The Effects Of Germany’s Energy Transition

Of all the developed nations, few have pushed harder than Germany to find a solution to global warming, reports The New York Times.

The word the Germans use for their energy plan is energiewende, the energy transition.

"It's pretty amazing what's happening, really," said Gerard Reid, an Irish financier working in Berlin on German energy projects. "The Germans call it a transformation, but to me it's a revolution."

Some experts say the electricity business is entering a period of turmoil beyond anything in its 130-year history.

"I am convinced that wind and sun will be the central sources of energy, not only in Germany but worldwide," said Patrick Graichen, who heads a think tank in Berlin, Agora Energiewende, devoted to studying the shift. "The question is: How can we turn the energy transition into a success story?"

Germany has spent more than $140 billion on its program, providing guaranteed returns for farmers, homeowners, businesses and local cooperatives willing to install solar panels, wind turbines, biogas plants and other sources of renewable energy.

The plan is paid for by surcharges on electricity bills from German families. However, they recover some of the costs from reduced electricty usage and pricing. 

One visible change is the skyline. There are wind turbines standing as far as 60 miles from the mainland, stretching as high as 60-story buildings and costing up to $30 million apiece. On some of the turbines, a single blade roughly equals the wingspan of the largest airliner in the sky, the Airbus A380, reports The New York Times.

By creating huge demand for wind turbines and especially for solar panels, it has helped lure big Chinese manufacturers into the market, and that combination is driving down costs.

The prices of the panels have plunged 70 percent in the past five years, reports The New York Times. Consequently, renewable energy is becoming more competitive when compared to other sources of energy. 

The only losers may be the utility companies. Even as the country sets records nearly every month for renewable power production, the changes have devastated its utility companies, which have had profits from power generation collapse, reports The New York Times.

The Germans expect the costs of harnessing offshore wind to drop sharply as the market grows over the coming decade. If that happens, the United States could be a big beneficiary. Studies have shown that offshore wind could supply as much as 15 to 20 percent of the power needed by East Coast cities, and construction is about to start on a handful of American projects, according to The New York Times.