Germany joining UK in darkness

Germany Topo Map

Germany

Well, the article I quote has some choice things to say about Germany, and their slow decent into darkness. Rather like the UK, it would seem that Germany is hanging it’s hopes on “Green” power. So I guess they will be buying a lot of power from France…

http://www.masterresource.org/2010/12/german-offshore-wind-problems/

I’ll give you their conclusions right up here at the top. I’ve bolded a vew bits:

A Darker Germany?

The bottom line: Germans will have to prepare for significantly higher electricity tariffs – and more frequent blackouts.

“If all German wind power projects are realized as planned, the country will incur economic losses well over 100 billion Euros by 2030,” Heinzow says. “The only word that describes this ‘world improvement’ strategy is suicidal.”

So what leads them to this point?

(Bolding is mine)

Thousands of bureaucrats are at another cushy climate confab–this time in Cancun–while Senators Bingaman, Brownback and Reid are contemplating how to ram a federal renewable energy quota through a lame-duck session. Their prospects are not good, which should give them more time to consider the experiences of Europe and windpower. The results of this experiment in energy coercion are humbling.

Oh, they looked at the history of German experience with wind power …

Germany, specifically, is in the throes of a windpower boondoggle that should be heard the world over. The general lesson is that energy forcing brings with it technological risk that must be factored into the public policy equation.

A North Sea Boondoggle

Barely two months after the inauguration ceremony for Germany’s first pilot offshore wind farm, “Alpha Ventus” in the North Sea, all six of the newly installed wind turbines were completely idle, due to gearbox damage. Two turbines must be replaced entirely; the other four repaired.

Friends of the project, especially Germany’s environment minister, Norbert Roettgen, talked of “teething problems.” The problem is far more serious than that, for wind turbines in the high seas are extremely expensive for power consumers, even when they run smoothly. When they don’t, the problem intensifies. Germany could face blackouts – a new dark age.

Oh, stuff doesn’t work. Well, that could be a problem…

The article then goes into some depth about who owns what and who’s losing how much money. There is then this interesting bit about German Engineering Superiority:

The good news is that “Alpha Ventus” also includes six even bigger wind turbines, supplied by the formerly German company REpower, which now belongs to India’s Suzlon Corporation. These turbines have thus far been running faultlessly. However, there are enough other issues associated with operating offshore turbines to send additional shivers up the spine.

So the Germans made some that work. But that company has moved off to India, so who knows what the future holds…

But wait, there’s more…

Monster turbines rated at 5 megawatt maximum power generation impose high costs even when – perhaps especially when – they are running full blast. Because each turbine costs $5,200 (€4,000) per kilowatt in upfront investment, Euro legislators have decreed that turbine operators must be rewarded with 20 cents in incentives for every kWh generated on the high seas.

Therefore, Europe’s energy consumers must pay 20 cents per kWh generated, plus an additional 5 cents per kWh for transmission costs. They must pay this regardless of whether they need the electricity at the moment, and despite the fact that a kWh of wind electricity is worth less than 3 cents on the Leipzig Power Exchange, due to the intermittent and highly variable nature of wind.

Sooo…. the operators have a business where they can make a product worth 3 cents per kW-hr and sell it for 25 cents per kW-hr via getting the government to mandate it. Sweet! Can I get the EU to mandate that I get, oh, don’t want to be greedy, say $2000 per posting? They ARE readable in the EU after all. I’m sure they are worth far more than that. Heck, if only 2000 people read each one, that would be barely a dollar. About the same as 4 kW-hrs of electricity from a wind turbine. Clearly they are worth far more than that. They are a bargain, by God!

Heck, I’d even grant editorial control if I can get that deal. Hey, everyone has a price. I can crank out 10 articles a day if that’s all I do. For $20,000 / day, I’m theirs… only $7,200,000 a year (not counting 5 days off per year). Barely chump change for the EU. A very small decision to make… But that’s my problem. The price of my honor is always way too much above market price…

The article goes on to look at potential “solutions” and finds them lacking.

Talking about the potential for gas turbines it says:

But unless shale gas development proceeds apace, this would increase Europe’s dependence on Russian gas supplies. It would also result in inefficient gas use and higher carbon emissions, as generators ramp up and down every time wind turbine output changes.

Oh, isn’t the Ukraine already having some minor issues with Russia turning the gas off in the middle of winter to make a point or two? (Then again, Ukraine hasn’t always been paying the bills…) And isn’t the UK already looking at gas supply drops, and Norway too as the North Sea depletes? Looks to me like an EU Gas Food Fight developing with Russia holding all the cards. Don’t think I’d want to be part of THAT process.

