Germany’s Renewables ‘Transition’ Means World’s Highest Power Prices & Power Rationing

Germany’s wind and solar transition aka the “Energiewende” is a monstrous debacle: power prices have rocketed out-of-control and wintertime power rationing is the new normal, thanks to the combination of solar panels plastered in ice, frozen wind turbines and dead calm frigid weather.

Wind and solar obsessed Germans are now paying record prices for electricity. German households suffer the highest prices in Europe. And, over the last 20 years, the prices paid by German industry have almost tripled.

Faced with the choice between going broke or going elsewhere, Germany’s world-renowned high-tech businesses are opting for the latter course.  Despite all that ‘free’ energy Germans pay some of the highest electricity prices in the world at 38c/KWh. Whereas Singaporeans use natural gas and pay 18c/KWh. Needless to say, it’s Singapore that’s becoming the landing pad for German high-tech businesses hoping to survive.

In one of those, ‘who could have possibly seen this coming’ moments, Germany’s Federal Audit Office has recently produced a report detailing the seemingly incongruous fact that Germany not only suffers Europe’s highest retail electricity prices but – thanks to the chaotic intermittency of wind and solar – its power grid is so unstable that the country faces an almost constant risk of grid-wide blackouts. Who would have thought, hey?

Germany’s energy drive criticised over expense, risks
Markus Wacket
30 March 2021

FRANKFURT, March 30 (Reuters) – Germany’s energy transition has proved too costly and underestimated the risks to supply, a federal audit office report seen by Reuters has found.

Reforms are needed to state taxes and fees to fix a system that has left Germany with Europe’s highest retail electricity prices and at risk of grid blackouts, the as-yet unpublished report said.

Chancellor Angela Merkel’s decision to abandon nuclear power by 2022 following Japan’s Fukushima nuclear disaster in 2011 has forced the sector to radically restructure.

The audit office’s report is a warning about the state of that transition and comes as Germans prepare to go to the polls in September.

Economy minister Peter Altmaier likes to underscore Germany’s role in moving to green energy under his stewardship.

“There is a risk of losing Germany’s competitiveness and acceptance of the energy transition,” the report said.

Germany’s energy-intensive industries, including the likes of steelmaker Thyssenkrupp and chemicals firm BASF, enjoy partial exemptions from some of the costs of supporting the rollout of wind and solar power.

However, more than 50% of householders’ power bills are made up of taxes and fees, most of which support the transition away from coal, gas and nuclear power.

This makes them 43% more expensive than the average of those across the 27-nation European Union.

Shortage Risk

The audit office also warned of a looming energy supply shortfall as utilities prepare to turn off the last of their nuclear reactors and the government spurs a pullout from coal.

There is likely be a shortfall of 4.5 gigawatts (GW), equivalent to 10 large coal-to-power generation plants, on the power grid between 2022 and 2025, the audit office report said.

The report said the economy ministry’s approach has been “too optimistic and (its assumptions) partly implausible” and had tip-toed around addressing the worst-case scenarios, a view echoed by grid operators.

The government strategy calls for improving cross-border flows to spread localised and temporary supply risks, but its neighbours are doing the same.

Network investment is estimated to reach 85 billion euros ($99.77 billion) by 2030 refinanced via grid fees paid by the public.

The government strategy calls for improving cross-border flows to spread localised and temporary supply risks, but its neighbours are doing the same.

By certified international standards, Germany’s current network disruptions are minimal.

Network investment is estimated to reach 85 billion euros ($99.77 billion) by 2030 refinanced via grid fees paid by the public.

A spokeswoman said the economy ministry had contributed to the audit office report and was studying the final version.

“Explosive” German Government Audit Report: ‘Energiewende’ Has Become “A Danger For All Of Germany”
No Tricks Zone
Pierre Gosselin
31 March 2021

A new German government audit report warns that the Energiewende is exploding costwise, and that there is a real danger of electricity shortfalls…”a danger for all of Germany”

Daniel Wetzel at German national daily Die Welt reports on the latest German Federal Court of Auditors’ warning: “If things continue like this, Germany as a business location is in danger. The costs are out of control – and there is a growing threat of an electricity shortfall.”

The “Energiewende” (transition to green energies) has seen Germany recklessly rush into wildly fluctuating wind and solar energy without properly planning the grave impacts they would have on the power supply grid and prices.

So explosive is the German Government Audit report that Die Welt and the government auditors see the Energiewende as a “danger for all of Germany”.

The German auditors had already voiced harsh criticism three years earlier in another special report, whose main focus had been on the high cost of the Energiewende. The latest report now also includes “an explosive analysis” on power supply instability and the high probability of power shortfalls.

“Since our last review in 2018, too little has been done to successfully shape the energy transition,” said the President of the Federal Court of Audit, Kay Scheller,

Dismissing the “real dangers” 
The report finds that not only have the costs spiraled out of control but that the German federal government “does not have a sufficient view of the emerging, real dangers to the security of supply” and that “ever higher electricity prices” are to be feared in the current system.

German electricity prices are among the highest in the world, and there is still no end in sight for the cost spiral. One study found that another whopping 525 billion euros will be needed by 2025 to upgrade the power grid, according to Die Welt.

Germany endangered, in jeopardy
The development of green energies in Germany has gotten so bad that the Federal Audit Office sees the risk the Energiewende could “endanger Germany as a business location and overburden the financial sustainability of electricity-consuming companies and private households,”

“This can then ultimately jeopardize the social acceptance of the energy transition,” warned Scheller.

Government making too many rosy assumptions
Die Welt characterizes the Government Audit report as “explosive” and a long-overdue wake-up call. The auditors accuse the federal government of not having properly taken into account the consequences of the coal phase-out, making assumptions that seem “unrealistic or are outdated by current political and economic developments” and making overly optimistic assumptions on the future available wind and sun.

Underestimating the need for reserve power plants
The auditors also doubt that the need for reserve power plants was properly determined and that should the government continue its current course with the Energiewende, costs will not only explode, but the risks of grid instability will rise. Already companies are envisioning voluntary temporary shutdowns in the event of power shortages.

Overall, the Federal Court of Audit finds that essential assumptions made by the government concerning the security of supply are “unrealistic or outdated.”
No Tricks Zone

2 thoughts on “Germany’s Renewables ‘Transition’ Means World’s Highest Power Prices & Power Rationing

  1. Anyone got a nut for that nut cracker?
    anyhow … the UK is sitting on so much hydrocarbon and fossilised nuclear power stations, what a dis-service to our Taxpayers from decades back when they invested in OUR future

  2. Just like Germany, America pursues expensive electricity while much of the world lives in energy poverty. Energy poverty is among the most crippling but least talked-about crises of the 21st century. We should not take energy for granted…
    Summary: The wealthier countries like America, Germany, and Australia, with some of the highest costs for electricity and fuels in the world, continue with increasing regressive expenses that takes up a lot bigger chunk of the budget of a lower middle-class family than it does an upper middle-class one.

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