Reality check for global hydrogen hype

The great attraction of green hydrogen has been and is that it can be used to gene­rate CO2-free electricity when needed to compensate for variation in wind and solar power generation – and that it can be used to maintain combustion as a source for industrial heat, building heat and vehicle propulsion. That is why green hydrogen has been seen as a key part of the renewable energy future for the past 30 years and subsidized to the tune of hundreds of billions USD.

But so far, green hydrogen has not delivered on the hype. The recent Global Hydro­gen Review 2023 of the International Energy Agency shows that demand for green hydrogen still hovers at less than 1% of total hydrogen demand and 0,004% of global energy use. Wind power alone generated more than 800 times that much energy.

The main reason is that so far and for the foreseeable future there is no business case for green hydrogen, where electric or biogas alternatives exist. The World Energy Council currently sees the levelized cost of producing renewable hydrogen at an average of 3,50 USD per kg or 0,35 USD/kWh (hydrogen-derived efuels will necessarily be even more expensive). That is some 10x more than the current cost of wind and solar power of 0,03-0,04 USD/kWh. In addition to this gap in energy costs, most vehicle and other technology for hydrogen use is significantly more expensive to buy and operate than equipment for using electricity or biogas.

This lack of good business cases is illustrated by some snap shots of the industry:

In other words, it is time to scale the scenarios down to where green hydrogen is and could remain without alternatives as governments are beginning to realize:

  • contribution to longer term storage of wind and solar power
  • selected industrial processes and perhaps – as efuel – in aviation

This reduces the amount of pipelines and other infrastructure needed for green hydrogen and allows both private investors and governments to focus on competitive applications instead of generating expensive stranded assets.

Globally 2023 was a year of both unpleasant and encouraging news for climate change. We are rapidly approaching the 1.5-degree Celcius threshold with high and unthrottled CO2 emissions and there are already significant negative impacts on both humankind and nature. At the same time, renewables have surpassed fossil and nuclear energy globally in terms of added generation capacity and investment volume.

This trend is reflected in Germany as well. In a concerted effort, the German government has passed numerous measures to set the course for a sizeable expansion of renewable energy in the sectors electricity and heat. The installed capacity of wind and solar power plants in 2023 is approximately 50% higher than that of 2022. However, significant progress is nor foreseeable in the transportation sector, and the Building Energy Act was significantly diluted before being passed.

In 2023, the Energy Watch Group became a non-profit leagl entity – the EWG Energy Watch UG. This strengthens the EWG, giving it more independence in financing and its operation. Hans-Josef Fell continues to serve as President of the EWG.

Download EWG Annual Report 2023 (DE)

Download EWG Annual Report 2021 (DE)

Download EWG Annual Report 2020 (DE)

This first news­letter in 2024 summarizes our view on the global and German path­ways to achieve zero greenhouse gas emissions (“zero emissions”) and cool the planet back down – and where we intend to focus our work in 2024. The Energy Watch Group (EWG) has now expanded its capabilities and independence by evolving into its own non-profit legal entity.

The EWG is a non-profit climate change think tank and network: we accelerate action by

  • developing suitable goals, effective options and prag­matic policy recom­mendations at the global, national and local level and
  • engaging in dialog with decision-makers and the media on that basis.

Global news

The word is speeding towards the 1.5 oC threshold on a so far unchecked path: 2023 was the hottest year on record: 1.48 oC  warmer than the pre-industrial average. Even the five year average – which levels out the current El Niño effect – puts us at 1.25 oC above the pre-industrial average. Further warming is being fueled by GHG emis­sions that are at a historic high. The lukewarm COP 28 commitment to “transi­tion away” from fossil fuels have not raised the chances of a significant decline.

The good news is that renewables are now broadly recognized to not only be climate friend­ly but also the cheapest energy available to mankind (in transportation combined with electric vehicles and in building heating combined with heat pumps). That has great­­­ly expanded the demand for and supply of renewable energies. Their growth is expo­­­nential and has con­sistently outpaced pro­jec­t­­ions. Wind and PV each added some 50% more capacity in 2023 than 2022: if this exponential growth rate is maintained, sta­ying within 2.0 oC global warming may yet be in reach. And contrary to expectations, pro­duction capacities for renewable energy technologies do not appear to be a limiting factor for the foreseeable future.

Now, the urgent course of action is to maintain this exponential growth rate until “zero” CO2 emissions have been achieved. The robust, feasible and macro­econo­mically pro­fi­ta­ble paths to get there are already availa­ble. Prof. Dr. Mark Z. Jacobson, member auf die EWG Scientist Network, shows that impressively in his new book “No Miracles Needed”.

