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  • Unlike Hurricane Sandy, Energy Policy Blackouts Threatening Germany Could Be Avoided

    A blackout occurred in the wake of Hurricane Sandy, as more than 8 million people in the northeast were left without power. Millions could remain without power for several more days. Hurricane Sandy was a natural disaster that people could prepare for but couldn’t avoid.

    Blackouts and brownouts caused by misguided energy policies, however, could be avoided. Micromanagement of the energy sector with renewable energy mandates, prohibitions, overly burdensome regulation, and subsidies are taking a heavy toll on people and on the electricity grid used to distribute power.

    Germany, one of the most aggressive renewable energy adopters, is demonstrating the dark and cold path down which a government-centric approach to electricity supply leads. This winter, Germany is short 500 megawatts in electricity compared to the previous year.

    Why the shortage? A premature shutdown of nuclear reactors and a slower than expected and government-directed energy transition toward renewable sources. The German government immediately shut down eight nuclear reactors in response to the Fukushima accident and determined to end all nuclear power generation in Germany by 2022.

    Germany also adopted an aggressive 35 percent target of renewable energy by 2022. In the U.S., California has similar ambitions for renewables, having set a target of 33 percent by 2020.

    The results of Germany’s policies are an unstable electricity grid that threatens to leave Germans in the dark and cold this winter. European grid operator Tennet reports that, during the last year, the electricity grid would have collapsed multiple times had only one more significant power plant or transmission cable become impaired. The rate of unusual measures to stabilize the grid—such as turning power plants off or taking wind farms off the grid—tripled last year, rising to 998 interventions.

    Meanwhile, Vattenfall, another grid operator, is preparing for brownouts, asking large energy consumers how much electricity they could go without in the event it becomes necessary to take some users off the grid in order to avoid even worse results.

    This is happening because federal policies are inhibiting electricity markets from responding to consumer demand. Government intervention is distorting prices and investment prospects in the electricity sector. Renewable energy subsidies are rendering conventional sources unprofitable, and yet the renewable sources alone cannot assure grid stability without conventional sources being available to meet electricity demand during times when the wind does not blow or the sun does not shine.

    California’s ISO, which operates the region’s power grid, referred to similar challenges in integrating the state’s 33 percent renewable portfolio standard:

    Among these challenges is ensuring that the ISO has sufficient flexible capacity to address the added variability and unpredictability created by intermittent resources.

    Blackouts and brownouts come with huge costs. Industrialized economies such as Germany and the U.S. depend on reliable electricity to function. Hospitals need power to keep patients alive, and people freeze in their homes when electricity is their only source of heating. Electricity is the lifeblood of the economy, and without it few transactions can take place. It is mind-boggling to think that governments would impose these large risks on people for lofty policy goals.

    Unlike natural disasters such as Hurricane Sandy, which caused blackouts across the American northeast, blackouts and brownouts as a result of short-sighted energy policies are avoidable. As Sandy relief efforts are underway, policymakers should look across the pond and avoid energy policies that put Americans at undue risk of power outages.

    Posted in Energy [slideshow_deploy]

    4 Responses to Unlike Hurricane Sandy, Energy Policy Blackouts Threatening Germany Could Be Avoided

    1. Florian says:

      As a German Engineer working in the Energy sector, I must say that this article presents opinions as facts. First of all, compared to US citizens, Germans don´t really know what "Blackouts" are, cause the average power cut duration a person experiences per year is only 15 minutes here, much less than in the US. This high level of supply quality has maintained stable for dozens of years now, and there is little reason to think that there will be more blackouts this year.

      In the past, the German electricity production was largeley based on coal, lignite and nuclear power. This is now changing and Renewable Energies are taking over. This shift has economical loosers (the old energy companies) and winners (the new energy companies). The grid owners are also involved as they need to make investments which some of them avoid to do.
      The reports about blackouts in the following winter are not science based, but a political campaign of the owners of conventional power plants.

      In capitalism, it's quite normal that some companies loose market shares cause they are not able to offer modern and adequate services, and newer companies come and take over their place.

      • Romina Boccia BocciaR says:

        Florian: Thank you for your comment.

        The difference in available megawatts compared to last year is provided by the German federal network agency, a regulatory agency in the electricity and other sectors similar to the U.S. federal energy regulatory commission.

        The German also government acknowledged the new challenge to the high level of supply quality (as you mention) that the German people are used to by passing a law that requires energy providers that are deemed critical to supply power. The law, requires power generators that are no longer profitable, like certain natural gas or coal plants, to continue operating, whether they want to or not. The government would compensate the power plant owners for the measure and the costs would be added to consumer’s electricity rates. The rule, which is intended to avoid large scale blackouts, will not go in to effect until next winter, however. (See http://wirtschaft.t-online.de/regierung-beschlies

        In the long-term, the German government is exploring capacity payments, a form of subsidy to keep conventional sources operating, because they are needed for grid stability as the renewable sources are intermittent and unpredictable.

        Creative destruction of old technologies, as they are replaced with new and better ones that satisfy consumers better, is a critical component of capitalism and economic growth. However, renewable energy mandates, and policies designed to pick and choose energy sources by political means are the opposite of capitalism. If renewable energy was pushing out conventional sources in a free market, it would not need to be subsidized. Instead, renewable energy sources are forcefully integrated by a process that's driven by special interests and politics, and not by consumers and entrepreneurs.

        The renewable energy transition would be less risky and more sustainable if the process were indeed driven by creative destruction. As it is, subsidies and government mandates often perpetuate technological mediocrity, hurting also the renewable industry by distorting the market processes that guide investors toward the most promising technologies.

    2. cowboybobmt says:

      you've missed the point Florian. Markets do not stop one activity and re-start the replacement activity the way today's governments attempt to. The green-nazis have decided that Coal = Bad, Nuclear = Bad, Hydro = Bad…therefore must stop IMMEDIATELY. Totally ridiculous. Wait until weather extremes which are outside the 3sigma hit one winter…no government on earth will have accurately predicted the capacity needed…many will suffer, not because of the market, but because of government disruption by regulation and manipulation for a political agenda. And what's to replace it…a bunch of immature technologies that currently have no way of replacing the removed capacity…without outrageous expense and waste.

      If solar, wind, free bubble-up and raindbow stew are the waves of the future, bring it on…but make it earn its way into the energy mix…the market will sort it out at the best value to society.

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