I happened to catch a spokesman for the German Ministry of Energy (or some such title) talking on the BBC about that nation’s intention to reconvert into a sustainable economy with little or no use of either fossil or nuclear fuels. It would seem that the German word “energiewende” is about to added to weltschmerz and waldsterben as another piece of household Deutsch, as the world’s synonym for major systemic energy transformation. The term “wende”, as used here, is to any normal U-turn what St Paul’s conversion on the road to Damascus would be to choosing a “pizza quattro stagioni” for once instead of a “capricciosa”. “Wende” carries a serious element of paradigm shift with it. To the Teutonic mind, there’s no going back after a “wende”. I just wanted to make that clear, as this is a change that will affect us all deeply.

Germany intends to convert its entire energy system: shutting down all nuclear power plants by 2020 and reducing greenhouse gas emissions by at least 80% by 2050. The role of renewables in the mix will be increased 35% by 2020 and 80% by 2050 and their contribution to total energy consumption should be 60% by 2050. Energy efficiency is central to reach these goals. The German government has set ambitious targets: a 40% reduction of energy demand in transport and an 80% reduction of primary energy consumption in heating by 2050. The Energiewende represents a fundamental transformation of one of the world’s leading industrial economies.

After the wilderness decades of the 70s and 80s, in which alternative energies (notably solar, biogas and wind power) eked out their bare survival on the fringes of the German policy debate and thus on the fringes of the economy, the first major change arrived in 1991 with a landmark, cross-party agreement spearheaded by the Greens and their unlikely bedfellows the conservative CSU. The Electricity Feed-in Law granted private household energy producers access to the grid and an economic interest in production within the margins of their own requirements: they could thus become cost neutral, but not profitable in the capitalist sense. Making pure profit from your own rooftop would come later, with the expanded version of the same law, as the Renewable Energy Act of 2000. Germany is now in the enviable pole position in Europe with regard to renewable energy share and total production in renewables, but the picture is far from rosy. There are three significant hindrances to sustainable development in the land of Goethe.

The first is structural. Germany was reinvented as a new order carbon-nuclear economy in the post-war period. Massive public funding of domestic coal and gas-fired electricity generation plants, profitable gas deals with the Soviets, cheap coal from Poland and the rise of a heavily subsidized nuclear industry have maintained stable and internally competitive energy prices for the last sixty years. This free lunch of the energy giants created a centralized and highly biased energy distribution grid that is now in dire need of revision and reconstruction if it is to reflect the new decentralized geographies of production. There is a lack of cooperation and parity between the new user/producers and the old utilities on the high voltage grid. There are too many zones where production outpaces demand or where demand outstrips production with insufficient cooperation to link them to one another. Diurnal rhythms and weather systems play havoc with solar and wind, while traditional plants that could run stably to take up the slack are being phased out as unprofitable as they are forced by law to spend more time shut down than operational, thus ruining their efficiency. In the meantime, NIMBY attitudes are starting to emerge with regard to new technologies from the very same people who opposed nuclear plants in the 1980s.

The second hindrance is commercial. Competition, whether unconstrained and without effective guidelines or over-constrained and manipulated, is not a good thing in cases where the national interest is at stake. And it is too much of a high-risk strategy to bet on a Betamax versus VHS type of free market shakedown. Such a battle cannot occur without severe collateral damage in a field so critical to a nation’s economic health and social welfare. True, the energy giants had it all their own way for too long and up until the 1980s there was no question of compromising a winning strategy. But Three Mile Island and Chernobyl changed all that. Waldsterben from acid rain changed all that. The rise of the EU and the emergence of a European energy market changed all that. Germany became the first post-nuclear, post fossil nation (at least ideologically) and, as good Europeans, the first nation after the Benelux countries to seriously consider spreading the load of supply and demand across frontiers. This has resulted in fierce and not necessarily healthy (because counter-productive) competition between the threatened and powerful oligarchies of “old energy” and the rising coalition of new energy users, producers and infrastructural manufacturers.

