BERLIN --
The crisis in Ukraine has added an extra dose of uncertainty to
German Chancellor Angela Merkel's biggest domestic project: shifting the
country from nuclear to renewable energy sources.
Merkel launched the drive to transition the country away
from nuclear after Japan's 2011 Fukushima disaster. Since then, the
"Energiewende" — roughly, "energy turnaround" — has created increasing
headaches.
Now, the tensions with Russia could complicate the plans further. Germany, other European countries and the U.S. have
slapped some sanctions on Moscow and threatened to impose more. The
problem, however, is that Germany and several European economies depend
heavily on Russian energy. Germany gets about a third of its natural gas
and crude oil from Russia.
Merkel is still pushing ahead with the plan to shift away
from nuclear energy. But if the situation with Russia escalates and
Germany decides to try and reduce its reliance on Russian gas, there
could be problems staying on track.
What's Happened So Far?
Deciding to switch off nuclear reactors by 2022 was
popular in Germany. But readying Europe's largest economy to switch
power sources has proven complicated and, at least until Merkel's new
"grand coalition" of right and left took office in December, a recipe
for political gridlock.
Germany's coast and flat northern plains offer plentiful
wind power, but planning the ugly lines to get that electricity to the
southern industrial heartland is hitting resistance. A subsidy system
meant to build up renewable energies is causing mounting problems.
"Make no mistake: the world is watching with a mixture of
incomprehension and curiosity whether and how we will succeed in this
energy turnaround," Merkel told lawmakers in January as she set out her
priorities for the next four years. "If we succeed, then I am convinced
that it will be another German export hit."
What's the Plan?
Merkel's ambitious plan is for renewable energies
including wind and sun to make up 40-45 percent of Germany's energy mix
by 2025, compared with just under a quarter now, and 55-60 percent by
2035. Critics say it's not green enough, though: coal and
lignite — decried as dirty by environmentalists — accounted for 45.5
percent of Germany's energy output last year, up from 44 percent in
2012, as nuclear energy dropped to about 15 percent from more than 20
percent at the time of Fukushima.
"The current path of the Energiewende is neither
competitive nor low-carbon," Daniel Yergin, vice chairman of the
research and analysis group IHS, said recently. "Costs are rising. And
so are CO2 emissions, with coal's renaissance in the fuel mix to replace
nuclear and balance out the renewables."
How Does the Ukraine Crisis Complicate Things?
If Germany makes its goal of having 80 percent of its
power come from renewable sources by 2050, there is no question it will
add to the country's energy security. But along the way, as it takes
nuclear power plants offline and builds up its renewable network, the
country remains reliant on fossil fuels — and that means Russia.
Germany gets some 35 percent of its natural gas and oil
from Russia, as well as significant quantities of coal, a dependency
that weakens Germany's energy switchover plan, according to Hans-Werner
Sinn, a prominent economist.
"It can't work without Russian gas," he said.
Alexander Rahr, research director of the Germany-Russia
Forum think tank, notes that as nuclear power has been phased out,
Russian coal "has taken on a more important role for Germany." Right now it doesn't seem likely that Russia would shut
down its gas pipelines — or that Germany and other western European
nations would include fuel supplies in any economic sanctions — but the
situation in Ukraine does have people talking about "what if?" Merkel
herself conceded last week there is "some unease" among European leaders
about Russian gas, but also noted "even in the Cold War the gas, the
oil kept flowing."
What's at Stake?
Germany's priority is to ensure that energy-hungry
companies such as steelmakers, chemical manufacturers and automakers
remain competitive globally. The issue requires urgent attention because
renewable energy subsidies paid by all consumers are pushing up their
bills - the costs are expected to total 23.6 billion euros ($32.5
billion) this year. Companies have enjoyed sweeping discounts on those
subsidies, but the European Union's executive Commission is
investigating whether that's unfair.
The conservative Merkel's new vice chancellor, Economy and
Energy Minister Sigmar Gabriel, is finalizing plans to reform the
system. Still, he faces blowback from regional leaders in his own
center-left Social Democrats over proposals to cut subsidies for new
wind-power facilities and make firms that produce their own electricity
share the cost of helping expand renewables.
"We simply have a gigantic problem in competition with the
United States," Gabriel said this week. "Electricity prices there are
50 percent of what they are in Europe. All of Europe has a competitive
disadvantage, and we Germans must take care that we don't add a
disadvantage of our own."
One thing that's unlikely to help anytime soon: fracking
for shale gas. The process, which involves blasting rock deep
underground with water, sand and chemicals to release trapped oil and
gas. Germans, like many other Europeans, view the industry with
suspicion because of environmental concerns.
Political Hopes
For Merkel's governing alliance of Germany's two biggest
parties and traditional rivals, "the focus is clearly the energy
switchover," said Gero Neugebauer, a political scientist at Berlin's
Free University. Gabriel in particular has a lot riding on it: succeed,
and he could make a strong candidate for chancellor in 2017. It's
unclear whether Merkel will seek a fourth term or let another
conservative run.
Gabriel's aim is to fix voters' impression that his Social
Democrats lack economic competence, Neugebauer says. Criticism that his
energy plans aren't green enough doesn't worry him, he added — "he is
not a Green."
http://www.renewableenergyworld.com/rea/news/article/2014/03/is-the-ukraine-crisis-compromising-germanys-renewable-energy-future
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