German Expert Warns Of Wind Energy's Economic Downside

A report on the German experience of renewable energy by Professor Wolfgang Pfaffenberger, Director of the Bremer Energy Institute at the University of Bremen, warns of wind energy’s economic downside.

Professor Pfaffenberger emphasises that the cost of reducing emissions by the use of stochastic (randomly intermittent) generation such as wind is very high, and referring to a growing body of research in Germany (see below), Professor Pfaffenberger states that the difficulties of managing wind energy make it so costly that its net economic impact is negative, a fact as yet unappreciated in the UK.

“Basically, of course, investing in renewable energy plants creates employment in industries producing these investment goods. On the other hand the extra cost of renewables adds to the cost of energy and in this way destroys purchasing power that otherwise could have created demand and indirectly employment in other areas. Whereas the gross effect of spending money on renewables is always positive, the net effect may be negative”.

Germany is one of the world’s leading adopters of wind energy, with nearly 17,000 MW of wind turbines installed, but contributes only 5% of total German electricity consumption. Problems at this low level of penetration are a warning to the UK government, which is aiming to achieve roughly 7.5% of UK electricity from wind by 2010 (and more to come), in a grid which is less modern and lacks significant interconnections to the European grid.

The Renewable Energy Foundation has repeatedly pointed out that the UK’s subsidy system, the Renewables Obligation, which will be costing consumers around £1 billion a year in 2010, is badly flawed and delivering very poor value for money by bringing forward wind to the exclusion of those renewable technologies which are capable of firm generation, such as biomass and tidal energy.

Dr John Constable, the Foundation’s Director of Policy and Research said, “Many industry analysts believe that our current renewable energy policy just isn’t delivering the sort of economically compelling example which alone can impress the developing world. The latest evidence from Germany confirms this view and shows just how far off track we really are. We need a radical overhaul of both our renewable energy and our climate change strategies.”