Issues Associated with Electricity Supplies in Germany - Essay Example

Issues associated with electri supplies in Germany Lecturer: presentation: Introduction Energy is one of the most fundamental components of economic development and its generation, supply and distribution to meet the existing demand plays a significant role in determining the rate of economic growth in every country. According to Annette and Lutz (2002), the global population is set to increase by approximately 2 billion in the next two decades and this will definitely exert enormous pressure on the existing sources of energy. Besides stimulating economic growth, power generation and supply have a great environmental impact. Brunekreeft (2002, p 68), notes that the energy sector contributes the largest share of greenhouse gases, responsible for the global warming phenomenon. Therefore, as countries strive to meet the growing energy demands, they have to put measures of reducing carbon emissions as well. This paper discusses the major issues associated with electricity supplies to meet the demand and low carbon emissions in Germany. Consumption trends and sources of electricity in Germany Generation and consumption of electricity in Germany has been increasing in the past decade and the trend is expected to continue in future. Electricity in the country is mainly generated from coal and nuclear energy (Keller & Gert). However, utilization of renewable energy and natural gas has been increasing significantly in the last two decades. Brunekreeft (2002) noted that electricity generated from renewable sources has increased by approximately three times in the last twenty years. Table 1: Sources of electricity and their percentage power contribution in Germany in 2008. Sources Nuclear Hydroelectric power Wind photovoltaics Thermal power plants Biomass Others Percentage Contribution 23% 4% 7% 58% 5% 3% Source: Low Carbon Societies Network, 2004. Thermal power plants account the largest source of electricity in the country. These plants make extensive use of coal, which contributes significantly to environmental degradation by emitting greenhouse gases and other air pollutants. Table 2: The proportion of green house gases emitted in Germany in 2007 Green house gas Carbon dioxide methane Nitrogen dioxide Others Percentage Emissions 88% 4% 6% 2% Source: Low Carbon Societies Network, 2004. From the table (2) above, it is apparent that heavy reliance on coal and methane in production of electricity contributes to the high levels of carbon emissions in Germany. According to Low Carbon Societies Network (2004), the per capital emission in (t CO2) in Germany was 9.7 in 2007 compared with France which had 5.8 during the same period. Nuclear is the second most important source of electricity in the country and its contribution has been declining gradually since 1998, when the German government introduced the nuclear phase out policy. However, unlike coal, nuclear does not contribute significant amounts of carbon emissions. Electrical consumption in Germany varies across the different sectors, with the industrial sector consuming the largest proportion of the energy. Table 3: percentage consumption of electricity in various sectors of the country’s economy in 2008 Sector industrial Transport Residential services Agriculture Electrical consumption (%) 60% 4% 34% 2% Source: Low Carbon Societies Network, 2004. Industries consume the largest proportion of electricity, due to presence of heavy industrial plants. According to European Commission (2009), consumption of electricity in European members will grow by an average of 2% per year, from 2010 to 2015. This is attributed to increase in residential services due and greater utilization of electricity in transport, as a result mass production of production electric cars and trains in future (European Commission, 2009). Plan of the energy sector in Germany in future Reducing carbon emissions is one of the most important long-term objectives of the energy sector in Germany. Therefore, the country has invested heavily in the development of renewable sources of energy and it projects to source all its energy requirements from the clean energy by the year 2050. Currently, the country is the global leader in production of renewable energy, which contributes to 16 % of its power supply (Annette & Lutz, 2002). Following the enactment of Renewable Energy Act, the country is the largest producer of electricity from photovoltaics approximated at 14,000 MW and it is the second largest producer of wind-generated electricity in the world. The German government intends to reduce carbon emissions by 40% by the year 2020, and thereafter reduce it further by over 80% (Keller & Gert, 2000). Carbon emissions in the country can be lowered by gradual reduction in electrical and energy demand in all sectors, increasing the capacity of renewable sources to be the major source of energy and reducing the need for heat energy. Power generation sector provides the greatest opportunity of reducing carbon emissions because it is the largest contributor of carbon emissions in the country. Attaining 80% reduction in carbon emissions by 2050 implies that Germany has to reduce its dependency on coal by over 90%. This is a formidable challenge because coal is the main source of energy, in a country that relies on heat to run the heavy industries. Moreover, reducing carbon emissions in transport sector by using electric cars and trains would increase the demand for power further. The situation is compounded by the policy of phasing out nuclear power in Germany. Distribution framework of energy in Germany According to Brunekreeft (2002), the energy sector in Germany was liberalized in 1998 and as a result, there