Examples will have to be made : Germany.

Posted by Pointman on October 26, 2012 · 31 Comments 

I wrote an analysis piece some time back, which put forward the idea that we climate realists had a secret weapon, and that weapon was time. Time would inevitably bring down the environmental movement, because it would demonstrate for all to see, the fundamental unworkability of its policies in the real world.

In business studies, there’s a concept called first mover advantage, which says that the first enterprise to identify and move into a brand new business sector, will do well out of it, or hopefully become the dominant player in years to come. In a similar sense, most developed countries around the world moved into greening their economies, but some were the first movers, so they’d be the first to reap the hoped for advantages. Or not.

The downside of the whole first mover concept, is that if the new business sector turns out to be just a fashionable bubble, your business is now in serious trouble. Depending on how early you jumped in and how committed to it you became, the shareholders clear out the boardroom and then call in a decent turnaround specialist or the bankruptcy administrators. The only upside of such a disaster, is that other enterprises considering the same move, back off it. The lesson has been learnt from a rather graphic real world example.

This article is the first in an occasional series pointing out the effect of our secret weapon upon those places around the world, who insisted on buying in early or hard to the dream of that new green Jerusalem, just on the near horizon. Beyond that dubious qualification, the other commonality they will share is the very real harm they’ll have inflicted on their own people, especially the most vulnerable.

I’ve lived and worked in Germany on several occasions. Once I got past the inherited propaganda stereotypes from a childhood of watching war movies, I liked them and the place. Like Italy, the whole idea of it as a country is a relatively new thing, even to them. In their heart, they’re still Saxons, Hessians, Brandenburgers, Berliners or whatever, though we think of them as a single country. Just to complicate things a bit further, you have the usual North South divide, but that’s more about which flavour of Christianity you’re partial to. It reminds me a lot of America, in that it is very diverse in terms of culture and custom, though neither are thought to be by outsiders.

This coming Winter is going to be harder on the average German household compared to most other countries, not only because of rocketing electricity prices, but because some of them are most probably going to suffer complete power blackouts. In years gone by, the power grid there was not only cheap for consumers and industry, but had a legendary reputation for reliability. It was that grid that powered Europe’s industrial heartland of the Ruhr and the Saar. What happened?

In a word, Fukushima.

In the immediate wake of a nuclear disaster that never actually happened, politicians reacted to the hysteria fomented by an overwhelmingly green media and the automatically anti-nuclear environmental lobby, by closing half of their nuclear electricity generation plants immediately and promising to phase out the rest by 2022. Given Germany’s history as a country not known to be prone to either earthquakes or the resultant tsunamis, it did seem to be an extreme precaution, but Chancellor Merkel was assured by the experts that renewables, in the shape of solar and wind power, could easily fill the energy gap.

However, the experiences of last Winter in the land of the Nibelungen, separated the bullshit from the horseshit. Large cities like Hamburg were only kept lit, because large energy intensive factories in it like the ArcelorMittal steel mill were persuaded to shut down. They did so but of course were compensated by the government and already, similar arrangements are being made across Germany for this coming Winter by large industrial concerns. That’s the sort of ad hoc arrangement a business can get away with for a while, but only up to the point where its customers realise that a guaranteed delivery date from them is a thing of the past. Given a contingent liability like that, their customers will be forced to move their business to more reliable suppliers.

In the Summer, the people responsible for the electricity supply grid warned the government in public that getting through last Winter had been touch and go but for next Winter, all the bets were off. They were washing their hands in advance. The response to this was the chappie responsible for overseeing the giant leap backwards to renewables being thrown to the dogs by Frau Merkel, but his replacement appears to think that encouraging people to insulate their houses better, will make the problem go away. He’s even been seen on television, ticking off a suitably embarrassed couple for having been caught with an unlagged pipe in their basement. After this coming Winter, I rather think he’ll be next Spring’s sacrifice, though whether that’ll be enough to save Angela’s arsch in next year’s election is a very moot point. Power outages are far from her only problem at the moment.

Already, in the seven years she’s been Chancellor, consumer energy prices have risen by nearly 50%, and with next year’s just announced 50% increase in the additional charge on energy bills to support renewables, a lot of people who are already struggling, will go under. As usual, statistics from government departments that might cast a bad light on policies, are hard to come by. Depending on whose figures you use, a record number of consumers have already had their supply disconnected, because they simply couldn’t afford the bill. Certainly, an umbrella consumer association, estimates that 200,000 people getting by on the equivalent of unemployment benefit have been disconnected. The number of in work but lowly paid people, who’ve been disconnected, is anyone’s guess, but social groups and campaigners are now talking about 800,000 households, who can no longer afford heating bills.

Why are consumers hurting so badly and more curiously, why aren’t businesses screaming loudly? Well, the simple answer is, it’s only the consumer who’s footing the bill. Nobody else is contributing a Pfennig.

