Energy Security in Germany - Essay Example

Energy Security in Germany 2009 Introduction Energy security is increasingly becoming a serious concern for all countries and governments as demand for energy is growing at a rate faster than the supply of energy generated from fossil and non-fossil fuel. Energy demand comprises that for electricity for industrial, residential and commercial use, vehicle fuel and also feedstock for a number of industries like metals and so on. On the other hand, energy is produced through fossils like coal and lignite, oil and natural gas, uranium and thorium or renewable sources like wind, solar, water and biogas. Although efforts are being made to produce power from renewable sources, bulk of the energy consumed in the world is from finite sources like coal, oil and natural gas. Since these resources are unlimited, countries need to take effort to conserve them so that energy security is maintained not only at present but also in the future. Besides, the environment is affected adversely not only by polluting industries but also by excessive energy and water use by households, offices and other establishments and hotels. Largely because of human intervention into the natural systems, global warming is raising the temperature levels across the world, resulting in floods, droughts and devastating hurricanes. The Intergovernmental Panel on Climate Change (IPCC, 2001) forecasts that carbon dioxide concentration may increase from 380 ppm now to 540-970 ppm in 2010 because of human development and changes in the ecosystem resulting from shifts in land and energy use patterns, industrialization and other livelihood factors. The higher concentration of carbon dioxide in turn would result in raising the average global temperature by 1.4 – 5.8oC and the sea level by 9-88cm by 2010 depending on the intensity of the various factors (Stern Review, 2006). Hence, energy use needs to be limited to protect the environment as well as for securing the supplies for the future. In this paper, I will study the energy demand and supply situation in Germany to understand whether the country is secure in energy at present and in the future. In the process, I will survey Germany’s energy mix and see whether it is sustainable and economically feasible in the long run. I will also discuss the politics over the phasing out of nuclear reactors in Germany by 2023 as committed. Energy in Germany (Present) Germany has one of the largest economies in the world, with Gross Domestic Product (GDP) of $2.8 trillion in 2005. Hence, it is also one of the largest consumers of energy, having consumed 549.1billion kwh of electricity in 2006, making it the fifth largest energy consumer in the world (CIA). However, the country does not have significant hydrocarbon resources like oil and gas and so has to import most of its requirement. Since the 1960s, Germany has invested heavily in nuclear power generation. But, lately environmentalists have protested on the dangers of nuclear energy and Germany has shifted its energy strategy towards renewable energy sources like wind power. It has some coal resources but coal mining has also been stopped to conserve the environment (Eoearth). Nuclear energy contributes approximately one third of the total energy supply in Germany. Although the country was a leader in nuclear science during the World War, it had to stop this research as Allied regulation after the war. It was only in 1958 that Germany was allowed to order an experimental nuclear reactor from GE. Simultaneously, research in nuclear energy stepped up and by 1970, the country had closed the technological gap in nuclear energy production that it had with other developed countries of the world (Nuclear Energy Association). Siemens/ KWU, the German manufacturer, and AREVA, the French manufacturer, are the leaders in European Pressurized Water Reactors. All nuclear reactors in Germany that are operating now are built by these two companies. The country has a sophisticated radioactive waste management and disposal program. Yet, in 2002, after the Chernobyl nuclear accident in 1986, a political consensus was reached between the then Socialist Democratic Party and the Greens to phase out nuclear energy production by 2030 as radioactive waste was thought to be harmful. Besides, uranium reserves, the fuel which runs the nuclear reactors, are also limited and renewable energy sources were thought to be a better alternative for sustainable energy source. As a result, many of the nuclear reactors as well as spent fuel recycling plants and radioactive waste disposal plants have been shut down. The remaining 17 nuclear reactor continues to supply 21 percent of total energy supplies in Germany (Nicola, 2009). In 2002, the nuclear power generation in Germany was 165TWe and the figure has been on a decline since then. Transport of spent fuel has stopped since 2005, with local interim storage facility being used till the final repository is built (Nuclear Energy Association). Wind energy contributes 15 percent of energy supplies in Germany. The country is a global leader in wind energy and exports wind turbines across the world. Since wind energy is unpredictable and uneven through the day, energy conservation and