It is only one sentence in the coalition agreement, but it could mean the end of Germany’s green energy shift (Energiewende). The Christian Democrats (CDU) and Social Democrats (SPD) want to force the renewable industry to pay for conventional back-up energy generation.
Almost unnoticed by the public, Federal Environment Minister Peter Altmaier (CDU) and North Rhine Westphalia’s Prime Minister Hannelore Kraft (SPD) have agreed upon on a passage in the Energy chapter of the draft coalition agreement that could ensure the end of the green energy transition and seal the fate of the renewable energy industry. “This is massive,” is the comment even in government circles. The decisive statement has allegedly been included in the draft contract under pressure from the bosses of RWE and E.on, Peter Terium and John Teyssen.
The renewable energy lobby has not even noticed the attack on its core business. The decisive statement can be found in line 259 of the 11 November draft agreement. It says: “We will examine whether large producers of electricity from renewable sources must guarantee a base load portion of their maximum feed in order to contribute to supply security.”
This refers to the cardinal problem of solar and wind energy, the intermittency of power generation that depends on the weather. The year has 8,760 hours; wind turbines, however, only produce for 1,530 hours at full power, photovoltaic systems even just for 980 hours. To make matters worse, no one knows in advance when green electricity is fed into the grid, and when it’s not available.
The proposal by Altmaier and Kraft boils down to a requirement for operators of wind and solar power to take out a form of insurance. In principle, they must guarantee the supply of the kilowatt hours usually provided by their systems, regardless of whether the wind blows or the sun is shining. However, this is only possible for wind and solar systems by guaranteed power of conventional power plants. This way, coal or gas power plants would be brought back into the business – and the green power producers would have to pay for it. They would be forced to do business with RWE and Co.
The business model of renewable energy operators would be destroyed. This is made clear by a simple calculation: the cost of conventional power plant capacity in Europe is typically estimated at 60 Euros per kilowatt. Since solar energy systems need the back-up only for about 1,000 hours per year, this would result in a kilowatt-hour price of approximately six cents for the insurance. An operator of solar power systems would have to pay this amount for every kilowatt hour generated by himself to the operators of a coal or gas power plant, so that they hold up the necessary safe plant capacity.
Part of the legally guaranteed EEG feed-in tariff, which has the objective to promote green electricity, would end up with the operators of conventional power plants in this way. It is such a big amount that one could no longer make any profit with green electricity. If they had to shoulder the burden, the development of renewable energies would come to an end – and so would the green energy transition.
Operators of onshore wind turbines would be charged for the usual hours at full load with less than four cents per kilowatt hour. The feed-in tariffs for new wind turbines is currently around nine cents. Take away four cents for back-up and the wind operator would be left with five cents per kilowatt hour. For this amount, however, nobody is building a wind turbine. The green energy transition would be killed instantly. Instead, RWE and Co. could breath again. It cannot be ruled out that their current search for a new corporate image would be undermined as a result.
Whether it will actually get that far is uncertain. After all, the formulation in the draft coalition agreement includes three vague concepts. Firstly, the matter should only be “examined”. Secondly, only “large” green power producers should be obliged, if at all. And thirdly, the back-up insurance should be organized only for a proportion of the base load. Disaster is looming but there is still hope.
The mere fact that the coalition partners are flirting with the idea of promoting old energy at the expense of new one is a revelation. It shows how much the CDU and the SPD are now distancing themselves from the green energy transition.