The key challenges to main­tai­n this exponential growth rate are:

  • make the feasibility and profitability of the net zero path common knowledge that politics und media disseminate and affirm in their communication,
  • trans­la­te more of net zero’s financial advantages to society into financial advantages for citizens and businesses making the key investment and purchasing deci­sions – so as to turbocharge the market “pull” towards net zero,
  • avoid social unrest with the transformation, by compensating any relevant addi­­tio­nal costs to the comparatively poor and by offsetting job losses in one sector with job creation in other sectors within each country,
  • maintain and build a strong domestic industrial base in renewable energy technolo­gies while utilizing the significant Chinese production capacity in these sectors,
  • remove a myriad of regulations designed to keep the national energy systems locked into fossil fuels and utilities with large central power plants,
  • and, last not least, stop subsidies for fossil fuels (another 1-7 trillion USD or 1-7 US-cents/kWh in 2022) as well as investment in fossil fuels (1 trillion USD in 2023).

Achieving “zero emissions” prevents further heating of the earth but does not cool it down for centuries. Since global warming will exceed 1,5 oC and beyond, significant and long-term damages to nature, human health, economic welfare and national secu­rity will result.  So, the other urgent course of action is to remove CO2 from the atmos­phere and cool the earth back down.  The CCS technologies currently under discussion are ex­pensive and unpro­ven at the necessary scale of capturing hundreds of giga-tons of CO2. We need more robust and affordable solutions to drive down CO2. Prof. Dr. Christian Bre­yer, Chair of the EWG Scientific Board, has championed research in this field.
Once these have been identified, deployment will require a robust funding mecha­nism, most likely within a framework of international agreements similar to the Paris treaty.

German news

In Germany, the wind- and PV capacity added in 2023 was 75% (!) more than in 2022. and 50% of the electricity generated in 2023 was renewable. To a significant degree, this development is thanks to the actions taken by the governing coalition (greens/social demo­crats/liberals) – and in spite of the broader criticism it is encountering.

Now, the most urgent course of action in Germany is also to maintain an annual growth of installed capacity by more than 50% and therefore reach zero emis­sions well before the mid-2030s. The key challenges to maintaining this exponential growth in Germany are similar to those on the global level, e.g.  

  • the political and media narratives hardly reflect how feasible and economical the path to zero emissions can be made. Once claims have been broadly accepted, they are rarely questioned, even if they no longer hold true (e.g. that green hydrogen and e-fuels predominantly need to be imported), limiting the range and effectiveness of options considered. And, measures are often discussed emotionally but with incom­plete or incorrect facts. For the building energy law passed in 2023, that significantly eroded both its CO2-impact and the broader social consensus on climate action.
  • the German government subsidizes oil, gas and coal with at least 30 billion Euro per year.  The government’s 2023 revenues from emissions trading (ETS and BEHG ) were a good 15 billion Euro. In other words, the government’s fossil subsidies provide twice as much incentive to consume fossil fuels as emissions trading incentivizes reducing fossil fuel consumption.
  • neither federal and state governments nor the main political parties have a cli­mate action plan to reach zero emissions that is fully calculated and validated in its techni­cal, emissions and financial effects (investments and annual costs/revenues of citi­zens, businesses and government). That kind of plan is necessary for broad support of climate action. Its measures should be designed to generate strong financial incen­­tives to act, be socially fair, fiscally responsible, easy to understand and streng­then both economy and international competitiveness.

Items on the 2024 agenda of the federal government and parliament currently include:

  • Power plant strategy („Kraftwerksstrategie“) – It will be important not to achieve a flexible response to fluctuating wind and PV generation solely by building expensive centralized natural gas or green hydrogen power plants but to draw from the most cost effective mix of sources for balancing electric demand and supply („tech­no­lo­gie­­offen“), incl. other energy sources such as water and local biogas, energy sto­rage and demand side management step by step. The power plant strategy should include the necessary changes in electricity market design, to generate the incentives and supply for this best mix of flexibility sources.
  • Solar package („Solarpaket“) – further simplification of planning and permitting of wind and PV generation
  • Resilience – develop and enact mechanisms to maintain and build sufficient natio­nal and EU production capacity for renewable energy technologies such as wind mills, PV panels, energy storage, electric vehicles and heat etc. for a good degree of independence from China and other suppliers.

Since we will already are heading towards a world that is 2.0 oC above preindustrial levels, it is important to stop engaging in bridging technologies („Brückentechnologien“) – such as replacing coal with natural gas – but invest our time, money and political capital to directly go into CO2-frei solutions. Prof. Dr. Claudia Kemfert, Chair of the EWG Scientific Board, has shown that building stationary LNG-Terminals would lock Germany into an expensive LNG-supply above and beyond likely demand for 1-2 decades.