use is effected through regional cooperation. When Germany’s wind energy production is high, it sends the excess power to Austria and Switzerland which can then shut down the valves of hydropower plants. The stored hydropower can then be sent back to Germany when the latter’s wind energy production is low (Nicola, 2009). The German electricity market was liberalized at one go in 1998. Till then, electricity supply in German was structured in a manner that provided monopoly to one utility in each region. In 1998, the market was thrown open to competition (Nuclear Energy Association). In a few months, many new companies, including foreign companies, entered the electricity market in Germany. Customers can now choose suppliers on the basis of prices. As a result, industrial and commercial users have had lower electricity prices by as much as 40 percent while household users have 20 percent lower prices than what it was in 1998 (Nuclear Energy Association). Germany had proven oil reserves of 367 million barrels in 2006. It produced 170,000 barrels a day of oil in 2006, of which 67,000 was crude oil. On the other hand, Germany is the fifth largest consumer of oil, with consumption of 2.7 million barrels a day in 2004. Most of the oil reserves are located in northern and northeastern parts of the country. Oil is transported to the rest of the country and also from Russia through a large pipeline network. It has crude oil refining capacity of 2.4 million barrels a day. The largest refinery is operated by Royal Dutch Shell. Germany also has 9.1 trillion cubic feet of natural gas reserves, which is the third largest in the European Union, after the Netherlands and United Kingdom. Despite this, nearly one third of the country’s natural gas requirement is imported from Russia (Eoearth). The use of natural gas in power production has increased from 7 percent in 1991 to 16 percent in 2004 as this is considered less emission-intensive than coal. Yet, coal is the main energy source in Germany as it is found in abundance. In 2004, the country had 7.4 billion short tons of recoverable coal assets, 97 percent of which is lignite coal or brown coal. Germany is the seventh largest producer of coal in the world. In 2004, it produced 232.7 million short tons of coal. This is the most important energy source in Germany. As much as 42 percent of Germany’s thermal power capacity is fueled by brown coal while 37 percent is fueled by hard coal. However, the production of coal has reduced over the years as many of the old and inefficient mines have been shut down after unification of east and west Germany. Most of the coal reserves in Germany are found deep underground hence coal exploration and production is expensive. The government has to pay heavy subsidies for coal mining which is also not an environment-friendly business. Energy in Germany (Future) The conservative party which is in power now in Germany wants to scrap the deal and continue with nuclear energy. This has become a heated political issue for the elections that are to be held this year. While environmentalists and socialists feel that wind energy is a more viable option for energy security in Germany and the country has already become the leader in wind energy, the conservatives argue that harmful effects of nuclear energy can be controlled through technological advancements. Substantial investments have already been made by wind energy companies so that 47 percent of the energy requirement in Germany can be met through renewable in 2020 (Nicola, 2009). On the other hand, conservatives argue that most countries in Europe has begun to invest in nuclear energy capacities as this form of energy generation emits the least carbon dioxide, thus having minimum greenhouse effects. On the other hand, wind energy is unpredictable and dependent on wind strength. Hence, during periods of shortfall of wind power, the country still has to depend on thermal power generation fuelled by lignite coal or natural gas. Germany import one third of its natural gas requirement from Russia and conservatives argue that shifting to wind energy from nuclear will make the country even more dependent on Russian natural gas (Nicola, 2008). Besides wind power plants, 60 new coal-fired plants are being planned in Germany. Although these plants are scheduled to be commissioned by 2018, the required government approvals have not yet been received because of opposition from environmentalists. Coal-fired plants have the highest carbon dioxide emission that causes greenhouse effect. Besides, there are limited reserves of coal and coal mining has been stopped in Germany. Therefore, coal will have to be imported for these plants (Energy Today, 2008). In order to make Germany energy secure in the future, not only should energy supply capacities be increased and made more efficient, thereby increasing production per unit of cost but energy demand should also be kept in check. This is possible not only be growing an awareness of consumers to conserve energy but also by providing incentives to do so. Green architecture, using recyclable material thereby minimizing the use of natural resources, efficient heating and cooling systems that minimize wastage of energy and installation of