Erstellt am: 29.07.2005 Autor: Edward Roby Status: Bisher nicht definiert
Who’ll stop the winds?
Few things have stirred the languid breezes of Germany’s unraveling consensus politics quite so much recently as the extraordinary proliferation of windmills. The factions contesting the approaching national election have become so wary of this disputed aspect of energy policy that each seems to have more than one position on it.
In the challenger’s corner, some Christian Democrats initially sharpened the energy issue by threatening to cap the rising energy taxes along with the imbedded electricity subsidies that have been driving the boom in wind and solar power. But their allied Free Democrats, who had long advocated a rollback of energy levies, have drafted a campaign platform that retracts this demand.
In the incumbent’s camp, environmental Greens praised themselves and the ubiquitous power windmills for making Germany a shining model of sustainable energy policy. Prominent Social Democrats heaped faint praise on their junior partner’s environmental achievements but took a safe distance from the underlying consumer issue of what all this may cost. And the defensive stance of both parties conspicuously muted any hint of another hike in disputed “ecological” energy tax.
So, who’ll stop the winds? The broader economic question has been framed diplomatically in the power-generating sector and among energy-intensive production industries, which detect a creeping existential threat in the steady growth of energy levies and power charges designed to foster alternative energy. Long steeped in the lore of environmentalism, the average German consumer has reacted with ambivalence to this intermittent energy debate.
But there may be a limit to public indifference, if the prevailing policy leads to still higher household electric bills and further dampens domestic demand, already the Achilles’ heel of Germany’s struggling, export-driven economy. The windmill phenomenon has emerged as the most visible and vulnerable aspect of an expensive energy policy which is suddenly being put to the test by soaring oil prices and the impact of energy levies.
There are now close to 17,000 power-generating windmills studding the German countryside from the Baltic Sea to the Alps. That represents installed capacity of around 17,000 megawatts – enough to supply about 6% of the country’s electricity consumption – but only if the wind is blowing. One-third of the world’s power windmills now churns in Germany,
These windmills are more than a new source of electricity. They are the heavily subsidized vanguard of a new equipment manufacturing industry that delivers clean, renewable energy for electricity customers – at an opaque but lofty price. The windmill campaign was initially promoted by government as an ecological breakthrough to squeaky-clean, sustainable energy. Yet the spreading forests of towering windmill masts, their long shadows and the low-frequency noise of the scything rotor blades are sparking environmental protests in many a rural area.
The unprecedented German windmill binge was energized by the Social Democrat-Greens government’s long-range objective of phasing out atomic power plants and curtailing the burning of fossil fuels, especially coal and lignite. Atoms, coal and lignite still deliver more than three-quarters of Germany’s electric power, but government wants half of all power to come from renewable sources by 2050. And a Deutsche Energie-Agentur (Dena) study published in May said 14% of electricity could come from windmills by 2015 at an additional cost that might fall between €1.6 billion and €2.3 billion.
Since wind and solar power are far more expensive than the conventional variety, a law called EEG was enacted to force power grid operators to buy it preferentially at the elevated rates required to make it „competitive.“ The embedded subsidy, which then grows with each new windmill, is shouldered equally by all commercial and retail electric rate payers, although some heavy industrial users have won an exemption.
Since regionally monopolized German electricity isn’t exactly a bargain to start with, the harnessing of power rates to finance costly sustainable energy schemes casts an advancing shadow over the competitiveness of the country’s vital manufacturing base. „Sustainability must not be defined only ecologically. ‚Economical‘ also belongs in this definition,“ said Werner Brinker, president of electrical engineering industry lobby VDEW. The average power bill already consists of 40% tax for households and 22% for industry, and the new subsidies are also lifting the cost, Brinker pointed out in an April speech.
The renewable energy program would add €2.4 billion to electric bills this year alone, VDEW has estimated. Fielding questions from opposition liberal parliamentarians, the government conceded that renewable energy producers were paid €10.6 billion in the period April 1, 2000 through the end of 2004 for both their power and the unquantifiable price subsidy component to make it competitive. This official figure omits further hundreds of millions in assorted direct public grants and accelerated depreciation for windmill investors.
