Published on September 20th, 2013 | by Zachary Shahan200
New York Times Gets Big, Red “F” On Germany’s Renewable Energy Transition
September 20th, 2013 by Zachary Shahan
Just coming back from an amazing trip visiting several of Ukraine’s cleantech pioneers, I’ve got a million things to do, including edit, upload, and share with all of you a bunch of interesting interviews and videos. Unfortunately, the New York Times — once a great journalistic outfit — has gone and published a horrible (horrible!), myth-filled article on Germany’s renewable energy transition. So, I’m putting all the fun stuff off in order to deal with this BS right now.
Rather than make this a flowery, conventionally journalistic piece that makes you feel like you’re strolling through yet another “informative” story somewhere in the mind of a concerned but relaxed NYTimes journalist who is “exploring the real world” and coming to “interesting,” counterintuitive, and even “shocking” conclusions (what would journalism be if it didn’t surprise you, right?), I’m going straight for the key BS points one by one as they appear in the NYTimes article. Not wanting to further impress some BS myths onto your minds, each section below starts with the counter-point rather than the message the NYTimes‘ Melissa Eddy and Stanley Reed provided.
Energiewende (the German plan to cut off nuclear and fossil fuel energy and replace it with clean, renewable energy) is running extremely well. Yes, there is a very popular talking point right now that claims Energiewende is running into problems (something like our congressional GOP’s “global warming action would hurt the economy” meme, which is actually completely false). In other words, this first key point from the NYTimes is total BS. Energiewende has come along and changed Germany in exactly the ways it was intended to. Changes to the country’s feed-in tariff policies have been implemented as solar and wind power grew and their costs came down, as was always planned. The initial investment costs money, but the payoff in terms of a cleaner environment and green jobs is paying off. As a result, there is still very broad support for Energiewende.
The “problems” the NYTimes references are basically manufactured problems created by big utilities, dirty energy companies, the think tanks they fund, and the politicians in their pockets. Yes, it’s politics season in Germany, so now is the time for these groups to greatly hype these fabricated problems. Unfortunately, some members of big media agencies don’t seem to see what is happening, and haven’t been following the story in Germany closely enough to know more about the actual situation and background of the Energiewende and its benefactors (i.e., common citizens and small businesses).
Germany’s electricity bills are a small percentage of overall household bills. One of the underlying arguments put forth by the NYTimes is that electricity rates are “skyrocketing” and putting the population in a whole lot of hurt. BS. Let’s actually look at some numbers. In the US, electricity accounts for about 4–6% of an average American’s budget. Here are some more details from a Charlotte Business Journal article:
Based on 2011 rates, the largest share of income going to power bills was in Hawaii, where those charges consume 6.2% of residential customers’ disposable money. That is no surprise. Power rates in Hawaii are famously high (34.68 cents per kilowatt hour in 2011, according to Moody’s)….
North Carolina’s average residential rate was 10.26 cents. That consumes 4.4% of customers’ disposable income, Moody’s says. States that take a larger share, after Hawaii, are South Carolina, 5.5% of disposable income; Alabama, 5.4%; Mississippi, 5.4%; Georgia, 4.9%: Tennessee, 4.7%, and Texas, 4.6%.
Arizona ties North Carolina at 4.4% of disposable income.
The two major Southern states that are not on that list are also interesting. Florida just misses getting the cut, with its power bills accounting for 4.3% of residents’ disposal income. All other traditional Southern states are also in the 4% range except for Virginia and Maryland. Power bills in each of those states account for 3.7% of disposable income. But Virginia and Maryland are both higher-income states than most in the South, largely because of the Washington D.C. suburbs.
In Germany, electricity now accounts for about 2–2.5% of a person’s budget. Hmm, unbearable, eh? Sure, that is an average, but even for the poorest 10%, the rate is just up to about 4.5%, probably less than the average American. Also, as I note in another section below, that is inevitable (no matter the power source), and the health benefits from switching to clean energy at least help to reduce sickness, early death, and healthcare bills (perhaps even having a net positive financial impact on the poor, who are disproportionately affected by such costs).
(Special thanks to our German writer Thomas Gerke for major help with this section.)
Germany’s welfare system has its poorer citizens living much more comfortable lives than those in other countries. The German welfare system would make congressional republicans in the US have seizures. Their unemployed and poor live very comfortable lives compared to ours. It’s a great system, in my opinion, that allows those who are less fortunate financially to live without too much extra struggle. As a quick anecdote, I have a German friend who was unemployed for quite some time. Visiting him in Berlin, I got a glimpse of how well even the unemployed and poor are able to live there. He had more money for food and the basics of life than he needed. He had a quite large apartment in a nice area that many a citizen in other countries could only dream about. Sure, he would be happy with something better, and he was working hard to get a job (as is of course required of the unemployed in order to keep getting support from the government), but he was at least able to live a comfortable life in a nice place as he worked to find employment.
