EWG Annual Report 2023

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)

Foto von Hc Digital.

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EWG Newsletter January 2024

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!

Bild von Ed White auf Pixabay

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On the danger of antiquated energy policy mindsets

We won’t solve any crisis as long as global leaders cling to outdated fossil-nuclear thinking patterns.

EU President von der Leyen, German Chancellor Olaf Scholz, French President Macron, Taiwan’s President Tsai Ing Wen, as well as most other global leaders – they are all characterized by the fact that in their important high-ranking functions they have almost always viewed energy security solely from a fossil-nuclear perspective. To the present day they have prioritised the business interests of the big energy companies, whose focus is fossil-nuclear.  

These global leaders subordinated the resulting geopolitical tensions and climate protection in their policy of procuring crude oil, natural gas, coal and uranium, although the consequences have been foreseeable for decades. They have not effectively promoted domestic renewable energies as the only real solution for energy security. For that reason, they are largely responsible for the fact that the EU and other regions are now highly dependent on energy supplies from autocratic countries and they bear a large share of the blame for the current, ever worsening energy problems, geopolitical tensions and global warming.  

In midst of the current multidemensional crises one might think that these global leaders would have gained new insights and would have realised that by now all efforts must be put accelerate the expansion of renewable energies at maximum speed. However, thats not the case. Instead, the famous saying of Hermann Scheer, German politician and co-author of the Renewable Energy Sources Act, applies: “Those who have created a problem cannot solve it.”  

This becomes obvious in the current actions and high-profile activities of global leaders to contain the energy crisis. Right now, they spend a lot of time visiting hotspots of the fossil fuel industry which means looking for solutions where they cannot be found. Instead of seriously engaging with people who are preventing the expansion of renewable energies and urging them to finally solve the blockades, they still serve the interests of the fossil and nuclear economy.  

German Chancellor Olaf Scholz  

For example, German Chancellor Scholz has still not been to Bavaria, the state that has been the biggest blocker of the energy transition for years and is hence now facing particularly massive energy problems in the coming winter. If Chancellor Scholz came to Bavaria, met with the citizens’ communities, who have wanted to build wind turbines or open-space solar plants for years, and explained them how the Bavarian government has been obstructing them for years with anti-windpower-regulations, permit harassment, lack of land designations and more, the pressure on the Bavarian government would be enormous. They couldn’t keep up the blockades any longer.  

But instead of sending such signals about the unprecedented urgency of expanding renewables across the country, Scholz has just held a high-profile appointment to inspect the Siemens gas turbine for the Nordstream 1 pipeline in order to document that it is operational. Again, a commitment to the fossil natural gas industry. It was supposed to be a signal to President Putin, who  will surely only have laughed at this waste of time by a German Chancellor.   

French President Emmanuel Macron   

Another example for persisting fossil nuclear patterns of thought is the French President Emmanuel Macron. He aims to build 14 new nuclear power plants and to continue operation of the existing ones with 50-year longevity extensions to enable French energy security in the years ahead.  This strategy seems particularly absurd in light of France’s recent experiences with new nuclear construction and operation.  For example, the only new nuclear power plant built in France, the EPR reactor in Flamanville, is still not in operation since construction started in 2007 and planned commissioning in 2012. Construction costs have skyrocketed by at least three times.  With this in mind, the plans for the construction of 14 new reactors will certainly not be feasible before 2050 and hence will by no means be part of a solution to the the current energy crisis.

Quite the opposite, France’s 56 nuclear power plants contribute significantly to the European energy crisis. Up to 50% of the French nuclear power plants had to be shut down recently, partly because significant safety risks had been discovered due to cracks in the cooling pipes. Additionally, many other nuclear plants had to be shut down this hot summer due to warm river temperatures and low water levels that could no longer guarantee the plants cooling.If the drought persists, there is a threat of further shutdowns in the coming weeks, incidentally also at coal-fired power plants as they also rely on river cooling water.   

So far, a French blackout has only been prevented with green electricity supplies from Germany. Exchange electricity prices in France have exploded and are considerably higher than in Germany, where they also drive up electricity prices.

It is clear to see that nuclear power is too expensive and does not contribute to energy security. The fact that Macron nevertheless clings to nuclear power instead of finally announcing a 100% renewable energy target by 2030 speaks for his inability to learn from energy policy mistakes. 

