Now the energy transition is becoming a danger for all of Germany

The federal government is accepting higher electricity prices and supply gaps in order to drive the energy transition. Now the Federal Audit Office is warning: If things continue like this, Germany as a business location is in danger. The costs are out of control - and there is a threat of an electricity shortage.  

The Federal Audit Office has accused the Federal Ministry of Economics of inadequately controlling the energy transition and inadequately managing it. The auditors have now renewed this criticism of energy policy expressed three years ago in a further special report - and added an explosive analysis of security of supply.

"Since our last balance sheet in 2018, too little has been done to make the energy transition successful," said the President of the Federal Audit Office, Kay Scheller, when presenting the second special report: "That is sobering."

There is a threat of ever higher electricity prices

Previously, the main focus was on controlling the costs of the energy transition, the auditors now also analyzed whether Germany's electricity supply was secure. The result is alarming. According to the study, the federal government does not have "the emerging, real dangers to security of supply in view." The monitoring of the energy transition is "incomplete".

"Ever higher electricity prices" are also to be feared in the current system. The Federal Court of Auditors quoted from a study according to which an additional 525 billion euros would have to be raised for the power supply including the network expansion in the years 2020 to 2025. Electricity prices for private households are already 43 percent above the European average.

"The Federal Audit Office sees the danger that the energy transition in its current form will endanger Germany as a business location and overwhelm the financial viability of electricity-consuming companies and private households," warned Scheller when presenting the special report: "This can ultimately jeopardize social acceptance of the energy transition put."

The report is also explosive from the fact that the auditors had already submitted their points of criticism to the responsible Federal Ministry of Economics . The answers, explanations and justifications of the house led by the CDU politician Peter Altmaier were incorporated into the auditor's report. However, these were not suitable to significantly soften the conclusions of the examiners.

Specifically, the auditors accuse the federal government of not having properly taken into account the consequences of the coal phase-out. At the beginning of this year, eleven hard coal-fired power plants were shut down. Overall, the phase-out under the “Coal Electricity Ending Act” is now being implemented faster than anticipated in the reports on security of supply.

The Federal Ministry of Economics last had an expert report on security of supply submitted in 2019, i.e. before the decision to phase out coal. In it, the coal phase-out was "indirectly investigated" - and found to be harmless, the ministry justifies.

In the review of these statements, however, the Federal Audit Office came to discrepancies. The comparison with the statutory timetable for the decommissioning of coal-fired power plants rather shows that the study assumes a greater secured output from 2022 than is actually to be expected after the decision to phase out coal .

There is a "planning gap" of 4.5 gigawatts, which corresponds to the capacity of four large conventional power plants. According to the Ministry of Economic Affairs, there is a “load balancing probability” of almost 100 percent despite the coal phase-out. The chance that the electricity demand can always be covered by the electricity supply is exactly 99.94 percent.

But this is doubted by the examiners. The calculation of the load balancing probability by the government report “is based on assumptions that sometimes appear unrealistic or are outdated by current political and economic developments”.

It is “not realistic to assume that the expansion targets for renewable energies will be achieved under the currently difficult acceptance conditions, especially for wind energy projects”.

It is also risky that the federal government derives its wind and solar power forecast from the "historical meteorological conditions of the years 2009 to 2013". It is "not appropriate that this simulation does not depict a year with weak energy yields from wind and sun ", criticizes the Federal Audit Office.

The auditors also doubt that the need for reserve power plants has been properly determined. For example, the federal government had planned to create a "capacity reserve" of two gigawatts on October 1, 2020 to secure the electricity market.

However, with the blessing of the Federal Network Agency, the transmission system operators only procured half of this power plant reserve. The Federal Audit Office "doubts that the Federal Ministry of Economics has fulfilled its legal obligation to review the size of the capacity reserve".

In the event of a power shortage, it is already planned that industrial companies will voluntarily shut down their production temporarily - in return for compensation. The Ministry of Economic Affairs is assuming a potential of 16 gigawatts, which will be fully developed by 2030.

Why, now asks the Federal Audit Office, does a study by the Federal Environment Agency only come up with a potential of six gigawatts? Apparently there is no consensus in the federal government on the extent to which voluntary “load shedding” can help stabilize the power grid .

It is also questionable why the federal government thinks it has over 4.5 gigawatts of "emergency power systems" in order to remedy disruptions in the electricity balance. The examiners were surprised to find that in emergency power systems with only 9.4 megawatts are currently cited in the so-called market master data register. This corresponds to only 0.2 percent of the potential estimated by the federal government.

The inspectors from Bonn warned that further assumptions made by the federal government may no longer correspond to reality. In predicting energy demand, the federal government assumes that the population will fall below 75 million in 2050. In contrast, the Federal Statistical Office assumes "in the three most important variants examined with a high probability of 77.6 to 83.6 million people in 2050".

Disagreement about the development of electricity demand

The assumptions of the Ministry of Economic Affairs regarding security of supply for electricity are "partly too optimistic and partly implausible", criticize the auditors. The ministry also did not examine a scenario in which several foreseeable factors coincide that could jeopardize security of supply.

So it could be that the network expansion is delayed and at the same time the cross-border transmission capacity is restricted. The Federal Ministry of Economics argues that “a stacking of various disadvantageous scenarios is not sensible according to the state of the technical discussion”. However, the examiners found this objection “not convincing”.

Further uncertainties would arise from the increasing demand for electricity for the electrification of transport and for the production of the energy carrier hydrogen in electrolysis plants. The auditors therefore do not share the assumption of the federal government that electricity demand will remain more or less stable until 2030.

The Federal Ministry of Economics rejected the criticism: Germany had a consistent system for assessing security of supply. Hydrogen production also does not represent a load on the network, because the electrolysis systems can be controlled in a "network-beneficial" manner.

However, the ministry as a whole cannot convince the auditors: “The Federal Audit Office maintains that essential assumptions on which the current assessment of security of supply on the electricity market is based are unrealistic or outdated,” says the conclusion of the special report.

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