This competition is both national and international, as the big generators form cross-border partnerships in the interests of more efficient use of fossil energy and its promotion as a vital base position strategy for energy stability, while the new energy coalition builds international alliances to compensate their obvious weaknesses in infrastructure, transmission and storage. They are both right, of course. Shutting down efficient and well-functioning plants for purely ideological reasons, particularly at this time of super-low carbon certificate values and very competitive oil and gas prices following the notorious expansion of North American shale-gas production and its knock on effect on the global energy economy, would be tantamount to lunacy. Meanwhile, ignoring the social reality of the new energy ideology and the level of public and commercial support it commands, particularly in research, where Germany is traditionally strong, would be tantamount to political as well as technological suicide. The blood is always on the cutting edge. There has never been a free lunch that lasted longer than four legislative terms. It is time the old school recognized this.

The third hindrance is political, not so much the policies themselves, as the structures they engender. Germany is healthily fragmented. After the Second World War, the allied powers were keen to avoid any possibility of a resurrection of “unified” German might. The new order needed Germany as a European force for good, integrated and engaged, commercially viable and technologically advanced but politically a little bit hamstrung. The resultant federal structure of semi autonomous “Länder” has proved good at maintaining a wide distribution of power and a colourful history of coalition and consensus, but it has proved bad at flexibility and clear direction, whether top down or bottom up. Free market liberals will say that German economic success can be largely attributed to a debating space in which local or regional constraints and imperatives have usually come before national ones, and for the most part they would be right. But Germany now needs a coherent, coordinated and transparent energy plan at the national level, one that will fire the imagination and motivate honest imitation. This is not going to happen without institutional reform, and such reform is likely to raise the ghost of Bismarck. A paper published in the run-up to the last federal elections by the Hertie School of Governance put it like this:

The transition of the whole energy sector in an industrialized country like Germany is a complex issue, which affects many sectors, the interests of companies, citizens and residents, as well as politicians. Good governance of such a complex transition should comprise the following main components:

1. Clear definition of mid-term and long-term goals on a federal and state level, which are well defined and regularly monitored. Because of the dynamics of the process, full flexibility in all areas is always necessary. The overall framework, including fixed long-term goals, should not be changed.

2. Clear allocation of responsibilities to one institution instead of a division of tasks to many different agents with diverse interests. If one institution is responsible for the Energiewende, the transformation process can certainly be managed more efficiently.

3. Transparency: Unbiased and objective information is essential in all changes to such powerful processes. This information should be provided by the government, neutral media and institutes, and be as broad as possible for all different actors and the mass-market.

4. Participation: All relevant agents and actors as well as citizens should be able to participate at all times - not only in concrete energy projects, but should also get the chance to participate actively in relevant processes. Various discussion forums, especially those with citizen involvement, as well as the attempts to clarify jurisdiction and to centralize planning, can serve as important catalysts.

5. Coordination: This complex process encompasses many different actions in different areas. Comprehensive coordination is obligatory. Good governance, which comprises the most important portions of this complex process, can lead to more efficient and effective progress of the Energiewende.

Why is this so important? Well, as fares Germany, so fares Europe. If the Germans falter, or worse, blunder on their way to energy independence and sustainability, they could end up with retired nuclear and fossil-fuel power stations but insufficient alternative power to drive their voracious economy, a grid that is completely unsuited to emerging new actors and rising bills for government and consumer alike. We cannot afford a sick man of Europe as big as Deutschland. Not ever, but certainly not now. Yet even if they put all their eggs in the sustainable basket and make all the infrastructural and institutional changes necessary, they could still end up fishing empties from trash cans to take down to the bottle bank as their vaunted new economy either under-produces (as many fear) or goes tragically south (literally, in terms of cheap solar production) failing to kick start the kind of “e-volution” they’re all hoping for.