EU Commission President Ursula von der Leyen   

Just recently, EU Commission President Ursula von der Leyen flew to Azerbaijan and signed new contracts for natural gas supplies to the EU. However, Azerbaijan can hardly increase natural gas production. Crude oil production has also peaked a long time ago. The resulting increase in unemployment leads to social tensions and is suppressed by the autocratic regime that violates human right on a regular basis. 

The supply of natural gas and oil from Azerbaijan is only possible via the new Turkey and Adriatic Pipeline, which was mainly promoted by German politicians of the conservative parties via the Council of Europe. These politicians have been criticised for receiving corruption money from Azerbaijan, called the “Azerbaijan Connection” by a German news channel. 

In addition, Ursula von der Leyen is responsible for the inclusion of the highly climate-damaging natural gas and the highly dangerous nuclear energy as “green” energies in the EU taxonomy. There is no more obvious way to document the compliant support of the fossil and nuclear economy. Against this backdrop, Ursula von der Leyens recent political activities completely failed in terms of the expansion of renewable energies.   

Ukrainian President Wolodimir Selenski  

The Ukrainian President Wolodomir Selenski plans to export electricity to Europe to generate revenue. However, more than 50% of the electricity in Ukraine comes from nuclear power plants. These are at high risk in Putin’s war right now. Misdicrected rockets as well as targeted attacks during wars can cause a nuclear “super-disaster”. In that case, regions all over Europe would be affected by radioactive contamination. After the latest attacks on the Zaporizhzhya nuclear power plant in Ukraine, Europe’s largest nuclear power plant, the International Atomic Energy Agency already speaks of a “real risk of a nuclear catastrophe”.  

For that reason, at least in wars, nuclear power plants must be shut down. President Selenski, however, is still sticking to nuclear power production, building up on his announcement to construct new nuclear power plants. Moreover, Ukraine itself buys fuel elements from Russia and thus paradoxically finances Russia’s war of aggression against its own country.  

Selenski’s adherence to the fossil-nuclear energy system is thus also a great danger to the existence of all Europeans. The only way out of this highly dangerous situation is the switch to 100% renewable energies. But so far, Selenski has hardly promoted this transformation.  

Taiwanese President Tsai Ing Wen  

Similarily, the industrial region of Taiwan, another current trouble spot,  is almost completely dependent on fossil and nuclear energy supplies from abroad. An interruption in the supply of raw materials would quickly send the economy into a tailspin.   

This is precisely what is currently being feared after the visit of U.S. Congresswoman Nacy Pelosi. China reacted angrily to what they see as an enormous provocation and has begun to hold a military manoeuvre. There are fears in Taiwan that a blockade of sea and air routes is being prepared.   

Should China actually block the sea and air routes in violation of international law, there would be an enormous energy shortage in Taiwan in a short time and the economy would collapse, with catastrophic consequences for the global economy. Two thirds of the global contract production of semiconductors takes place in Taiwan. Should Taiwan try to prevent this with military means, the nuclear powers USA and China would probably be at war with each other. 

Against this geopolitical backdrop, it becomes painfully apparent, that it was a mistake for President Tsai Ing Wen to not put all efforts into transforming the energy policy towards 100% renewable energies immediately after coming to power and to continue to serve the fossil fuel economy instead.

The Energy Watch Group had already advised the President in this matter, when she was still in opposition. In 2021 the EWG in cooperation with the LUT University in Finland and the Taiwanese Ministry of Energy additionally completed a study on 100% renewable energies in the Taiwanese electricity sector by 2050, that was supported by the Taiwanese President Tsai Ing Wen. Only the suggested rapid switch to 100% domestic renewable energy can solve this dangerous situation for Taiwan in the medium term. Tsai Ing Wen did try to end the dependency on nuclear power, but the powerful nuclear industry in Taiwan had overturned this nuclear phase-out law with a referendum.  

If China continues to block Taiwan, there will probably be no more fuel elements for nuclear power in Taiwan. The situation of Taiwan currently shows the fragility and vulnerability of countries which are dependent on fossil and nuclear energy. Even if China does not block the sea routes this time, there will always hover the “Sword of Damocles” above Taiwan, that this might change.

Conclusion 

Scholz, Macron, von der Leyen,  Selenski, Tsai Ing Wen – as different as the challenges that the respective countries are currently facing may be – what unites them all is that they seem to have learned nothing from the current crises. Even though the multidimensional crises of our time – energy price crisis, climate crisis, health crisis, wars – show us more painfully than ever where our nuclear fossil dependency has led us, they are still clinging to the fossil and nuclear energy system instead of clearly focusing all efforts on the expansion of renewable energies. Only with these will we be able to embark on the path to a sustainable and peaceful future. Read our global study to learn how such a 100% clean energy supply can be implemented worldwide in a technically and economically viable way.

