Europe's Illusion of a Renewable Future

Germany is the economic powerhouse of the EU, with a far larger and more industrialized economy than other European nations—the fourth largest in the world. Given such a large industrial base it is unsurprising that Germany needs reliable power, which makes its headlong rush into renewable energy, called Energiewende (“energy transition”), even more mystifying than similar attempts by smaller EU states. Now come reports that the country’s rapid expansion into solar, wind, and other renewables has not been entirely smooth. Subsidies and regulations are promoting ill considered wind and solar installations while driving up costs. Slipped in among the solar panels and wind turbines are "biomass" generators—in other words, things that burn wood and agricultural waste—and the green party's anti-nuclear pogrom has led to an upsurge in coal usage. This hardly sounds like progress. Meanwhile, a new article makes bold claims for three of the smaller EU markets. Denmark, Portugal, and Spain have all made rapid transitions away from fossil fuels for electricity, but each in a different way. Are they truly examples for the world to follow?

The green dream is to run the world on nothing but solar and wind energy, maybe with a bit of geothermal and tidal generation to help out around the edges. Two recently released online articles from IEEE Spectrum claim that success in Denmark, Portugal, and Spain prove that the all renewable view of future energy is not only possible but close at hand. This tremendously optimistic assessment of Europe's renewable success comes from less than unbiased sources. Author Christian Roselund is the global content director for SolarPV TV. He previously covered the global solar industry for the trade publications pv magazine and SolarServer. Co-author John Bernhardt is outreach and communications director for the Clean Coalition. Not surprisingly, if one reads past the authors' bias, things are not quite as green as they seem.

The first article, “Lessons Learned Along Europe’s Road to Renewables,” touts the success of three of the smaller EU economies in going renewable. “Denmark, Portugal, and Spain have all made a rapid transition away from fossil fuels for electricity, but each in a different way,” the headline reads. So let's run down the supposed success stories one by one, starting with Denmark.

According to the article: “[W]ind met 39 percent of Denmark’s electricity needs last year, the highest share of any nation. And wind isn’t Denmark’s only renewable energy source; the country has also been investing heavily in biomass power plants that burn woody material and straw and in biogas tanks that capture methane from organic material to produce electricity. Add in solar arrays and renewable sources accounted for 60 percent of Denmark’s electricity in 2014, according to Energinet, the company that operates the Danish electricity and gas grids.”

The source that is most ballyhooed is wind, bragging that wind alone produced more power than the whole of Denmark could use on one particularly windy day in December 2013. Contrary to the article's central claim—that this success disproves the need for favorable geography when switching to renewables—Denmark is uniquely blessed by its location when it comes to available wind power. But that aside, the real catch here is that Denmark is a small country. Bordered primarily by the Baltic Sea and North Sea, Denmark occupies 43,094 square kilometers (16,621 square miles), a little less than twice the size of Massachusetts. Germany shares 68 kilometers (42 miles) of border with Denmark, and the other 7,314 kilometers (4,545 miles) is coastline. Its population is around 5.6 million, about 1% of the total population of the EU. In terms of economic activity, it accounts for roughly 1.9% of the EU total ($314 billion vs $16,584 billion). In comparison, New York City has a population of 8.4 million and a gross metropolitan product (GMP) of over $1,330 billion. Denmark going 60% renewable is hardly a world changing event.


The bit in dark green is Denmark.

What's more, the real catch is that Denmark can only run on renewables because its larger neighbors do not. When the wind blows too strongly, Denmark dumps its excess power on the international market. When the wind is still, rather than let the lights go out in Copenhagen, they buy energy from other countries with more stable sources. Even the authors admit that wind is a fickle source of energy.

Of course, wind is the most variable electricity source, and its output is hard to forecast. In any electricity system, supply and demand must be balanced, and this is harder to do when the electricity supply is continuously changing and you have limited visibility as to how much power will be available. Reliably integrating large amounts of wind generation into the grid thus presented a technical challenge. Grid interconnections with neighboring countries proved vital because they allowed Denmark to send excess power abroad on windy days and to import power in times of low wind—a much less expensive solution than available forms of energy storage. Indeed, the nation has one of the highest degrees of regional interconnection in the world, with a series of high-voltage power lines running under the icy waterways that separate it from Sweden and Norway, as well as overland transmission to Germany.