Important things to factor in when evaluating the requirements for an entire national energy strategy based on renewables are time-to-market, price volatility and cost/benefit curves (whereby both “cost” and “benefit” need to be construed as widely as possible to include social, environmental and health aspects). There is a plethora of inconclusive data in all these areas. Much of what we have is immature and undeveloped technology, still far away from being robust enough for national, let alone international implementation. The market for energy is currently very unstable, with a wide range of high-risk geopolitical factors to be considered. Simply opting for sustainability at home may not solve this. It could just mean that areas of the world once politically tethered to energy economy constraints might begin to spin out of control. We worry about Saudi wealth … we would find Saudi poverty even more worrying. Fortunately they will always be solar or fossil energy sustainable, but not at the living standard they are used to. Not so for Venezuela or Mexico or any of the “-stans”…

Moreover, myths abound: “electric cars are the solution to greenhouse gas emissions”; “solar generation alone can power the world” etc. Without putting the possible long-term truth of these statements into doubt, in the short term, such thinking may prove environmentally and financially disastrous. Don’t be taken in by high-end Teslas and BMWs, those carbon-fibre honed and Lithium-guzzling monsters of speed. Realistic e-cars are only valid for those with a parking space in front of their door, who only make short journeys and who are ready and able to car share. In general terms, however, e-vehicles are far too heavy, lack autonomy (the great benefit of conventional cars) as well as being rare-metal (tungsten, lithium, iridium, beryllium, colton, gold) and copper consumers par excellence. This alone would make the international implications of massive industrial e-car conversion on already over-exploited and war-torn central African states too scary to be imagined. And e-cars are far from the environmentally friendly ticket they’re being billed as. They merely shift the burden of energy production onto an already over-strapped grid. In addition, ever-stricter emissions standards for urban areas (some German cities are considering going exclusively hybrid and electric by 2020) are manifestly punishing to the poor who cannot afford expensive new e-cars (but whose old bangers will be banished), while equally punishing to an environment that will have to sustain the burden of their entirely unnecessary production and distribution, because sufficient conventional vehicles already exist.

Perhaps I should explain those last phrases. The building of a new car currently accounts for 80% of its lifetime environmental burden. That is the sole fact you truly have to grasp in this debate. It means that the most environmentally friendly thing anyone can do, short of going everywhere by bike (and please, don’t even get me started on public transport!), is to continue to drive an old car, no matter how fuel inefficient. Miranda, my elegant 1963 Alvis, recently refurbished after a small but costly accident, is a paragon of green virtue, despite her thirsty, supercharged 3-litre straight six! Germany already launched a massive “new lamps for old” buy-back in 2010 to boost its flagging economy after the recent, US-inspired, banking crash. Hundreds of thousands of perfectly good cars over five years of age were comprehensively trashed. Resale, even to Poland, was not permitted, as it would mitigate the effect on total sales. After such an environmental catastrophe entirely engineered by government for the unique profit of big business, can Germany really afford another hecatomb of valid machinery, merely for ideological ends?

The other myth I mentioned, that of solar power sustainability, relies on some bright young scientists solving the very real silicon availability, no-loss transmission and storage issues, without which we are very far from a solar economy. In other words, the detractors are quite correct. Solar, in real economic terms, is still (literally) pie in the sky. Current solar technology is woefully inefficient and far too expensive without direct government subvention or tax credits. Moreover, it provides power when we least need it (on sunny days) and lets us down when we need it the most (on cold, rainy days). Yes, it’s a great thing if you have it and if you got it at the right time (with the right contract and the right amount of direct financial or tax support), but as a pure, non-ideological investment, it’s still dodgy. It also marks the dreaded return of high voltage DC into our homes, a potential fire and safety hazard we went to great lengths to ban in the 1930s. Just ask your local fire brigade how happy solar panels make them!

And there are other social effects of the new energy economy that are neither negligible nor positive. Typically it is middle-class householders who benefit from the panels on their roof or the tax loophole investment they have made in a new energy start-up. It is the already comfortably well off who stand to gain the most from thinking green. There is an urgent need to democratize these benefits. The urban underclass must be encouraged to form tenants’ alliances powerful enough to bulk-buy energy or even found their own energy cooperatives, producing power in Spain or Morocco to sell on Euro markets to pay their heating bills in Dresden or Magdeburg. In the brave new world of sustainable growth it would be tragic if three quarters of the population became inherently unsustainable. This is not the best way to drive social and economic change. Sorry to be a Cassandra, but there is no silver bullet here. I do believe, that if any nation can make a success of this transition, it will be Germany. But if they fail, they fail for all of us. And then it’s “Welcome back to the Dark Ages, Ms Merkel”.


© Edwin Drood, November 2013



Illustration: "Abgang" by © David John