The other is nuclear power plants. High performance nuclear plants can adjust their electricity output to replace the highly variable output from wind farms, but that reduces efficiency and causes irregular burn-up of fuel rods. This is a serious concern, because high efficiency is the primary way nuclear plants make up for their high capital costs. A bigger concern is that the German government has still not reversed its decision to phase out all nuclear power plants.

OK, so they are, along with the UK, shutting down their nukes. Like that’s going to end well…

But I suppose they can just pipe the power in from the French. I’m sure Germany will be quite happy with a choice between being dependent on Russia or being dependent on France. After all, they’ve gotten along SO well in the past…

However, the lack of suitable or sufficient backup power generation may still be a relatively small problem. Billion-dollar investments in transmission lines are needed to bring expensive wind power from offshore sites north of Germany to big industrial consumers hundreds of miles away in the south. But resistance to new high voltage lines in urban and recreation areas is high and rising.

A Lower Saxony law already prescribes the use of ground cables in certain areas. But those are ten times more expensive than above-ground lines – and less reliable, due to constant assault by water, salt and subterranean animal life.

Oh, well. Never mind about that bringing in power from somewhere else…

In Conclusion

I can think of no worse time to be doing this. We’ve got a pretty good handle on what’s to come. Increasing cold until about 2030 to 2040. Call it a quarter century. Increasing snow. Increasing foul weather. Looks to me like windmills are exactly the wrong solution for that problem. Irregular output with strong and rising regular need.

Furthermore, when Mother Russia gets it’s own “bit of cold”, they will get the gas first. Then the Ukraine. The further down the pipe you are, the less gets to your end. Germany is placing a bet that Russia will develop AND deliver all the gas the EU wants. And Russia would never ever use that dependency for political advantage.

OK, how I see this playing out:

Russia wins. Might be worth some investment in Russia, but their political volatility means it must be ‘fast money’.

The UK and Germany are not going to be toasty. They might be toast, though, but it will be served cold.

India is going to be a winner. They seem to be doing the right things. Add to the India positions as charts call for a re-entry. Besides, they are closer to the equator so stay warmer during the coming cold turn.

France might actually end up the winner out of this. The commitment to nuclear power gives them a great advantage in economical power costs and a stable utility supply to homes. Now if only they could stop having riots about the desire to retire before just about everyone else on the planet (Greeks excepted…)

The EU is headed for some major stability problems. Germany will not be able to continue to carry all the hangers-on with rolling blackouts and excessive costs to industry.

Then comes the biggest question:

In a much colder and darker Europe, with Germany suffering. Dependent on France and Russia, but funding Italy, Greece, Ireland, Portugal, … Will we revisit the forces that lead to the last two world wars? I think we’ll dodge that result. But the forces are pushing toward breakup, not toward stability. I think the monetary union is on the chopping block (though with a question of ‘how soon”) and that path leads to many interesting possibilities. As Germany demands repayments, and the other countries say “No, we’re at the beach. We’ll get back to you in 20 years.” will Russia accept a German IOU (backed by Greek bonds…) for winter gas?… Somehow, I think not…

I put that about 2015 – 2020. It will be very interesting to see how it plays out.

It will also be interesting to see if a couple of more years of Damn Cold Winters change some of those powerplant shutdown plans…

Subscribe to feed

About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
This entry was posted in Economics - Trading - and Money, Political Current Events, World Economics and tagged , , , . Bookmark the permalink.

15 Responses to Germany joining UK in darkness

  1. boballab says:

    Umm hasn’t any of these idiots cracked a history book?

    Seriously just take a look at what happened the last time someone put the screws to Germany financially: A crazy corporal from Austria was made leader and the Tanks started rolling!

  2. R. de Haan says:

    Great article.

    I’m not too worried about Germany.
    Germans are simply too pragmatic.

    They have already started to drill for shale gas this year in Nord Rhein Westfalen (Kleve and Bocholt). The estimated reserves are gigantic and will last for centuries.

    Besides that, we all know our Greens.
    They change color very quickly the moment their balls freeze off.

    And Merkel?

    She is able to perform a 180 degree turn on a dime and sell her changed views to her political adversaries and her electorate.

    Industry and power companies depend on each other.
    Germany is still Export Weltmeister in terms of productivity and they are determined to play ball.