There are further challenges on the local level: federal and state government create a framework with regulations and financial support. However, implementation of „zero emissions“ largely happens at the municipal and county level and is often held up by a variety of factors. These range from limited staff and know-how in local government for planning and permitting renewable energy solutions to imminent losses municipal utilities and budgets will encounter with the historically profitable but now strongly shrinking gas consumption. To achieve exponential growth of CO2-free electricity, heat and mobility in and with municipalities, solutions to these challenges need to be developed and disseminated now.

Energy Watch Group

Based on this global and national outlook on climate action, we expect to focus our work in 2024 on:

Zero Emission

  • Develop „zero emission“ roadmaps for countries, states and cities that are economi­cally attractive, socially just and fiscally responsible as well as easy enough to under­stand and implement.
  • Engage in the political and media narrative on climate action with intuitive and well researched material, that shows how economic and feasible exponential growth of renewable electricity, heat and mobility and reaching “zero emissions” is. This inclu­des key data, that is currently not reported or misreported.
  • Support implementation of „zero emissions“ at the city and county level
  • Develop and disseminate other solutions to obstacles on the „zero emissions“ path (e.g. resilient supply chains) and items on the political and government agenda (e.g. power plant strategy)

Cooling the earth back down

  • Develop technically and economically feasible and scalable solutions for cooling the earth back down and achieving the historic CO2-concentration of 350 pm or less.
  • Derive meaningful zero emission and carbon capturing targets.

Our organizational set up
While continuing our work as the think tank and network “Energy Watch Group” in 2023, we made an organizational adjustment by creating our own non-profit legal entity and transitioned our work into this new framework. This makes EWG more effective by increasing control over reve­nues and expenses. The name of the legal entity is „EWG Energy Watch gUG” (due to German law on legal entity names we could not call it „Energy Watch Group gUG”). This name will only appear when acting as legal entity (e.g. contracts, bank account, receipts for donations). Hans-Josef Fell is and remains presi­dent of the Energy Watch Group. Dr. Hartmut Fischer is managing director of the EWG Energy Watch gUG. Felix Rodenjohann is the other shareholder.

Your contribution

Any suggestions are welcome regarding our choice of focus areas, solutions in these areas and dissemination of these solutions. Please direct them to  office@energywatchgroup.org.
And your donations will help us continue our work with good impact!

New EWG study: Parts of the German federal government plan to abolish domestic renewable energies amounting up to 50% of Russian energy supplies

Bioenergy and small hydropower are currently under enormous political pressure and partially even threatened in their existence. Yet they already generate energy amounting up to 51% of Russia’s energy supplies and their potential is far from exhausted. This is shown by the latest EWG study published on 29 June 2022.
 
Biogas plants and small hydropower are thus not only irreplaceable for a renewable energy system, but also for energy independence from Russia. Talked down as “niche technologies” for a long time, the current government draft of the German federal governments “Easter package”, among others, contains further deteriorations of the framework conditions, which are partly tantamount to abolition.
 
“The study reveals the absurdity of the current debate on the reduction of bioenergy and hydropower. On the one hand, reliable and system-serving domestic renewable energies are to be throttled. On the other hand, the German government is trying very hard to replace Russian energy with fossil energy from other countries with a fossil diversification strategy, thereby accepting new geopolitical distortions and a further overheating of the earth,” says Hans-Josef Fell, President of the Energy Watch Group.
 
Relevance of bioenergy and hydropower for a renewable energy system
 
Already today, bioenergy and small hydropower make a significant contribution to the German energy supply. For a sustainable renewable energy system based predominantly on sun and wind, however, they are indispensable
 
“Due to their reliability even during dark winter periods, bioenergy and small hydropower avoid the costly provision and use of stored energy, e.g. in the form of green hydrogen, and reduce the need to expand the grid. In the transition to a sustainable energy system, these technologies therefore have a cost-reducing effect. Our study shows that the currently discussed abandonment of small hydropower of up to 1000 kW installed capacity alone would mean a loss of up to 2.8 billion euros annually,” says Dr. Thure Traber, author of the model calculations of the study.
 
No energy independence from Russia without “small renewables”
 
The study shows that the reduction of the use of bioenergy and small hydropower planned by the German traffic light coalition would make the necessary independence from Russian energy supplies much more difficult, if not impossible. A further massive increase in energy prices would be the consequence. Instead of the current discussions about banning these technologies – fuelled particularly by nature conservation associations – we finally need suitable political framework conditions for their nature-friendly expansion.
 
