Germany’s unlikely champion of a radical green energy path

Chancellor Angela Merkel said the Fukushima disaster "has forever changed the way we define risk in Germany."

In my view, the key to the chancellor's radical turnaround lies deep in her past. In the 1980s, well before she became a politician, Merkel worked in the former East Germany as a researcher in quantum chemistry, examining the probability of events in the subatomic domain. Her years of research instilled in her the conviction that she has a very good sense of how likely events are, not only in physics but also in politics. Opponents of nuclear energy were "bad at assessing risks," she told me in the 1990s.

Then came the March disaster at the Fukushima-Daiichi nuclear power plant, which made the chancellor realize that she had been terribly wrong about the probability of a nuclear catastrophe in a highly advanced nation. Merkel's scientific sense of probability and rationality was shaken to the core. If this was possible, she reasoned, something similar might happen in Germany - not a tsunami, of course, but something equally unexpected. In her view, the field trial of nuclear energy had failed. As a self-described rationalist, she felt compelled to act.

"It's over," she told one of her advisers immediately after watching on TV as the roof of a Fukushima reactor blew off. "Fukushima has forever changed the way we define risk in Germany."

Merkel's conservative environment minister, Norbert Röttgen, recently echoed this line of thinking when he said that the Fukushima disaster "has swapped a mathematical definition of nuclear energy's residual risk with a terrible real-life experience." He added: "We can no longer put forward the argument of a tiny risk of ten to the power of minus seven, as we have seen that it can get real in a high-tech society like Japan."

The new course is a huge challenge in terms of cost and feasibility. Of the current 82 gigawatts of peak demand, about half comes from coal, 23 percent from nuclear, 10 percent from natural gas, and 17 percent from renewables. That means three quarters of Germany's electricity sources will have to be replaced by green technology within just a few decades, if the nuclear phase-out and the CO2 goals are to be accomplished.

Germany is in a good starting position, though. Since the 1990s, the Renewable Energy Sources Act has paved the way for billions of Euros flowing to consumers and investors for green power projects. The law guarantees that each kilowatt hour of green electricity is fed into the grid and bought at a favorable statutory rate by operators. The rate varies between green energy sources, but is considerably higher than normal electricity prices. It is guaranteed for a 20-year period. This makes investment in renewable energy projects very attractive; witness Google recently pumping money into a German solar park.

As a result, the share of renewable electricity in Germany has jumped from 5 percent in the 1990s to 17 percent today. Traveling through the country, it is easy to see signs of this change. In the north, wind farms are now characteristic of many regions, particularly along the coastlines of the North and Baltic seas. In the south, which is richer in sunlight, photovoltaic cells cover the roofs of whole villages. The bright yellow of rapeseed is prevalent in many regions, as the plant is widely used for producing biodiesel. More and more farms are equipped with big tanks holding "biomethane" derived from maize or agricultural residues.

Merkel's big hope for her "energy turn" is offshore wind energy. After a sluggish start, several new commercial projects are under construction. On May 2, Merkel proudly pressed a button at a ceremony on the Baltic Sea coast, setting in motion 21 huge offshore wind turbines 16 kilometers away at sea. Taken together, they can provide 50,000 households with renewable energy.

"Baltic 1" is Germany's first commercial offshore windpark. The turbines have been constructed by Siemens, a company that until recently earned most of its money in the energy sector by building nuclear and fossil-fuel power plants. The wind farm is run by EnBW, a German utility that has so far produced most of its electricity with nuclear power plants. Nothing could symbolize the new policy better than this offshore wind farm.

Merkel's big bet is that environmental technology will be one of Germany's most important sources of income. Already, the country's share in the green-tech world market is 16 percent, which means billions of Euros in business. Renewable energy has generated 300,000 `green collar' new jobs in the past decade, Röttgen says. Big companies like Siemens and Bosch are determined to become "green multinationals." Thousands of small- and medium-sized technology companies see green technology as an important part of their business and investment strategy.

Experts agree that the transition will be costly and carry economic risks. Already, consumers in Germany pay about 5 U.S. cents per kilowatt hour as a surcharge to finance the feed-in tariffs, which enable owners of wind turbines or geothermal installations to sell renewably generated electricity back to the grid at favorable rates. For an average family of four, this amounts to 220 U.S. dollars per year. And with investment needs in the hundreds of billions of Euros, consumers can expect a growing surcharge on their monthly bill. This will surely test Germans' willingness to support Merkel's plan.