    We are already watching the collapse of the AGW doctrine. Japan has no intend to further support Kyoto, the funding is already cut, the USA never signed Kyoto and the window of opportunity for Obama to close a global deal has passed. In January the GOP will control Congress and all climate related voodoo will be rolled back.

    All we have to wait for is the scare to die.

    And when it’s dead in the US it will be dead in Europe.

  3. a jones says:

    Umm not quite I think.

    Germany has had considerable success in recent years with small coal fired combined heat and power plants and has decided to keep its nuclear plants open beyond their mandated shut down date. She has no natural gas of her own of course but can expect to be able to buy supplies from the new Polish coal gas plants: albeit at a higher cost than the Russians charge.

    In the UK the shut down of older nuclear plant is simply due to age, but the main backbone is fine and good for twenty years yet. It is notable that the UK governrment has quietly decided to suspend the previous decision to phase out coal fired stations by 2015: further decisions are awaited.

    Again for the UK north sea gas has been declining but it has a long standing agreement with Norway over the Frigg field and once the new interconnector was finished three years ago wholesale gas prices fell to their lowest for many years. Which is not to say that the gas companies are not overcharging their hapless customers.

    Moreover gas and oil exploration was strangled for many years by punitive taxation which was only relaxed by technical adjustments in the tax code two years ago with the result of a boom in exploration by small scale companies who have found so much gas and oil nobody knows what to do with with it.

    So I think you will find the UK manages pretty well. As will Iberia with its new interconnector to Morocco.

    None of this is to say that the sheer lunacy of the EU and its members states about fossil fuels and alternative energy will not cost the people dear: But I doubt the lights will be going out across Europe any time soon.

    Kindest Regards.

  4. DirkH says:

    We have an energy mix in Germany and can bring in various fuels from various sources, so that’s really quite robust – for instance, an old underground mine in Northern germany is being converted to become a huge LNG storage for LNG tank ship loads. So there’s quite a bit of thinking ahead going on.

    OTOH we have a very large urban leftist populace, shifting through the color spectrum between Green, Red and Infrared. You just don’t know what their parties will do should they come to power. The SPD was once a halfway capable party when it came to governing the country but the party is in decay.

    And then, we have the EU kommissariat. A whole bunch of wide eyed lunatics. Van Rompuy. Climate Commissioner Crazy Connie. Need i say more? I’d rather deal with Putin; at least i would know that that guy follows his self-interest.

    So it stays very difficult to predict the future here.

  5. DirkH says:

    on December 5, 2010 at 4:34 pm boballab
    “Umm hasn’t any of these idiots cracked a history book?”

    boballab; different times and vastly different demographics. During the rise of the Nazis Germany had a youth bulge. Now we are old – the youth is not plentyful these days and will have more job offers than they will need. So there is no large unemployed angry young male population.

    Check history. Youth bulges have the best correlation to the rise of fanaticism and subsequent war with neighbouring states.

  6. Pascvaks says:

    “We have dreamed down tyrants,
    We have dreamed down Kings,
    We have dreamed down War,
    And the end of evil things.”

    One day we will wake up and see that it takes more than dreams to realize something truly worthwhile.

    PS: Has anyone else noticed that China has a lot of young people? So does India? And Arabs and Africans and Mexicans seem to be making woopie too.

    PPS: Think the French will let the US plug into their power grid via a TransAtlanticCable or two?

  7. The “Windmills of the German mind”:

    Like a tunnel that you follow to a tunnel of it’s own
    Down a hallow to a cavern where the sun has never shown
    Like a door that keeps revolving in a half-forgetton dream
    Or the ripples from a pebble someone tosses in a stream
    Like a clock whose hands are sweeping past minutes of his face
    And the world is like an apple spinning silently in space
    (The Windmills of Your Mind, lyrics)
    :-)
    They need a second “lesson” from the Russians: To close the gas pipe for at least one whole month, to wake them up to reality.

