Germany’s influence in Europe is unquestionable, but it appears that some of its neighbors may be adversely affected by recent German decisions; and Greece is not the neighbor in question here. France has been reporting heavy levels of air pollution which authorities in the country are blaming on diesel cars there. But the real culprit may in fact be the renewed German penchant for coal power.
Up until a few years ago, Germany, along with France, was at the forefront of nuclear power use. But after the Fukushima disaster in Japan in 2011, the Germans were quick to begin phasing out nuclear power. In some countries, phasing out nuclear power would be easy, but in 2011, Germany obtained 25% of its power from nuclear sources. This nuclear power generated no carbon dioxide emissions of course, and little in the way of other forms of pollution. But after starting the phase out of nuclear power, Germany still needed to find a source of replacement power. Related: Coal Markets May Just Have Been Thrown A Lifeline
Renewables like wind and solar sound great in theory, but the sporadic nature of power generation from those sources makes them imperfect substitutes for the consistency of nuclear. In that sense then, battery solutions like that announced by Tesla last week, or the solutions from General Electric, may eventually provide a solution for Germany. But as of now, the grid battery industry is still too nascent to provide serious help to Germany.
Germany aims to generate 80% of its power from renewable sources by 2050 with nuclear being fully phased out by 2021. But given the costs associated with renewables and the challenge of replacing nuclear power efficiently, it is not clear that Germany will succeed in either of these goals. Related: The Greenest Oil Companies In The World
With renewable energy sources facing generation consistency challenges, that has left the Germans with only a few alternatives for replacing nuclear power: oil, natural gas, and coal. Oil has been so expensive for so long that it never received serious consideration for new power plants. Natural gas on the other hand is cheaper per unit of power generated and it releases about half the level of carbon dioxide that coal does. These characteristics have helped to make natural gas the power plant feedstock of choice in the US especially given the falling per MCF over the last decade.
In Europe though, in part because of concerns about fracking, much of the natural gas comes from Russia. And relying on Russian natural gas as a primary power feedstock can be a dangerous proposition especially given the geopolitical concerns about Russian involvement in Ukraine. Thus, the Germans have increasingly turned to coal as their power generation source of choice, especially US coal. Today coal power plants are responsible for generating nearly half of Germany’s power, and numerous new plants are scheduled to come online in the next few years. Related: What Is Holding The Green Revolution Back?
Overall, the increase in coal is likely to create a significant increase in airborne pollution and potentially stoke tension between Germany and its neighbors. But at the same time, if Germany wants to phase out nuclear power, coal is the only realistic option; a fact which some German politicians are starting to admit.
German increased reliance on coal could throw a lifeline to US coal companies and manufacturers like Joy Global (JOY) and Caterpillar (CAT) that rely on coal miners as significant customers. While Germany is the eighth largest coal producer in the world, even with this production it still imports significant amounts of coal from the US. If the country continues its plan to phase out nuclear power, it is hard to see how it can avoid increasing its coal use dramatically which, in turn, should help to offset the decreasing coal use from the United States.
By Michael McDonald of Oilprice.com
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Elon Musk introduces the Powerwall. Disregard the party atmosphere and all the hoopla and take in the actual ideas:
https://www.youtube.com/watch?v=yKORsrlN-2k
Please mind that Germanys nuklear cut just save the market-price for electricity! for whole europe!
Renewables in Europe are much more expensive than traditional sources, even before condering extra costs/issues associated with required grid development and fossil backup.
As for why they sometimes seem to reduce wholesale market costs, that's because almost all their costs are paid elsewhere, essentially by taxpayers and captive retail customers, through policies like feed in tarriffs and portfolio standards. They do NOT have to recover their costs through the sale of power on the wholesale market (which traditional plants have to do).
Renewable generation is essentially erected for free (as far as the wholesale market is concerned, anyway), and when the wind does blow and the wind does shine, they just dump their power onto the market, causing a glut and, yes, reducing prices. That in turn hurts the financial performance of traditional plants (probably the plan all along). One may choose to support that (renewable power at a *higher* overall cost), but please don't mis-characterize them as being cheaper.
only comparing new RE capacity with written off FF capacity, i.e. apples with oranges, gives a REs are more expensive.
Fact is that new nuclaer and fossil capacity is much more expensive than on-shore wind, which provides the main contribution to German's REs. And NG has alraedy problems to compete with PV. Around 2020 offshore wind will be chaeper than NG.
You can correctly claim that the current market design allows the REs to get a higher price for their generation, however, the claim that REs have higher costs is complete nonsense, sorry.
That's wrong. Total coal usage has been falling slightly for years and the plants are cleaner than ever so whatever it is that's choking Paris, it's not the fault of Germany.
There are only 6 new coal projects in the pipeline and only 2 have confirmed dates so it's likely the others may be cancelled or deferred.
But there are a couple dozen wind projects that are moving forward or have started production.
https://twitter.com/CountCarbon/status/640528931939065856/photo/1
German coal fired power plants have been generating about 300 TWh of energy for the last 30 years:
http://www.iea.org/stats/WebGraphs/GERMANY2.pdf
And total energy production has seen a 100% reduction in the use of coal for the last 30 years:
http://www.iea.org/stats/WebGraphs/GERMANY3.pdf