is no autonomous regulator. Six transmission operators generate and distribute electricity through many grid operators, and they exercise self-regulation in the generation and distribution of electricity. In view of the growing environmental concerns, and the increasing energy demand in the country, several issues have come up regarding energy policy and supply of power in the country. They include the cost of electricity, the amount of carbon emissions generated by a given energy producing technology, sustainability and security of the electrical supply, in addition to compatibility of the technology with local power installations (Brunekreeft, 2002). Moreover, public acceptance of the energy producing technology is a major issue of concern. In this respect, an effective energy policy should take into account sustainability, security and competitive supply of energy for it to succeed in lowering carbon emissions and meeting energy demands. In the absence of an independent regulator, the ability of the energy players in Germany to meet the specifications is challenging. Despite the increasing pressure to comply with measures to reduce carbon emissions, many countries put greater emphasis on the security and public acceptance of the energy supply. The countries include United States and some nations in the European Union involving the use of nuclear energy. Though nuclear power produces negligible carbon emissions and it is sustainable, construction of new plants has been receiving a lot of opposition from the public due security reasons. Increasing incidents of global terrorism has raised the security concern issue further. In this case, many developed countries are planning to phase out nuclear power in future including Germany. This puts a lot of pressure on the electrical suppliers to come up with more secure technology of producing energy that is acceptable to the public and meets their needs. However, this has not always been the case as demonstrated by the carbon capture and storage (CCS) project in Germany. Ehlers and Brunekreeft (p 81, 2006), noted that the public opposed the CCS project that was intended to reduce carbon emissions undermining the country’s efforts of getting clean source of energy. According to Ehlers and Brunekreeft (p 73, 2006), there are several operational technologies of reducing carbon emissions in Germany. They include hydroelectric power, geothermal, nuclear, biomass and alternative sources of energy such as wind and solar. Other technologies such as Carbon Capture and Storage (CCS) and concentration of solar power are still at infancy stage though research is still being carried on their feasibility. However, each of these technologies has unique limitations. For instance, hydroelectric, biomass and geothermal technologies are only viable if the relevant natural resources are available. This makes them unsuitable for use as the major sources of energy due to lack of sustainability. Other technologies for concentrating and storing solar, coal, and natural gas are yet to be perfected for commercial use. Therefore, their ability to meet energy demand in the country is questionable and this is one of the major issues associated with application of renewable sources of energy. Lack of independent energy regulator in the country has hindered the entrance of suppliers of renewable sources of energy in the country. According to Keller and Gert (2000), the local companies for distributing electricity impose heavy charges on independent power suppliers. Consequently, the charges are passed down on the customers who may wish to switch to cleaner sources of energy. This has greatly undermined the efforts of providing low carbon emission technologies to consumers cheaply. Installation of wind and solar technologies is prohibitive, and the costs of running high because they require installation of new capacities and grid lines since most of them are not compatible with the existing power distribution network. Therefore, wide application reduces the ability of reaping maximum economic benefits from low carbon emission technologies (Annette & Lutz, 2002). Conclusion Supplying electricity from low carbon emission technologies Germany remains a challenge because of the huge and growing demand of energy in the country. In addition, the industrial sector relies heavily on heat and electrical energy derived mainly from coal. Though low carbon emission technologies are developing fast in the country, their limited capacity to satisfy the demand makes them insufficient of satisfying the demand. Moreover, the distribution framework in the country hinders cost effectiveness in its supply. However, increasing capital investments in production of a wide range of low carbon emission technologies is essential for lower operating costs in future. References Annette , P. & Lutz, M. “Phasing out Nuclear Power Generation in Germany: Policies, Actors, Issues and Non-Issues.” Energy & Environment Journal, 13.2(2002): pp 160-179. Brunekreeft, G. “Regulation and Third Party Discrimination in the German Electricity Supply Industry”. European Journal of Law and Economics, 13.2(2002): pp 207-224. Ehlers, E. & Brunekreeft, G. “Ownership Unbundling of Electricity Distribution Networks and Distributed Generation.” Competition and Regulation in the Network Industries, 1.1(2006): pp 68-89. European Commission (E.C). 2008- Annual Energy Review. January 2009. Keller, K & Gert, B. “The Electricity Supply Industry in Germany: Market Power or Power of the Market? Utilities Policy, 9.1(2000): pp 20- 34. Low Carbon Societies Network. Energy Scenarios in Germany and France: A Comparison of the Main Outcomes. 2004. Accessed on 2 Dec. 2010. From http://www.lowcarbon-societies.eu/ Read More