Although the modern dictates of laissez-faire, market economics and globalization are frequently cited as clinching arguments for other government initiatives lumped under slogan of “urgently needed reforms,” this program advances under the much older banner of European statism. Indeed, proponents of wind and solar subsidies readily point out that government intervention on a much larger scale had established an atomic power industry and sustained domestic coal mines. High time that government also does something for the environment, they reason. „Only continuity in the terms of energy policy can assure investment and a stable domestic market,“ said Peter Ahmels, president of the German Wind Energy Association, BWE.
An input-output energy balance, such as the negative one* that can be shown for programs to make subsidized ethanol fuel from maize crops, seems much too complex to prepare for wind energy, although unflattering tallies have occasionally been made for photovoltaics. Whatever the case, it’s an ill wind that blows no man good. A key enthusiast of power windmills has been the vast mechanical engineering industry, which now exports most of its output. Apart from the ecological cover story for high-priced electricity, government’s supply-side industrial policy of subsidizing renewable energy takes on concrete business aspects here.
Tossing in about €1 billion a year for windmill installation and services, wind power generation has become a €4 billion-a-year industry in Germany, up from €3.8 billion in 2003, said Johannes Schiel, the expert for power systems at machinery industry association VDMA. Sales of wind generators and related hardware alone came to €3.15 billion in 2004, VDMA and BWE announced. This represented more than half the world’s power windmill production, they said. And they also said that this segment of the machinery industry last year exported “around 59%” of its output.
GE Wind Energy, which produces in Lower Saxony, is the biggest of six generator manufacturers represented by VDMA, said Schiel. Another 35 member companies supply various equipment. The world‘s burgeoning windmill export market is led by Danish company Westas, followed by Gamesa of Spain and Enercon of Germany. The GE unit, heir to the German company Tacke, ranked fourth, ahead of such small producers as Germany’s Repower and Nordex.
The global dimensions of windmill engineering can be glimpsed in the export statistics of Germany, which takes credit for pioneering this booming business. Big German customers now include the United States, Canada, China, India, France, England and Italy. Spain, the largest foreign customer for German windmills, has already jumped on the juggernaut with its own windmill production and a system of domestic power-rate incentives.
As lord of the winds, however, Germany now finds itself tilting with fresh problems at home. Rural communities are making rules to curb the height of the generator masts and their proximity to dwellings. „It’s a question of acceptance,“ said Schiel. „Many communities feel there are just too many windmills in their vicinity.“
Productive wind sites in the countryside have also become rare, making upgraded replacement generators the industry‘s main growth driver at home. Yet, a new development frontier has opened on the Baltic and North Sea, where plans for gigantic offshore wind farms have already run into gales of opposition from beach resort communities, shippers, fishermen and yachtsmen.
Despite steady advances in the efficiency of wind generators, the cost of their power is at least twice as high as the conventional variety. And the new study by Dena, affiliated with the environmental ministry, reveals that they still won’t be competitive by 2015, VDEW commented. At that point there would still have to be a „shadow“ reserve of 34,000 megawatts at conventional plants to back up the anticipated 36,000 megawatts of windmill capacity whenever the breezes die down, it said. This means that only two conventional plants would be replaced. And the subsidies would spin on indefinitely. Nevertheless, the windmill model has already inspired a budding boom in photovoltaics and power plants driven by the sun, which makes only rare appearances in the rainy German winters.
Of deeper concern are the underlying economics of the federal wind and sun-power program. „How much more will they have to pay for electricity? That’s the question that really has to be put to the citizens,“ said VDEW representative Patricia Nicolai. The potential impact of high-priced alternative power on the country’s manufacturing base and on retail and commercial consumers has already sparked a public policy tiff between Social Democratic Economics Minister Wolfgang Clement and Greens Environmental Minister Jürgen Trittin, a wind and solar zealot.
