For Germany, the fact that the renewable energy industry, particularly wind, is not performing as expected is worrisome news.
Germany has long been the powerhouse of Europe’s economy, yet growth in the country has slowed significantly this year. Exports account for nearly half (47%) of Germany’s economy and sluggish growth elsewhere, which has dampened consumer confidence, and an intensifying global trade war have seen Germany’s economy grow by a mere 0.1% in the third quarter. This comes after negative growth in the previous quarter. In other words, the country has escaped recession – but only just.
It hasn’t helped that Germany’s energy industry has been thrown into disarray. Berlin has embarked on an ambitious transformation of the country’s energy mix, seeking to embrace low-carbon energy in lieu of coal, which currently provides most power in the country. Along with the phasing out of all coal-fired plants within two decades, Chancellor Angela Merkel has pledged to shut down Germany’s 17 nuclear power plants by 2022 owing to safety concerns in the wake of the Fukushima disaster in Japan.
Germany, which has the largest electricity market within the European Union, is banking on renewables, yet there is trouble on the horizon. Solar investments are down and Germany’s wind industry is in decline. Experts are warning that “Germany’s low-carbon future will come at a cost” to the country’s robust economy. Within the three years of planned nuclear phase-out Germany’s capacity of conventional energy will likely fall by a fifth, raising the economically ruinous prospect of frequent outages.
Germany’s government argues that the shortfalls can be offset by improved energy efficiency, as well as expanded renewable energy capacity and further electricity imports. “Others are not as confident, including many utilities, network operators, manufacturing companies and analysts,” notes Reuters, citing an energy expert who calls the government’s strategy risky and prone to unforeseen consequences. The expert, Katharina Reiche, chief executive of the VKU association of local utilities, stresses that if the phaseout of coal-fired plants “was not accompanied by a mandatory, risk-oriented monitoring of supply security, it would be like ‘walking a tightrope without a safety net.’”
Germany’s government foresees a 65% share of the country’s power consumption for renewables by 2030, the date by which all coal-fired plants are to be shuttered. Between January and October this year the share of renewables reached a record of nearly 43%, which seems encouraging. At the same time, however, onshore wind power expansion has been slowing across Germany, which is raising doubts about the long-term viability of a strategy centered primarily on renewables like wind and solar.