1. I hereby wholeheartedly, sincerely and unreservedly apologise in the name of all sensible Germans for the propaganda of the German government.

    Only 2098 industrial producers were privileged. They were not totally freed from any feed-in tariff (FIT), but rather had to pay a greatly reduced FIT. About 18 % of the electricity demand was privileged.
    Producing industry made 46.6 % of demand in 2011,
    Trade and Businesses 14.3 %
    Households 25.5 %
    Public Services 8.8 %
    Traffic 3.1 %
    Agriculture 1.7 %

    So it is not like they had to pay nothing and put the whole burden on private households.
    Just to put that one fact straight.

    1. No there’s not just 2098 users privileged, who in addition almost won’t pay the grid connexion costs, which is another burden on private households and small scale business where all companies above 100 MWh already get a significantly reduced contribution (19-Umlage) which this time includes small scale industrial users.

      At the end, consumers between 160 et 20000 MWh are paying 14,97€/MWh against 28,73 for individual users and mom and pop business. Those mid-scale consumers aren’t as privileged as large industry but they’re already quite privileged.

  2. I sincerely wonder how German energy security (mainly in terms of fuel) can be stressed on one hand, then the current situation of transmission between East and West, (sometimes) using parts of neighbouring countries’ grids, can be just casually mentioned?

    1. @Oscar Archer

      The Engergiwende is not known for its intellectually consistent arguments. It is supposed to help reach “climate targets” yet preferentially shuts down ultra low emission nuclear. It is supposed to aim at reducing fuel imports, but prefers imported hard coal and natural gas to uranium. It is supposed to improve energy security, yet aims to depend on tenuous wires bringing weather dependent power from the North Sea and the Baltic.

    1. @KitemanSA

      Until you asked, I had never heard of a “Donation Book.” A quick search didn’t provided me with much insight on the topic. Can you provide a link or a short explanation on how it works?

  3. I love this sentence:

    “The German government claims that market decisions are the most important factor in the course of the Energiewende given the preexisting condition that the government has imposed the nuclear phase out policy and implemented several policies that strongly support sanctioned energy sources like solar and wind.”

  4. Let’s put some numbers on the carbon footprint of the German electric power sector, compared to neighboring France.


    From page 112 of the pdf (page 110 of the document), as of 2011…
    Germany: 477 grams of CO2 per kilowatt-hour of generation
    France: 61 grams of CO2 per kwh

    The 2014 version of this document is out, but for some reason they have stopped reporting the grams CO2/kwh measurement. Regardless, coal consumption in Germany is going up, so the carbon footprint is getting bigger. But still, President Francois Hollande in France wants his country to be more like Germany. Hollande recently sacked the pro-nuclear head of EdF, Henri Proglio.

  5. Some other numbers to consider…
    Germany has around 70 gigawatts (GW) of combined solar and wind power capacity. In 2013, those 70 GW generated 85,132 GWh of electricity.
    Germany also has 12 GW of remaining nuclear capacity in operation. Last year, those 12 GW produced 92,097 GWh.
    So, over the next 8 years, when they plan to retire all of the remaining nuclear plants, they will need to build another 70 to 75 GW of wind and solar capacity just to replace the clean electricity from the nuclear plants. This is why they are failing to achieve their climate goals. They need to build huge amounts of renewables just to replace the nuclear plants, so they still need to burn lignite for baseload power. How much higher will the power bills go with another 70 GW of renewables receiving feed in tariffs?

    Data from here:

    plus wikipedia and world nuclear org.

    1. Plus the fact those 85 GWh are generated randomly and not when they’re needed, or at least able to cover the baseload. This means that at times a significant amount must be exported, and at other times either backup fossil power started, or imports used.

      Denmark which is further along that road than Germany ends up both a very major exporter, exporting about 14% of it’s production (it’s a higher percentage than France, maybe even Canada), but also at other times needing to import almost 10% of it. This work as long as you’re a small country that can rely on neighbors to complements ones production, but doesn’t at a larger scale.

      1. @jmdesp
        Denmark is importing more electricity than they export. Yes Denmark export a lot when the wind is blowing, it just happens that Denmark import even more when the wind is not blowing.

        1. You’re right, I mixed up import and export above, even if the percentage is correct. So that’s the reverse, exporting almost 10% of it’s production, and also importing about 14%.

  6. From: http://en.wikipedia.org/wiki/Energy_transition_in_Germany

    Seems to be a pretty good summary.