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Renewable Power Remains Cost-Competitive amid Fossil Fuel Crisis

New IRENA report confirms: Renewable electricity is significantly cheaper than conventional

This month, the International Renewable Energy Agency (IRENA) published a report in which it examined the costs of electricity generation from renewable energy sources in 2021. IRENA concludes once again that renewable energy is by far the cheapest source of electricity compared to conventional energy.

The report shows that the cost of renewable energy in 2021 has further decreased compared to the previous year. Specifically, the average cost of electricity for onshore wind fell by 15% while the cost for photovoltaic and offshore wind fell by 13% each. Furthermore, nearly two-thirds or 163 gigawatts of new renewables commissioned in 2021 had lower costs than the cheapest existing coal-based option in the G20 states.

Overall, the development of the competitiveness of renewables is remarkable. For example, between 2010 and 2021, the average cost of electricity of newly added PV projects fell by 88%, the cost of onshore wind and solar thermal power by 68% each, and of offshore wind by 60%.

Against this background, Francesco La Camera, Director General of IRENA, states:

““Renewables are by far the cheapest form of power today. 2022 is a stark example of just how economically viable new renewable power generation has become. Renewable power frees economies from volatile fossil fuel prices and imports, curbs energy costs and enhances market resilience – even more so if today’s energy crunch continues.”

Also recommended is this interactive infographic from IRENA, which clearly illustrates the evolution of renewable energy competitiveness in the midst of the fossil fuel crisis.

 

Outlook: Fossil energy costs will continue to exceed renewables in 2022

According to IRENA, conventional energies will still be much more expensive than renewables in 2022. For example, the fuel and CO2 costs for existing gas-fired power plants in 2022 are estimated to be on average four to six times higher than the total operating costs for PV and wind power plants added in 2021.

The fact that renewables are already leading to significant savings is also shown by the fact that in the period January to May 2022, imports of fossil fuels worth at least 50 billion $ were avoided in Europe through the generation of solar and wind energy alone. The global addition of renewables in 2021 will reduce electricity generation costs by at least 55 billion $ in 2022, given the current fossil and nuclear fuel price crisis, according to IRENA.

In view of these clear cost advantages of renewables, it is even more incomprehensible that in Europe in particular the replacement of Russian energy supplies is being sought primarily with new LNG terminals and diversification in the import of oil, natural gas and coal. This strategy, which comes from the old thought patterns that first brought us into this fundamental dependence on Russian energy supplies, will fail again this time: The diversification of fossil energy imports will lead to a further increase in fossil energy prices, due to their scarcity also to new geopolitical tensions, and at the same time this will lead to a further rapid heating of the Earth’s atmosphere.

At the same time, replacing Russian energy supplies with renewables together with energy conservation will reduce energy costs overall, guarantee security of supply, protect the climate and avoid new geopolitical tensions. However, this requires massive acceleration laws for the expansion of solar and wind power, bioenergy, hydropower etc, similar to those similar to the recently enacted laws for LNG terminals in Germany. We finally need those legislative changes that will lead to a fireworks display of the expansion of renewables. Then, in combination with energy savings, we will also able to get through the next winter safely, even if Russian natural gas supplies continue to be halted, and we will also reduce energy costs.

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A remarkable proposal for international security and a sustainable future

Nuclear disarmament is the key to global security as well as for a sustainable future and the prevention of the climate collapse. For decades, not only the peace movement has therefore been calling for nuclear weapons to be removed from the world.

After the end of the Cold War between East and West around 1990, effective disarmament treaties were indeed concluded between the U.S. and Russia, the two most powerful nuclear powers. But this hopeful process came to an abrupt end many years ago. Nuclear armament not only in Russia and the US, but also in other countries, such as France, Great Britain, China, India and many others has increased massively again. By the way, this is the key driving force of many governments to build new nuclear power plants, because they are the source of nuclear weapons material.

However, now there emerged a remarkable proposal for nuclear disarmament in the context of the Ukraine war, which deserves more attention. Oscar Arias, Ex-President of Costa Rica Nobel Peace Prize laureate, and Jonathan Granoff, President of the Global Security Institute, have suggested that the U.S. should withdraw all U.S. nuclear weapons from Europe and Turkey as a unilateral sign. This could get Putin’s attention to move him to the negotiating table and possibly agree to an end to the war in Ukraine.

