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Germany pioneers renewable energy to thrust economic growth

Europe’s industrial powerhouse Germany is transforming its energy supply by switching to renewable sources.

Rather than slowing down the country's economy, which grew by 1.4 percent last year, Germany's green transition decreased energy demand by 5 percent and created additional 300,000 jobs.

The German term “Energiewende” -- meaning energy transition -- sums up the Teutonic solutions causing tectonic shifts in the direction of sustainable development: dismantling of nuclear power, switching to renewable alternatives and reducing carbon dioxide emissions.

As proof, Germany on July 25 set a national record of meeting 78 percent of daily electricity demand through renewables, surpassing the previous record of 74 percent in May last year.

A combination of political will, strategic policies, free market competition and grassroots activism foster a fertile ground for a green economy, simultaneously strengthening environmentalism and entrepreneurship.

Germany embassy’s deputy head of mission Dr. Rolf Schuster (German embassy)
Germany embassy’s deputy head of mission Dr. Rolf Schuster (German embassy)

“The idea that a switch to renewable energies would raise Germany’s electricity import and bring about ‘blackouts’ has proved to be wrong,” the German embassy’s deputy head of mission Dr. Rolf Schuster told The Korea Herald in early September.

“Germany became a net exporter of electricity and the price has continued to fall. Renewable energy also has a strategic aspect of bolstering energy supply security, crucial particularly for countries reliant on import.”

According to the diplomat, the decentralized format of renewable energies also ignites free market competition between companies. Germany’s transition has spurred innovation and research leading to significant productivity gains, he noted.

Renewable energies of wind, solar, hydro and biomass power generate on average 28 percent of daily electricity in Germany. In the first half of this year, the country exported 25 terawatt-hours, equivalent to around 8 percent of all electricity generated domestically.

The renewables last year collectively produced 403 terawatt-hours with a surplus of 34 terawatt-hours in the trade balance with neighboring countries -- the Netherlands, Austria and Poland -- which have then passed on remaining portions to Belgium, the U.K., Switzerland and the Czech Republic.

As Germany aims to shut down all of its nuclear power stations by 2022 and reduce greenhouse gas emissions by 80 percent by 2050, more than 1.5 million renewable power plants have been installed over the last 20 years, and their share in the energy mix is set to double by 2035.

In Germany, wind turbines are installed across the gusty northern fields, both offshore and onshore, and solar panels cover the sunny southern regions’ rooftops. Thanks to technological breakthroughs, windmills have become 40 times more powerful over the last 20 years, and coal and gas usage has shrunk by a large margin.

“The profit from solar and wind powers, unlike nuclear, gas and coal, is not determined by variable costs, as wind and sun are available free of charge,” Schuster explained. “As technology develops, the cost of investing in these devices will decrease further, as will the average price of electricity.”

The wholesale electricity price at base load in Germany has come down to roughly 3 euro cents (3.4 cents) per kilowatt-hour, and is on course to fall continuously, he added. The industry average price per kilowatt-hour is around 8 euro cents, and the household price is around 30 euro cents, comparatively high due to taxes and levies.

As households use 25 percent of overall electricity, its relatively high price incentivizes saving energy: Families resort to energy-efficient light bulbs, induction cooking and insulation, and seek renewable solutions such as solar panels on their rooftops.

Germany’s renewable transition has also spurred research innovation and industry collaboration benefitting conglomerates as well as small and medium-sized enterprises. As wind and solar powers generate a fluctuating amount of energy depending on weather, smart grids, storage facilities and efficient solutions are constantly improved.

Smart grid technology enables transferring electricity produced at the wrong time, place or amount to different locations after it is stored in facilities, thereby balancing demand and supply around the clock. A myriad of software is developed to pinpoint solar and wind forecasting and integrate them into the energy infrastructure. Information and communications technology solutions identify and remove bottlenecks without delay.

“Korean companies, which are very strong in all relevant technologies, have vital roles to play by partnering with German firms,” he said. “The technology is there. It’s a matter of implementing and refining.”

Samsung SDI, with its innovative energy storage systems, has provided batteries to German renewable power utility companies; Korea’s Hanwha Group bought German photovoltaic solar cell manufacturer Q Cells in 2012, growing it into Europe’s largest solar panel company -- Hanhwa Q Cells.

Germany’s “Energiewende” started in the 1970s based on the previous decade’s economic foundations. The German economy that took off in the early 1960s satisfied citizens’ basic needs, allowing them to care about “other dimensions” of the environment, health and well-being, according to Schuster.

Germany’s sustainable transition is also tied to European regulations enacted and enforced by the EU commission in Brussels, which are commonly applied across the European market.

The 1973 oil crisis, Three Miles Island nuclear meltdown in Pennsylvania in 1979 and the Chernobyl nuclear disaster in 1986 have sharpened awareness of the dangers of relying on fossil fuel and nuclear power, leading to the formation of renewable energy institutes and the Green Party throughout the 1970s and ’80s.

“The Fukushima nuclear meltdown in Japan has served as a crude wakeup call to phase out nuclear power,” Schuster said. “Shortly after the disaster in 2011, Chancellor Angela Merkel's government made a clear decision to break with nuclear power.”

For the first time in German history, a prime minister from the Green Party -- Winfried Kretschmann -- was elected in an economic power state of Baden-Wurttemberg. Kretschmann visited Korea in May 2013.

Since Germany has committed to reduce CO2 emissions, increasing the use of fossil fuels as a substitute of nuclear power was not an option, he stressed, citing safety concerns and high long-term costs. “The only way to phase out nuclear power without substituting the energy need with coal or gas was renewable energy.”

As nuclear waste emits toxic radiation for hundreds of thousands of years, storing it completely sealed from leakage into the soil, including the ground water, is critical, the diplomat emphasized. The “considerable cost” of decommissioning nuclear plants and storing wastes must also be taken into account when comparing the cost of different energy sources, he added.

By Joel Lee (joel@heraldcorp.com)

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