Wednesday, August 08, 2012

Can Germany Avoid a Spain-Style Meltdown and Indian-Style Blackouts?

Germany's government is treading a fine line between economic catastrophe and widespread power outages, on the one hand, and barely squeaking by with high unemployment and low growth, on the other hand.

If the quality and reliability of Germany's power supply continues to decline under the controversial Energiewende policy, Germany's industry may have no choice but to re-locate in more energy-friendly territories.
...private consumers and especially small and medium-sized businesses are heavily burdened by rising energy prices. Especially the medium-sized companies suffer doubly: first, from the higher energy costs in production and secondly because customers have less money in their wallets because of the rising electricity prices

It should also be remembered that the absolute level of wholesale prices is not really important for the competitiveness of the industry. The comparison with the electricity prices of other countries is much more important for the decisions regarding relocation or outsourcing.

And this comparison does not look good. Germany has the highest industrial electricity prices in Europe. With increasing costs of the green energy policy, relocating abroad is becoming increasingly attractive for companies, especially for energy-intensive businesses. _DieWelt_via_The GWPF

If Germany loses its energy-intensive industries, it will be the beginning of a long, slow slide into deep economic stagnation for the most powerful economy in Europe. And the underlying cause -- the failure of the nation's power grid to maintain high levels of reliability and quality, even while electricity prices are shooting through the roof -- will only get worse as Germany's economy fails.
The loss of such industries would have potentially disastrous consequences for Germany, however. The strength of Germany’s economy – compared to international standards - is mainly due to unusually intact and tightly knit supply chains. Basic industries are not the dinosaurs of "old economy” - already condemned to extinction. They are rather at the beginning of the value chains; with their quality and price level they set the starting point for all subsequent stages of industrial production.

German machine producers, car manufacturers and electrical industry are world leaders, because their engineers and skilled workers have an exceptional knowledge of the characteristics and abilities of their materials.

This expertise also stems from the geographical proximity and close ties of primary industry and processing companies in the manufacturing sector. This proximity should not be put at risk through negligence, allowing value chains to break because companies are driven abroad by unilateral cost burdens due to the green energy transition. _Translation of DieWelt article via The GWPF
Real Clear Energy

Labels: , ,


Blogger Carter said...

Although the cost of grid power is increasing, you are failing to consider all those consumers that have installed solar and are getting most of thier electicity for free now and selling some of it back at a profit with the feed in tarrif. (Admittedly the policy that is driving up the cost of grid power) Isn't this going to be a boom time for them?

The fact that a transition to a renewable economy is going to increase the cost of grid power is a red herring because it does not consider all the consumers that are now getting thier electricity basically for free or at a steep discount. This issue is far more complicated than the rising cost of grid supplied power and the convention power industry constantly trumpets this part of the story but leaves out the part about all those consumers that are now reaping a windfall from lower energy cost. In any technological transition, there will be winners and losers.
Germany has forged a bold path for its country and time will tell whether it will bring them success or failure but the idea that they will wind up like India or Spain is shear speculation at this point. If I were a gambling man, I wouldn't bet against the Germans on this one.

5:24 AM  
Blogger al fin said...

Germany is most definitely forging "a bold path," not only for itself but for all of Europe, full of the grandest ambition and good intention.

The people at large are not likely to approve of where the path leads, once they get a bit closer to their destination, and the end point grows clearer.

People who profit from the feed-in tariff system resemble small-time political opportunists, who profit from the suffering of society at large.

If you wish to obtain your home energy from solar or wind, fine. But don't ask me to pay for it.

2:05 AM  
Blogger Carter said...

But it's OK to subsidize Coal, Oil, and Nuclear and I guess the people that are profitting from that are what, "civic leaders"? I think I would call them "big time political opportunists". But I suppose there is nothing wrong with that. What a double standard!

So you're saying you would rather have our money, and the money of future generation for the next 100,000 years btw, spent on cleaning up after the nuclear industry? How much did 3MI, Chernoble, and Fuchashima cost? How much tax money is spent on supporting the nuclear industry, waste management, regulation, loan guarantees etc, etc? But that's OK, right? Because? I'm guessing Japan could have installed solar on every home on the island for what they're going to pay cleaning up that mess. And nobody ever got lukemia from a solar panel.

I'm not particularly a big proponent of feed-in tarriffs either, but let's get real here. It has been an unlevel playing field for renewable energy from the beginning so I don't see a problem with spending a little money promoting good ideas for the future. But I guess you want a little radiation to go with that mercury in your tuna salad.

And while where at it, why don't we characterize those "small time political opportunists" that capitalize on these solar incentive as lazy, pot smoking hippies that have never worked a day in there life too.