renewable energy sources like solar panels and wind turbines, reduce the energy consumption. The recent UN Conference on Climate Change held at Bali developed an action plan by countries in order to cooperate by and beyond 2012 to develop strategies for reducing carbon emissions on a long term basis. Appropriate policies should be put in place in countries in order to implement sustainable development supported by clean technologies, financing and capacity building of clean industries. Countries should policy approaches to provide incentives to reduce deforestation and forest degradation. A mix of market-based solutions as well as voluntary and policy-directed solutions was proposed. For all policies, international cooperation was deemed essential for vulnerability assessment, prioritization of action plans, financial assessment, response strategies, capacity-building and integration of national plans and global objectives. The conference also suggested that the developed countries supported the least developed countries in this aspect (UNFCC). The global policy framework is intended to develop national policies that would provide incentives and regulations for businesses to mitigate their exposure to carbon emissions. Businesses can be provided market-based incentives through carbon trading or even cost-saving opportunities by imposing carbon taxes. Besides, companies should also realize the potential for cost saving through voluntary programs that would reduce their energy bills. The Kyoto Protocol, the 1997 international treaty that came into force in 2005, has enabled the 141 signing developed countries including Germany to put the carbon cap and trade system into practice. The carbon trading system provides businesses in developed countries opportunities to earn carbon credits by setting up production facilities with clean technologies. In addition, according to the treaty, the countries that emit less than the specified quota till 2012, will be able to sell carbon credits to countries that exceed the quota. At the national or regional level, specific policies have been developed, for example the acid rain mitigation program in the United States (Stern Review, 2007). Conclusion Thus, Germany is one of the largest consuming country of energy in the world, largely because of its large industrial base as well as high consumption at the individual level. Not only is electricity consumption of residential houses high, vehicular fuel consumption is also one of te highest in the world. Most of the electricity is produced by thermal power plants, which are fuelled by coal or natural gas. However, all of these energy sources, namely coal, oil and natural gas, are fossil fuels and have limited reserves. Hence, to remain energy secure, that is be able to meet its energy requirement at present and in the future, the country needs to diversify to other sources. Besides, coal has very high carbon emission levels, which results in greenhouse effects that raises global temperatures. Natural gas is less carbon emitting but the country has limited reserves of natural gas and has to import one third of the requirements from Russia. Over four decades since the 1960s, Germany has invested heavily in nuclear energy production, becoming one of the largest generators of energy power. But a number of nuclear plant accidents drew concern from environmentalists although nuclear energy is less carbon emitting than coal. The government has decided to phase out nuclear power generation in Germany by 2030 since radioactive emissions from nuclear plants are even more dangerous for the environment. Over the recent years, Germany has developed capabilities to produce wind power. But wind energy is fluctuating and unpredictable. For energy security in the future, Germany should focus both on energy supply and demand. While supply may be increased by installing more power plants and exploring and developing oil and gas resources, controlling demand rise is more difficult. Germany has signed the Kyoto Protocol by which it has committed to reduce carbon emission over time. This requires energy conservation through using green architecture, using efficient heating and cooling mechanisms. This will not only reduce carbon emissions and protect the environment but also keep the country energy secure. Works Cited Intergovernmental Panel of Climate Change (IPCC). Climate Change: Third Assessment Report, 2001. Retrieved from http://www.grida.no/climate/ipcc_tar/ Stern Reviews of the Economics of Climate Change, 2007 http://www.hm-treasury.gov.uk/independent_reviews/stern_review_economics_climate_change/stern_review_report.cfm CIA, World Factbook: Germany, https://www.cia.gov/library/publications/the-world-factbook/geos/gm.html Nicola, Stefan, German energy sees nuclear vs. renewables fight, UPI, March 6, 2009, http://www.upi.com/Energy_Resources/2009/03/06/German_energy_sees_nuclear_vs_renewables_fight/UPI-54721236370208/ Nuclear Energy Agency, http://www.nea.fr/html/general/profiles/germany.html Energy Today, German Electricity Industry Supports Coal Power, April 28, 2008, http://www.energytoday.eu/articles/86030.php EO Earth, Energy Profile of Germany, http://www.eoearth.org/article/Energy_profile_of_Germany Read More