Merkel’s Solyndra – Germany’s Green Industries Start Their Collapse

Not long ago I wrote about how German solar cell manufacturers are drowning in a sea of red ink, read here and here.

The latest to bite the economic bullet are a biofuel plant in Freiberg, and Germany’s E10 ethanol blended fuel.

Merkel’s Solyndra – Choren Industries GmbH goes insolvent

The online leftist TAZ reports here that Choren Industries GmbH located in Freiberg, Saxony is now insolvent. The plant was designed as a pilot for future plants in producing “sun-diesel” from wood waste and biomass. It was designed to produce 18 million litres of the “climate-friendly” fuel, the TAZ reports. It employs 300 workers.

Even Chancellor Angela Merkel visited the plant along with a substantial entourage, before cameras, in April 2008. Unfortunately, the plant was never able to make a profit. The TAZ writes:

Indeed neither the manufacturing costs nor the technology appear to be controllable. Shell opted out already in 2009. Then VW and Daimler followed in July, and so insolvency was unavoidable. Approximately €100 million have been invested so far, €30 million of which were subsidies.”

It turns out that the entire project is not financially feasible and naive calculations had been made. Such a plant requires huge quantities of wood and biomass to operate. All the handling, power, equipment and effort needed to process the raw material ended up consuming much of the energy that was produced. The result: an economic fiasco. Your government masterminds at work.

Still, Germany does not allow itself to be easily deterred by a few green follies and failures. Indeed it is now building a 60 million euro pilot plant in Karlsruhe, insisting that more development is needed. But not everyone is convinced. The TAZ writes:

Biologist Stefan Klotz of the Environmental Research Centre in Leipzig is doubtful when it comes to the production of biofuel. The sun energy stored in biomass via photosynthesis is used with an efficiency of less than 1%. To grow extra plants and then to burn them is a ‘dead-end’.”

Germany’s E10 fuel debacle

Now add the E10 debacle. Awhile back Germany mandated that petroleum companies must blend in 10% bio-ethanol with regular fuel and to offer this so-called E10 fuel to consumers at petrol stations – all part of reducing CO2 emissions. Unfortunately, the government forgot to ask consumers if they had any interest in buying the low-grade stuff to begin with. As the online DIE WELT reports here, few people are interested in filling up with E10 fuel because of concerns the fuel could damage sensitive engine parts and lead to premature wear and expensive repair costs. DIE WELT writes:

The ADAC made headlines with a long-term test of an Opel Signum, which was rated as not being able to handle the E10 fuel. The conclusion: ‘E10 can be damaging’. After 27,000 kilometers of driving, according to ADAC Motorwelt magazine, the driver noticed an intense gasoline smell. The wall of the fuel pump was completely corroded.”

So adamant was the government about petrol stations selling the “environmentally friendly” fuel that it threatened to levy massive fines on companies who did not fulfil sales quotas. DIE WELT writes:

In the industry it’s already clear that the biofuel quota of 6.25% will never be reached.”

For Holger Krawinkel, energy expert of the Federal Association of Consumers:  it is already clear:

E10 is factually dead.“

And these people want to rescue Greece?

The more that Angela Merkel and the Greens try to take over and manage Germany’s energy industry, the more of a laughing stock they are becoming.

16 responses to “Merkel’s Solyndra – Germany’s Green Industries Start Their Collapse”

  1. DirkH

    Pierre, a mistake: “Schlagzeilen macht der ADAC mit einem Langzeittest eines Opel Signum, der als E10 unverträglich eingestuft war.” the car was NOT compatible with E10 – the ADAC obviously wanted to test what happens with such a car, and found out. So it looks like the announcements of the car makers about which car is allowed to use E10, and which is not, is by now not contradicted!

  2. DirkH

    I’ve been watching the German green stocks – solar, wind, bio – for years now, and it was clear to me that we would be seeing the usual pattern of hype – crash – steady growth. The crash of the young stocks from their overhyped valuation began in 2007 and has not ended yet, see for a typical example Conergy:

    http://www.comdirect.de/inf/aktien/detail/uebersicht.html?ID_NOTATION=47825310

    We will now see companies going insolvent and being bought up and a consolidation of the market. Exactly like the dotcom companies, many of the German green companies took little care of cost control and built or rented expensive office space and took on too much administrative staff… lots and lots of team leaders and other wannabe managers there, with little office workers to manage – a reverse pyramid hierarchy… 😉 – many, many conferences, more than i’ve ever seen before…

    They could afford this as long as solar cells were a sought-after good selling for top prizes; this situation has reversed with oversupply flooding the market. Lay-offs abound now; you can get pretty cheap young solar industry management talent now (if you have any use for it). They’re all running for the life rafts!

    I’ve been in a project in this industry for 2 years as a programmer and got fired when money ran out; can’t blame them; firing the temps is what you do; that’s why you have them. I’m busy with something non-Green now. Can’t say I miss saving the planet!

  3. R. de Haan

    I think I have summed up all the negatives about E10 and Bio diesel more than once here at this blog.