Coming back to the matter at hand, Craig Morris of Renewables International has actually done an excellent job of trying to put electricity bills and Energiewende charges into perspective. Here’s one excerpt from that:
What is the impact of the cost of renewables on his power bill? Below I provide figures both for single-person households and four-person households in Germany.
Household Power consumption / year Monthly bill Of which, RE 1 person 1,800 kWh €40.5 €7.95 2 people 2,700 kWh €60.75 €63 3 people 3,400 kWh €76.5 €15.02 4 people 4,000 kWh €90 €17.67 5 people 4,600 kWh €103.5 €20.32
As you can see, the average monthly power bill for a single-person household in Germany comes in at €40.50, equivalent to around $55 at current exchange rates. Of that, around eight euros is attributable to green power alone – roughly the cost of one and a half of those packs of cigarettes on the German man’s kitchen table. For a family of four, the figure rises to €90, equivalent to around $120, with roughly €18 then devoted to renewable electricity.
Craig has much more in the way of calculations that I think is worth checking out. Head over to Renewables International for that. But just two more findings from that article that I think are particularly worth highlighting are as follows:
- Using an online welfare calculator, Craig found that a single-person household in Germany would receive about €382 a month while also having rent, heating costs, and other utilities completely covered. That translates to about $517 spending money after rent & utilities.
- For a family of four, including the rent (estimated at €600) and utilities, the total came to €2068, which is about $2800. That comes to nearly $34,000 a year. As Craig summarizes: “The German welfare system would thus put a family of four nearly 50 percent above the poverty level in the United States, which was just over $23,000 a year in 2011 (PDF). For a single person living alone, the poverty level in the US was around $11,500, which is also a full 10 percent below the approximately $13,000 a year that that person would receive in Germany according to the online calculator above.”
Anyway, check out Craig’s full piece for more on that. He also has great sections on the options Germans have for changing power providers (hint: the guy featured in the NYTimes story could save €12 a month by switching to a different power provider), some perspective on how many Germans get their power shut off versus how many Americans land in such a situation, and facts on other German costs that make the focus of this NYTimes story look like a joke (a key reason why the matter “uncovered” by the NYTimes is not given much attention at all in national political debates that are happening right now).
Yes, new power plants cost money. The fact of the matter is, when we build new power plants, they are going to cost money. When we expand the grid, it is going to cost money. This is true whether we use clean or dirty energy. But the fact is that old power plants and dirty power plants need to be retired. Power plants can’t run forever, and extending them beyond their safe operating life risks major failures that cost the country and perhaps the world in radiation leaks, other pollution, explosions, and even simply and increased number of blackouts and brownouts. All of that costs a lot of money. Fukushima has cost Japan alone billions and billions of dollars (I’ve even seen estimates in the trillions). It has greatly damaged Japan’s economy. And the disaster isn’t even over — they still can’t contain the radiation leaks. As far as coal pollution, it surely costs Germany billions of dollars a year. Coal pollution costs the US approximately $500 billion a year according to a study from Dr. Paul Epstein, Director of Harvard Medical School Center for Health and the Global Environment at the time of the study (now deceased), and eleven other co-authors.
Renewable energy deployment speeds up the move away from fossil fuels. Germany’s Energiewende is moving the country away from nuclear energy and fossil fuels at a rapid clip. The increase in renewable energy development, very importantly, brings down the wholesale cost of electricity. This makes coal and natural gas power plants even less competitive. The result is threefold: 1) renewable energy deployment speeds up (which further brings down their costs, which continues to make other energy sources less and less competitive), 2) CO2 emissions are eliminated more quickly, and 3) investors in dirty energy power plants who are threatened by this put out propaganda that, unfortunately, outlets like the NYTimes eat up and spew out uncritically.
More coal power plants have been shut down than started up. Despite the common meme that coal use has grown due to the renewable energy transition in Germany, the actual fact is that several gigawatts (GW) of fossil fuel power plants are being shut down in Germany because they simply aren’t competitive with cheap wind and cheap solar. A handful of new coal power plants are planned, but those have been planned for years. And, given that coal is becoming increasingly uncompetitive with clean energy, my guess is that some of those will never get built. Furthermore, at least 20 coal power plants have been shut down in Germany in recent years, despite the simultaneous closing of nuclear power plants. Here’s a map on this progress from March 2013:
Germany exported a record amount of electricity in 2012, much of which was surely still from coal power plants (cheaper than natural gas in this region), but that is largely due to factors related to electricity production and costs in other countries.
