Energiewende

(Note: This week's posting is written by Jim DiPeso who was recently invited by the German Government to tour their renewable energy installations along with several state legislators from across the country.)

In Germany, the energy business isn't just for big operators. Anyone—farmers, homeowners, and small businesses—can produce clean energy and get paid for it.

It's all part of the "Energiewende" (Energy Transition), Germany's long-range plan to rely on renewable resources for 80 percent of its energy by 2050. Europe's biggest economy and most populous country has embarked on a remarkable if risky transformation. If the Energiewende succeeds, it would point the way towards revitalizing economies, increasing energy security, and lowering environmental risks in communities and nations worldwide.

During my visit to Germany November 11-18, I had a chance to learn in detail about the Energiewende and its many moving parts. Two of the leading motivations for the strategy are security and safety: Germany imports 95 percent of the oil and 80 percent of the natural gas it uses. The 2011 accident at Japan's Fukushima Daiichi nuclear reactor complex stirred renewed concerns about nuclear safety in a nation of 82 million people packed into densely populated country the size of Montana.

A core element of the Energiewende is the "feed-in tariff." Anyone who installs wind or solar energy is guaranteed a purchase price for 20 years and priority access to the electricity grid. The guarantee has led to a surge of decentralized energy development in cities and in the countryside. Between 2006 and 2011, solar generation expanded by a factor of nearly nine. Wind energy production increased by nearly 60 percent during that period. Renewables, led by wind and solar, now account for 26 percent of power production in Germany. One-sixth of German power also is generated in "combined heat and power" plants, which co-produce electricity and useful heat, a more efficient way to produce energy than stand-alone power and heat plants.

Renewable energy supports about 370,000 German jobs, approximately equal to jobs supported by Germany's world-famous automakers. The Renewables Academy in Berlin provides a range of educational services, taught in English, to train the skilled labor that is vital for planning, designing, financing, managing, operating, and maintaining renewable energy projects. The offerings include a master of science degree in solar energy development and an MBA in renewables.

The feed-in tariff is funded through a surcharge on consumer electricity bills, although energy-intensive industries are exempted from the surcharge, a point of controversy. There are other points of controversy with the Energiewende. Consumers worry about energy costs and industries worry about reliability. Germany must expand and modernize its transmission grid in order to handle the ups and downs of variable renewable generation, and to deliver offshore wind energy from the country's north to its population and industrial centers in the south. Spillover of surplus wind-generated electricity into the power grids of Poland and the Czech Republic has annoyed Germany's two eastern neighbors.

Perhaps the most dramatic Hamburg project is the re-purposing of a massive above ground concrete bunker that supported anti-aircraft guns and sheltered Hamburg civilians from Allied bombing during World War II. The structure, which the British Army unsuccessfully attempted to destroy after the war, is being turned into a renewable energy production center. A biomass-fueled combined heat and power plant, along with solar panels, will supply heat to nearby neighborhoods and renewable power to the grid. A building born of an ugly past is being transformed into a showcase of tomorrow's clean energy technologies.

Germany's energy transformation challenges old assumptions and breaks new ground. The Energiewende will bear close watching as we in the U.S. confront our own energy challenges in an uncertain world.