Download the study (in German) here.

Against the backdrop of the war in Ukraine, the rising energy prices and the rapidly progressing climate crisis, the Green Party (Alliance90/The Greens) in the German federal state of Brandenburg passed a groundbreaking resolution at their party conference on March 27, 2022. For the first time ever, a party with governmental responsibility decides to aim for 100% renewable energies by 2030.

In this decision-making process the EWG study “100 % renewable energies for Berlin-Brandenburg by 2030”, published in December 2021, played a key role as it showed that Brandenburg can implement a transition to 100% renewable energy  at competitive costs. The study shows that a complete transition to 100% renewables in less than ten years is highly ambitious for the region, but feasible without jeopardizing security of supply.

In addition, our study was able to prove that a full supply with domestic renewable energies is much more cost-effective than today’s fossil and nuclear energy system. The dramatically increasing prices of conventional energies underpin this economic advantage.

On this scientific basis, the Greens with yesterday’s resolution now aim for a provision of all energy for electricity, heat, transportation and industry entirely from 100% renewable energy sources within less than ten years. As they are part of the Brandenburg government, there is a real chance that this resolution turns into a government program.

The federal state of Brandenburg is particularly affected by the disastrous consequences of the climate crisis, especially by long-lasting dry periods including problems like water shortage or forest dieback. Renewable energies play an outstanding role in combating climate change as the conversion to 100% renewable energies reduces greenhouse gas emissions by approximately 60%.

In addition to the escalating climate crisis, the war in Ukraine and the resulting debate on an immediate boycott of Russian energy supplies reinforces the urgency of a massive acceleration of the expansion of renewable energies. At the same time, only the rapid expansion of renewable energies will lead to energy prices that are socially acceptable and support the economy in the long term.

It is a great success that our study was able to provide the scientific basis for this progressive and groundbreaking resolution of the Brandenburg Greens. Now it remains to be hoped that this ambitious goal will become enshrined in Brandenburg’s energy strategyand that other state governments will follow suit.

The resolution on 100% renewable energies by 2030 by Alliance90/The Greens Brandenburg can be found here.

The full EWG study (German) well as an English summary can be found here

Guest article by Dr. Rudolf Rechsteiner, EWG network member and President of the Ethos Foundation

EU taxonomy – It’s all about public funds

Much has been written about the EU Commission’s misguided decision to retroactively include nuclear energy and natural gas in the sustainability taxonomy. On the surface, it’s about private investments and greenwashing. But the nuclear lobbyists are interested in something else.

Rarely has the EU Commission disgraced itself as much as it did now with its plan to enrich the originally good EU taxonomy for “green investments” with gas and nuclear power plants. The responsible EU Financial Market Commissioner Mairead McGuin-ness defended herself, saying it was all about “transitional technologies”, and adding by the way: “coal kills!” – as if coal-fired power plants were still planned in the EU. The authoritative Platform for sustainability finance criticized the decision very sharply and pointed out that the old coal-fired power plants in Europe will cease to operate anyways as thanks to stricter CO2 emission-trading they can no longer be operated economically. In addition, the platform criticized the lack of trustworthy verification processes for the alleged sustainability of fossil gas and nuclear power plants. The annex of the EU Commission contradicts the Do No Significant Harm requirement, which is the basis of the taxonomy.

Lobbyism and power games

The highly controversial EU decision reveals that even the highest executive body in Brussels is by no means immune to power games, heavy-handed lobbying and disinformation.

 The original criteria of the taxonomy were consistent:

– Climate protection and adaptation to climate change.

– Sustainable use and protection of water and marine resources.

– Transition to a circular economy.

– Pollution prevention and control.

– Protection and restoration of biodiversity and ecosystems.

The word of power from Brussels undermines the taxonomy and indirectly harms all green-oriented financial products. Those who are running sustainable funds will have to explain themselves from now on. For many providers, it may be popular to clearly distance themselves from the annex from Brussels, for good reasons.

The history of commercial nuclear energy records five serious reactor accidents with core meltdowns: Three Mile Island (1979), Chernobyl (1986), Fukushima 1 to 3 (2011). The consequential costs cannot yet be quantified conclusively.

The disposal of highly radioactive waste poses puzzles. A reliable proof for the next 100’000 years cannot be provided. The Sustainability Platform points out that the costs for the disposal of existing nuclear power plants are already insufficiently covered (Response to the Complementary Delegated Act).