  8. Those windmills are not innocent neither the romantic Quixote´s windmills nor the enchanted landscape of Netherland´s tales, no, they are a symbol of corruption, because only bribed politicians could buy such systems having an average performance of only 2.35%

  9. Luís says:

    There are several problems with this post, but upfront you forget to say that direct subsidies to the Coal industry in Germany totalled more than 2 billion € last year, or something like 42 €/ton, you should take that into account when comparing traditional sources of energy with wind…

    Secondly, that 20 cents per kWh figure is completely wrong, note that there are no references in the original article. In Portugal and Spain the feed in tariff is around 0.075 €/kWh, which while presently higher than traditional sources is perfectly bearable. In Germany the legislation is rather complex, but final figures tend to be lower than those in Iberia. Check the real figures here:

    http://en.wikipedia.org/wiki/Feed-in_tariff

    And to REPower. Rest assured it remains in Germany and that both their offshore models work, the 5M and the 6M. They were chosen for the largest commercial offshore wind project in continental Europe so far. Assuming a 20 year lifetime and 40% baseload this project shall pay for itself with something just a bit over 0.05 €/kWh.

    Michael, reading your blog is like riding the roller-coaster, it can be great sometimes, while other days it can be really low…

  10. GregO says:

    Here’s a good example of numbers on a wind project in Ontario Canada:

    http://ontariowindperformance.wordpress.com/2010/09/24/chapter-3-1-powering-ontario/

  11. sophiaalbertina says:

    As a complement to this expose of the stupidity of our dear politicians and the Global Warming Hysterics when it comes to “renewable” energy, in this case wind power.

    I can give you some interesting figures (and these are the norm) from the combined Swedish wind farms during the last 3 winters.

    You have the total combined output at 3%, 4%, 6% or 9% during cold periods when the output is MOST NEEDED. And a drop in output of 84% in two days. Or a 98 % drop in three days. Or a 67% drop in one day.

    And as I said, these are completely “normal” figures”.

    You van find more stats in my post:
    http://uddebatt.wordpress.com/2010/12/04/record-cold-and-snow-in-november-wind-power-at-12-output/

  12. E.M.Smith says:

    @R. de Haan: One can only hope you are right.

    @a jones: Do you have a pointer to the decision to keep nuclear going? Great news (depending on just how long is “longer”…)

    On the UK, nice to hear about keeping their coal plants open. I guess being frozen has a clarifying effect on the mind? ;-)

    @DirkH and Pascvaks:

    A lot of folks are betting on LNG (which is why I’m holding onto my LNG shipping stock TNK (presently a bit ‘flat’ but with a 10% yield). IFF facilities can be built very fast and both the UK and Germany hold off the (prior planned) shutdowns then this has a chance of working. We’re finding lots of ‘tight gas’ so it’s a reasonable alternative for a few decades (centuries?).

    Per “young populations”: A problem for many reasons. Resource constraints is one of them (which is why international trade is so important). China is actually an odd case in demographics. Due to the “one child” policy, they will have a very abrupt transition to many retired folks and few workers per retiree. Nobody knows how that will work out.

    @Luis: You are talking about the costs in Iberia, the quoted article is talking about the ocean off northern Germany. Very different places with different weather. Per the wiki reference: I’ve come to the point where I’m immediately suspicious of anything wiki when related to energy or climate. Yes, the quoted article is pushing an agenda, but so does the wiki. I’d be more interested in an alternate reference. And per REpower still being German: Give it time. I’ve seen a lot of these things play out. For a couple of years everything stays put. Then the “low level jobs” get moved. Then the “mid level” as more engineering is done in the lower cost location. Finally, the upper levels are thinned out to just a sales and marketing presence. We’ve been through it with India in our high tech arena here in the USA. Many of my prior clients are now shut down in the USA with operations moved to India.

    Per coal: It is simply more ‘dispatchable’ than wind. Yes, I didn’t get into the whole accounting issue (but then we’d also have to run off and ask why they want 42 €/ton of subsidy for domestic when they could buy US coal for about $20 / ton…
    http://www.eia.doe.gov/coal/page/coalnews/coalmar.html
    lists Powder River coal at about $14 as I type. (A modest sulphur thermal coal of low BTU).

    And per roller coaster: Well, I can only hope you enjoy the ride. Individual opinions will vary, some more than others.

    @GregO:

    Wind has a great potential in some places, especially those with steady winds. There is a ‘wind belt’ that starts up in Canada and ends down in Texas where you can have a steady 10 mph wind for days. Great place for wind turbines. IIRC, estimates are 4 cents/ kW-hr. I’m not as familiar with Canada, as they have ice and cold issues too, and population centers can be far from the windy spots.

    Placing turbines at sea, and out in a place that’s darned cold at times, with both vendors being foreign owned (one that doesn’t work and the one that does work being in transition to India) while shutting down the baseload is what caught my eye. It just has red flags going up all over it. Adding wind to established baseload and at a pace that does not disrupt (and that allows for life cycle assessment) is a much more workable solution.

