A common sight in Germany: wind turbines in fields of rapeseed. Oil from the plant is made into biodiesel fuel to power cars, produce electricity and heat buildings. Credit: Osha Gray Davidson, InsideClimate News.
Zingst, Germany—"What an eyesore, huh?" the man standing next to me on the beach said, nodding in the direction of a little girl flying a kite. The man, in his mid-40s, seemed to enjoy my confusion. He waited a beat before pointing beyond the girl, far out into the Baltic Sea. "There," he said, smiling to make sure I understood his sarcasm. "The 'ugly' wind farm."
Staring hard, it was barely possible to make out the turbines on the horizon. Ten miles from shore, the Baltic 1 Wind Farm seemed as small and insubstantial as the scruffy grass along the coast. But, in fact, each of the nearly two dozen turbines is as tall as a 27-story building and has fiberglass epoxy blades nearly 150 feet long. Work has already begun on wind farms with even larger turbines that will generate twice the power of those at Baltic 1, enough to supply 250,000 households with electricity.
Wind turbines produce 10 times more electricity in Germany today than they did in 1999. What's even more remarkable is that this expansion is modest compared to the growth of solar power. In 1999, Germany had an installed solar capacity of 32 megawatts. In 2012, that figure was 30,000 megawatts—a nearly 1,000-fold increase in a nation that gets roughly as much sunlight as Alaska. On a sunny day that's as much electricity as 13 nuclear power plants would produce.
This is Chapter 2 of a six-part series on Germany's remarkable clean break with coal, oil and nuclear energy. Click to read Chapter 1, Chapter 3, Chapter 4, Chapter 5 and Chapter 6. Or read it all now as a Kindle Single ebook on Amazon for 99 cents.
How did wind and solar power take off so fast and so dramatically in one of the world's largest industrialized economies? How did renewable energies of all kinds come to account for more than 25 percent of the power fed into Germany's grid—compared to just 6 percent in the United States?
The answer is as simple as that old cliché about real estate—the one about how everything depends on location, location, location. In the case of Germany's astonishing energy transformation, it's all about policy, policy, policy. Specifically, it's the Renewable Energy Act of 2000, known in Germany as the EEG.
Rainer Baake, one of the EEG's authors, sums up the task that members of the German parliament faced when designing the policy: "We had to transform the old system completely."
The EEG's goal was to replace coal- and nuclear-generated electricity with power from clean, renewable sources of energy: wind, biomass, solar, geothermal and small hydropower facilities. The target set by the law was one of the most ambitious in the world: By 2050, Germany would rely on renewable energy sources for 80 percent of its electricity. Opponents scorned the plan as "green delusions."
The
law's supporters had several reasons for wanting to phase out coal and nuclear
power. Burning coal adds tremendous amounts of carbon dioxide to the
atmosphere, and nearly all Germans recognize climate change as a serious
threat. Also, the country is running out of coal and Germans don't want to be
dependent on foreign imports—the desire for energy independence is felt even
more acutely in Germany than it is in the United States.
Gradually phasing out nuclear reactors made sense, too. Germans
had been ambivalent about nuclear energy for decades, especially after the 1986
meltdown of a Soviet reactor in Chernobyl, Ukraine, sent radioactive clouds
drifting across much of Europe. In addition to fears for their own safety, many
argue that it is unethical to burden future generations with the radioactive
waste that nuclear power produces.
There was a more immediate social goal behind the EEG as well:
the democratization and decentralization of energy production.
"The solution to our energy problems, from nuclear to
climate change, can't be a centralized one," Eva Stegen explained to me as
she piloted us through the cloud-banked mountains of the Black Forest in her
three-wheeled electric car. As communications director for EWS, Germany's first
clean energy cooperative, Stegen had no doubt explained all of this many times,
but she is so enthusiastic about the Energiewende that she answered my most basic
questions as if she were hearing them for the first time.
"Einstein said that the way that leads into a catastrophe
cannot be the way that leads out," she said, rounding a corner in the
little, neon green car. "Centralized power is the problem. So we needed to
find a new way. And that is what the EEG gave us."
Centralized power generation is such an entrenched part of the
U.S. electrical system that most Americans just assume that the only way to get
power is from a few large generating plants, usually owned by corporate
utilities operating as monopolies.
Not in Germany. Decentralizing electricity was at the core of
the Energiewende,Rainer Baake told me. If
utilities had remained in control of electrical generation, renewable power
would still be a novelty.
"Our big utilities completely ignored renewables," he
explained. "In the beginning, the Energiewende was driven almost entirely by
individuals. Over half of our renewable power is still produced by small
operations."
