By Paul Homewood
Far too often in this country, big business has been only too happy to prostrate itself over global warming.
In Germany, however, there are signs of resistance:
Diess lamented that the EU’s campaign against conventional petrol cars was “threatening the very existence” of Germany’s car industry.
“The current campaign against individual mobility and thus against conventional cars is reaching existence-threatening proportions.”
Diess also attacked the proposed switch to electric cars as detrimental to the environment because Germany’s electricity systems is still dominated by coal-fired power generation.
“Instead of using petrol or diesel, we’ll basically use coal, even if we’re electrically powered, and in the worst case we’ll use even lignite,” he said. “That drives the idea of electric mobility ad absurdum!”
Full story (in German)
In fact, German industry sources have been spelling out this concern for years now, worried that mass migration to EVs would harm their car industry and give China’s a huge advantage.
The importance of Germany’s car sector to the national economy cannot be overstated, as Bloomberg report today:
Germany is at a crossroads, and nowhere will that be more evident than at the Frankfurt auto show this week.
Despite sleek new electric models like the Porsche Taycan, the traditional showcase of German automotive excellence risks becoming a platform for protest rather than preening, drawing attention to a generation of young consumers more likely to demonstrate against the car’s role in global warming than shop for a new VW, BMW or Mercedes-Benz.
Autos have made Germany into a global manufacturing powerhouse, but pollution concerns — intensified by Volkswagen AG’s 2015 diesel-cheating scandal — have sullied the reputation of a product that once embodied individual freedom. More recently, trade woes and slowing economies have hit demand. The consequence is Germany’s car production slumping to the lowest level since at least 2010.
Germany is teetering on the brink of recession, and the auto industry is pivotal to the economy’s health. Carmakers such as Volkswagen, Daimler and BMW AG as well as parts suppliers like Robert Bosch GmbH and Continental employ about 830,000 people in the country and support everything from machine makers to advertising agencies and cleaning services. With factories from Portugal to Poland, the importance of the sector radiates across Europe as well.
With emissions regulations set to tighten starting next year, concerns are mounting that companies across the country’s industrial landscape are ill-equipped to deal with the technology transition resulting from climate change and increasing levels of digitalization. IG Metall organized a demonstration in June, with more than 50,000 people rallying in Berlin, to draw attention to the risk of widespread layoffs from what Germany’s biggest industrial union calls “the transformation.”
If that’s not enough, a new report from McKinsey warns that the obsession with renewables threatens both Germany’s economy and energy supply:
A new report by consulting giant McKinsey finds that Germany’s Energiewende, or energy transition to renewables, poses a significant threat to the nation’s economy and energy supply.
One of Germany’s largest newspapers, Die Welt, summarized the findings of the McKinsey report in a single word: "disastrous."
"Problems are manifesting in all three dimensions of the energy industry triangle: climate protection, the security of supply and economic efficiency," writes McKinsey.
In 2018, Germany produced 866 million metric tons of carbon dioxide, a far cry from its goal of 750 million tonnes by 2020.
Thanks to a slightly warmer winter, emissions in Germany went down slightly in 2018, but not enough to change the overall trend. "If emissions reductions continue at the same pace as they did over the past decade, then CO2 targets for 2020 will only be reached eight years later, and 2030 targets will not be reached until 2046."
Germany has failed to even come close to reducing its primary energy consumption to levels it hoped. McKinsey says Germany is just 39% toward its goal for primary energy reduction.
Despite much hype, Germany still generates just 35% of its electricity from renewables. And if biomass burning, often dirtier than coal, is excluded, wind, water and solar electricity in Germany accounted for just 27% of electricity generation in 2018.
But McKinsey issues its strongest warning when it comes to Germany’s increasingly insecure energy supply due to its heavy reliance on intermittent solar and wind. For three days in June 2019, the electricity grid came close to black-outs.
"Only short-term imports from neighboring countries were able to stabilize the grid," the consultancy notes.
As a result of Germany’s energy supply shortage, the highest observed cost of short-term "balancing energy" skyrocketed from €64 in 2017 to €37,856 in 2019.
"It can be assumed that security of supply will continue to worsen in the future," says McKinsey…..
German utilities too are warning of insecure supply. “By 2023 at the latest, we will be running with eyes wide open into a shortfall in secure capacity,” a managing director for the Germany energy industry association BDEW said.
"The ongoing phase-out of nuclear power by the end of 2022 and the planned coal withdrawal will successively shut down further secured capacity," explained McKinsey. "In particular, the industrial regions in western and southern Germany are affected, in which many capacities go off the grid and at the same time, one can not expect high rates of development of renewables."
In June, Germany imported more electricity than it exported, and by 2023, Germany will become a net electricity importer, McKinsey predicted.
The growing insecurity of German energy supply is made worse by the fact that its neighbors Belgium and Netherlands may shut down baseload capacity: coal plants in the Netherlands and nuclear plants in Belgium.
As such, McKinsey worries that Germany may not be able to meet demand with imports. "In the medium term, there is a risk that there will not be enough supply capacity in the entire European network."
That could happen as soon as five years from now. "Without adequate expansion, the first bottlenecks could occur as early as the middle of the next decade, and they will continue to worsen until 2030."
If Germany continues to phase out both coal and nuclear, Germany will lose "the equivalent of 43% of total secured output in 2018."
To stabilize the electricity grid and avoid becoming too dependent on imported natural gas, Germany is expanding coal mining to the Hambach forest, where environmental activists were arrested last September.
Meanwhile, local communities and environmentalist have successfully blocked the building of transmission lines from the windy north to the industrial south.
"By the first quarter of 2019, just 1,087 kilometers of the planned 3,600 kilometers of power lines were completed." At that rate, McKinsey notes, "the 2020 target will not be reached until 2037. "
German consumers have paid dearly for the energy transition. German electricity prices are 45% above the European average, McKinsey reports. Green taxes account for 54% of household electricity prices.
Electricity prices will continue to rise through 2030, McKinsey predicts, despite promises in recent years by renewable energy advocates and German politicians that they would go down.
And higher prices will threaten the German industry’s competitiveness. "Even a modest increase of a few euros per megawatt-hour," McKinsey says, "could jeopardize the competitiveness of energy-intensive industries in Germany."
Radical change is required, McKinsey says. "Small changes in direction are no longer sufficient to lead the energy transition back on track. What is required is a fundamental turn in energy policy."
Among the radical changes required include building transmission lines eight times faster than they are currently being built, building new back-up power plants, and installing instruments to control electricity demand, all of which would drive electricity prices even higher.
"But it is also clear that the consequences of a blackout would be much higher," warns McKinsey.
Alternatively, Germany could abandon its phase-out of nuclear energy, something the consultancy, like many others in the country, does not mention.
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September 9, 2019 at 11:24AM
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