Globally, no insurance company can be found that offers liability insurance against severe nuclear accidents. Recent new nuclear power plants in Europe are experiencing exorbitant cost and construction time overruns, making them – and their owners – very unpopular on the stock market. The glossy annex won’t change that.

Gas-fired power plants can only be named “green” if they are fed with gas from renewable sources. Instead of hydrogen and e-fuels, there exist other cheaper flexibilities on the electricity market. Thermal storage or contractual load shedding by large consumers that can align with cheap, fluctuating renewables.

The day-ahead markets on the German electricity exchange recorded 298 annual hours with negative prices (2020). The trend towards “cheap sunshine hours” in the electricity market is enabling new business models for flexible energy-intensive industries that operate without fossil gas-fired power plants.

Large-scale batteries and the further development of intra-European electricity trading are also cheaper and suitable for providing the necessary back-up for solar and wind power with already existing water storage systems. In the USA as well as in Australia, batteries with the capacity of coal-fired power plants are replacing new gas-fired power plants. Germany has slept through this trend, hence the greenwashing of natural gas. As with the fairy tale of the “clean diesel,” there is a huge need to catch up. With technology-neutral incentives and a de-blocking of grid expansion, new fossil gas-fired power plants would be unnecessary.

Money for the “nuclear renaissance”

Alleged transitional technologies being built now will remain in operation for decades. Building new capacity with inflexible base load will lead to renewable energy curtailment, much to the detriment of the desired transformation.

The intent behind the absurd “Annex” is not to attract private investment. The question with nuclear power was, and still is, how to get to new governmental subsidies in a supposedly competitive electricity market. The EU’s “Green Deal” includes a budget of over 1000 billion euros, based on revenues from CO2 certificates and unclaimed Covid credits.

Lazard, a New York-based investment bank, provides annual cost comparisons for electricity from new power plants. New nuclear power plants have become risky and effectively unaffordable for private investors. Wind and solar power are now four times cheaper. The pro-nuclear EU member states want to see the “nuclear renaissance” paid for by Brussels, by subsidies from the “Green Deal”. For this reason, the obsolete risk technologies need a green coat. Hence the new taxonomy. Private investors who are serious about responsible investment will be left out in the cold.

Today, the Energy Watch Group published a statement on the currently ongoing revision of the Swiss Energy Act and the Electricity Supply Act.

The result: The draft presented by Switzerland’s Federal Council is neither compatible with the Paris Climate Agreement, nor does it enable the long overdue nuclear phase-out or energy independence from from autocratic states such as Russia.

The Federal Council’s current draft’s goal of a climate-neutral Switzerland by 2050 is inadequate – not only in terms of compliance with the 1.5°C limit agreed on in Paris, but even for limiting global warming to 2°C. Moreover, the war in Ukraine illustrates that additionally the European dependence on the fossil-nuclear energy system is untenable due to its security risks.

In order to ensure Paris compatibility and to end the untenable dependence on the fossil-nuclear energy system, the target must be adjusted towards 100% renewables for all energy sectors by 2030.

Read the full policy paper (in German) here.

New article by Hans-Josef Fell for Energy Post:

A massive expansion of domestic renewable energy stops wars, not just climate change.

A massive expansion of domestic renewable energy generation over the last decade would not only have saved the planet from a future climate catastrophe, it would be stopping wars today Firstly, 70% of Russia’s state revenues come from oil, natural gas, coal and nuclear energy dealsState revenues fund its military. Secondly, an EU dependent on imports from any geopolitical adversary will always struggle to impose sanctions on it. Fell explains that if the EU cuts energy imports from Russia it cannot easily get supplies from elsewhere, leading to a further increase in prices, more inflation, economic hardship and therefore political consequences at home. Reversing dependence on imports will take time, and Europe is now paying for the lack of foresight, says Fell. Yet wind and solar prices have been dropping for a decade, are now at record lows and are still getting cheaper. Studies for “100% renewables” have been available for a long time. So nations should start implementing them.

Import dependence is a security risk

For decades, there have been warnings about how the strong energy import dependence of industrialised nations like Germany in the fossil and nuclear sectors poses a major security risk. Today, we see a massive increase in these geopolitical distortions and the threat to peace in Europe as a result of strong energy dependencies.

Indeed, the lack of a shift to domestic renewable energy, especially in the last decade under Angela Merkel’s chancellorship, was one of the main reasons why Germany and the EU did not have sufficient political means to counter the Russian deployment of more than 130,000 Russian troops on the Ukrainian border. One of the reasons why Russia’s military attack on Ukraine, which is against international law, could not be prevented is due to the fact that Russia is in a very powerful position because of the EU’s immense energy dependenceIt is now taking advantage of the fact that the EU and Germany, under pressure from the gas and oil lobby, have continued to rely on fossil fuels instead of domestic renewable energies over the past decade.

