Germany’s Solar and Wind Success Come at Expense of Utility Companies

Solar panels cover the roofs in all or most homes in many German towns and cities.

Solar panels cover the roofs in all or most homes in many German towns and cities.

There may be no better illustration of the meaning of the phrase “disruptive technology” than in Germany’s experience over the last several years with wind and solar energy adoption. Germany, along with Canada and, interestingly enough, Brazil, leads the industrialized world in switching to a green economy.

The story of Germany’s incredibly rapid adoption of renewable energy sources has been told well and often enough that I need not repeat it here. If it’s news to you, you can check out this NYT article or this German government site that updates the national policy of energiewende (energy transformation). Or just Google “Germany renewables”.

But this piece by Justin Gillis focuses more on the impact of this transformation on Germany’s power utilities, who, according to Gillis, have seen “profits from power generation collapse.” He points out that, “In Germany, where solar panels supply 7 percent of power and wind turbines about 10 percent, wholesale power prices have crashed during what were once the most profitable times of day.” One of the nation’s largest power utilities recently announced a $3.8 billion loss for the most recent fiscal year. Its CEO admitted the company was “late, probably too late,” to respond to the transformation now sweeping the country.

American utilities are watching what is happening in Germany and they are acting like ducks: calm and unruffled on the surface, but underwater paddling like crazy to stay afloat without changing directions. In this country, Big Coal, and Big Oil, and other Big Power vested interests are resisting and opposing changes in rules and laws that would encourage and facilitate more rapid response to global climate change as they scramble to protect their obscene profits. Instead, they could and should be investing some of that windfall into clean energy, finding ways to channel some of the coming profit from the transformation into their coffers (which is, after all, the only thing they actually understand).

A sudden disruption of the power companies and their suppliers would have a temporarily devastating effect on the economy in the form of thousands, perhaps millions, of jobs lost. But if industry and government work together to plan the transformation, and if the private companies take an active role in creating and channeling the transformation, some of that disruption an be managed and minimized.

In the long run, though, the disruption is not only tolerable, it is essential. Global climate change threatens the very existence of humanity.

As it is, we’ve allowed Big Power to turn us into global eco-terrorists, holding humanity hostage as we refuse to give up the dangerous and poisonous ways we generate and consume energy even as the reserves become depleted and the air becomes unbreathable and the water becomes inhabitable.

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