Unpleasant encounter with hard facts

Guest opinion by Fred F. Mueller

Until just a few days ago, the determination of the German government to halt the presumed Catastrophic Anthropogenic Global Warming (CAGW) seemed to be absolutely imperturbable. The main driver behind the German resolve to hammer down CO 2 emissions both domestically and abroad while at the same time finishing off its last remaining nuclear power generating units is Chancellor Angela Merkel. The daughter of a clergyman socialized in the formerly communist east of the country, she is known for her outstanding political cleverness and flexibility in avoiding conflicts she feels she can’t win. Nevertheless, there are certain aspects where this cleverness is superseded by an almost fundamentalist doggedness when it comes to certain key points – such as exterminating nuclear power or saving the planet from overheating.

Only a few weeks ago, Germany engaged in a new initiative to revitalize the ailing international effort to reverse the course of constantly increasing worldwide CO 2 emissions by replacing the vintage Kyoto protocol by more stringent and binding reduction targets at the UN conference that will be held in Paris in November/ December 2015. To this effect, Germany convinced the other European Union states to agree to a 40 % reduction scheme by 2030, sweeping across opposition from negatively affected member countries using a combination of compromises, financial incentives and sheer politico-economic pressure. As a result, the EU came out with bold CO 2 reduction commitments. These in turn were meant to be used as a political lever during the preparatory meetings taking place in the current run-up to the big show.

The push for increased CO 2 sobriety…

In order to underscore its ambition to shine out as a beacon of climate saving efforts, the German government additionally decided to further strengthen its position by renewing domestic efforts aimed at achieving its own commitment of reducing national CO 2 emissions by 40 % (compared to 1990) until 2020. This target had at first seemed to be easily attainable since the country benefitted from the opportunity to decommission the ridiculously inefficient and energy-squandering industry it inherited from the former communist DDR. But in the past years, this special effect waned and the CO 2 emissions even reversed course and climbed again. This countertrend was further underpinned when in the wake of the Fukushima events; the German government ordered to halt eight out of 17 existing nuclear power plants and decided to phase out the remaining ones by 2022. The share of nuclear power was largely taken over by lignite- and coal-fired units, with the result that in the field of power generation, Germany was unable to achieve any reduction since 2000. During the same time period, the electric power markets were flooded with heavily subsidized “green” power, causing prices to collapse to a point where conventional power utilities were unable to generate sufficient revenues. Share prices collapsed and more than ten thousand qualified jobs disappeared. In the centers of political power in Berlin, the grievances of the sector went unnoticed and even the most urgent submissions fell on deaf ears. To add insult to injury, just a few weeks ago, the sector was confronted with tough additional regulations requiring it to further reduce its CO 2 emissions, while signs of mounting albeit muted unease in a growing number of industrial sectors heavily burdened by skyrocketing energy prices were ignored.

This resulted in the rebellion of vital players…

In this situation, the frustration felt by a number of foreign investors in the sector – in the first place those involved in the energy giants E.ON and Vattenfall, a subsidiary of a Swedish state-owned energy producer, culminated. The background is highlighted in a recent article written for the renowned German financial newspaper “Handelsblatt” by Wolfram Weiner, former chief editor of several leading print media. In his item, he used unusually drastic language to chastise the current state of the sector: “In reality, E.ON is capitulating. Faced with wrong decisions and impositions instigated by the German energy policy, the power generation industry is giving up in despair because political leaders have narrowed down their maneuvering space to such an extent that they are choking to death. For too long a time, the political class naively believed that E.ON and RWE (the second in rank of the sector) could be indefinitely squeezed just as a lemon – but now it is dawning to some that there simply is no more juice left…the “Energiewende” (Energy U-turn) resembles a communist command economy…(the policy) has within a short period of time achieved what the communists had been dreaming of for decades: Power generating groups are being dismantled, market rule is supplemented by command economy. But the question remains – who will in the future care about Germany’s power supply, who will invest? Is the state willing to take over these activities too in order to finalize energy-socialism”?

The led to an event that can be likened to the proverbial iceberg unexpectedly popping up right in front of the German state ship while it was plowing through the waves on its climate-saving mission at full-steam. With just a 48-hour notice delivered by a personal phone call to Ms. Merkel on a Saturday, the CEO of E.ON, the largest German and European power producer, let it be known that the company had decided to split itself in two, one part grouping fossil and nuclear power generation and a second part encompassing the “politically correct” activities in the field of “renewable” energies. Sort of a “Bad E.ON” / “Good E.ON” move. The intention is to get rid of the “bad” part as soon as possible by putting it up for sale. At the same time, this also means the “good” part will cease to be duty bound to ensure a stable power supply under all circumstances. Obviously, such a liability is not enforceable from an entity whose only power sources are unstable wind and solar power plants. In a nutshell, the message behind this move is that the silverback of the “big four” German energy producers who group the bulk of the country’s conventional and nuclear power production is about to close shop at short notice. The others will probably follow suit.

