German Government Alienates Wind Industry by Prioritizing Solar in Its Climate Change Act
To reduce carbon emissions and address the effects of global climate change, the German government announced a package of new policies known as the Climate Change Act at the end of this September. Along with this law, the German government has also introduced new renewable energy targets, a carbon pricing scheme, and many other related measures. While this legislative framework is regarded as being very detailed and ambitious, its prioritization of solar PV over wind energy has aroused some controversy. Germany’s struggling wind industry is especially worried that the government has become bearish about the prospect of onshore wind.
The various parties in Germany’s governing coalition have reached an agreement on the preliminary framework and key measures of the Climate Change Act. The solar PV and onshore wind targets for 2030 have changed somewhat compared to the earlier drafts of the legislative package. The cumulative installed capacity for solar PV has been raised from 85GW in the previous draft to 98GW, whereas the cumulative installed capacity for onshore wind has been lowered from 80GW to 67-71GW.
The German government has thus tipped the scale in favor of solar. The measures contained in the Climate Change Act show that a clear decision has been made to greatly expand installations of PV systems. However, the new direction runs counter to the existing development trends in the country’s renewable energy sector, which has long been focusing on wind energy.
Wind energy is a major contributor to the overall renewable generation in Germany. According to Bloomberg New Energy Finance, wind energy accounted for 17% of the country’s energy mix in 2018. In contrast, solar PV accounted for just 7% in the same year. A report from the International Renewable Energy Agency (IRENA) also states that Germany’s share of global exports for wind technologies was 29% in 2016. The country’s share of global exports for PV technologies in the same year was only 5%. And this is not to mention that the workforce in Germany’s renewable energy sector is heavily skewed toward the wind industry. Approximately 141,000 people in Germany were employed in the wind industry in 2018, compared with around 30,000 in the solar industry.
Germany is not particularly suited for developing a solar industry due to its geography. The country does not receive a lot of sunshine throughout the year since it is located in the same latitude range as China’s northernmost province Heilongjiang (or above the island of Hokkaido in northern Japan).
The German Wind Energy Association (BWE) has reacted negatively to the revised wind target for 2030 and was the first to issue a critical statement to the new climate package. BWE pointed out that the government has seriously overlooked the “depth of value” that the domestic industries have created with respect to the development of wind technologies. Moreover, BWE views that the abrupt shift to solar will work against German companies’ competitiveness in the global wind energy market.
Presently, there are many hurdles that limit the development of onshore wind projects in Germany. The regulations concerning the installation of wind turbines are strict and complex. For example, large turbines have to be placed as far as one kilometer apart. This rule, in turn, exacerbate the existing problem of land shortage for wind farms. Additionally, public and private efforts to expand the domestic wind energy market has been constrained by popular opposition. Construction of wind turbines has led to “not in my backyard” protests in local communities. Environmental groups, too, are increasingly critical about the hazards that wind turbines may pose on wildlife.
Policy changes and declining public support have already exacted a toll on Germany’s wind industry. Employment data given to the Bundestag (the lower parliament) show that the total workforce in Germany’s wind industry has been cut by around 26,000 since 2016. IG Metall, one of the country’s major trade unions, also warned that around 8,000-10,000 jobs related to the wind industry have been shed since the start of 2018.
At the same time, Germany’s demand for wind energy has also contracted substantially. BWE’s tracking data reveal that just 35 onshore wind turbines were installed across the country in the first half of 2019. This translates to a huge year-on-year decline of 82% in the installed capacity for the period.
On the other hand, the German government has valid reasons to become more aggressive in the deployment of solar PV. For one thing, the cost of producing solar energy has gone down very rapidly in recent years. Another report from IRENA has found that the global average cost of solar PV generation dropped sharply by 77% between 2010 and 2018. The global average cost of onshore wind generation also fell during the same period, but by a much smaller magnitude of 35%.
The Fraunhofer Institute for Solar Energy System stated in a 2018 study that the cost of solar PV will remain on a downward trajectory over the next 17 years, falling at a faster rate than the cost of wind energy. Even in the less sunny northern Germany, electricity produced by utility-scale PV systems will eventually become just as cheap, if not cheaper, than onshore wind turbines.
There are few areas in Germany that have the potential for large-scale deployment of PV systems. Take Freiburg for example. This city, which is located in the southwestern part of the country, receives a good amount of sunshine throughout the year and has been consistently incorporating solar PV into its urban development policies.
Solar panels have a performance edge over wind turbines during the summer season, especially when heat waves hit. But more importantly, installing solar panels on rooftops will not incite a high level of local resistance that is often seen with the building of giant wind turbines. Perhaps due to these reasons, the German government has decided to accomplish its climate goals by significantly expanding the domestic solar market.
(This article is an English translation of news content provided by EnergyTrend’s media partner TechNews. Photo credit: Thomas Kohler via Flickr CC BY 2.0.)