Germany’s Energy Crisis Plan Contradicts Itself

Germany’s Energy Crisis Plan Contradicts Itself

Late-night pedestrians on Berlin’s historic Unter den Linden boulevard can’t help but notice that its iconic monuments and structures—the bronze of Frederick the Great, Humboldt University, the German Historical Museum, and the Brandenburg Gate, among others—are conspicuously dark. As of Sept. 1, all of Berlin’s public monuments, city halls, state administration buildings, libraries, and museums can only be lit between 4 p.m. and 10 p.m. every day. This is the case across Germany now, and in many countries elsewhere in Europe, too.

The lights-out policy is only part of a sweeping new energy conservation act: All public buildings must avoid heating rooms beyond 66 degrees Fahrenheit and not heat hallways, entrances, or foyers. Public employees must wash their hands with cold water. “We’re going to have to bundle up,” said Humboldt University’s new president, Julia von Blumenthal.

Germany’s new regimen this month also applies to the private sector: The brightly lit billboards, like those along Berlin’s glitzy Kurfürstendamm shopping mile—known to locals as the Ku’damm—must go dark at 10 p.m. every night, as well as showroom windows. And Berlin’s Social Democratic mayor has gone a step further—provoking gasps and indignant protests from tabloids and Christian Democrats—by canceling the iconic Christmas lighting along the Ku’damm this season.

Late-night pedestrians on Berlin’s historic Unter den Linden boulevard can’t help but notice that its iconic monuments and structures—the bronze of Frederick the Great, Humboldt University, the German Historical Museum, and the Brandenburg Gate, among others—are conspicuously dark. As of Sept. 1, all of Berlin’s public monuments, city halls, state administration buildings, libraries, and museums can only be lit between 4 p.m. and 10 p.m. every day. This is the case across Germany now, and in many countries elsewhere in Europe, too.

The lights-out policy is only part of a sweeping new energy conservation act: All public buildings must avoid heating rooms beyond 66 degrees Fahrenheit and not heat hallways, entrances, or foyers. Public employees must wash their hands with cold water. “We’re going to have to bundle up,” said Humboldt University’s new president, Julia von Blumenthal.

Germany’s new regimen this month also applies to the private sector: The brightly lit billboards, like those along Berlin’s glitzy Kurfürstendamm shopping mile—known to locals as the Ku’damm—must go dark at 10 p.m. every night, as well as showroom windows. And Berlin’s Social Democratic mayor has gone a step further—provoking gasps and indignant protests from tabloids and Christian Democrats—by canceling the iconic Christmas lighting along the Ku’damm this season.

All of Germany, and most of Europe with it, has shifted into power-saving mode. Skimping on kilowatts is now a fundamental national interest, and further measures go into effect in October. The emergency steps are a reaction to Russia’s suspension of all gas deliveries to Europe in early September, as well as the subsequent sky-high prices of power and gas. Swearing off the Christmas lighting on the Ku’damm alone will save Berlin around $600,000, but that’s just a tiny fraction of 1 percent of the city’s total energy usage.

“We shouldn’t assume that we will be receiving natural gas this winter from Nord Stream 1,” said Robert Habeck of the Green party in his function as Germany’s minister for economic affairs, energy, and climate action, referring to the main pipeline delivering gas from Russia to Europe. “In Germany, there can be cold spells everywhere,” said Klaus Müller, head of the country’s grid agency, last week. “If we get a very cold winter, we have a problem.”

Germany’s self-imposed target is to cut back gas use by 20 percent, which is roughly the shortfall caused by Russia’s discontinuation of gas supplies amid its war in Ukraine. The European Union’s gas emergency plan has also come into force—thus mandating scrimping Europe-wide—though it only calls for shaving 15 percent off gas consumption. Spain, France, and other EU countries have instituted conservation measures much like Germany’s.

While Müller suggests Germany will “have a problem” if this winter is bad one, he must be aware that there already is a problem—a very big one—as whole sale  gas prices have shot up to four times its price last year, with electricity costs rising dramatically, too. Ordinary Germans and businesses alike are in for a nasty shock when their energy bills arrive this year. Some industries have already scaled back production in anticipation of the price increases. Moreover, Habeck has made clear that the stakes are high for all of Europe: Ensuring a constant energy supply and bringing down energy prices is imperative to stave off a recession in Germany, Europe’s biggest economy, he said. It is also key to heading off protests, like those that shook the Czech Republic two weeks ago. And a worst-case scenario—running out of gas completely—would mean freezing-cold homes and schools, wide-ranging industrial stoppages, insolvencies, and even the deaths of vulnerable people.