Inflicting a deadly setback…

A situation where a country’s leadership is left only 48 hours to digest this sort of threat can be likened to the sudden crash of the Titanic hitting its iceberg. Although most of the German public has not yet noticed that something really important has gone wrong, frantic activities can be noticed on the bridge, with both the minister for economic affairs and the chancellor’s office hastily preparing new legislation aiming at enhancing the situation of coal-fired plants by implementing an all-new market design. It will most certainly provide for compensation payments for coal-fired plants forced to turn idle or at minimum load when the grid is clogged by an oversupply of wind and solar energy. According to comments in various press articles, the German government seems to have realized its vessel is taking in water and is starting to list. So while the ship’s orchestra composed of green and socialist parties together with assorted NGO’s and the accomplices in the media is doing its best to drown out first anxious noises by playing climato-patriotic anthems at full pitch, the power brokers in Berlin seem to be hammering out a plan B in a desperate attempt to fend off a catastrophic breakdown of the nets. Outlines currently emerging suggest that

A) Nuclear power will remain banned. More than 30 years of demonization of the technology probably cannot be reversed,

B) Plans to rein in the soaring price of electric power prices will be abandoned. A key representative of the ruling CDU party has already warned that price hikes will continue.

C) The hope of the government that highly flexible combined cycle gas-fired power plants can be deployed in large numbers to offset the highly volatile production from wind and solar plants has gone up in smoke since these entities have much higher costs than coal-fired units. They thus were the first to succumb to the market distortions brought about by the heavily subsidized “renewable” technologies.

D) The government now implicitly recognizes that in the years to come, coal and lignite fired plants will play a substantially bigger role in securing the country’s power supply than projected. The obvious hope is that it may be possible to stabilize the vessel without having to explicitly admit the core pieces of the previous strategy have to be scrapped.

On to sweet green dreams

While the German public, lulled by decades of seemingly incessant economic upturn, will probably continue to ignore these harsh realities for some time, the long-term implications for CAGW supporters inside and outside of the country do not bode well. Given the fact that the “renewable” energy lobby remains extremely strong, with millions of people having been misguided to invest their life’s savings and pension claims into “planet-saving” energy projects, resistance to any plans to limit further engagements in the “green energy” sector will be extremely fierce. Together with the need to stabilize the ailing conventional energy sector in order to avoid a total breakdown, all requirements for energy costs spiraling out of control are in place. The government can only hope that the public will continue to accept these hikes without too much resistance. But a major stumbling blocks remains in place: German electric energy prices, already the second-highest in Europe, are increasingly choking off economic growth. More and more key sectors such as the aluminum, steel making and chemical industry are increasingly opting out of investing in the country, turning to regions offering more reasonable energy prices, notably the US. Over time, this will put the wealth of the country and with it the fate of its political leaders in jeopardy.

Germany’s anti-CO 2 policy is poised to fail

With their naïve two-pronged approach to abolish nuclear and fossil fuel powered electricity generation in parallel, the German political leaders have maneuvered themselves into an impasse and now find themselves caught between a rock and a hard place. The “renewable” sector propped up with at least half a trillion € in subsidies has reached proportions making it too big to fail, while conventional generation will now call in the same favors that had hitherto been granted to the “good ones”, threatening to cut supplies if they are not treated likewise. Embittered by more than a decade and a half of injuries “sweetened” by insults, one can expect that they will probably be pushing for fulfilment of their demands with little regard as to whom it might hurt. With the door to nuclear generation firmly shut and welded tight, German CO 2 emissions are set to increase as naïve expectations of falling electricity demand will dissipate. Especially since no-one seems to have taken into account the power requirements of e.g. the many million electric cars that are supposed to crowd German streets in the coming decades. While arrogantly claiming the role of a vanguard policy-maker with respect to climate-saving measures, German politicians have entangled themselves in a maze of conflicting interests and harsh realities restraining their actions to near-immobility.

At some point, when the populace will finally realize it has been fooled and plundered, politicians will refrain from CAGW aspirations when it becomes evident they will not be favorable for their future prospects to be elected. And if and when Germany fails in full focus of the spotlights they themselves asked to be turned upon them, the CAGW theories will suffer a major blow on a worldwide scale. This might hopefully turn out as an important contribution to the demise of the whole CAGW scam.

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