    Basically, I’ve got nothing against wind ( I like watching them as I drive the Altamont pass) other than the tendency to make bird-burger, but I’m very critical of using subsidy to distort market responses. It far too often turns into political payoffs for favors. So we’ve got 2 types of turbine, one which simply doesn’t work, in this German farm. I’d expect a free market to stop buying the broken ones, or return them as defective. What is more likely to happen is that they will buy more of them due to some rule driven behaviour and / or subsidy.

    So in a much less politically driven market, Germany would be building more nuclear and coal plants (and probably buying foreign coal). Instead they have a welfare system for German coal miners and are buying wind turbines that don’t work. (Though it’s nice to hear that they are not going to shut down the nukes any time soon).

    Still, one never knows. Once a system is driven by political decisions rather than economic ones, it can go in any direction; and change with the next election or vote.

  13. a jones says:

    Attn E M Smith

    To deal with your points and amplify.

    Although there was much opposition to building new nuclear reactors no UK gov’t has ever had a policy of shutting down existing nuclear stations for environmental reasons.

    The simple fact is that the early Magnox stations, some nearly fifty years old, have have reached the end of their working lives. Decommissioning is a little difficult because they were designed to produce plutonium. But in fact there haven’t been any problems.

    The AGRs built in the 70’s probably have another 20 years of life left. And the UK Gov’t has recently announced a new civil nuclear programme sufficient to meet much baseload demand, but that won’t be coming on stream for 15 to 20 years: not least because nobody knows who is going to pay for it.

    The much trumpeted announcement that all UK coal stations had to close by 2015 to meet environmental targets was the previous administration’s grandstanding, and the new Gov’t slipped out its review of this decision very quietly indeed. It’s not definitive yet, officially it is still wedded to windmills and such like junk, but it is clear that reality is slowly sinking in as it tapers off subsidies etc.

    As far as the UK is concerned natural gas went from feast to famine and is going back to feast again.

    LNG is all well and good and was predicted to boom a few years ago. So for example the UK has major receiving terminals which have never unloaded a cargo.

    Likewise shipowners wise enough to secure long term charter before ordering a new LNG tanker have prospered but there are an awful lot of laid up orphans out there.

    The predicted boom never happened not least because the oil majors, who charter most of the shipping capacity from private owners like me were very wary of the supposed growth in the US market. They had had their fingers burnt before by politicians capping gas prices and the rest and they saw that the Greens were insisting on building expensive offshore terminals etc.

    So it never happened, and won’t now, the US has ample onshore reserves today: as do many other countries due to new extraction technology.

    So whilst the LNG market will probably grow slowly but steadily I doubt it is going to boom.

    Likewise despite US misgivings about Europe being at the mercy of Russian supplies they seem to have overlooked the fact that Morocco and Algeria have ample supplies and subsea interconnectors across the a few miles of the Med are very cheap: something which did not escape the notice of the Spanish Government.

    At the moment all of the south of Spain is busy installing urban gas distribution but this will reach north to the French border and from there on it is but a short step to the Northern European gas grid.

    So if Russia imagines she is going to be master of EU gas reserves she had better think again, within ten years she will have to compete with much cheaper North African supplies.

    Make no mistake I think natural gas is very much the future but in terms of gas to liquid technology (GTL) rather than either LNG or pipelines. GTL is costly, breakeven is around 40 dollars a barrel, but it moves refineries away from sensitive areas and puts them close to source and of course produces a beautifully clean product that is easy and cheap to store, ship and distribute, using existing infrastructure.

    The changeover will take 30 to 50 years of course. Despite what politicians imagine these things take time as market pressures build up.

    Kindest Regards

  14. Chuckles says:

    A bit of interest for the ‘peak’ doomers. And I’d say LNG/NG sounds good for the US of A?

    http://alfin2100.blogspot.com/2010/12/is-north-america-new-energy-kingdom.html

  15. E.M.Smith says:

    @Chuckles: Nice article. Yeah, I keep telling folks we’re up to our eyeballs in fuels, but only some are receptive.

    The simple fact is that all that CO2 that WAS in the air prior to the Carboniferous period is now in the ground somewhere. Until it’s all back in the air, we have fuel left. (Even after that we’ll have fuel left as there are fuels that were not sequestered then…)

    There simply is not an energy shortage and there never will be. There can only be temporary market disruptions.

Comments are closed.