Why The “Energiewende” Is Based On Facts And Not Romance

This post should be understood as my answer to yesterday’s article in German “Manager Magazin” entitled  Please Don’t Disturb Us With Facts.

Winds of Energy

Recently I saw many good articles coming from Manager Magazine, but the one mentioned here seemed odd from the very beginning. I began being a bit suspicious and decided researching some facts as well as finding out about the author himself.

The Author, Marc Oliver Bettzüge, is an Economics Professor in Cologne and member of the EWI. As such I expected him to have a more in-depth understanding of our industry.

However, a quick Google Search later, I learned that the EWI of the University of Cologne is sponsored by the NGO “Gesellschaft zur Förderung des Energiewirtschaftlichen Instituts an der Universität zu Köln e. V” which intern is sponsored by E.ON and RWE. Further, they worked in the past for the Initiative Neue Soziale Marktwirtschaft (Initiative New Social Market Economy), a German neo-liberal lobby group. This should help to understand his position and his reasoning that lead to the clear bias in his article.

Bettzüge  opens by joking about Germans having a new purpose in the world, and although it is meant as a joke, he is probably right. During my active time at the European Youth Parliament (2011-2014) I noticed that more and more we Germans are known as a country caring about the environment, climate change, waste recycling and renewables. But this development is, in my opinion a welcoming one. It gives the German Renewable Energy industry a strong sense of seriousness and credibility. It shows that we care.

He goes on to argue the Energiewende is a rigid process that Germans follow blindly. His only facts supporting this claim: Two quotes, one from Baden Würtemberg’s Minister President, Winfried Kretschmann (Green Party) (“The Energiewende is national consensus”), but instead of a full quote he half quotes using a subjunctive to ensure the audience notices his doubt and another quote from former Energy and Environment Minister, Peter Altmaier (CDU) (“Everyone has to do their part in the Energiewende”).

Fact is that Kretschmann was elected in the aftermath of the Fukushima Disaster, combined with the protests against the Stuttgart S21 rail station plans.

The events in Fukushima also defacto triggered the general opinion in Germany to switch toward an anti nuclear standpoint which now, undoubtedly, is the majority view, and for a good reason.

However, it is not true that many people follow the new direction blindly. First of all, the direction is not new, but we just returned to this path in 2009, although reducing the speed vs 2004. Also, the number of people constantly questioning this path, trying to adjust it and improve it is not so small that one could ignore it: For example, the whole reason YourEnergy exists to drive and influence the global switch to Renewable Energy by the means of developing new technologies such as energy storage, turbine management software, facilitating investment in the industry and lowering the hurdles to accessing and deploying these technologies.

In the next paragraph Bettzüge directly compares renewables  to fossil fuel and nuclear, stating that the first are incentivised and the other phased out. While this is true, he is missing half of the story: A 2009 study quoted the total subsidies the German taxpayer paid to the nuclear Industrie since 1954 to be over 203.7 Billion Euros. Considering the fact, that nuclear energy is not required to have liability Insurence in Germany, we can add up two  820 Billion Euro in indirect subsidies that also influence their market position.

Further, the coal industry has been subsidised with 352 Billion Euros between 1950 and 2008.

Therefore, arguing that subsidies are an unfair and unreasonable advantage for renewable energy is a false claim. He also fails to mention that the phase out of coal is a climate political necessity to reach the 2 degrees kelvin goal of maximum global average temperature rise and to phase out nuclear is the economically sensible choice.

The fact that Germany only accounts for 1/40th of the global energy economy is no excuse not to act in our best ability. Also, you might notice this is actually a quite large chunk compared to other states. Electricity production is also on of the major sources for pollution, leading me to conclude that this is a good way to start.

When the Energiewende is successful, we have a brilliant basis for a larger scale role out of Tesla Model S style EVs that will make more sense than ever.

Currently Renewables make up 56% of the new capacity added to the world’s power sector. REN21 reported renewables to now account for 26.4% of the world’s generating capacity and 22.1% of the world’s supplies at the end of 2014 while Mr Bettzüge claims fossil fuels and nuclear contribute over 90%, but fails to mention a source. I’d like the add one more fact: According to the Umwelt-Bundesamt (Federal Agency for Environment) the current contribution of renewable energy to the total electricity production in Germany is 27,8%. The “over 90%” mentioned in Bettzüge’s article are not a number that is backed up by any reliable data source we use in the renewable energy industry.

The Author writes that current policy is based on a “future prediction” that he sees in competition to strategic thinking. As every manager will tell you, strategy includes goal setting, therefore I don’t see them in competition. If a 20% CO2 reduction by  2020 EU wide is the goal, we need to break it down into achievable bites and find ways to accomplish them, hence, renewable energy.

I don’t deny that the decision to opt out of the usage of nuclear power is mostly lead by a political one, but for the economic reasons mentioned above it is the right one, especially taking the health and risk factors into further consideration.

Mr Bettzüge asks what the benefits are for all the political decisions made in regards to energy policy in Germany, but I think they are clear: lower cost inflicted by climate change, lower cost inflicted by storage, transport and security of nuclear waste products, reduced long term cost by accelerating technological development and proving the capability of the German renewable energy sector. This immensely strengthens Senvion, Nordex, Enercon, Simens and others.

One of my most used arguments in favor is an actual net job gain. We create more jobs than we destroy and save money along the way. Modern Wind Farms produce cheaper electricity than nuclear power plants or gas fire plants, even when ignoring all subsidies paid directly through our tax bill. You may ask why we still need subsidies? Ignoring that most of them are used to pay for stand by power plants that can be made redundant in the near future thanks to storage and smart grids, the rest is a useful incentive to support broader deployment and development of renewable technologies.

The last claim made by Mr Bettzüge is also the one that feels the most twisted to me:

He first mentions a redistribution, but goes on to complain that the aging business model of many large scale utilities is falling apart as many more private people and small to medium companies revolutionary a market to the better. He criticises a state led surge for innovation, but does fail to mention the slow reactions and the low engagement the current giants in the market proof.

To conclude, I believe this article is blindly ignoring the important facts and then describes us, in the renewables industry, as dreamers while we are busy taking over global electricity supply and, in a second step, global energy.

While Mr Bettzüge calls for our industry to wake up and face reality, he seems to be caught in a day dream, financed by those who seem to be too slow to adapt to our success and the necessary market shake up. He condemns state intervention  as much as he condemns an accelerating competition. He asks questions, but still owes us proven, factual answers.

I, for one, am certain that the Energiewende in Deutschland is anything but a romance affair that ignores the facts. It rather is a new reality that, if anything, should come even faster and with more force to clean out the old dust that is still on the shelves of the few large monopolists.

(Jannik Malte Meissner is the CEO and Co-Founder of Renewable Energy Startup YourEnergy that helps companies and communities to build their own generation capacity, invests in renewable energy infrastructure and researches in electricity storage and wind energy)