Former journalist Christoph Podewils is now the Head of Communications at Agora Energiewende. Last week, Podewilis sat down with ReadCONTRA reporter Brian Vaughn to discuss aspects of Germany’s clean energy revolution.
Some call them nerds. Others call them experts. Whatever you think of them, the team at the self-described “think-and-do tank” Agora Energiewende are doing some seriously groundbreaking research.
The Berlin-based group focuses on the diverse aspects and effects of Germany’s Energiewende. Literally translating to “energy transition”, this series of political decisions has made Germany a global leader in electricity generation from renewable sources. Agora regularly publishes meticulously written studies on topics such as generation, efficiency, and system optimization.
Germany’s renewables sources produced a plurality of its electricity supply in 2014. Compare this with the United States, which produced only 13% of its electricity from renewable sources, according to the U.S Energy Information Administration. “RES” stands for renewable energy resources. (Graphic courtesy of Agora Energiewende).
As any good investigator knows, the devil is in the details. It’s important to not only know what the Energiewende is, but the challenges and opportunities it creates. ReadCONTRA talked with Christoph Podewils, Agora Energiewende’s Director of Communications, to bring to light how the renewable sector is changing Germany.
ReadCONTRA: What has Agora found as the most compelling evidence of the Energiewende’s economic effect?
Christoph Podewils: We can observe that, on the one hand, there’s a rising share of renewable energy, so that’s very nice. And due to that, we see that we have an overcapacity of electricity supply, which makes wholesale electricity prices decline a lot. Since 2008, there’s been a decrease of wholesale electricity price by about 50%, or maybe a bit more than 50%. Very energy intensive industries benefits from that.
I also have to mention that for smaller companies, energy prices have been increasing, because they are not exempted from paying for renewable energies. But starting last year, there was a change in the regulation. Smaller energy intensive companies were exempted to a certain degree.
RC: While Energiewende focuses on development of renewable energy, it also seeks to close nuclear and coal plants. How are the workers in those plants finding new jobs?
CP: It’s not about closing a nuclear plant, and then it’s all over. Deconstruction takes many, many years. There are some nuclear power plants from the former GDR (East Germany before unification) which were have been in the process of deconstruction since the mid-90s, lasting until today. So there’s a lot of work to do when deconstructing a nuclear power plant. This might be an opportunity to use the workforce that worked there before.
When it comes to lignite and hard coal, the situation might be different. You have to face that there aren’t that many people working in a coal plant. It’s only somewhere from a few 10s to a small three digit number. Of course those people will have to look for new jobs, they might be supported in doing so by the government. There are programs to make this transition period smoother. Of course renewable energy and energy efficiency are offering a lot of job opportunities.
But it is the same story as always. An old industry dies. People who were working there have to look after themselves, in a way. But when something is dying, usually something new is grown. For instance, in Berlin, there are companies coming to Berlin and offering jobs. The same is true for the Rhine-Ruhr area. I would say that it’s a transition period comparable to others. The people who are working in those old industries have to deal with that, but also society and the government will have to support them in their efforts.
A German coal mine in Prosper-Haniel Bandberg. A vast majority of German carbon dioxide emissions related to electricity generation come from coal, according to an Agora Energiewende report. (Photo courtesy of Arnoldius, CCA-SA 3.0).
RC: Why is the idea of distributed energy resources important to the Energiewende?
A map showing an imbalance in supply and demand for electricity. This illustrates why distribution and transmission are vital to the transition to clean energy in Germany. (Graphic courtesy of International Energy Agency, Technology Roadmap, Energy Storage).
CP: Our main sources will be wind and solar. By nature, those sources are distributed. If you’re going to collect these sources, this comes with some decentralization.
The task is to collect energy from a large area, 2-4% of Germany’s land area, and then transport it to the centers of demand. You won’t be able, for instance, to supply a city like Berlin with energy only being produced in Berlin. You will need the surrounding areas to collect energy from wind and solar and bring it, for instance, to Berlin. Before the Energiewende, in the 1990s, about 85-90% of the energy production was in the hands of very few companies so the big utilities and smaller, local utilities, which had a quite notable share.
Because of the distributed nature of renewable energies, we have faced a growth to 1.5 million generating facilities, starting from the very small solar installations to very huge wind farms and solar fields. That came along in the structure of the ownership. Usually one solar installation is owned by one person. The money from big wind farms originated from private funding. The shareholders are private people or pension funds. The shareholder system totally changed. Municipalities and cities are profiting from wind and solar installation due to business taxes companies have to pay. 70% of the business taxes paid by those companies or private owners are going to the city where the wind or solar plant is installed. Only 30% goes to the city where the owner lives. In the North of Germany, lots of small municipalities have a lot of money because of that mechanism.
In Northern and Southern Germany, there are a lot of cooperatives. So people are joining together to build a solar field or a wind park. By means of that, their investment stays in their region.
RC: Under the German Renewable Energy Act, also known as the EEG, ratepayers subsidize feed-in tariffs, but companies that use a lot of electricity are exempt from paying this fee. Is this a sustainable model, and is it being abused by companies that aren’t truly energy intensive?
CP: It’s very hard to say. I would say it’s not a question of abusing this mechanism. On the other hand, we will only have a sustainable system if people and companies pay for it. If more and more entities leave, even if they are allowed to by law, it will be more expensive for those remaining in the system. After all, it’s a political decision about how to manage those distribution effects.
It was addressed during the last elections. The result is not reducing the exemptions, but making them fairer. My prediction is that there won’t be new discussions. The big effects of the past won’t be had again. I won’t speculate on discussions that haven’t happened yet, though.
This graph shows how the subsidization of solar PV has driven up installed solar capacity in Germany between 2005 and 2014. (Graphic courtesy of Agora Energiewende).
RC: Who will assume the cost of updating the grid? Why is an updated grid important to the Energiewende?
CP: New capacity in wind power will be built close to the shore in the north. The big consumers are in the south. Those consumers used to get their electricity from nuclear power plants. Of course, you have to transport the electricity from the north to the south. Currently we have some power lines which are almost sufficient for our producers now. With increasing distributed energy, we will need additional lines. When it comes to financing, it’s a task of the whole German society. Every power consumer pays a grid fee, a tenth of a cent for high voltage lines. That’s where the money comes from. This grid fee is adjusted. It’s regulated by the federal grid agency. The grid companies get a guaranteed amount of money. If they say they need more money, and then can prove it, which is an important part of it, they will get the money. There is no competition or limit of money. If transmission developers were developing unnecessarily, the grid agency would deny them more funding.
Currently, Germany’s grid is the second most reliable in the world. It experienced fewer than 25 minutes of blackouts in 2012. It will need to expand its capacity in the future to allow long range transmission froma centers of supply to urban and industrial areas. (Graphic courtesy of Agora Energiewende).
RC: Have you observed any state in the United States that is taking steps towards its own Energiewende?
CP: Yes, of course. A lot. I would say California is similar to Germany in what it is aiming for. Also Texas is doing a lot.
The reasons may differ. In California, it’s a question of climate protection and other things. Texas is quite different. A lot of companies have turned to wind and solar, which comes at far lower prices that conventional sources. For that reason, they are building huge wind farms.
(Story and title image originally via).