatory process.)

The GDA concerns, the EU EIA findings, and the Fukushima lessons will all add to the cost of nuclear plants, which in spite of subsidies and privileges (such as liability caps and waivers) are not competitive as they are today.  Meanwhile, the cost of renewable energies and their integration into a smart grid will fall further.

Thanks are due to the European Commission for focusing on the virtuous dynamics in renewable energy and the possibility of ending support as well as the dismal economics of nuclear power and the flawed regulatory process for licensing new nuclear plants in the UK.