    One factor that has inhibited efficient employment of new renewable energy has been the lack of an accompanying investment in power infrastructure to bring the power to market. It is believed 8,300 km of power lines must be built or upgraded.[6] The different German States have varying attitudes to the construction of new power lines. A second factor is the storage capacity needed to create a stable electricity supply from wind and solar energy is far beyond what can be realized in Germany. A third factor is the amount of windmills needed to meet the German electricity consumption can by far not be realized on German territory. [7] Industry has had their rates frozen and so the increased costs of the Energiewende have been passed on to consumers, who have had rising electricity bills. Germans in 2013 had some of the highest electricity costs in Europe.[8] In comparison, their nuclear-reliant neighbour France has some of the cheapest in the EU (#7 out of 27).

    1. Another aspect of Germany’s energy transition involves bulldozing entire towns to mine the lignite underneath.


      In the article, Energy and Economic Minister Sigmar Gabriel is quoted as saying more lignite mines are needed. Lignite is seen as a vital energy source “for the times when the wind doesn’t blow and the sun doesn’t shine”. He also mentions gas reserves, which, as discussed in the podcast, most likely will come from Russia. One of Rod’s smoking guns involves former Chancellor Gerhard Schroeder, who went on to become the chairman of the board of the Nord Stream gas pipeline between Russia and Germany.

  7. From the better-late-than-never dept, the 30 Nov. 2014 New York Times reports Plan Outlines Low-Carbon Future for Germany, from the Fraunhofer Institute for Solar Energy Systems, in Freiberg. It paints a rosey picture:

    “Our estimate is that the changeover will cost about 500 billion euros,” or about $628 billion, (Institute Director Prof. Eicke Weber) said. “However, between now and 2050 we will realize savings of between €600 billion and €1,000 billion. These are savings on the total energy system, including fossil fuels and the distribution system.”

    “To go beyond 80 percent would cost a lot more,” he added. “But the low-hanging fruit is to start with an 80 percent renewable energy system. The faster you add renewable energy to the grid, the faster you reach the crossover point where the savings become greater than the costs. We estimate that Germany could reach that point as soon as 2025.”

    The penultimate statement invites (at least) a few questions:
    1. All else being equal, the unit cost of any renewable energy system must increase once the unreliable penetration exceeds its capacity factor, roughly 30% for onshore wind and 10% for solar. Is the cost increase from the remaining 50% to be absorbed solely on the back of increased efficiency, or are there assumptions about unreliable supply utilization as auto fuel transitions from petrol to wind/solar generated hydrogen and methane?
    (The article also mentions increase in pumped hydro capacity, which is at present on decline. However, storage of any form and/or overbuild is what causes unit cost to escalate with high penetration of renewables.)

    2. While one must welcome any such study, one must also scrutinize its assumptions. For example, this Fraunhofer study concludes 80% German carbon reduction may be realized
    without economic hardship. This may be a matter of opinion, as Germans seem willing to shoulder a bit in the name of green economy than are, for example, most Americans. And a lot rides on both efficiency increase, and fossil costs avoided. By way of apples-to-oranges comparison, NREL’s Renewable Electricity Future 2012 concluded an 80% carbon reduction in the U.S. would come at a unit electricity cost increase of about 50% over bau baseline, assuming moderate efficiency gain resulting in essentially flat demand growth, with unit cost rising more with increased demand.

    That is, unreliables don’t scale really well. In contrast, Fraunhofer models sharply decreased German demand with sharply increased German efficiency. Also, REF 2012 collects residuals on existing U.S. nuclear to the tune of 9 or 10% of total generation out to the 2050 time frame, so in that sense is renewable in name only. There are no doubt other differences that must be accounted for before a direct comparison is made with Fraunhofer.

    But okay, so Germany elects to trade increased unit energy cost for increased efficiency and decreased demand. It all works out in the end, and in fact gives a fairly healthy payback up to about 80% total carbon reduction. So German economy comes out ahead. Yay!


    1. Although a commendable start, 80% reduction isn’t going to be good enough by century’s end. One hopes Fraunhofer plans for that eventuality as well. (In contrast to the United States, which is making no plans at all.)

    2. The German economy comes out ahead only if other competitive economies play the same game by the same rules. And China, at least, is not noted for such sportsmanship. (Neither is Russia.) China intends to keep ramping up energy consumption like there’s no tomorrow, peak its carbon emissions around 2030 (no new coal), and have over 1.5 TWe nuclear by 2100. (The U.S. is currently about 1 TWe total.)

    By which time China’s coal plants should have reached end-of-life and she’ll be running entirely on renewables, hydro, and nukes. Mostly nukes.

    The environmental and climate damage done in the meantime, of course, is TBD.

    1. That New York Times article just convinces me more how difficult it will be for Germany to go to a 80% reduction in CO2 emissions without nuclear. As mentioned in the podcast, this 80% reduction is from 1990 levels, and includes the old East German power supply system, which was very dirty and inefficient.