The levers that the Social Democrat-Free Democratic Party-Green government have at their disposal are limited, untested, and in themselves problematic. In terms of supply, Germany has nearly topped off all available gas storage facilities and negotiated several new suppliers, including liquefied natural gas suppliers. Yet, this still leaves the country way short should temperatures plunge below freezing for weeks on end. The build-out of more renewable energy, primarily solar, is happening at record speed, but it will not be enough to impact this winter. The government is allowing the continued operation of previously mothballed coal-fired power plants (a decision that was highly controversial among the Greens), and two of Germany’s three remaining nuclear power plants will be on standby past their Dec. 31 termination date, should the electricity supply falter and blackouts loom.

This leaves the demand side of the gas-management equation—energy consumption—as the lever most available to policymakers. But officials have been hesitant to use it, reluctant to impinge on the private sphere of ordinary citizens and the way the private sector conducts business.

Nevertheless, Germans are treating the gas shortage as an acute energy crisis. Germany’s gas consumption sank by about 17 percent in May, 8 percent in June, and 15 percent in July, compared with a recent five-year average. Industry cut its gas use by 22 percent in August by switching to other energy carriers and curtailing some production. (Germany generates 12 percent of its electricity in gas-fired power plants.)

The pleading of German politicians and energy experts for citizens to economize and pinch kilowatts has probably done less to effect this drop than the exorbitant price signals. But there has been a relentless rhetorical campaign led by officials and the media: They repeatedly dole out energy-saving tips Germans could take in solidarity with the good people of Ukraine, such as turning down the thermostat by 1 or even 2 degrees Celsius, wearing wool socks and sweaters this winter, cutting down on shower length, and turning off lights when they’re not in use. One Green politician committed the egregious faux pas of suggesting that Germans bathe using a washcloth rather than running hot water. Homeowners are eligible for tax incentives and subsidies to insulate their walls, install renewable energy, invest in cold-weather windows and frames, and shift their heating source to electric heat pumps.

These measures, energy efficiency experts say, applied rigorously across homes and businesses, would have a massive impact on demand, as well as prices, basically canceling the gas supply deficit left by the Russian embargo. Groups like the German Industry Initiative for Energy Efficiency (known by the German acronym DENEFF)—as well as global climate advocates—have been advocating them for years. The EU’s aim to cut energy consumption by 36 percent by 2030 and make such targets binding for the first time is right-minded, they say, but still too timid.

“Now that energy efficiency is not just a climate priority but a geopolitical imperative, at least it’s being taken seriously,” said Christian Noll of DENEFF. Germany could have cut Russia’s gas imports out of its energy equation years ago, Noll said, had the current energy efficiency principles been policy. And Germany could circumvent gas shortages this winter, he said, were the state to compel using enforcement mechanisms rather than just ask households and businesses to become more energy efficient.

Germany is instead bracing for the higher prices it now believes are unavoidable. To cushion the blow to citizens and businesses, the government has already enacted three relief packages worth almost $100 billion. The second measure sent $300 to every taxpayer. The third paid an additional $300 into the bank account of every retiree and $200 to all students. It also proposed that private households would receive the amount of electricity needed to cover basic consumption at a reduced price. This would also apply to small and medium-sized enterprises with utility tariffs. The federal government has said it will set price caps on gas and electricity by the end of the year, and the EU is also planning to intervene in energy markets.

But, contrary to the greater goal of throttling back consumption, price caps and subsidies will have a positive effect on demand. By easing the burden on consumers, they dilute the price signal to save. “This increases the risk of brownouts and blackouts over the winter,” said Toby Couture of the energy consulting firm E3 Analytics, “as citizens and businesses consume more power than the system can effectively supply.”

Couture and Noll advocate that more state largesse be spent on the likes of new thermostats, energy-saving appliances, insulation, and efficient faucets and showerheads—all DIY home improvements that could have an immediate impact on energy bills. “The only way to spur a meaningful and sustained decline in fossil fuel use is to switch to more efficient alternatives,” Couture said. “And where the upfront cost of alternatives such as heat pumps is higher, governments should do more to cover the difference, making it easier for people to switch.”

In exactly this vein, the government’s new relief package will extend the hugely popular $9 monthly nationwide public transportation ticket that it created this summer. Fifty-two million tickets were sold, which cut back road traffic by 17 percent, thus saving gas, reducing congestion and air pollution, and obviating 1.8 million tons of carbon dioxide. Moreover, it functioned as an economic relief measure for Germans struggling with high energy prices and inflation. Although new ticket is expected to run between $29 and $69, rather than $9, the measure is the kind of slam dunk, according to Couture, that, like the other conservation measures, should become part of the status quo rather than a six-month red-button exception.

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Last Update: Tue, 20 Sep 22 15:35:53