Category — Germany

Across the European Union, solar energy is facing tough love conditions as its feed-in-tariffs (FiT) face déjà vu in another round of reduction.

Like in the classic Tale of Two Cities, the world of solar energy today seems filled with the excitement of seeing its revolutionary potential realized by rapid growth, while fearful that falling prices, changing feed in tariff subsidies and looming government deficits will overwhelm it first.

There is no denying solar energy’s promise and potential.  Its rapid growth is a worldwide phenomenon.  Lately I have been catching up on the news reports and changing solar situation in Europe.  A recent report prepared by Ernst & Young for UK’s Solar Trade Association confirmed what we already knew that solar PV prices are falling so fast that by 2013 they will be half of what they cost in 2009. But keep in mind for for on-grid applications, conventional power sources fueled by shale gas in particular are improving too.

New EU Realities

The EU’s big aspirations for a clean energy, low emissions future had run up against government budget deficits. Consequently, the mother’s milk of feed-in-tariffs for qualifying renewables is vulnerable to rapid modification.

Across the EU countries, feed-in-tariffs are being reduced or at least re-evaluated for affordability about every six months.  France is the latest country to announce changes in its feed-in-tariff regime. The UK is scheduled to follow suit slashing its feed in tariff rates in August 2011. [Read more →]

Thousands of bureaucrats are at another cushy climate confab–this time in Cancun–while Senators Bingaman, Brownback and Reid are contemplating how to ram a federal renewable energy quota through a lame-duck session. Their prospects are not good, which should give them more time to consider the experiences of Europe and windpower. The results of this experiment in energy coercion are humbling.

Germany, specifically, is in the throes of a windpower boondoggle that should be heard the world over. The general lesson is that energy forcing brings with it technological risk that must be factored into the public policy equation.

A North Sea Boondoggle

Barely two months after the inauguration ceremony for Germany’s first pilot offshore wind farm, “Alpha Ventus” in the North Sea, all six of the newly installed wind turbines were completely idle, due to gearbox damage. Two turbines must be replaced entirely; the other four repaired.

Friends of the project, especially Germany’s environment minister, Norbert Roettgen, talked of “teething problems.” The problem is far more serious than that, for wind turbines in the high seas are extremely expensive for power consumers, even when they run smoothly. When they don’t, the problem intensifies. Germany could face blackouts – a new dark age.

The Alpha Ventus failures created intense pressure for Areva Multibrid, a subsidiary of the semipublic French nuclear power company Areva. Every “standstill day,” with the expensive towering turbines standing idle and not generating a single kilowatt hour of electricity, causes lost revenue.

Environmental economist and meteorologist Thomas Heinzow of the University of Hamburg estimated the operator’s revenue shortfall at almost $6,500 (€5,000) per turbine per standstill day. Instilling additional consternation within Areva was the certainly not unreasonable fear that already skittish investors could get cold feet, and wander off in search of less risky ventures. [Read more →]