      But even allowing for a reduction from high levels, it will be very difficult. The NY Times article describes how 150 GW of new solar PV is needed, as well as 120 GW of on-shore wind, 30 GW off-shore wind, 60 GW of combined heat and power (presumably from natural gas), as well as the existing 37 GW of solar PV and 33 GW of existing wind. Adding all of this up is 430 GW of clean, or cleaner than coal, power. It has been difficult just to build the existing 70 GW of solar and wind capacity.

      Look at the solar PV output for today, Dec 01, in Germany.

      The peak was 1.7 GW, on a system with 37 GW of capacity. Must have been a cloudy day. Also, there are not many sunny hours available in Germany in December. But people, businesses and industry still need to use electricity.

    2. I would like to know how Weber can claim with a straight face, “However, between now and 2050 we will realize savings of between €600 billion and €1,000 billion. These are savings on the total energy system, including fossil fuels and the distribution system.”

      If they are realizing savings on the system about equal to the costs then the price should not be going up. Right? Yet, the cost of electricity in Germany has more than doubled and continues to increase.

      Or was he working under the assumption that costs would more than double without the Energiewende? That seems a little far fetched.

      Simple arithmetic and a few widely known facts say that this guy is either a great liar or delusional.

  8. Having made a number of bad investments in coal plants in Germany and elsewhere, many of which aren’t making any money, suffering write-downs, and are leaving a “trail of blood on our balance sheet” (here), EON has decided to join others (such as RWE) and will be refocusing it’s corporate strategy on renewables, distribution networks, and customer solutions and spinning off it’s troubled assets into another company.


    In press conference, Chief Executive Teyssen described it this way (here):

    “Until not too long ago, the structure of the energy business was relatively straightforward and linear. The value chain extended from the drill hole, gas field, and power station to transmission lines, the wholesale market, and end customers. The entire business was understood and managed from the perspective of big production facilities. This is the conventional energy world familiar to all of us. It consists of big assets, integrated systems, bulk trading, and large sales volume. Its technologies are mature and proven.

    “This world still exists and will remain indispensable. In the last few years, however, a new world has grown up alongside it, a world characterized above all by technological innovation and individualized customer expectations. The increasing technological maturity and cost-efficiency and thus the growth of renewables constitute a key driver of this trend. More money is invested in renewables than in any other generation technology. Far from diminishing, this trend will actually increase.

    “At the same time, the costs of some renewables technologies — such as onshore wind farms — have sunk to parity with, or below, those of conventional generation technologies. We expect that other renewables technologies could become economic in the foreseeable future.

    “Renewables aren’t just revolutionizing power generation. Together with other technological innovations, they’re changing the role of customers, who can already use solar panels to produce a portion of their energy. As energy storage devices become more prevalent, customers will be able to make themselves largely independent of the conventional power and gas supply network.

    “The proportion of customers that want to play a more active role in designing their energy supply is growing steadily. Above all, they want clean, sustainable energy that they can use efficiently and in a way that conserves resources.

    WSJ adds: “The split will provide a clear distinction between business portfolios that vary in risk, with each company appealing to different investor groups … the renewables-focused EON SE would have low volatility and could tap growth potential from the transformation of the energy market” (here). In so doing, it joins Vattenfall (here) who is divesting from brown coal, RWE, NRG, and others in responding to shifting prospects, policy reform, and changing market circumstances in Europe and elsewhere. For EON, this is likely consistent with the realization that Germany will be imposing more strict controls on coal plants, dealing with current over-capacities by shutting down plants (here), and additional reforms in renewables, grid expansion and interconnection, fuel supply concerns, and carbon reduction policies.

    With France doing much the same (here) … where is the pitch from nuclear on controllability (load following and peak generation), demand response, efficiency, fuel security, low risk investment, and cost effectiveness in a changing consumer environment focused on vertical integration, individual customer expectations, local storage alternatives (EVs), ownership, conservation of resources, and more. With conventional producers getting out of the business of big assets and bulk trading … is it anywhere to be seen?

    1. @EL

      I’ve never been much of a follower, especially of lemmings that are running headlong over a cliff. You may continue to try, but you have little hope of convincing me that my technical judgements on energy production systems are way off base by quoting pronouncements by business leaders and financial press reports.

      1. @Rod Adams

        The idea that E.ON is a “follower” is a stretch … unless by following you mean focusing on the profitable side of their business. They seem motivated by survival more than anything else: E.ON “has been one of the strongest opponents of the ‘energiewende’ (energy transition) in Germany.”

        If you’re not convinced by business and finance professionals … who will convince you to modernize and revise your technical judgements.

        1. The profits in E.ON’s business are now determined by legislative fiat, not any aspect of cost vs. customer revenue.  When the Energiewende is un-wound due to massive overspending and voter rebellion, E.ON will again be on the wrong side.

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