If Energiewende opponents really cared about the poor… they would cut the electricity bill exemptions provided to big industry. Instead of making poor citizens pay for a portion of big industry’s electricity tab, exemptions provided to numerous companies and industries should be cut. Already, it has actually been questioned whether or not these exemptions are even legal according to EU law, since they disproportionately favor German companies. And the political reality is that the only reason these industries and companies pay less for electricity than poor citizens is because they have money, power, and influence — which has allowed them to rig electricity legislation. There is certainly not going to be a mass exodus of industry if they are forced to pay their fare share, bringing down the price of electricity for small business and individuals.
Merkel was forced to go full steam into Energiewende because of public demand. The NYTimes paints Angela Merkel as a big supporter of renewable energy. In a country where the vast majority demands a shift away from coal and nuclear power, yes, every major politician is forced to “support” renewable energy. However, providing electricity bill cuts to big industry and then advancing the socially destructive messaging that “Energiewende is costing the poor,” what her team has actually quite cleverly done is oppose faster renewable energy growth in a very sneaky, roundabout way — one that is politically acceptable to those who don’t actually understand the situation in Germany. Merkel originally tried to move away from a strong renewable energy transition and decommissioning of nuclear power plants, but in the aftermath of Fukushima, she was forced to drop that and “go all in” due to public opposition to nuclear (and, of course, fossil fuels). Nonetheless, she and her team are not the strongest supporters of renewable energy and are actually a notable force behind the propaganda the NYTimes has picked up and destructively spread to many uninformed Americans.
Intermittency of renewable energy is very much not a concern. It is a talking point that has had far too much time in the sun. I’m not going to go into detail on that here, since we have done so many times and this piece spends thousands of words on that.
Energiewende problem? There is actually one notable problem with Energiewende that needs to be changed, in my opinion. The NYTimes journalists briefly touch on it, but then swerve off the road. Basically, Big Industry is granted major cuts in its electricity bills, shifting the cost of electricity to common citizens and small businesses very unfairly (as I mentioned briefly further up the page). These exemptions should be cut, but big companies continue to actually push for more financial help despite not needing it. If the exemptions are cut, we will see that Big Industry was indeed bluffing and will continue to do business in Germany. As Craig writes, “Companies everywhere complain incessantly about government policies. The private sector constantly puts pressure on politicians to make countries more ‘business-friendly.’ In reality, power prices for German industry are increasingly competitive. And most of the [companies] complaining are not only almost entirely exempt from the renewables surcharge (2,276 in total, not the 700 claimed by the New York Times), but also from grid fees. Don’t worry about German industry; Germany has a major trade surplus (even larger than the US trade deficit), and firms are not leaving the country.”
Other than this exemption issue, however, Energiewende is actually doing very well. It has dramatically cut the cost of solar power in Germany and the world over. It has led to clean energy that makes Germany’s air and water cleaner, gives Germans the satisfaction of being one of the few society’s doing what needs to be done to address global warming, and boosts local economies across the country. Germans like Energiewende. Here are three charts from an article about this that I wrote earlier this year (linked above):
90% of survey respondents said that Energiewende is “Very Important” or “Important” (I dare you to find that level of support for anything else):
51–61% of respondents said that renewable energy growth was “Too Slow,” while another 30-33% said it was “Just Right:”
59% of respondents said that Energiewende has more advantages for industry in Germany than disadvantages, an only 15% said it had more disadvantages:
And note that the survey referenced was done by not an energy association that is not a pro-renewable energy lobbying group… “on the contrary, the BDEW is the ‘respectable’ lobbying organisation of the conventional energy industry,” as Thomas noted.
How do you turn the public against itself? The fact of the matter is, the public has shown tremendous support for democratized, distributed renewable energy for years. This more egalitarian system has grown much faster than almost anyone realized it would. It now threatens monopolistic utilities and dirty energy companies. If your job is to represent them, you must find very innovative ways to turn the public against itself, to turn the public against a clean and democratically owned electricity grid. One of the last hopes for the now struggling monopolies and their representatives is obviously to make it seem as if renewable energy is making the price of life go up and is putting a major hurt on the population, especially the poor and middle class. German politicians and dirty energy leaders have been playing this chord for over a year now, and it seems to be (incorrectly) sinking in with some ill-informed parties, such as members of the US mass media.
Unfortunately, that’s a testament to how strained and incapable mass media journalists now are. It’d be nice if the NYTimes journalists I’m responding to had learned a bit more about the topic they were covering before confusing who knows how many Americans and global citizens. This is important shit (very important shit), and such counterproductive propaganda is the last thing we need.
I’ll just close with one last point: anyone in the media business should know that a lot of BS gets thrown around during politics season (which Germany is currently in) and it’s worth talking with true experts to get the story underneath all of that. Don’t turn misleading arguments into long arguments that hurt the public. And feel free to give me a call next time you’re covering clean energy — I’m sure I’m on your good side now. 😉
Drive an electric car? Complete one of our short surveys for our next electric car report.
Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.