The EU’s massive dependence on energy raw material supplies from Russia has led to great political powerlessness in the conflict over Ukraine. The recognition of the Independence of Donetsk and Luhansk as independent could not be prevented by the West, because the West kept buying energy from Russia, even during these last six months with significantly higher revenues for Russia’s war chest. About 70% of Russia’s state revenues come from energy deals with oil, natural gas, coal and nuclear fuel.

Russia’s riches are based on the revenues from oil, gas and coal

Russia has thus been able to accumulate considerable wealth with the revenues from oil, gas, coal and nuclear fuel, which allowed Russia’s massive armament in the first place. At the same time, the EU’s energy dependence has led it to believe that it cannot do without Russian energy supplies. In order to secure energy supplies, the EU could not quickly announce, let alone carry out, threats of sanctions. It is certainly no coincidence that the escalation of violence against the Ukraine comes at the very moment when the EU economy is already in a massive crisis due to high fossil fuel prices.

Not certifying Nord Stream 2 is a long overdue step

In response to Russia’s recognition of the regions of eastern Ukraine, the President of the European Commission, Ursula von der Leyen, and the German government announced sanctions. They had remained very nebulous the weeks before, which led to fear that these sanctions would remain as weak and ineffective as the EU and US sanctions after the occupation of Crimea. With Russia’s attack, we do see now that Russia hardly takes these sanctions seriously either.

Chancellor Scholz’s announcement to not certify the Nord Stream 2 gas pipeline is a long overdue step. This shows that t his fossil gas policy, which was enforced recently in the coalition agreement, was wrong from the very beginning and disregarded its inherent geopolitical dangers.

President Putin knows very well that the EU has its back to the wall

President Putin is very well aware of the fact that Germany and the EU cannot significantly endanger Russia’s crucial state revenues in the short term or even in the medium term. A ban on imports of Russian gas, oil, hard coal and nuclear fuel elements would lead to an economic burden for the EU that goes far beyond today’s energy price increase.

A collapse of the economy due to missing or expensive energy raw materials, uprisings of the population due to cold flats and missing fuel for cars and trucks, food shortages and raising prices for food due to missing or expensive fertilisers, pesticides and transport energy would soon be the consequence.

Strong increases in the prices of natural gas (+60%), oil (+43%) and hard coal (+180%)

With an oil price of just under 100 US dollars per barrel, even today 23% of German companies already classify the current energy prices as threatening to their existence, 65% speak of a “strong challenge”.

Many media as well as companies still see taxes and levies as the main cause of the increase in energy prices. However, the sharp increases in the prices of natural gas (+60%), crude oil (+43%) and hard coal (+180%) since mid-2021 are the main cause for this development, as they are driving up energy prices despite the sharp drop in solar and wind energy costs.

Oil & Gas lobby

Most of these companies, that are now under massive pressure, from BASF to OMV or other natural gas companies, share a large part of the blame and are responsible for their own plight. It was these companies, who lobbied against the expansion of renewable energies for decades. They hindered political support for renewable energies and failed to create sufficient renewable energy investments in their own companies. All warnings that this could lead to a dire dependence with rapid price increases were ignored so that they are now facing the shambles of their own actions.

Further price increases are to be expected

The rise in commodity prices has many causes, ranging from speculation to the current geopolitical tensions, wars, accidents and terrorist attacks. It is especially the decline in production of fossil raw materials in important producing regions, especially OPEC, that causes this development. Overall, the production of fossil raw materials, especially oil, is increasingly unable to meet demand. Further price increases are to be expected. The day Russia attacked Ukraine, the price of oil jumped above the 100 US $ per barrel mark.

The energy importing countries are now feverishly seeking diversification from Russian energy supplies. However, this will not lead to an increase in the total production. Shortages in the market will continue to increase and with them commodity prices will as well. The shortages have driven up energy prices in all sectors: power generation, transport, heating, industry. The unexpected outage of one third of the French nuclear power plants has put additional pressure on electricity prices in the EU, showing that nuclear energy cannot contribute to lowering electricity prices either.

The EU is stuck in a dilemma that cannot be resolved in the short term

The EU hence is stuck in a dilemma that will not be solvable in the short term. Finding effective sanctions that seriously affect Russia do not seem to be working. However, the EU is not able to impose strong sanctions in the one and only sector of the Russian economy that is seriously vulnerable, the energy sector, as this would lead to the greatest economic hardship and to popular uprisings due to the heavy dependence on energy – as the recent survey on the existential fears of businesses mentioned above shows.

