Renewables Overtake Coal For First Time Ever In Germany

For the first time in history, renewable power sources have overtaken coal in Germany’s energy mix, the German Association of Energy and Water Industries (BDEW) reports, saying the share of wind, solar, hydro, and biomass in the country’s energy production mix reached 36.3 percent as of end-June this year, versus a combined 35.1 percent for hard coal and lignite coal. This compares with 32.5 percent for renewables and 38.5 percent for coal same time last year. Great, news, right?

And there’s more. Total electricity production from renewables in the first half of 2018 in Germany hit 118 billion kWh, which compares with 114 billion kWh generated from coal. The difference may not be all that great, but it has been hailed as a clear signal that “Renewables are on the march,” as the head of BDEW said, and coal is on its way out.

Yet the 118 billion kWh seems to be only an estimate, and not the only one. Utility E.ON has calculated that electricity from renewables actually came in at 104 billion kWh in the first six months of the year. That’s less than even the coal-generated electricity estimate of BDEW. However, on the flip side, it is a record-high electricity output, enough to power all households in the country for 12 months. So, despite the difference in calculations, the news is decidedly good for the renewable industry in Europe’s biggest economy.

It looks like this news is a natural consequence of a concerted government effort to increase the country’s reliance on renewable energy at the expense of coal and nuclear power. Sporting one of the strongest national environmental lobbies in the world, Germany’s coalition government earlier this year set a target of 65 percent of electricity to be sourced from renewable capacity by 2030. According to a clean energy think tank, the goal is fully within the capabilities of Germany. So why is it that the country is on track to miss its own emissions targets?

Germany had set itself a target of having 40 percent lower emissions in 2020 than in 1990. Last month, the coalition government admitted the actual reduction will fall short of the target, by as much as 8 percentage points. Also, Germany has been pushing for lower EU-wide renewable energy targets for 2030.

Energy industry representatives and environmentalists are blaming the government for the missed 2020 targets. BDEW’s Stefan Kapferer told media at the time the industry was putting more effort into advancing renewable energy targets than the government. Simone Peter, president of the Renewable Energy Federation, noted that the government is effectively harming the industry by failing to provide clarity on energy and emissions policies, which means companies can’t adequately plan for spending and capacities.

If we are to judge by Energy Minister Peter Altmaier’s comments regarding the EU targets, perhaps the government is being cautious.

“Let’s have higher goals but with a lower degree of reliability and a lower degree of measures. That’s exactly what I think leads to citizens’ dismay with politics, if you define targets, which are not underpinned, which cannot be controlled, without legal liability,” he said at a recent BDEW event in Berlin.

Further, commenting on a proposed 2020 target to have 1 million EVs on German roads, Altmaier said “We’re not going to manage that. Nowhere in Europe is going to manage that. And even if we did manage to get enough electric cars, we wouldn’t have enough renewable electricity to keep them on the road.”

The minister’s remarks are refreshingly different from the usual renewable enthusiasm demonstrated by other senior government officials from different parts of the world. It is also the safer approach to the renewable shift.

In Norway, the top performer in EV adoption, there are already worries that the grid could handle all the electric cars in the country, whose number is set to continue growing steadily. In the UK, a wind draught in June reduced wind power production to less than 5 percent from more than 10 percent for more than a week. These are just two examples highlighting the challenges around renewable energy that need to receive more attention from policymakers and the industry alike.

So, it’s great that renewables have overtaken the dirtiest fossil fuel in Germany’s energy mix. It will be even greater if this share continues to grow, supplemented by an adequate storage capacity that solves the intermittency problem of wind and solar. The amount that could power all German households for a year did not, in fact, do this. It could theoretically power all households, but it only made up 36.3 percent of the total electricity output in Germany.

Irina Slav for OilPrice.com