The second nation held up as an example of renewable energy success is Spain. Granted, Spain is a much bigger country than Denmark, with a population of 47.3 million, and a GDP of $1,352 billion, or 8.2% of total EU GDP. Given its location, sunny Spain unsurprisingly looked to solar power as a way to a renewable future. Unfortunately, by investing heavily in solar photovoltaics, Spain created a solar boom in 2007-2008. The government, to spur investment, created a generous feed-in tariff that set electricity rates for renewable energy generators above their calculated costs. This had the predictable result.


Spain is a leader in bird cooking technology.

The high cost of solar and continued government meddling conspired to create a huge, €4 billion deficit in the Spanish power industry. In a panic, the government rescinded the feed-in tariff, drying up investment in renewable energy. Despite claiming that wind power has filled the gap, growing from a negligible amount in 1995 to 20% of annual demand in 2014, Spain's renewable boom has gone bust, along with much of the Spanish economy.

These cuts halted renewable energy investments in Spain, and they now threaten to bankrupt tens of thousands of people who invested in wind and solar. This collapse in renewable energy deployment is particularly tragic given Spain’s past leadership in wind and solar thermal technologies and its success in integrating large volumes of renewables in a geographically constrained system.

Some claim that 43% of Spain's power comes from renewables but, if you exclude hydro and biomass, wind and solar only account for 27%. And this comes at a ruinous price. According to the New York Times: “Years of disastrous policies, coupled with the economic crisis, have recast renewable energy in Spain. Once touted as the embodiment of progress, wealth and sustainability, the industry is now seen as an unwanted and costly extravagance.” Does that sound like a resounding success to you?

Last of the supposed success stories is Portugal. Indeed, Portugal is the smallest economy of the supposed success stories, with a GDP of $213 billion (1.3% of total EU GDP), though its population of more than 10 million is almost twice as big as Denmark. “Few people outside of Portugal know about its renewable energy transition, and yet it has also been a leader,” the authors gush, adding. “In 2014, renewable sources supplied 63 percent of the country’s electricity, according to Portugal’s Renewable Energy Association (APREN).”

Actually, the data published by APREN show that large dams were the main source of electricity generation, contributing with 29.4% of electricity consumption, followed by wind with 23.7% of the consumption. Solar power accounted for 1.2% of consumption and biomass for 5.4%. In third place, with 22.2% of the consumption, was coal.

So wind and solar only managed ~25% while hydro provided the lion's share. But the article’s claim that having a particularly favorable geography isn't necessary for renewable success clearly rings false. So far we've seen that Denmark has a surfeit of wind, sunny Spain is perfect for solar, and Portugal runs mostly on hydro. All of these circumstances are accidents of geography and not factors that other nations can bank on in their quest for a renewable future. And once again, the importance of being connected to other, larger nations' power grids is obvious. Portugal is connected to Spain, and Spain is connected to Morocco and has recently completed a major connection to France.

So how about Germany? The leading economy in Europe, with a declared national goal of going 45% renewable by 2030. With a GDP of $3,401 billion, 29% of the EU total, Germany is arguably the most important industrial nation in Europe. In 2014, wind, biomass, solar, and waste-to-energy plants met 24% of Germany’s electricity demand say Roselund and Bernhardt in “Has Germany’s Energy Transition Stalled?” Even they admit that the country’s rapid expansion into solar, wind, and other renewables has not been without problems. Indeed, while solar often provides practically nothing in the winter, too much power can be produced on sunny summer days at noon.

However, the Energiewende has had some missteps. Even as Germany’s solar capacity was rapidly expanding, the country’s existing interconnection standards required that distributed generation facilities, including solar PV installations, automatically disconnect from the bulk grid if system frequency exceeded 50.2 hertz—a situation that can occur when power supply exceeds demand. Solar sometimes provides more than 40 percent of the country’s electricity needs at midday, so this standard could have resulted in vast amounts of PV capacity going off-line all at once.

