The German energy transition threatens to be an unaffordable, unrealisable disaster, according to the government's own independent auditors
The German Bundesrechnungshof, or the Federal Audit Office, is an independent government body charged by statue with overseeing the economic management of the Federal Republic. Last week, they published a devastating “Report … on the implementation of the energy transition” in Germany. Every one of its fifty-eight pages represents a brutal slap in the face to our Green Economics Minister Robert Habeck. German energy policies have not only made us the laughing stock of the developed world; they are deplored even by our own bureaucrats.
The report says clearly what everybody knows but nobody in charge will acknowledge, namely that wind and solar are relentlessly intermittent power sources, which require “a largely redundant” backup system to provide “secure, controllable power” when the sun does not shine and the wind does not blow. Habeck’s much-ballyhooed “power plant strategy,” unveiled in February, will “probably not be sufficient” to supply these “secured, controllable backup capacities.” This is because the “strategy” plans for a mere half of the capacity that was originally envisioned, because it is not clear whether conditions will be attractive enough to entice any power plant operators, and because nobody can say when the backup will come online. We are transitioning from a functional electricity system into a lot of insubstantial aspirations, which are not the kinds of things that keep the lights on.
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Because we have no clear means of countering the intermittency of renewable power sources, it is some comfort that renewable build-out is lagging hopelessly behind schedule. To meet the goal of 80% renewable power by 2030, Germany must install an astounding 7.7 Gigawatts of onshore wind capacity every year for the next seven years. For context, we installed a mere 2.9 GW in 2023. Photovoltaic capacity looks more hopeful; here, we need to increase expansion to 19 GW a year, above the 14.1 GW we installed in 2023. As if in compensation, offshore wind is much worse. To meet these targets, we must increase our installation rate to 3.1 GW every year – an order of magnitude more than the 0.3 GW installed in 2023.
Onshore wind seems to be particularly hopeless. By law, Germany was required to award contracts for 12.84 GW worth of wind turbines in 2023. Only half of these contracts found any takers, which means the balance must be awarded in 2024, in addition to the 10 GW already planned for this year. The Federal Network Agency, in other words, which could contract only 6.38 GW of onshore wind in 2023, must find people to build 16.46 GW this year. One presumes that the backlog will just grow and grow with every passing season.
As everyone knows, renewable capacity is barely half of the story. Wind and solar are no good if the power they generate can’t be brought to consumers, and this project requires massive expansions to the electricity grid. Specifically, we need 6,000 kilometres more electrical cables than we have. We’ve basically never met any of our grid expansion targets; in 2023, we finally got where we’d hoped to be in 2016. The Scholz government is hardly doing any better than the Merkel government in its final years:
All the while, our Green-controlled Federal Network Agency has been telling us that everything is fine. This is because their reports blindly assume that we are expanding our electricity grid and our renewable capacity on schedule. The Economics Ministry thus certifies the security of our electricity according to a fantasy “best-case scenario” that is not only improbable, but contrary to present reality. Remarkably, both the Federal Network Agency and the Economics Ministry “appear to doubt … the validity” of their own excessively optimistic assessments. Thus the Federal Network Agency has said elsewhere that “various scenarios and sensitivities” must be calculated “in order to comprehensively assess the level of supply security,” while the Economics Ministry “has accepted that threats to supply security are not recognised in good time and that the need to act is recognised too late.” In other words, they provide doctrinaire assurances that everything is fine, and when pressed admit that they’re not really sure if any of this will work.
They are also lying about how much this will cost, citing the facile fable that wind and solar energy are “free.” The truth, our auditors note, is pretty nearly the opposite:
The Ministry of Economic Affairs argues that only a significant expansion of renewable energy can guarantee a cost-effective electricity supply, in particular because of the low generation cost of renewables. As early as 2022, the Federal Accounting Office criticised the fact that the Ministry does not take account of the costs of the energy transition. These include, for example, the aforementioned grid expansion costs. This creates a false picture of the actual costs of the transition beyond specialist circles. In view of the very high prices, the German government has repeatedly subsidised the costs of energy … It thus recognises that electricity prices would be too high without state intervention. To date, the German government has failed to define what it considers to be an affordable supply of electricity.
At the end of their executive summary, our auditors provide this regrettable graphic:
A homely barge, sailing under a German flag with the words “energy transition” stamped on its hull, approaches a series of icebergs, or cliffs, or rocks, or whatever, bearing five labels. Four of these – “Grid expansion,” “renewables expansion,” “backup powerplant expansion” and “environmental monitoring” – remain out of reach to us; a fifth – “electricity prices” – we have achieved in abundance. On the other side is the green promised land, of infinite cheap power from solar panels and wind turbines. Of course, the utopia is not real; nobody has achieved it, in Germany or anywhere else. Perhaps this is why the path through these obstacles appears to be narrower than the barge itself. Out of frame is the land we departed from, where our electrical grid was sufficient and power was affordable. Perhaps it is inevitable, that the reigning theology must be criticised on its own terms until it finally falls away.
The report dropped while the accused, Robert Habeck, was on a four-day visit to the United States. As German bureaucrats were tallying up all the ways in which he has been a complete and utter failure, Habeck was telling reporters how much he hates the idea of a second Trump presidency and giving a speech at Columbia University where he lectured Americans that they need to “solve the fucking problems we are having now and not distribute them to the others in the next generation.” By that, he apparently means that the United States needs to do more to combat carbon emissions.
“Be more like my trainwreck of a country” is not a very good message for our consummate moral preener, and Habeck spoke to reporters about the report with visible anger:
“I have taken note of the report by the Federal Audit Office, but nothing more,” Habeck said on Thursday during his … trip to America in Washington.
He said he could not understand the criticism. The generation prices for electricity were at pre-war levels and the expansion of renewables was picking up speed. “I’m not saying we’ve solved everything. But to say that the German government is not doing enough (...) is an astonishing assessment that has nothing to do with reality.”
Habeck later emphasised once again that the traffic light coalition had inherited the problems from previous governments. Grid expansion is important to reduce electricity prices, he says, but that also costs money. “I didn’t need the report by the Federal Audit Office for that. Anyone who can think can see that this is a problem.” Yes, the auditors had “a point,” Habeck said – and added “thank you very much for that.”
Habeck’s statements carefully skirted all the most devastating assessments of the auditors. There are no counter-arguments here; there is no reason we shouldn’t worry about the fact that none of our plans are workable or have any prospect of ever being realized. There is just misidirection, happy talk for the press, and a brutal unwavering persistence on the course that is taking us ever closer to the rocks.