Germany, renowned for economic efficiency, has given the world a remarkable display of how misguided green energy policies can burn money far more reliably than fuel. The latest news from the Energiewende is Bloomberg’s "Germany’s Power Grid Overhaul to Cost €20 Billion More Than Expected”. Not 20 billion total. 20 billion more than expected, bringing the total to “as much as” 52 billion instead of the $32 billion budgeted as recently as 2014. And for what? Massive power cables to move largely imaginary wind and solar energy south to make up for the reliable baseline coal and nuclear the government is ditching.
The builders explain that gosh, we’re going to need five super cables not three. Too late to say no now, huh? Who saw that coming?
Well, it must be said that there’s a pattern here that has no inherent relationship to climate policy. As Bent Flyvbjerg, Nils Bruzelius and Werner Rothengatter wrote in 1996 in Megaprojects and Risk: An Anatomy of Ambition, politicians and major engineering firms have learned over 70 years that it pays off, in votes and money, to overestimate benefits and underestimate costs on huge projects of every kind from dams to bridges to highways, because once the “error” is discovered the public must pay up or write off the sunk cost and do without infrastructure around which all sorts of other vast plans have now been made, while the politicians who signed the deal to loud applause and enthusiastic votes have retired with generous defined-benefit pensions, moved on to lucrative consultancies or higher office, or both. But while it’s neither exclusive to climate policy nor more pronounced there, the sheer scale of things like the Energiewende and the evangelical enthusiasm of its proponents make it even harder than usual to ask questions of this particular sort of megaproject.
Until the vast bills start rolling in, that is. As Bloomberg notes, Germany already has the highest retail power costs in the EU, along with Denmark, and prices in Germany will now go higher as this huge new amount is put on consumers’ bills. Ominously, Peter Franke, VP of the German energy regulator Bnetza, said in an interview that “Overhauling the national grid to take a new green power target will definitely cost power users more — how much we can’t say”. Which is easy to believe given how badly they already miscalculated.
What’s worse, Angela Merkel’s new coalition government charged recklessly ahead, promising to increase the share of “clean” power in Germany’s total energy production to 65 % by 2030 from an already unrealistic and costly 55%. And yet a feeble 150 km of the “super power highway” needed to transport hypothetical clean energy south was finished by 2018, with another 5,700 kilometers (yes, 38 times as much) needed by 2025, prompting Peter Altmaier, Economy and Energy Minister, to call the situation a “catastrophe” last year.
Well, he got that right. Which is a nice change. Sort of.