Energiewende: The price of courage – economy

There is one thing with courage: demanding it from others is easier than having it yourself. And if you then take it together, it’s wise to make sure it doesn’t turn into arrogance. One of the biggest industrial policy projects of recent decades shows how quickly one thing creeps into another: the energy transition.

Almost two-thirds of electricity in Germany is expected to come from renewables by 2030, for the sake of the climate. That is what the federal government decided. However, by then the country will also need a lot more electricity than expected: the federal government now estimates demand at 645 to 665 terawatt-hours – much more than expected. Economy Minister Peter Altmaier (CDU) only had to admit it a few days ago.

This enormous demand does not come only from traffic, which is shifting more and more quickly from heat engines to electric motors, powered either by batteries or fuel cells. Much of it comes from industry: “Electricity is the answer to climate issues,” says Christian Hartel, for example. He has been running the Wacker chemical company since May. For him and his industry, this is both a promise and a risk: the chemical industry is one of the biggest energy consumers in Germany. For example, Wacker consumed nearly 4,000 gigawatt hours at its German sites in 2018 alone. The chemical company generated a good third of its electricity needs at two of its own power plants, but the company bought the majority to electricity producers.

Hartel’s claim is therefore clear: “Just produce cheap green electricity, then a lot of things will work out on their own. Whether his company and others with high energy needs can stay in Germany ultimately depends on how energy prices develop here relative to other countries. “We will see higher CO prices higher and that also makes sense. Costs are likely to increase not only here, but “in global unison.”

“The larger the industrial policy portfolio, the greater the added value in Europe.”

For this to work with cheap green electricity, coal, oil and gas would have to become more expensive. “Fossil fuels are still far too cheap,” says Florian Bieberbach, director of Stadtwerke München (SWM). The supplier currently operates a total of four offshore wind farms with partners, as well as onshore wind turbines in several federal states and other European countries. By 2025, they want to produce as much green electricity as it consumes in and around Munich, says Bieberbach. So far it is already 70 to 80 percent. But the pressure of politics is even stronger than that of customers: “Security of supply and prices are often more important for our customers than ecology”, explains Bieberbach. And at SWM, more than two-thirds of these customers are industry, commerce and the public sector.

Private investments have shown that solar and wind power are already competitive despite everything, believes Eveline Steinberger-Kern. In 2014, the former head of energy and Siemens founded the start-up incubator The Blue Minds Company, specializing in energy transition and digitization. “There is more and more venture capital going in this direction. These investors typically have a seven to ten year timeframe, which is too short for many technologies. Here, the state must create foundations which it can then use profitably.

Politicians should therefore show more courage to take the main line. Veronika Grimm demands that she does not have to split her funding into small chunks here and there. The economist is a recognized energy expert and since last year he has been a member of the “Wirtschaftsweise”, one of the most important advisory bodies of the federal government. Instead of individual projects, she says, states should define the framework – then leave the concrete decisions to companies. “The larger the industrial policy portfolio, the greater the added value in Europe.” It therefore also needs the political courage to develop technologies for battery and hydrogen vehicles, for example.

Economist Grimm is nonetheless convinced that, even in the best of cases, value chains and therefore industries will change in the decades to come. “We should not focus too much on safeguarding the future,” she demands. Moreover, economic alternatives should be established in time – and the state should direct its money where it would be productive for the future. It is also a decision that requires courage.

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