Thus, the EU cannot adopt sanctions that would seriously affect the Russian state and it is not surprising that all the EU rhetoric of “effectively and severely burdening the Russian economy” hasn’t been taken very seriously in Russia.

Berlin cannot approve an embargo

The Ukrainian Ambassador to Germany, Andriy Melnyk, had made one thing clear a few days ago: among other things, he demanded an embargo by Germany and the EU on Russian gas, oil and coal exports, as well as the end of the Nord Stream 2 gas pipeline. As a matter of principle, he is right with these demands as this is the only way to seriously hit Russia’s economic power.

However, it is obvious that this will not be taken up by the government in Berlin: it cannot, because the consequence would be the collapse of the German economy. In the short time required, the missing energy supply from Russia cannot be replaced by alternative energy suppliers – nor will this be possible in the future because of the shortage tendencies on the world markets.

Russian energy supplies to the EU cannot be replaced in the short or medium term

Who is to replace the large Russian energy supplies to the EU in the short or medium term? The few supplier countries under discussion, such as the USA, Australia, Central Asia, North Africa or the Middle East, will not be able to organize the replacement in a few years and certainly not next winter. In addition, many of these countries are governed by unjust regimes, which foreshadows the next geopolitical upheavals.

Fossil energy prices, which have risen considerably in recent months, are the result of a shortage of fossil energy on the world market. Demand exceeds supply. So where would the missing quantities of oil, natural gas and coal in the EU come from, for an energy embargo against Russia, if they are currently already insufficient to cover global fossil energy demand?

Russia can sit back

Should the EU nevertheless impose an embargo, it would be cutting its own throat. Russia could sit back, wait for the economic collapses and popular uprisings in the EU and then dictate its terms for renewed energy supplies.

After all, Russia has amassed a financial reserve worth hundreds of billions with the revenues from energy sales. The reverse scenario is that even now at war, Russia could ignore contractual supply obligations and turn off the oil and gas taps on its own authority. The powerlessness of the EU would then come to light very quickly.

Previous expansion of renewable energies far too weak

Germany’s and the EU’s self-created dependence is a result of the extremely weak expansion of renewable energies. Solar radiation and wind do not have to be imported, neither from Russia nor from other countries.

A steep expansion of renewable energies in the last decade could have led the EU out of its dependence and powerlessness towards supplier countries like Russia. This is exactly what the G7 energy ministers demanded after the occupation of Crimea, precisely in order to achieve more energy independence from Russia. It has not happened. On the contrary, the annual expansion of renewable energies in Germany and the EU – politically decreed, for example, with the amendments to the Renewable Energy Sources Act (EEG) – has further collapsed. This is precisely what led to the EU’s current geopolitical powerlessness in the face of Russia’s military threats against Ukraine.

Ukraine is dependent on Russia’s energy supplies as well

Besides, the Ukrainian ambassador’s brisk demand for an energy embargo must also be seen in the light of his country’s own impotence. Ukraine still obtains large amounts of energy from Russia: electricity via the interconnection with Russia and Belarus, oil and coal as well as most of the fuel elements for the Ukrainian nuclear reactors.

To receive transit fees, Ukraine still insists on the transit of Russian natural gas to the EU and overlooks the fact that in doing so, it finances the Russian state budget and therefore the military threats against its own country. It is significant that the Ukrainian ambassador called for the end of Nord Stream 2, but not for the end of the transit of Russian natural gas on Ukrainian soil.

Share of renewable energies in Ukrainian energy supply well below 10%

For more than a decade, I have been pointing out in ministerial talks and hearings in the Ukrainian parliament in Kiev that as long as Ukraine keeps on buying large amounts of energy from Russia, it is completely powerless politically in the face of Russian aggression.

A steep expansion of renewable energies in Ukraine within the last decade would have been the right strategy to gain political independence from Russia. However, this hasn’t happened and the share of renewable energies in Ukraine’s energy supply is still well below 10%. The Ukrainian impotence towards Russia is therefore also partly self-inflicted.

For more than a decade, there have been ongoing warnings of geopolitical upheavals and even wars as a result of fossil energy dependence as well as calls for a rapid switch to domestic renewable energies.

In my Bundestag speech on February 11, 2011, on the EU energy summit, I stated: “The black-yellow German government failed to initiate the urgently needed transformation process towards a full supply of renewable energies while exploiting the large potential of energy savings. Europe is in danger of becoming more than 70% dependent on energy raw material imports from increasingly insecure supply countries. Instead of finally focusing on the development of the inexhaustible and free domestic energy resources from solar radiation, wind, hydropower, and geothermal energy, the EU summit is focusing on increasing import dependency from politically unstable supplier countries with new pipelines and terminals.”