This proposal would be a sign of de-escalation on the part of the U.S. in the increasingly hardening Ukraine war. This could effectively move Putin and deprive him of one of his most important propaganda arguments for his merciless aggression. Europe’s conventional defense capability against the aggressor Russia in the Ukraine war would remain fully intact. In this respect, there would be no security risks for Europe.

Unfortunately, this important proposal has not found its way into the international media and is obviously not being discussed in the German government.

The withdrawal of all U.S. nuclear weapons from Europe, and thus also from Germany, is a long-standing demand of the the German Green Party. For that reason the Green Party’s candidate for chancellor and current foreign minister Annalena Baerbock , amongst others, had called for the withdrawal of U.S. nuclear weapons from Germany during the last federal election campaign.

Oscar Arias is a remarkable politician who has made a significant difference in Costa Rica. In Costa Rica, the military budget was largely abolished and invested primarily in education. Ultimately, this also had an impact on Costa Rica’s relatively rapid achievement of its goal of converting its own power supply to 100% renewable energies. Oscar Arias knows how to create peace and climate protection with innovative political ideas. We should learn from him and Foreign Minister Baerbock would do well to adopt this proposal and initiate corresponding talks with the USA, as she already had proposed during her own election campaign. We should seize every opportunity to end the horrific war in Ukraine and implement it politically. The proposal of Oscar Arias has the potential to make a relevant contribution to the de-escalation of this conflict and needs to receive more attention from the international community.

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New Short Study on the Relevance of Bioenergy and small Hydropower

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.

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On the defaults of the current energy policy

A few days ago, the Russian Finance Minister Anton Siluanov announced: Almost 14 billion Euros will end up in Russia’s war chest this year through the revenues from Russian energy sales. The lion’s share of this revenue, and thus of Russian war funding, comes from Germany and the EU.

Germany and the EU remain Russias biggest war financiers

All the talk of “successful” sanctions policy is nothing but self-deception. It was clear from the beginning of the war that only an immediate complete energy boycott could make a real impression on the oil elites around Putin. Germany and the EU, however, have still not managed to enforce such a boycott.

On the contrary, the uncoordinated and ill-considered governmental actions, especially to relieve energy customers from further increasing fossil energy prices, lead deeper and deeper into a dead end, so that Putin gets to feel vindicated: The fossil and nuclear energy dependency of the EU results in them continually filing the Russian war chest.

Only fossil prices are rising

In this context, it is important to finally stop talking about “energy prices” in general terms when we actually mean ”fossil prices”. Only the prices of fossil and nuclear energy have been rising massively in recent months, not those of renewable energies. The “commodity prices” of solar and wind energy, the sun’s rays and the wind are, after all, free. It is true that there is also a slight increase in the price of technology investments for renewable energies, e.g. through price increases for materials needed for construction. But unlike fossil fuels and nuclear energy, the prices of energy raw materials do not rise, which keeps the energy prices for renewable energies calculable and low in the long term.

Fiscal activities of the German government drive up geopolitical tensions and fossil energy prices 

The German government has so far relied exclusively on cosmetic fiscal activities to lower fossil energy prices and on a diversification in the purchase of oil, natural gas and coal, mostly from other warring or anti-democratic regimes (Qatar, Senegal, Colombia, etc.). It is thus driving geopolitical tensions and even fossil energy prices ever higher.

Legislation to accelerate the expansion of renewable energies or even effective energy-saving measures have not yet been passed, although this is the only way to bring about real and rapid relief in the energy price sector. Instead, ineffective fuel discounts and fossil energy price subsidies are introduced. All helpless activities that only drive up energy prices and national debt, fill Russia’s war chest and damage the climate.

In order to understand this, one must recall a few basic analyses and facts:

Energy prices are essentially determined by global crude oil prices. Natural gas, coal and electricity prices have been going up and down in a rough pattern with crude oil prices for decades. Of course, there are always special effects, such as the massive increase in electricity prices in France due to the shutdown of more than half of the nuclear power plants. But, while taxes and levies are not insignificant, they do not have the financial impact that crude oil prices do. As a result, energy tax cuts cannot compensate for sharp crude oil price increases at all – what becomes evident in the current situation around the German fuel discounts.

