Chief Executive Johannes Teyssen of German power giant Eon announced yesterday the spin off of its fossil fuel and nuclear generation operations, saying it will focus instead on renewables like wind power, energy efficiency technology, and smart grids. The announcement yesterday sent shock waves through Germany’s power generation market and the political landscape.
The moves produces a host of important questions? Who will take over the massive conventional power generation operations Eon is spinning off? In a nutshell, what is going to happen to a large part of Germany’s steady base-power supply in a power grid that is becoming increasingly dangerously precarious?
Daniel Wetzel at Die Welt writes of the “hidden dangers of the power revolution” and that Eon’s move is of “importance for the future of the German energy market, for the electricity supply security and the competiveness of the entire nation.”
Another blow was delivered on Monday as Vladimir Putin announced that Russia was cancelling the construction of the South Stream pipeline as a result of political conflict over the Ukraine crisis. The pipeline was planned to deliver huge amounts of natural gas to stabilize the European energy grid.
Over the past years, government intervention has made fossil energies unattractive and is forcing a shutdown of its 9 remaining nuclear reactors by 2022.
Where will the power come from when the wind doesn’t blow?
Today Holger Steltzner at Germany’s flagship Frankfurter Allgemeine Zeitung writes that the Eon move presents the German government with 2 major problems: “It has to make sure that the decommissioning of the nuclear power plants succeeds, and it must explain where the power will come from when the wind doesn’t blow.”
23 billion euros to subsidize 2 billion euros of renewable power
Steltzner describes a hostile German power market that has been grotesquely distorted by massive government subsidies in wildly fluctuating renewable energy sources. Stelzner writes:
With 23 billion euros annually, the government subsidizes renewable energy that is worth only 2 billion on the market.”
An irresponsible and reckless experiment?
In summary Germany’s wildly executed Energiewende experiment has just gotten a whole lot more interesting: a major gas supply pipeline from Russia has been cancelled, and the future of a large part of Germany’s electric power supply backbone is now in the dark. And if the trend continues, a whole lot more risks ending up in the dark.