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Where we should go, but do not go. Looking at Germany, Ethiopia – and South Africa

On 18 November 2016 the Nuclear-Free Future Award (NFAA) was presented in Johannesburg, South Africa. As part of the symposium “Think Nuclear-Free!” Dr. Axel Berg, chair of EUROSOLAR Germany, presented the following speech analyzing chances and obstacles of the energy transition in Germany and the African continent.

The German Energiewende is rooted in the anti-nuclear movement of the 1970s and brings together both conservatives and conservationists — from environmentalists to the church. The shock of the oil crisis and the meltdowns in Chernobyl and Fukushima lead to the decision to close the last of 19 nuclear plants in 2022 and to the search for alternatives — and the invention of feed-in tariffs with full-cost compensation to cover the higher prices for renewables in those days.

Recently there have been some setbacks; from challenges, such as the retail power price discussions and Germany´s coal comeback, to the recent reforms of Germany’s Renewable Energy Act, the Energiewende currently finds itself in a phase of continuing confusion. More needs to be done to achieve greater energy efficiency. Calls for a smarter electricity infrastructure, the need for more flexible and clean backup power, and the transformation of the German energy transition into a European one will drive the discussions in the coming debates.

But 2016 also marked some important Energiewende achievements. Electricity prices for industry continued to fall to 3 Eurocent per kW/h, while the German consumers pay 30 Cent. Germany’s grid is stable – twelve (12!) minutes of power blackout – yearly. The world’s longest superconductor with a length of one kilometer was put into operation, and new high-voltage grids are being planned while the first 5 MW battery-storages have started their work.

The core of Germany´s success story is the Renewable Energy Act, called EEG (Erneuerbare Energien Gesetz), which guarantees full-cost compensation to cover the investments, guaranteed for 20 years; the rates dropped down for newly installed systems each year - to put price pressure on manufacturers. The feed-in tariffs differ in the actual costs of the specific system size and technology type. This act, initiated by Hermann Scheer, came just in time, in 2000. It is the best instrument to start if you have a grid.

The German energy transition is driven by citizens and communities.
Germans want clean energy, and a lot of them want to produce it themselves. The switch to renewables has greatly strengthened small and midsize businesses, and it has empowered local communities and their citizens to generate their own renewable energy. Across Germany, a rural energy revolution is underway. Communities are benefiting from new jobs and increasing tax revenues, which become even more important after the debt crisis in the euro zone.

In the first decade of the 21st century Germany had a development up to 10 GW (10.000 megawatt) newly installed renewable technologies a year. That was great. And proved that even in a highly industrialised country the change to 100% renewables is possible in one generation. In the last 15 years the quota of the renewables in the German grid rose from 6 to nearly 40%. During some sunny and windy summer days we had nearly 100 % renewables in the grid.

Several amendments and changes in law caused the EEG to grow larger and larger. In 2000 the first EEG was a three-page document, understandable for every child. In 2009 it comprised more than 50 pages. It was the grand coalition between conservatives and social democrats, with the Greens no longer in power. A rising number of ruling parliamentarians felt that the policy should somehow be changed to bring renewables „closer to the market“. But there never existed an open market in a group of four utilities who shared this „market“, run by cartel.
The situation is comparable with South Africa. Eskom is the monopolist who runs 98% of the grid and exports power to other sub-Saharan countries.

After some years of very professional disinformation campaigns against renewables in German print and TV-media the grand coalition of conservatives and social democrats took over the government in 2013. 80% of the parliamentarians are members of this grand coalition. So finally the parliament has lost its impact which was highly important for the energy transition.

Unfortunately both big government parties are siding with the big four trusts. And the political fighting line lies between centralised and decentralised systems.

Germany never showed real continuity in its energy politics. But now the current government brakes sharply the German energy transition. 

  • The right to feed-in the renewable current first in the grid the renewable current before the fossil produced current jams the public grid will fall.
  • Instead we switch to a system with tendering which will raise the costs for renewable projects. At the same time Germany has guaranteed capacities, up to 80 GW - for coal plants.
  • And self suppliers have to pay a fee if they are still connected to the grid.

In the meantime we have hundreds of pages of the EEG and comparative regulations. All this happens because the government wants „more market“ pretending to make energy cheaper for the consumers. But the decentralised renewables are the cheapest of all forms of current-production. In reality we realise a last-minute-maneuver to prevent the losses of the big utilities, who are sitting on stranded investments in coal plants. Nobody needs them anymore.

Energy-intensive companies benefit from being largely exempt from the renewables surcharge. Since Chancellor Merkel took office in 2005, the amount of this industry electricity that is exempt has roughly doubled and may reach a new record high next year.

Our government´s reasoning is shortsighted. The whole world is booming and we put on the brakes. The big problems of the transition of heating and cooling and the transition of our fossil fuel powered mobile system are not yet a big government issue. And it will not be made an issue. Not as long as Russia reliably delivers the natural gas and South Africa the coal. Not as long as we sell our Mercedes, BMW and Volkswagen in China.

