Germany’s Lessons in Windpower

by Stephen Mraz
Mar 08, 2017

About 15 years ago, Germany embarked on an ambitious plan to re-engineer how it got its electricity. Its goals were noble, but that alone hardly guarantees success. Let’s take a look at those goals and see how they compare to the results so far.

One of the main goals was to reduce reliance on fossil fuels and cut carbon dioxide emissions. Germany also wanted to boost its portfolio of renewable energy. As a coal-rich country, these were major challenges. So it forced utilities to buy electricity from renewable sources (wind and solar) at above-market rates and regardless of whether the electricity was needed. This subsidy could last through 2020. It’s been a boon for solar plants and wind turbine operators. In 2009, for example, utilities paid eight times the market price for electricity if it came from a solar panel. It was also a good deal for Chinese plants making solar panels.

But Germany does generate nearly 15% of its power from wind and solar. But as a result, German consumers pay three times what U.S. consumers do for electricity. And over 800,000 Germans (1% of the population) have had their power cut off for being unable (or unwilling) to pay the power bill. Energy-intensive industries like steel and car manufacturing account for 25% of Germany’s economy, and many of those businesses are looking at the lower energy prices in the U.S. and thinking about moving production here for the cheap electricity.

Germany generates nearly 15% of its power from wind and solar. 


The German government also believes, and rightly so, that it is imperative they upgrade the electrical grid to handle the influx of small, intermittent producers like wind and solar, a project that will cost at least $33 billion. With the grid, supply has to meet demand. Too much electricity damages the grid; too little causes brownouts.

Germany suffered a double whammy when a Japanese reactor was lost to a tsunami. It panicked the Germans into deciding to shutter its nuclear plants, a source of about 18% of German electricity. But the power grid still needed reliable sources of power to meet ever-changing demands. Wind and solar cannot be counted on, sometimes only turning out 10% or less of their rated plant capacities. So Germany replaced the clean (compared to CO2) power plants with coal-burning plants. And once all the nuclear plants are closed, around 2022, (according to projections), the country will need to back up each gigawatt of wind or solar power with a gigawatt of coal or gas power.

The upshot is that CO2 emissions have climbed, despite the higher percentage of power coming from solar and wind. The cost of electricity has also shot up as subsidies to solar and wind plant operators are still in effect, although the German government is trying to roll them back.

It seems no matter how well-meaning a project is, the details matter. And even “free electricity” from solar panels and wind turbines has definite costs. Hopefully the lessons from Germany’s head-first dive into renewable energy will be taken to heart in the U.S. and other countries— including Germany itself.

Discuss this Blog Entry 11

on Mar 9, 2017

Another bad result out of well-intentioned plans to go green (The road to hell is paved with good intentions). When those good intentions are backed by poorly thought-out and executed laws we all suffer. They now have three times the energy costs, yet their CO2 emissions have climbed.

on Mar 9, 2017

Great article, except the fourth paragraph that begins, "The German government also believes..." This is a categorical error which leads to the thinking that caused this problem to begin with. Governments don't believe, specific individuals within governments do, and never do they all agree. If it is economically feasible (i.e. there is sufficient demand and sufficient capital investment) for private power producers to upgrade the grid, they will do so. Government edicts mandating that which is not economically feasible is what causes these kinds of problems to begin with. The great Austrian economists and social philosophers Ludwig von Mises and F.A. Hayek explained these concepts better than anyone ever has nearly a century ago.

on Mar 9, 2017

"Hopefully the lessons from Germany’s head-first dive into renewable energy will be taken to heart in the U.S. and other countries— including Germany itself." well... Canada and specifically Ontario learned nothing and possibly dove in at the same time or even before Germany did with equally as dismal results. Residential electrical bills have more than doubled in the last few years. The provincial premiere (leader) has admitted the provincial Liberals (been in power for 14 years) made a mistake with their 'green energy plan'. To top it off they've imposed a carbon tax in January 2017.

on Mar 11, 2017

Ontario's electricty prices are high, but not by European standards. And we rely heavily on nuclear & hydro. Variable wind & solar are backed up by gas, AND NO COAL,resulting in a grid with an amazingly lo CO2 profile (<30gm/kwh) for a large industrial society. See below for real time statistics

on Mar 9, 2017

These poorly thought out political plans are ruining countries Like Canada, because we are so gullible as a population. and teh Government officials are all about me me me instead of listening to the people who know. If you want a better power source then look into Liquid Salt Thorium Reactors! just 5000 tons of thorium will power the entire planet for a year. Look at You tube Thorium 2916 remix and watch it!!!

on Mar 9, 2017

We should have a hiatus in the advance of other well meaning schemes, such as CO2 capture through chemistry.. These appear to offer at best only incremental reductions of CO2 production per energy unit. All depend on processing huge quantities of exhaust consisting of mostly nitrogen to get some fraction of the CO2. The CO2 then has to be transported somewhere for deposit.
About all this is likely to accomplish is to increase the price of energy from coal.

on Mar 9, 2017

Literally everything in this opinion piece is wrong ... the most important example, wholesale electricity prices are SIGNIFICANTLY cheaper in Germany:

German wholesale $36.69/MWh

US wholesale $54/MWh

on Mar 9, 2017

Or how about this March 6, 2017 headline:

"EUROPE POWER-Spot prices slip on increased renewables output"

on Mar 9, 2017

The table by Ovo Energy showing 2011 worldwide average electricity prices (in US cents per kwh) has the US at 12 cents/kwh and Germany at 36 cents/kwh. Most other sources I have examined in a brief Google session report similar disparities.

Promoters of wind and solar power are hard at work justifying their agendas. The trick used is to tout lower prices to industry, without mentioning the much higher prices charged to domestic consumers, raising the average cost to the correct and fair level.

I would suggest.a little more research before believing in cheaper German electricity prices.

on Mar 15, 2017

Unfortunately, wholesale and retail power pricing are two different animals, strongly so in Germany, as is also true in many parts of the US. Wholesale pricing can and does vary significantly, due to many factors which may be long and short term.
For a good assessment of current retail and wholesale costs in Germany visit:
What German households pay for power @ CleanEnergyWire Factsheet Feb 16, 2017. "German household power prices have reached a record high in early 2017 while wholesale prices are sinking."
By government action, German households pay two to three times what most US households pay. Partly by government action, I also pay per KWH two to three times what I can contract my electricity generation ("wholesale") rate to be. Excess available current production capacity, can rapidly decrease wholesale prices in the short term. That does not necessarily imply that those prices are sustainable in the long term. Sustained low wholesale prices could even result in older, relatively expensive, solar and wind installations being shut down, if and when the government subsidies are reduced or eliminated.

on Mar 9, 2017

"It panicked the Germans into deciding to shutter its nuclear plants, a source of about 18% of German electricity...". I would see it as a genius way to get (temporarily) off the hooks of Nuclear Energy Lobbyists. How can mankind utilize nuclear energy ...hoping that someone someday will find a solution for the waste. Sun and wind is almost free of just need a few gigafabs to buffer the energy.

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