Once again I say, only time will tell whether Germany's bold path will be a boom or bust, but the last I checked, their economy was going gangbusters and the problems in Spain and India don't have anything to do with solar energy development.

5:45 AM  
Blogger al fin said...

Perhaps you should check again, Carter. Germany is beginning to pay the same price that Spain is paying in spades.

Considering "energy subsidies," have you ever looked at benefits in terms of units of energy or power delivered in a timely manner?

If you were ever willing to look at the issue in such an objective manner, you might gain a level of insight which seems to be lacking at present.

11:34 AM  
Blogger Carter said...

Why don't YOU take an "OBJECTIVE" look at energy subsidies yourself. And be objective, don't just find the examples that make nuclear look good. And while you're at it, don't convieniently forget the cost of waste management for 100,000 years, decommissioning, and accidents, past and future.

Aggressive energy conservation and many forms of renewables, (not all admittedly), give you more bang for the buck than anything else. I have done the analysis and while it's far less profitable for the conventional energy industry, it's infinitely better for consumers and the environment in the long run.

The debate between pro and anti nukes is about like Arabs trying to convert Jews to Islam or vice versa, both sides are so entrenched in thier own dogma they can't open thier mind to any other possibility. I've read the Bible, the Koran, and the Tora cover to cover and do you know what struck me? They all say pretty much the same thing except everyone gets so hung up on the differences that they want to kill each other over it. I'm sure you love your children as much as I love mine and hopefully want to leave them a better world. Do you honestly believe an almost never ending legacy of nuclear waste does that.

Hey, I'm a registered professional mechanical engineer who has studied nuclear physics and it's pretty cool stuff from a technical standpoint. And I'd even say there are some "potential" applications of nuclear technology that "might" actually be a good thing, but not what we're doing with it now! Can you predict what the state of the political and geological world will be in 10,000, 1000, 100, or even one year from now. I don't think so!

If the nuclear industry had a record of safety that didn't include 3 major disasters in 3 decades, dozens of near misses, and documented cancer clusters around many of it's complexes I'd be all for it. But it doesn't and who know what catastrophies still await us. The arrogance of this industry is absolutely breathtaking sometimes.

I'm not going to argue that the path to a renewable future is going to be easy, it's not. As a matter of fact, I'm willing to admit it is technical the most challenging course we could chart. But it is without question possible and in the end, from a truely objective analysis, it is by far our best hope for a sustainable and secure long term future.

The truth can be painful but it will set you free.

8:21 AM  
Blogger bruce said...


Would you be so kind to indicate what kind of subsidies are being given to traditional energy? Beyond what is available to all businesses?

Aren't there some very interesting developments in reusing nuclear waste as fuel for new plants?

3:25 PM  
Blogger Carter said...

I'm certainly not an expert in this realm so I would direct your attention to a NYtimes article,(hardly a bastion of liberal thought), I found online to answer your question.

Here is an excerpt:

"With differing periods and different eras, comparisons are difficult. But the report calculates that nuclear subsidies came to more than 1 percent of the federal budget in their first 15 years, and that oil and gas subsidies made up one-half of 1 percent of the total budget in their first 15 years. “Renewables have constituted only about a tenth of a percent,’’ the report says.

It does not give a total number for coal, but notes that when Congress raised taxes to pay for the Korean War, it decided that the royalty payments received by people who owned land from which coal was mined should be taxed at the capital gains rate rather than the income tax rate, which is higher. The goal was to avoid depressing coal production. That provision remains on the books, the authors said.

Coal in fact enjoys a long history of government help; the report notes that in the colonial era, it was transported here from Britain as ballast, but that in 1789, the new United States put a tariff on such imports. Eager to encourage coal mining, states gave tax breaks as well."

Good question btw, I had no idea.

There are a few caviots that make the reality a little less slanted than this excerpt presents and I encourage you to read the whole article but overall, there doesn't seem to be much question that conventional energy has recieved considerably more support than renewables every thought about getting.

As for new ideas in nuclear, I can't help but think, "too cheap to meter" when I read about developing technologies in this area but in my heart, I am a scientist and I'm willing to keep an open mind and form my opinions on facts, not inuendo and emotion. It's basically a chemistry problem on steroids and you can do a lot of interesting things with chemistry. I've never advocated that we slam the door on nuclear research. I just don't think we should be generating commercial electricity with it when there are cleaner, safer, and far less expensive alternatives.

5:47 AM  

Post a Comment

Subscribe to Post Comments [Atom]

<< Home

Newer Posts Older Posts