Clean Power

Published on April 2nd, 2012 | by Thomas Gerke


April 1st in Germany — Happy Birthday, Renewable Energy Sources Act!

April 2nd, 2012 by  

Not a Joke

On a cloudy saturday, on April 1, 2000, the German “Renewable Energy Sources Act” entered into force replacing the “Feed-in Law” of 1991. It’s unique features were 1) a renewable-energy-source-specific feed-in tariff (FiT) guaranteed for 20 years and 2) minimum goals for the share of renewable energy generation for the decades to come. At a time when renewables had a share of about 6% of electricity production, the law called for an increase to 12.5% by 2010 and 20% by 2020.

Since Germany has rather limited untouched resources for conventional hydro power, most of the new renewable capacity had to come from wind, solar, biomass, geothermal, small hydro, or other so-called “alternative energy sources.” Considering that the share of these sources amounted to only 1.7% of electricity production after almost a decade of renewable energy investments based on the “Feed-in Law” of 1991, critics called the “Renewable Energy Sources Act” a waste of money that would accomplish nothing. The goal of 12.5% for 2010 was laughed at for being unrealistic and an “environmentalist pipe-dream.” Many so-called “energy experts” actually went on record and claimed that such goals were impossible to reach because the physical potential of renewable energy sources would simply not be enough.

And criticism didn’t end when the success and the actual potential started to show. In 2005, the head of the conservative party and current Chancellor of Germany Angela Merkel said, “Increasing the share of renewable energy sources to 20% by 2020 is unrealistic.”

A Taste of Tomorrow…

12 years later, the laws of physics haven’t changed, but the so-called “experts” have been unmasked as ill-guided charlatans. Just 11 years after its introduction, the “pipe-dream law” reached it’s minimum goal for 2020. In 2011, a share of 20.1% of renewable electricity generation was achieved, despite electricity demand being 6% higher compared to 2000. Many conservative politicians and CEOs of conventional energy corporations have come to the painful realization that they underestimated the potential of renewable energy sources and the law they campaigned against and laughed at on April Fools Day more than a decade ago.

As the law entered it’s 12th year of existence, nature gave it a fitting birthday present yesterday. Wind and solar worked together to show what they are capable of, while hydropower and biomass provided their share with their baseload-capable form of production. The exact numbers for all renewable sources are hard to come by at this point in time and the complete electricity-export numbers won’t be available for at least another week, but it’s quite certain that the “energy mix” of April the 1st looked something like this:

The strong performance of renewables had several effects:

  • At least two of the remaining nine nuclear reactors had to be taken offline to grant wind power it’s priority in the grid.
  • Lignite power plants operated at an average of just 11 GW all day. That’s less than 60% of their installed capacity.
  • The capacity factor of conventional load-following and peak-load power plants using imported hard coal, natural gas, or oil fell to approximatly 6-8% 
  • Due to the current market design and the resulting Merit-Order Effect, peak-load power actually sold cheaper than baseload power at the European Energy Exchange. While traders and industrial customers paid very cheap 2.4 ct/kWh for baseload power, they could buy “expensive” peak-load power for only 1.8ct/kWh on the spot market.

Of course, it was a Sunday, which means that overall demand was rather low, but nonetheless, it’s been a wonderful birthday gift for the “Renewable Energy Sources Act” and a small glimpse into the future.

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About the Author

is a close observer of the scientific, political and economic energy debate in Germany and around the globe. Inspired by the life's work of the renewable energy advocate Hermann Scheer, Thomas focuses on spreading information that showcase the possibilities & opportunities of a 100% renewable energy system. Though technology is key for this energy shift, he also looks at the socio-economic benefits and the political, as well as structural barriers.

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  • Guesto

    Infact, according to :

    Price of electricity was negative on 1 april 2012.

    • Bob_Wallace

      That’s an informative site you linked. I checked April 1, 2009 and midday prices are very high in comparison to the same week in 2012. It’s not just the weekend when demand is down that you see the effect of lots of solar on the grid.

      We’ve seen the same thing happen at night in Texas when there’s lots of wind working to decrease the price of electricity.

      This is most interesting. I expected to see lower electricity prices after panels/turbines are paid off, but this is happening now….

      • ThomasGerke

        It’s even more interessting to compare the prices to late 2007 – early 2008. That’s the time when prices for coal, gas & oil were at a similar level of what we see today in Europe. Basicly the global gap between demand & supply is back to where it was before the financial meltdown.

        When looking at the EEX, it should be noted though that only a fraction of the total electricity is being traded at the Spotmarket. Most of the electricity is sold in form of futures weeks or months in advance. However, if the Spotmarket price is significantly lower for an extended period of time (like all 2012 😉 ), that lowers the price of “power futures” aswell. Because only idiots would buy expensive futures in advance if they can buy cheaper spot market prices.

        The lowering effect of solar & wind are a combination of re-financing their electricity through the FiT and dumping their output on the market for free. The “Merrit-Order Effect” has been the subject of some articles around here already.
        But that effect is also a very clear sign that the electricity market is very artificially designed and biased against renewable energy sources. It’s basicly the illusion of a free market system designed to optimize the conventional energy system. Wind & Solar can never be profitable on their own, when competing in that fake market, so all people who suggest that they have to get more efficient and be more competative, know very little about the realities or deliberatly spread misinformation.

        I think I gonna write something about this in a future post 🙂

  • Bob_Wallace

    My hat is off to Germany for what it has been able to accomplish.

    Not only is Germany able to demonstrate a meaningful role for solar in a country not know for massive amounts of sunshine, it’s been able to bring rooftop solar prices down to an astounding low price.

    We, in the US, are paying almost 3x as much as German roof owners for the same panels and same installation. Being a much larger overall market we should be doing as well, if even better.

    Countries such as Germany and Spain who have installed lots of renewables set examples for the rest of the world. Politicians who oppose conversion to renewable energy can’t claim that renewables won’t work when other countries clearly show that they both work, and reduce the cost of energy.

    Thanks Thomas. Please keep bringing us good stuff….

  • lukealization

    Be sure to do a follow up in 2015 when Germany reaches 25% and 2020 when they reach 30-35%

    • ThomasGerke

      I sure will, though I doubt it will be that long.
      The 30-35% goal has been called ambitous by the german federal government, but calling it that way is a far cry from reality on the ground actually. 😉

      The official target of the Renewable Energy Act is “at least 35% till 2020”. That’s a stated minimum goal and has been a part of the legal framework since a revision back in 2008.
      The fact that the conservative government didn’t change this goal after declaring a accelerated phaseout of nuclear and actually chooses to talk of it like a maximum goal, is very telling.
      Despite the proclamation of “ambitious goals” & wishes for the future, the policies pushed by the federal government are a mix of programs & changes of laws that are more about hindering and slowing the “energy revolution”.

      As luck has it, Germany, like the US, is a Federal Republic. That’s actually rather rare among OECD nations and it means that the federal government is not neccessarily the deciding factor. The states have their own goals and ambitions.
      It’s quite save to say that recent elections, public opinion and the nuclear phaseout has created a very dynamic enviroment for renewables to prosper. So while history has shown that predicting growth in renewables is tricky, I think we are looking at 30% in 2015/16.

      I will propably write a post about this to look at it in more detail.

  • Guesto

    This is awesome!

    • Totally awesome, loving our new German writer! 😀

      • Guesto

        And I love how nukes are getting subtitly out of the game.

        French nukes are the next when Itally goes all solar.

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