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Germany’s energy gamble

August 2, 2012

Germany’s political class has steered their nation toward what is termed “The Energiewende” – an energy transformation – in which they intend to increase the nation’s use of renewable energy at the same time that they abandon their greatest renewable source – nuclear power.  David Buchan, a researcher at the Oxford Institute for Energy Studies has examined the early stages of this process and finds that

“Germany is on track to meet only one of its three main targets (a one-third renewable share of electricity by 2020), that the country will fail to reach the second target (to cut energy consumption by a fifth by 2020), and that this failure will make attainment of the third goal (emission reduction) harder.  In a broader sense, the gamble may still come off, provided future gains in renewable technology and jobs can be achieved with lower subsidy costs. No other country possesses Germany’s combination of technical expertise from industry and of bottom-up activism from municipal companies and citizens’ cooperatives in support of low-carbon energy.”

The German Energy Concept has certain assumptions embedded within it – and probably cannot succeed unless those assumptions are met.   Chief among them are the institution of a global, binding price on carbon, which would raise the cost of using fossil fuels and thereby lessen the relative cost of renewable energy.  Only then can the renewable sector wean itself from what even some German politicians call “the sweet poison of subsidies.”

That is not the only challenge.  Massively reducing energy consumption while at the same maintaining an advanced standard of living seems counter-intuitive, and the technical challenges of energy storage from renewable sources is as elusive as ever.  Germany seems to be headed toward the model of a “hydrogen economy,” although for many reasons that remains infeasible at the moment.  Personally, I think their chances would be better if they embraced the model of the “methanol economy” (which is something I would like to see the US move to as well).

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