The Predictable Outcomes of German Policy

Economist Hans-Werner Sinn comments at Project Syndicate on the consequences of 30 years of German policy:

Green politicians in Germany always hoped that other countries would emulate this energy agenda once they saw how well it was working. But, in light of the war in Ukraine, the world is instead witnessing how Germany’s approach has created a policy disaster.

To cushion the twin phaseout of coal and nuclear, and to close supply gaps during the long transition to renewable energy, Germany decided to build a large number of additional gas-fired power plants. Even immediately before Russian forces invaded Ukraine, policymakers assumed that the gas for these facilities would always come from Russia, which supplied more than half of Germany’s needs.

Unfortunately

Germany’s pledge to abandon coal and nuclear, the very energy sources that would have given it a degree of self-sufficiency and autonomy, has thus placed the country in great danger. Not so long ago, Germany was the world’s second-largest lignite producer, after China. And it easily could have procured the tiny amount of uranium needed to run its nuclear power plants, and stored it domestically for many years.

Committed Greens claim that the twin phaseout would not have been a problem had Germany pressed ahead with developing wind and solar energy to achieve green energy autonomy. If anything, they say, the need to ensure energy security is an argument for, not against, Germany’s renewables-based strategy.

This view is debatable. Despite the fact that turbines and photovoltaic panels now dot much of the landscape, in 2021 the share of wind and solar power in Germany’s total final energy consumption, which includes heating, industrial processing, and traffic, was a meager 6.7%. And while wind and solar generated 29% of the country’s electricity output, electricity itself accounted for only about a fifth of its final energy consumption. Germany would not have come close to achieving energy autonomy even if the renewables sector had expanded at twice the speed that it did.

The Green argument also overlooks the fact that the planned scaling of wind and solar-based energy supply must always be complemented by adjustable conventional electricity production, given that storage solutions are difficult and extremely expensive. This power is fed into the grid when wind and sun do not produce enough energy, and can ensure that the economy is not disrupted during a protracted wind and solar lull.

You will notice in his observations some of the things I have written about around here. Although I would welcome Germany’s changing its course, I don’t actually expect the Germans to do so. It would be just too politically and economically painful. They’re also pledging to increase their military spending. I don’t actually expect them to do that, either, at least not in any meaningful way. I also would not be surprised if American military leaders wouldn’t discourage the Germans from rebuilding their military capabilities. It flies too much in the face of their long-standing objectives.