    However it is good to remind us that the German mandate for E10 and bio diesel in fact is an EU mandate.
    It is with great pleasure that I can announce that today’s farce of EU unity and determination to save Greece when Merkel met with the Finish Financial Minister and performed her show of confidence probably has been her last, at least about Greece.

    Today the Dutch Ministry of Finance came out with a declaration stating that it was too late to save Greece, leaving controlled bankruptcy as the only remaining option.

    If that happens, we will see a series of European bank defaults followed by the next Eurozone member state to go bankrupt.

    Greece as we know was the cradle of civilization and democracy and as it looks now they certainly will remain the cradle of democracy for the near future.

    The Greek will owe us a lot of money but the fact that they have started the collapse of the EU as a centralized, wasteful and highly undemocratic institution for me at least is… absolutely priceless.

    Let the domino’s fall and the zealots go home.

  4. Ron Henry

    If you read the extreme socialist blogs, the collapse of the Eurozone and “green” industries are seen as symptoms of the final collapse of capitalism, being caused by the greed of capitalists and bankers.

    I suggest the opposite, that these events are signs of the collapse of European socialism. Solar, biofuel and other “green” companies were only started and can only continue with the infusion of OPM (Other Peoples’ Money, i.e. tax dollars). Similarly, the workers’ paradise that was (until recently) Greece was paid for by OPM (in this case loans from large banks implicitly guaranteed by tax dollars). What we are seeing now is that Greece and the green companies are running out of OPM, just as Dame Thatcher predicted decades ago.

    Serious question to European readers – is there any chance that the majority of people in Europe will wake up to reality and shake off decades of socialist propaganda from the schools and press and reject the failed utopian vision of the greenies and socialists?

    1. DirkH

      No. Not the chance of a snowball in hell.

      Two current examples:

      There’s an election in Berlin upcoming; the SPD (social democrats) who rule there try to get re-elected. They promise to buy back the S-Bahn (the Metro system of Berlin) and the local utilities from their private owners, which will cost 9 bn EUR (Berlin is broke, but still the SPD makes these promises).

      Here in Lower Saxony there were just municipal elections. The centre-right CDU mostly stayed in power but lost a little… to the SPD and the Greens who are now at 17%, still far higher than before Fukushima. They thrive on nuclear power issues.

      People here are frightened chicken and want a harmless world.

      1. DirkH

        Well, I can only speak for the Germans. I have hope for the French and the Brits; and the Czech and Polish people are realists, unfazed by CAGW.

        1. Ike

          In the past Germany declared war to the world, now it declares peace to it.

          Or in German: Die Deutschen sind entweder für den totalen Krieg oder den totalen Frieden

  5. Ron Henry

    DirkH – Thank you for the excellent, relevant, and specific examples. Too bad that you apparently had little trouble coming up with them.

    As you say, people want a harmless world. If you have seen the old movie “Who framed Roger Rabbit”, remember the vision of Toon Town, all happiness and sunshine – and no one gets permanently hurt, even if a safe falls on your head. Well, this is what the greens and socialists do, they mesmerize people with visions of Toon Town where nothing really bad can happen and everyone has all they want. All you have to do is give up all your basic freedom and independence to them and they will banish all want and alienation. However:

    “The historical experience of socialist countries has sadly demonstrated that collectivism does not do away with alienation but rather increases it, adding to it a lack of basic necessities and economic inefficiency.” – Pope John Paul II Centesimus Annus, 1991

    1. DirkH

      Toon Town – great metaphor for this mentality. Love it. 🙂

  6. Ulrich Elkmann

    Toon Town is a fitting metaphor indeed – they believe in the everlasting sunshine. They are in for a surprise:
    http://www.youtube.com/watch?v=RwPkAUBr4Sc
    [Remember Judge Doom and the Dip?]

  7. R. de Haan

    First ANTI EURO protest ECB
    http://www.zerohedge.com/news/guest-post-first-anti-euro-protest-front-ecb

    Watching politicians and bankers bickering over a Euro rescue on the back of Eurozone taxpayers for more or less 2 years by now, a group of Germans has staged the first protest in front of the headquarters of the European Central Bank (ECB) on Tuesday.

    Some 100 protesters, organized by the fringe Partei der Vernunft (Party of Reason) held up banners with two key demands: “Raus aus dem Euro” (Out of the Euro) and “Stoppt die Schuldenunion” (Stop the debt union), according to a report by German Daily

    I am pleasantly surprised by these protests and I hope we will see more of them, much more.

  8. R. de Haan

    Here is another article about the banks and the Euro crises refering to growing German opposition.
    http://disquietreservations.blogspot.com/2011/09/banks-from-hell-are-bankrupting-western.html

    And last but not least we have Nigel Farage: Greece under Commission-ECB-IMF Dictatorship mentioning German opposition as well.

    http://www.youtube.com/watch?v=pry5iL4TIa8

  9. DirkH

    September 18, 2011 Rahm Emanuel on Solyndra: ‘I don’t remember’

    Emanuel was Obama’s chief of staff during the administration’s green energy initiative in 2009, when the Solyndra loan was finalized.

    http://dailycaller.com/2011/09/18/rahm-emanuel-on-solyndra-i-dont-remember/

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