Monday, January 02, 2012

Germany, Energy Starvation, and the Collapse of the Eurozone

Up until now, Germany has been the rock of the Eurozone. Stalwart German workers and relatively responsible German bankers and governments, have prevented much of the economic disaster that has befallen southern Europe. I say "up until now," because a recent decision by the German government to expand German dependency on wind power while shutting down all German nuclear plants, has sown the seeds of future decay of the German economy. Here is Spiegel online, describing some of the early stage problems in Germany's grand plan for energy starvation:
One of the central projects of Chancellor Angela Merkel's center-right coalition government, the scrapping of atomic energy and the switch to renewable energy, has hit a major obstacle. Nine months after the disaster at the Fukushima nuclear power plant in Japan, Berlin's multi-billion-euro project is facing increasing difficulties. And the expansion of the country's offshore wind farms in particular, which Minister Röttgen considers of paramount importance, is constantly beset by new problems.

...The energy industry is currently under more stress than almost any other sector of the German economy. The country's utilities are being forced to completely change their focus: away from nuclear power; away from their centralized structure; and away from their accustomed business models. The quartet of E.on, RWE, EnBW and Vattenfall, which for so long have been spoilt by enormous profits, has had to implement tough cost-cutting measures, and countless jobs have been sacrificed. E.on alone is shedding up to 11,000 of its workers, and the industry as a whole could ax more than 20,000 jobs in all.

At the same time, the sector is forging aggressively into the business of regenerative sources of energy -- or at least that was the plan. Now it's becoming increasingly clear that the promised expansion will not progress as hoped due to a lack of the necessary conditions for its success.

...According to internal estimates, RWE alone could lose more than a hundred million euros. Delaying construction is no longer possible. The timing of shipping transports, supplies of materials and the use of specialized construction teams is simply too intricate to easily reorganize.

One particularly devastating consequence is that private investors, who only recently overcame their wariness about the technologically challenging business of offshore power generation, now have doubts once more.

...Time and again, the projects have been tested for possible weaknesses, and their funding tweaked accordingly. Teyssen finally released the money just before Christmas, but his planners estimate that the projects' start dates will be pushed back by 12 to 18 months.

The delays on the high seas are a bitter blow for the German government's sensational about-face on electricity generation. Should the expansion of the offshore wind farms be delayed further still, this could lead to not only higher prices but also bottlenecks in energy supplies.

Pressing for Damages

The utilities could presumably only alleviate such a possible shortage of electricity by importing nuclear-generated power from the Czech Republic or France. "Political blunders are carelessly threatening the hard-won faith in offshore technology," says RWE's clearly annoyed manager Vahrenholt. After all, it's the job of Germany's ministers and civil servants to guarantee the timely connection of the wind farms with the national grid.

Unfortunately both the politicians and the Federal Network Agency are ducking their responsibility. In their letter of December 6, the wind farms operators suggested offsetting the financial losses they would suffer by increasing or extending the feed-in payments for the offshore wind farms under the Federal Renewable Energy Act. They also demanded the introduction of legally binding connection deadlines for wind farms to allay investors' fears as quickly as possible.
The German government has yet to respond to the pleas. However there's little enthusiasm at the environment ministry for reopening the tough negotiations that preceded the passing of the Renewable Energy Act in the first place.

RWE's bosses say they won't be satisfied with that. If the government sticks by its hard line, the company vows to press for damages in the triple-digit millions. _Spiegel
"Damages in the triple-digit millions?" That is a rather low-ball estimate of the actual damages which the utility will suffer. The German economy as a whole is likely to suffer damages in the trillions, once the repercussions of the grand plan for energy starvation cascades down to its denouement.

Here is what intelligent people need to know about big wind power, before the energy starvationists are able to force this catastrophe down their throats more than is already the case:
Arm yourselves with knowledge or you will have your posterior reamed in the manner of the German taxpayer, by the big-money greens and the big-wind developers. The reaming will not stop for decades after the fact, since besides paying higher prices for unreliable energy, your economies will suffer from chronic power shortages. Huge broad fields of giant rusting wind turbines will litter the landscape as a monument to the stupidity of politicians, the unscrupulous grubbing at the public trough by big wind developers and investors (such as Warren Buffett and Boone Pickens), and the thorough corruption of big money Green activism.

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