The German Armed Forces also warned against dependence

The Transformation Centre of the German Armed Forces had also strongly warned of the serious security threats associated with a shortage of energy resources in its 2010 Peak Oil Study:

P. 17: “Oil-importing states are forced to be more pragmatic in their foreign policy towards oil suppliers and must subordinate normative aspects to the primacy of security of supply. On the part of the oil-producing states, a political instrumentalization of their power position and a corresponding formation of alliances along ideological lines of conflict is quite plausible.”

p. 25: “In addition, bilateral supply ties for gas could more easily turn into effective politically dependency relationships that override traditional political orientations or integration into alliances”.

p. 26: “Above all, an expansion of nuclear energy, however, exacerbates the problem of proliferation.”

These warnings of the of the German Armed Forces Transformation Centre from 2010 speak for themselves, but have nonetheless always been thrown to the wind.

Goal: establishment of a domestic energy supply in the EU and Ukraine, 100% from renewable energies

After the hopefully imminent end of the war, the clear realization of global politics must be to build a domestic energy supply in every country, especially in the EU and the Ukraine based on 100% renewable energies. This would deprive Russia of the revenues, which have been flowing into Russian high armament, and would make the political decisions of the EU and Ukraine more independent, since a collapse of the economy due to rising energy prices and energy shortages would no longer have to be feared.

Quite the contrary: renewable energies are now the most cost-effective way of generating energy, even as a reliable energy source with a mix of 100% renewables and storage technologies. Scientific studies, which show that the transformation to a full energy supply with renewables is not only possible within a decade, but would even be much cheaper than the fossil nuclear energy system, have been available for many years.

This geopolitical liberation strategy, which can be realized in the medium term, would simultaneously care for climate protection and reduce the long list of economic and social burdens caused by fossil fuel price increases, including increasing droughts, food shortages, heavy rains, storms, rising sea levels and other catastrophes. On the other hand, these catastrophes caused by global warming will lead to additional geopolitical distortions, which are likely to cause warlike tensions or wars in other places, as it is currently the case in the Ukraine.

Source: https://energypost.eu/a-massive-expansion-of-domestic-renewable-energy-stops-wars-not-just-climate-change/

Details & Webinar-Link: http://ewg-restore-duhz34gqyp.hans-josef-fell.de/wps/100-erneuerbare-energien-fur-berlin-brandenburg/

New short study by the Energy Watch Group (EWG) finds:

Electricity would already be cheaper today with a full supply of 100% renewables

27.10.2021 – Berlin | In the coalition negotiations for the new German government, both ambitious climate protection and the reduction of electricity prices play a central role. The previous government still expects only 45% renewables in the electricity mix by 2025. A new short study by the Energy Watch Group offers an answer to the rising energy costs: The study calculates that a full supply with 100% renewables would already be economically competitive today compared to the current energy system based on coal, natural gas and nuclear. By 2025 at the latest, an energy system based on 100% renewables would then be significantly cheaper than power generation with fossil fuels.

“Since around 2017, the electricity generation costs for solar and wind power have fallen far below the electricity generation costs of conventional power plants such as natural gas, coal or nuclear. However, this new development is largely dismissed in societal discourse with the claim that total system costs, including storage, would be far higher than those of conventional power generation. The study proves that this claim is outdated and simply wrong.”, adds Hans-Josef Fell, President of EWG.

The latest developments in the price decline of renewables and storage technologies in conjunction with the price increases of conventional power generation leave no room for doubt: Since 2021, supply-secure power generation from 100% renewables is cheaper than power from newly built conventional power plants, even including storage costs. From 2025, even conventional power plants that have already been built and depreciated will no longer be able to compete economically with newly built full-supply systems with 100% renewable energy. These findings are obtained by modeling the development of electricity prices based on current data.

“In the next few years, conventional existing plants will no longer be economically viable to operate due to the lower costs of renewable full supply. This means that a historically favorable extensive self-sufficiency in all energy sources will be within reach in Germany and also worldwide. This revolution in the fundamental conditions of energy supply can be seen as an opportunity and must be used for immediate climate protection. This means that all energy investments must be immediately withdrawn from fossil fuels and directed into renewable energies,” says Dr. Thure Traber, lead author of the study.

Download the Short Study here in English and German.

Download the Press Release here in English and German.

Press contact:

Sophie Marquitan – presse@energywatchgroup.org