Baake, who had been in the German Parliament, is no longer
involved in party politics. Today he uses his political experience and his
formal training as an economist to direct Agora Energiewende,
a non-partisan organization that works with energy producers, consumers and
large utilities to smooth Germany's new energy path.
The group is so new that when I talked with him in April 2012 he
didn't have an office yet. We met in a borrowed break room in an old Berlin
office building in what was once East Germany.
Germany's "Big Four" power companies opposed the new
law, he explained. They declared that smaller producers were too unreliable and
intermittent to power the grid efficiently. They insisted that an
industrialized nation required what the old energy system delivered: a few
massive power plants churning out electricity 24 hours a day.
"They said it would be technically unfeasible to get more
than 4 percent of Germany's electricity from renewables," Baake recalled.
He smiled. "Well, we just reached 20 percent." Six months later, that
figure is over 25 percent.
Decentralization is one of keys to the Energiewende's
success. It rewarded people who installed solar panels on their roofs, or
invested in cooperatives that bought wind turbines, by paying them for the
energy they produced.
As a member of the Green Party, the environment was one of
Baake's chief concerns. Renewable energies are nearly carbon-free, and like
most Germans he believes humans have a moral obligation to reverse climate
change.
But the real key to getting the German public to embrace the Energiewende was based less on what was in people's
hearts and more on what was in their wallets. This was accomplished by giving
every German the legal right to generate power and sell it to the grid, through
a provision known as the Feed-in Tariff, or FiT.
The FiT
helped decentralize power generation by setting a guaranteed premium price paid
to anyone—individual homeowners, groups of neighbors or large companies—who
produces energy for the grid using renewable sources. Farmers were among the
first to take advantage of this new right. Because wind turbines leave
relatively small footprints on large fields, they gained a lucrative new source
of income while maintaining the old one.
The government sets the amount of the renewable bonus, but it
doesn't fund it. Ratepayers do, as part of a monthly surcharge that shows up on
their utility bills. The average German household pays around $108 a month for
electricity, with the renewable energy surcharge accounting for $11.50 of that
amount. (By comparison, an equivalent U.S. household pays $110 per month for
electricity.)
The FiT works better than direct government subsidies or tax
credits, supporters say. Subsidies can soar or plunge after each election, so
they often fail to provide the stability that businesses need. But the FiT
largely protects investments in renewable energy from politics by giving
producers a 20-year guarantee on the amount they'll receive for the electricity
they generate. The size of this renewable energy bonus shrinks every year,
adding incentive to get solar panels and other renewable power plants up and
running as soon as possible.
According to Hans-Josef Fell, the chief architect of the 2000
renewable energy act, one concern in setting up the EEG was to make sure it
didn't give foreign manufacturers an economic advantage over Germany's
all-important export sector, which uses large amounts of electricity. That's
why the EEG exempted "electricity intensive" businesses from paying
the renewable energy surcharge.
The arrangement seemed to be working well until this year, when
the number of companies slated to receive the exemption swelled from 813 to
well over 2,000. The exempted companies consume nearly 20 percent of all
electricity generated in Germany. In part to cover the cost of the additional
exemptions, the government recently announced the surcharge for 2013 would be
raised, adding an average of $5 per month to each household's bill. The result,
as Deutsche Bank recently pointed out, is that average Germans "will
effectively subsidize German industry in 2013 to the tune of at least $2.5
billion via their electricity bills."
Even without the hike in rates, however, the cost of electricity
from all sources has been steadily rising in Germany, as it has the U.S. and
most other countries. One-third of the increase over the last decade is
attributable to the renewable energy surcharge, but two-thirds is caused by
completely unrelated factors. In fact, renewable energy has driven down the
wholesale price of electricity in Germany, allowing the companies that are
exempt from sharing the cost of theEnergiewende to pay 15 percent less for electricity
in 2012 than in the previous year.
There is a broad consensus in Germany that paying somewhat
higher electric bills is a fair exchange for moving to a clean energy future,
said Ursula Sladek, who founded the Schönau Power Supply, Germany's first green
energy co-op. Her evidence is compelling: the co-op began selling renewable
power to a handful of neighbors in her Black Forest village in 1998. Today it
serves 130,000 households and small businesses throughout Germany.
Unlike in the United States, where most people get their
electricity from a single utility, Germans are free to choose from more than
800 electric companies. The success of her co-op shows that Germans are willing
to pay more for renewable power, Sladek once told a German reporter, adding,
"People aren't as dumb as politicians and energy providers think."
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