These developments are bad for Germany in long term. Because we will lose the first mover advantage we worked out in the last 15 years to produce the best renewable technologies.

But they are great for the rest of the world. The point of no return is reached already. In Germany. In Ethiopia. In South Africa. Everywhere.

Yes. German politics is paradox. And even worse: We Germans have the bad habit of discrediting our own country. With its Energiewende, Germany has raised the bar in terms of setting the pace for renewable energy policies. By going renewable, Germany has created more than 350,000 new jobs, built up the world’s leading green technology sector, and has reduced its dependency on fossil fuel imports.

In the meantime 15% of our energy consumption is renewable. That means that 85% are still fossil. More than 90% of housing heating systems run on oil and gas and nearly all cars are still driving ineffective and expensive combustion engines.

It is very unlikely that Germany will reverse its course. The transition away from nuclear power has been long in the making. Nobody in Germany, neither the political parties nor industrial groups favor new nuclear plants. This is a broad agreement in German society.

Of course the big four utilities (E.on, RWE, Vattenfall, EnBW) once fought hard to defend their rested interests by delaying the switch to renewables. E.on and RWE have publicly announced their plans to stop building nuclear plants internationally. EnBW is now owned by the State of Baden-Württemberg, which has a Green governor who is unlikely to instruct his utility to support nuclear. Industrial giant Siemens has also stepped away from nuclear in its global portfolio and now wants to focus on wind power and hydropower. The famous German car producers did not yet begin to start into the modern world of electric cars. Either they will follow the Japanese or decline.

The public strongly supports extending renewables, even in light of rising retail power rates. Germans expect their political leaders to take on the challenge of the energy transition. There are disagreements across the political spectrum about which strategies are the best, but in general all German political parties today support the energy transition because the German public overwhelmingly does so.

The energy transition is affordable for Germany, and it will likely be even more affordable for other countries which have more wind and sun.

Germany has benefited economically from its international leadership role in going renewable – similar to Denmark and other pioneers moving to renewables. Germany has created the world’s largest domestic solar PV market. German commitment and Chinese mass scale production have helped to drive down the costs of renewables worldwide. In Germany, installed system prices for solar PV plummeted by 66% from 2006 to 2012. It will be much cheaper for other countries to invest in renewables now that the costs are lower.
On top of that, many countries have much better solar resources than Germany; some of them with the capability of producing twice as much power from the same solar panel, because of more sunshine. The sun in Ethiopia or South Africa is so intense that all creatures seek shadow. In Germany we produce PV-current by 7 €Cent/ kWh, in Mexico and in Dubai less than 3 $Cent/ kWh. The latest 86 MW PV-solarpark in South Africa, put into operation in November 2016 produces current for four Cents per kilowatt-hour and is even cheaper than South-African coal conversion to electricity.

China drives the worldwide progression with the cheapest PV worldwide. The Chinese also install 2 windmills - per hour, while we are discussing pros and cons.

All over Europe, many more and different energy transitions are already happening. Energy has become a core issue for the European Union. However, the EU does not have an exclusive competence in this field. All vice-presidents and commissioners for the energy sector come from the old industry. Emission trading is the central instrument although it is in reality an instrument that helps coal. So the old industry-politics for the big industrial players still prevail. This is not very helpful for the consumers and the small businesses inside EU.

It cannot surprise that the resistance against the energy transition grows with the success of the decentralised renewables. The big utilities tend to keep their comfortable monopolies. They earn their profits by selling kilowatt-hours or gallons of gas but not by rescuing the climate or democratising the energy production. The more progress the renewables accelerate the bigger is the resistance.

An energy transition is possible in developing, underdeveloped and overdeveloped countries. While the challenges vary in all countries, five key requirements can nevertheless be generalized:

  1. renewable energies need advantageous and reliable political frameworks,
  2. subsidies for fossil fuels have to be reduced,
  3. private sector involvement is just as indispensable as
  4. social acceptance in the introduction of renewable energies, and finally
  5. social innovation and willingness to change are essential.

Renewable energies are competitive with building a coal-plant and three times cheaper than a nuclear plant. Besides no fuel costs, no CO2-emissions, no radioactive waste, no risk of ultimate MCA (maximum credible accident) without insurance, no A-bomb. On the other hand thousands of new jobs and value creating - at home and not in the Near East or in Russia. The energy transition in Ethiopia or South Africa is thus no longer about ideology but about economic forces.

As consultancy firm KPMG puts it in the Sub-Saharan Africa Power Outlook 2016, solar power is "the most widely available source of renewable energy in Africa", and could "bring energy to virtually any location in Africa without the need for expensive large-scale grid level infrastructural developments." Allow me to note that Phys.org, which is a leading science service in the web, writes that kerosene costs per kilowatt hour are 53 times higher and candles 105 times higher than photovoltaic.

Finally, I am optimistic. Globally we are on a good way. In the meantime we have the proof that a 100% renewable world is technically and financially feasible. The remaining political obstacles we will conquer and overcome. Truth comes with time.