Windmills made their debut on the power grid at a propitious time. In the sluggish German economy of the 1990s, power demand increase by only about 1% a year, and there is still no sign of a sustained upswing. Vastly excessive capacity in rate-based generating plants became a problem for the former regional power monopolists when the electricity industry was liberalized in the late 1990s, leaving power generators in possession of their regional grids. Estimates of overcapacity in millennium year 2000 ranged from 12,900 megawatts by the power generators to the economics ministry‘s 23,100 megawatts and a figure as high as 35,000 megawatts from experts of the alternative energy lobby. Numerous marginal power plants were decommissioned to preserve earnings levels after the demise of rate regulation.
Despite the federal liberalization to permit competition, generators rushed to purchase stakes in some local public power distributors, their wholesale customers. And the grid owners were also accused of imposing capricious charges or erecting access barriers to discourage competing power supplies from traversing their former turf. Upstart suppliers and the EU demanded regulatory intervention in lieu of self-regulation. There has also been mounting pressure to sever the transmission networks from the generators, as had been done with apparent success in Britain and Scandinavia.
Nevertheless, electricity prices began to decline noticeably following liberalization. Yet, that trend reversed a couple of years ago for reasons that are in dispute. Since then, green energy advocates have been accusing the big power companies of price gouging. But the conventional power generators place the blame for rising prices on alternative energy subsidies and rising energy taxes.
This Byzantine energy tableau became even more complicated last winter with the latest spike in oil prices and the advent of EU-wide trading of emissions rights to curb carbon dioxide – a 37-year-old U.S. idea that simmers on a low flame in its homeland. EU power companies have been buying emissions rights from industrial producers on the forward market, London traders say. This thin new market has proven extremely volatile, with an initial upward bias attributable to an estimated EU shortage of rights coverage for 130 million metric tons of carbon dioxide.
Rights buying by electricity generators, which can switch fuels, has also been driving forward rates for steam coal in lieu of expensive oil. The high oil price in turn has encouraged electric companies to sell power forward. Costly emission rights could eventually force power companies to burn less coal and more gas, which emits less but is more expensive. That would serve the EU goal of curbing emissions. But it could also sting retail electricity customers and such energy-hungry industries as steel, chemicals and light metals. Parts of the German aluminum industry are already threatening to leave the country. And some observers fear that the rising price of emission rights may now be helping to lift the price of traded power. Forward power quotes, more than 20% higher for 2006 base-load delivery, have been taken by some observers to presage coming increases in electricity charges in the EU.
Such an outcome would certainly focus more critical attention on Germany’s power tax component. Escalating energy taxes were the cornerstone of the sweeping “ecological energy” reform launched by the Social Democrat-Green coalition that took power in 1998. These have targeted everything from motor fuels to natural gas, ostensibly to promote conservation while reducing air pollution from fossil fuels and dependency upon foreign petroleum. Oddly enough, though, the industrial production sector, the biggest fuel burner, was largely excused from this ecological crusade. And the government has continued its 10-digit annual subsidies to deep German anthracite coal, which has been uncompetitive for decades and is now mined by only one company, headed by a former economics minister.
The statist winds of redistribution by means of politically orchestrated energy pricing have blown much good to a select few. Yet, the bill comes home to the millions of ordinary consumers who actually power the faltering domestic economy. During the 1998 election campaign, when the plan for an “ecological” regime of rising excise taxes on energy consumption was first unveiled, the “Commerce Germany” magazine of the American Chamber of Commerce in Germany detected both bad news and good news. A crushing weight of other taxes, it observed, was already threatening to choke the life out of the country’s once thriving economy. With new, open-ended environmental levies, it quipped, “at least it will die clean.”
Remark:
Ethanol made from corn (maize) uses the fossil fuel equivalent of 29% more energy to grow and make than it can deliver as a motor fuel, concluded a recent input-output study by engineer Tad Patkek of University of California at Berkeley and ecologist David Pimentel of Cornell University. Encouraged by the farm lobby, the U.S. Senate has prepared an energy policy bill to raise U.S. output of ethanol from corn for motor fuel to an annual 8 billion gallons by 2012 from 3.3 billion in 2004. Annual subsidies estimated at $10 billion already make corn the most heavily subsidized U.S. crop
