German Renewable Energy Revival

The elections in Germany on 24 September last year still haven’t resulted in a government coalition. Now a new document was published on January 12th that summarizes the results of talks between the CDU/CSU and the SPD parties.

Possibly this will lead to continuing the “big coalition” that was in place until the last election. If so, this document may give some clues on what the new government, if there ever is one, wants to do about climate and energy. The document deals with these topics on pages 24 and 25.

On climate, they acknowledge that Germany will not achieve the 2020 goal of reducing CO2 emissions by 40 percent compared to 1990. They are now talking about “closing the gap as far as possible”, that is reduce the amount of failure.

And they also say that the next goal for 2030 should be met “at all costs” (auf jeden Fall). That goal is a reduction of 65% compared to 1990.

To develop policy on these matters, they want to assemble a commission that discusses the necessary steps, including phasing out of coal.

I recall that the 2011 legislation to phase out nuclear started with a similar commission. This time around, people can learn from the experience of phasing out nuclear. The document mentions setting a fixed final date for phasing out coal and starting a fund to help regions affected commercially in a negative way from the phase out.

Another section is on “Energiewende”, the fundamental change in energy politics necessary to achieve the reduction goals.

It mentions a “special auction” (Sonderausschreibung) of 4 GW onshore wind and 4 GW solar distributed over 2019 and 2020, in addition to offshore wind projects.

I think that the transition to an auction model for renewable energy in recent years has been stopping progress, contributing strongly to Germany’s failure to meet the 2020 CO2 target. But there is one nice thing about it.

An auction model removes the decision on how much new capacity is built from the market to the state. That’s bad if the state is slamming the brakes on development, as in recent years. It may have some merit if they start taking the CO2 reduction goals seriously and adjust the auction volumes upwards accordingly.

This new “special auction” idea is not unconditional. The document says that this is subject to the grid being able to absorb the extra electricity.

That leaves the door open for waiting for some power line or other to be built.

I recommend to start some Bitcoin mining industries instead. Bitcoin mining can absorb extra electricity anywhere. The same is of course true of using the energy to make aluminum or quick lime. If you lack the power lines to bring the electricity to industrial consumers, bring the industrial consumers to the renewable energy sites.