15.01.2013
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Energy policy

Misreporting of Energiewende

Over the past few weeks, a number of reports in the international press reveal a lack of familiarity with the situation in Germany. In particular, reports of a sudden collapse of the German PV market continue – despite all facts to the contrary.

The New York Times dropped a bomb this month when it announced the closure of its environmental desk. The paper says it will continue to cover environmental matters, but simply with reporters from other desks. Climate issues will nonetheless be getting short shrift. Whenever journalists from other fields try to cover such topics, they bring along with them a set of preconceived notions and a basic lack of depth in the field they cover on the side.

One recent example came on the weekend, when Business Insider suspected that Germany is going "off the solar energy demand cliff." We have been hearing reports from abroad of the German solar sector's demise since at least March 2010, when highly respected British environmental journalist George Monbiot completely misread some information and claimed that Germany had had enough of its solar boom.

 - Solar markets in Germany, Spain, and Italy may have peaked in terms of newly installed capacity expressed in absolute numbers, but other markets are nowhere near the solar penetration in these countries. Germany's installed solar capacity is currently equivalent to more than 50 percent of its average peak summer demand. Other countries like the US and China have a lot of solar to install before they reach these levels.
Solar markets in Germany, Spain, and Italy may have peaked in terms of newly installed capacity expressed in absolute numbers, but other markets are nowhere near the solar penetration in these countries. Germany's installed solar capacity is currently equivalent to more than 50 percent of its average peak summer demand. Other countries like the US and China have a lot of solar to install before they reach these levels.
www.energytransition.de

In its report, Business Insider misconstrues the lack of a boom in December 2012 as a sign that solar is over in Germany. In fact, feed-in tariffs for PV were generally lowered on January 1 of each calendar year, but Germany switched to a monthly reduction schedule starting on November 1, 2012. There were also unscheduled one-off reductions during the course of the year, so the boom has been spread across various points in 2012. Going forward, there will probably be no monthly booms at all.

It is therefore accurate to say that there was no major boom in December, but it is inaccurate to take this as an indication of any downturn. 2012 was the third record year in a row for PV. And while the forecast for 2013 is below 6 gigawatts, that level will still put Germany near the top of the list in terms of absolute figures, possibly in second place behind only China, which has hardly gotten going yet. Certainly, "going off the solar cliff" looks a bit different than slipping from first place to second.

UBA cost
UBA cost - Germany's Energy Agency has reviewed various scenarios for the differential cost of renewable power and finds that investments made today in facilities that will run for 20 years are likely to pay for themselves even without taking account of external costs.
Germany's Energy Agency has reviewed various scenarios for the differential cost of renewable power and finds that investments made today in facilities that will run for 20 years are likely to pay for themselves even without taking account of external costs.
UBA

Another comment in Business Insider is typical of the assumptions made in the Anglo world: "[Germany's] whole drive to switch to renewable energy has ended being far more expensive than they [the Germans] thought it would be." This statement is completely unfounded – the calculation is basic math, and Germans have calculated the cost impact of the Energiewende correctly for a number of years, with numerous studies correctly estimating years ago that the cost impact would reach a plateau right about now – exactly what is happening (see this chart from 2009 or this from 2008). If anything, the cost impact comes as a surprise to foreign onlookers. Germany's ongoing support for solar is proof that they saw the cost impact coming.

Evidence that the worst is behind us comes from the current feed-in tariffs themselves. As of January 1, only 17.02 cents was paid for a kilowatt-hour from a solar arrays smaller than 10 kilowatts. The rate for systems from 10-40 kilowatts was 16.14 cents, but only 90 percent of the power receives compensation (the rest is assumed to be consumed internally), putting the effective rate at 14.53 cents. The rate for systems from 40 to 1000 kilowatts is effectively 12.96 cents (officially 14.40 cents), and 11.78 cents is provided for systems from 1,000 to 10,000 kilowatts, for which 100 percent of the power receives compensation. Larger systems are no longer eligible for feed-in tariffs as of November 1, 2012.

System prices are also easily half as high as prices in the US, which does not have German-style feed-in tariffs. Photon magazine puts the average cost of a turnkey system smaller than 10 kilowatts at 1,632 euros per kilowatt as of October 2012.

Finally, Business Insider mistakes event in Germany for "a sure sign that Europeans are going to want to spend a lot less on solar energy." In fact, energy policy remains securely in the domain of individual member states, meaning that nothing that happens in any particular EU member state can be taken as an example of any trend within Europe. Energy policy approaches vary widely within the EU, as the cases of France (which remains wedded to nuclear), Germany (with its Energiewende), and Poland (which is a strong supporter of coal power) show.

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2 Comments on "Misreporting of Energiewende "

  1. James Wimberley - 23.01.2013, 11:11 Uhr (Report comment)

    Your'e going up in the world when the people who get it wrong are the likes of Business Insider, a site with roughly the reputation of the Drudge Report. Wikipedia: "Henry Blodget is the CEO and Editor-In-Chief, a Yale graduate who previously worked on Wall Street before being censured and barred from the securities industry by the Securities and Exchange Commission."

  2. Photomofo - 15.01.2013, 15:16 Uhr (Report comment)

    Effective rates? No no no! Bad math.

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