When Germany pays a high price for its energy shift

The question burst into the electoral campaign for the legislative elections on February 23, with the leader of the conservative opposition attacking Olaf Scholz this week in front of deputies.

“Your energy policy is making the entire European Union cringe, which is today very angry with Germany,” thundered Friedrich Merz, favorite to succeed the social-democrat leader as chancellor.

The Minister of the Economy, the ecologist Robert Habeck, responded by denouncing the legacy of the sixteen years when the conservatives ruled the country, under Angela Merkel, “blind” to the energy challenges that were ahead.

At the origin of this pass of arms: a staggering price of electricity recorded twice in November then in December, for a few hours. On December 12, at the end of the day, it reached a historic record of 936 euros per megawatt hour, twelve times the average of recent weeks.

Wind turbines near the village of Klein Buenzow, northeast Germany on September 8, 2020. PHOTO AFP / Odd ANDERSEN

The fault lies in a winter episode without wind – or sun – which shut down the country’s wind and photovoltaic farms.

Some energy-intensive companies, which buy on the market in real time, have reported having to limit or temporarily stop their production.

During this short outage, Germany bought a quantity of electricity from the Leipzig Stock Exchange (east), which plays a key role in the formation of energy prices in Europe, causing the bill for some of its banks to soar. neighbors, such as Sweden.

Most individuals and many businesses, however, have fixed rates, which protect them from these fluctuations. And the situation quickly returned to normal with the restart of renewable production.

Wind turbines in Sievern, northern Germany on December 10, 2019. PHOTO AFP / Patrik Stollarz

Faced with the controversy, the government pointed out the obvious: “There are phases where there is a lot of sun, a lot of wind, where electricity is produced at a very low cost in Germany, which exports it to the neighboring countries, and then there are phases where it is the opposite.

But the world’s third largest economy, already losing competitiveness, cannot afford to depend on fluctuations in prices and volumes of electricity produced, experts insist.

In line with the objectives, renewables continue to progress, having represented on average 60% of electricity production in Germany since the start of the year.

At the same time, traditional sources of energy are declining: coal-fired power plants are gradually closing, and the last three nuclear reactors were disconnected in April.

Aerial view of the solar park near Erftstadt, western Germany on October 22, 2024.
Aerial view of the solar park near Erftstadt, western Germany on October 22, 2024. PHOTO AFP / Ina FASSBENDER

To compensate for the intermittency of solar and wind power, it is therefore necessary to increase the storage capacities of renewables and maintain a second production park, gas power plants convertible to hydrogen, to take over when necessary.

So many projects that are not progressing fast enough.

“If the State establishes the right regulatory frameworks, then investments in energy storage and flexibility of demand will help prevent shortages,” Georg Zachmann, energy specialist for the circle, explains to AFP. Brussels think tank Bruegel.

But “there is a big fear that the framework will not be enough to quickly develop” the necessary infrastructure, underlines the expert.

The Hamborn gas power plant on the Rhine in Duisburg, western Germany on October 14, 2024.
The Hamborn gas power plant on the Rhine in Duisburg, western Germany on October 14, 2024. PHOTO AFP / Ina FASSBENDER

Many obstacles, particularly bureaucratic, remain for the deployment of green energies: “it takes on average seven years to build a wind turbine, but only seven months to build a liquefied natural gas terminal. It should be the opposite”, underlines Claudia Kemfert, energy expert at the DIW institute, with AFP.

The fall of Olaf Scholz’s coalition, which will lead to the formation of a new government after the February elections, has just led to the abandonment of a key bill to build a fleet of gas power stations in order to to replace coal.

Industrial circles are sounding the alarm: Markus Krebber, boss of RWE, the country’s main German electricity producer, sees a system which has reached “its limits”.

The “green blackouts” at the start of winter would, according to him, “not have been manageable on another day with a higher peak load. For example in January”.

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