Of course the reason for the frequency standard is to preserve the integrity of the power grid and all that is attached to it. This is not the only report of instability in the German power market. By deciding to rapidly shut down all of its nuclear plants Germany has been strugling with rapidly rising prices and dwindling generation capacity. According to an article in Forbes:

Because renewable power sources have been so unreliable, Germany has been forced to construct numerous new coal plants in an effort to replace the nuclear energy it has taken offline. In fact the country will build more coal-fired facilities this year than at any time in the past two decades – bringing an estimated 5,300 megawatts of new capacity online. Most of these facilities will burn lignite, too, which is strip-mined and emits nearly 30 percent more carbon dioxide than hard coal.

In other words Germany is dirtying the planet in the name of clean energy – and sticking its citizens with an ever-escalating tab so it can subsidize an energy source which will never generate sufficient power.

The cruelest impact of all has been on the German people, who have seen skyrocketing energy costs. According to some, the rising cost of Germany’s energy policy actually threatens its industrial base. Once again the bad idea at the root of the burgeoning problem is the feed-in tariff. “Ballooning costs of subsidising feed-in tariffs under Germany’s EEG have increased to more than 120 billion euros between 2000 and the end of 2013,” says World Review. “Germany’s electricity is 40 per cent more costly for private consumers and 20 per cent more expensive for industrial users than the EU average.”

"German industry is going to gradually lose its competitiveness if this course isn't reversed soon," said Kurt Bock, chief executive of BASF SE, the world's largest chemical maker. And as reported in the Wall Street Journal, nearly 75% of Germany's small- and medium-size industrial businesses say rising energy costs are a major risk, according to a recent survey by PricewaterhouseCoopers and the Federation of German Industry. All this to battle that demon gas, CO2, of which Germany contributes a whopping 2% of total global emissions.

“Initially, there was this enthusiasm that Germany would be at the head of the parade,” said Daniel Yergin, vice chairman of research firm IHS, who has chronicled the global energy sector for decades. “But now the Germans look back and see there aren't that many people behind them.”

Has Europe succeeded in its effort to go renewable? The first IEEE article makes this claim for three of the smaller EU markets. Yet all three have distinct natural advantages that help bolster renewables, and none of them can stand alone as an isolated renewable energy producer. This is the key statement in the article: "Grid interconnections with neighboring countries proved vital because they allowed Denmark to send excess power abroad on windy days and to import power in times of low wind—a much less expensive solution than available forms of energy storage.” That is why renewable energy works for little Denmark. But as we can see from Germany's experience, trying to go mostly renewable in a large economy is a different matter, fraught with economic danger.

Contrary to what the authors' claim, Denmark, Portugal, and Spain show that meeting a substantial portion of electricity demand with renewable energy does depend upon favorable geography, an existing set of circumstances, and, in lieu of widespread deployment of energy storage, the ability to use neighboring systems to stabilize the local grid. Without neighboring nations with large baseload capability the success of these green midgets would not be possible. Nuclear, hydro, and fossil fuel power in France, Scandinavia, Germany, and elsewhere is what allows smaller EU nations to “go renewable.” They have not overcome the major hidden problems with intermittent power sources such as wind and solar, merely passed the problems off to their neighbors.

If you have read our book, The Energy Gap, you know that we are not opposed to renewable energy sources. They certainly have a place in providing energy for a new, cleaner future. But that is only if they are used safely and only where they make economic sense. Otherwise, renewable energy can harm the very people whose lives it was meant to improve, driving up energy costs and damaging economies. Indeed, as we have seen in Germany, it may even be worse for the environment than what it replaces. Articles like the one in IEEE, that paint an overly optimistic picture and even distort the facts, help no one, least of all those trying to promote a rational energy policy for the future. Sound energy policy needs solid engineering not propaganda from renewable energy fan-boys.

Be safe, enjoy the interglacial and stay skeptical.

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