Crude oil prices are determined by the global interaction between supply (crude oil production) and demand (global fossil/nuclear energy consumption). If fossil demand exceeds crude oil production, fossil prices go up quickly and vice versa. For example, there even were negative crude oil prices in the short term when the global economy was in a deep recession due to the Corona virus in April 2020. Since then, the global economy has been picking up again, and oil prices have therefore risen sharply, well before the war in Ukraine. Oil demand, and with it the energy prices, will rise significantly again in the coming months, as global demand for oil, especially in the USA and Europe, will increase considerably due to the start of the travel season.

The rising energy prices with rising energy demand show that the supply cannot satisfy the rising fossil demand, a clear indication that the world has probably reached the peak of fossil energy production. This observation is reinforced by recent statements from the Organization of the Petroleum Exporting Countries (OPEC). The UAE’s energy minister, Suhail Al-Mazrouei, stated recently that the amounts, OPEC could deliver in terms of additional quantities aren´t very encouraging. In his opinion, oil prices are nowhere near their highs. Even though there are feverish and highly climate-damaging activities by the fossil fuel industry to open up new oil fields, they are clearly not strong enough to satisfy the increased fossil energy demand. Analyses of the Energy Watch Group have shown for years that this will even worsen massively in the coming years due to the massive productivity decline  from the oil fields that have been exploited for decades.

Tax measures such as fuel discounts can never lower fossil energy prices

To put it in a nutshell: Due to insufficient promotion and expansion of renewable energies, every increase in demand drives up fossil energy prices. Conversely, only a reduction (conversion to renewable energies, energy saving measurements) of fossil energy use can lower fossil energy prices, whereas tax measures such as fuel discounts never can.

Being aware of these principles, it is easy to understand that the recent actions of the federal government have no chance of relieving the burden on fossil energy customers. Energy tax cuts, fuel discounts, direct energy price support from the state budget – all these instruments lead to an increase in demand for fossil energy and thus contribute to the opposite effect of what is desired: Fossil energy prices rise with the increased demand and with them the national debt in Germany, Russian energy revenues as well as the earth’s temperature.

Of course, it is right to support low-income households financially in the light of the high energy prices, e.g. for their journey to work. But, the instruments must be targeted specifically at this group. However, what is happening now with fuel discounts and related instruments is a scattergun approach. Everyone, including those from the middle and upper classes, are now being given a lump-sum tax break, which only leads to increased demand. Despite high fuel prices, traffic on motorways and rural roads has increased massively this spring.

Tourist air traffic is also increasing massively again and with it the demand for crude oil. To such extent  KLM and other airlines have stopped selling tickets and cancelled flights because their staff, permanently reduced by the Corona crisis, has no chance of handling the surge in air tourists.

There is a lack of large-scale energy saving campaigns

Against this background, where are the governments appeals to save energy?  Where are the energy saving campaigns that call on citizens to the Sunday lake trip by bike or public transport or to spend the summer holidays at home instead of jetting around the world in order to stop Russian war financing?

Instead, ministers and the chancellor continue to travel all over the world – to Qatar, Senegal, Israel, Jordan – to purchase the highly climate-damaging LNG gas from other regions of the world to substitute Russia’s energy supplies and to meet the continuing high demand for fossil fuels. The fact is, that won’t help either, because all these natural gas and oil producing regions simply will not have much more natural gas and oil out of a sudden. They can only change their supply routes. Instead of delivering their previous customers in Pakistan, India, Japan, China and others, oil and LNG tankers are now being diverted to Europe as they pay higher prices.

The oil multinationals are happy about the massive increase in profits.  A special tax will hardly be enforceable against them as multinationals and would not help to lower fossil energy prices anyway.

LNG from the U.S. is no secure source of energy

One example, that shows very clearly that this fossil diversification is an erroneous path and that supply of LNG imports – also from the USA – is by no means secure, is the recent explosion of an LNG production plant of the Freeport company. The company now had to stop its production. As this plant handles about 20% of the LNG processing in the US, this event will also lead to bottlenecks in Europe and thus to further increases in the price of natural gas.

Renewables are the only way out of the looming fossil energy price spiral

There is only one effective strategy to break the looming fossil energy price spiral that continues to drive upwards: A rapid and radical switch to renewable energies in combination with energy savings. However, exactly these aspects are neglected irresponsibly by the German government and the EU.

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Historical decision based on EWG study: Brandenburg Greens target 100% renewable energy by 2030

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

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Guest Article on the EU taxonomy

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.

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Statement on the revision of Switzerland’s Energy Act

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.