Big business are exempt from paying the additional green tax to support the switchover to renewables, because if they weren’t, they have to raise their prices substantially and even the greenest of green governments knows what that means. Bang goes any competitive edge on the exports front and eventually, the manufacturers would simply relocate to a more business friendly country. With a revolver like that held to their head, Berlin caved in to business interests. When all six chambers are loaded, it’s a no brainer, even for greens.

The state electricity grid is obliged to buy electricity from renewable sources at guaranteed prices, which are well above the wholesale prices charged by the traditional generators. Who’s financing that gap? Well, that’s the government but one has to ask where they are they getting all the extra money to do that? Easy, they just charge the consumers an extra tax on their bill.

All those businesses building, installing and selling things like wind turbines and solar panels are not only receiving generous start-up grants, but lots of running tax and benefit breaks. The people buying solar panels for their roof are not only getting them at below manufacturing cost price, but are also paid generous feed in money for the electricity generated. Who’s picking up the tab for such monetary largesse? Yup, the government. How’re they affording it? Yup, tax and spend a few more of the consumers.

If you’re a generator of renewable electricity, it gets even better though. You get paid, even if they can’t use whatever you’ve generated! Lots of huge wind turbines have been built off the coast, and although they’re occasionally turning, they’re not actually connected to the national grid. They get paid for generation once the things have been constructed; transportation is not their problem. The body who pays them is the government, who raise the required revenue by taxing a certain specific demographic, whose identity I think you might guess.

In point of fact, the big industrial demand for electricity is in the middle and south of the country but unfortunately, the grid required to transport what’s being renewably generated off the coast doesn’t actually exist at the moment. There is however a plan to construct it, but the downside is that it’s going to take about ten years and a lot of money. Where the money is going to come from, you can probably guess.

In the short term, you have southern states like Bavaria, who know they need electricity now, not in ten years time, irrespective of whether all that construction even runs to plan. They’re planning to build their very own renewable supplies, but I rather suspect that famous Bavarian sense of humour is at work here. They’ll stick up a few windmills and pay the traditional generators to keep going. Everyone will be happy, except as usual the consumer, who’ll be footing the bill.

The traditional generators are as is by now almost ceremonial, receiving all the blame from the media and the greens, but of course are being handsomely bribed to stay in role. Traditionally, they generated the juice 24/7, using what was produced overnight, when there wasn’t much demand, to pump water back up into dammed lakes, for release in daylight hours, when demand was at its highest. That’s when they made their money. Pumping water uphill to create potential energy is a lot more efficient than any battery.

However, since the daylight hours are when any solar energy is produced and it has to be bought in preference to their electricity, they’ve no profit incentive to stay in business, so they want to close down those generation plants. They’re now being paid to keep unprofitable generation plants running as backups for when the wind isn’t blowing or the sun shining. Incidentally, Germany gets the same amount of sunshine per year as the State of Alaska, which should give you an idea of how utterly brainless an idea it was to install any solar panels there, never mind ending up with the biggest installed base in Europe. By this stage in the article, I’m sure you know who’s paying them to keep the old generators running and from whom the money is actually coming.

If you’ve got the impression that it’s all just one huge disorganised cluster fuck, that is hemorrhaging money left, right and centre, to no sane purpose, you’re right. You can smile and thank your lucky stars that but for the vagaries of some self-serving politics, there go us, but don’t get too comfortable. If your own government continues to pursue similar policies, you’ll end up exactly where the Germans are today, but just a few more years down the line.

Given the sheer amount of generation and distribution infrastructure yet to be constructed, the already announced price increases for next year, are certainly not going to be the last.

They’re staring at fuel poverty, and as usual, it’s the most vulnerable who’ll take the pain. I wrote the following paragraph in a previous piece, to convey some sort of sense of what fuel poverty entails, and I see no point in restating it in different words.

“It’s pensioners, who spend most of Winter in bed for warmth, because they can no longer afford to heat their home, it’s families wearing overcoats indoors, it’s kids trying to do homework when their hands are freezing, it’s Dad’s overcoat thrown over the sleeping kids in an unheated bedroom as an extra blanket, it’s the sickly ones of all ages really suffering through Winter, it’s months of coughs and colds and chilblains, it’s the cold-related deaths that never should have happened and it’s just basically plain miserable. As usual, the biggest proportion of people in poverty, fuel or otherwise, are always the children.”

Every time I look at the end results of environmental policies, all I see is poverty and inhumanity, and every time it’s always visited on the most vulnerable people, in both the developed and developing world. The hysterical reaction to Fukushima, convinced the German government to be first movers, and this winter, it’s the ordinary people who will yet again pay the price for others making bad decisions.

©Pointman

Related articles by Pointman:

Our secret weapon.

The sun is setting on solar power, the money’s gone and nobody’s asking any questions.

Click for a list of other articles.

Filed under Article · Tagged with Fuel Poverty, Germany, Nuclear, Renewables, The examples will have to be made series