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WHEN GOVERNMENTS DIRECT from POLITICAL CAUSE

WHEN GOVERNMENTS DIRECT THE MARKETS

When governments direct markets the very best that they can possibly hope to achieve is misdirection.

 

Germany’s Energy Poverty: How Electricity Became a Luxury Good

By SPIEGEL Staff

Photo Gallery: The Costs of Green EnergyPhotos
DPA

Germany’s agressive and reckless expansion of wind and solar power has come with a hefty pricetag for consumers, and the costs often fall disproportionately on the poor. Government advisors are calling for a completely new start.

If you want to do something big, you have to start small. That’s something German Environment Minister Peter Altmaier knows all too well. The politician, a member of the center-right Christian Democratic Union (CDU), has put together a manual of practical tips on how everyone can make small, everyday contributions to the shift away from nuclear power and toward green energy. The so-called Energiewende, or energy revolution, is Chancellor Angela Merkel’s project of the century.

“Join in and start today,” Altmaier writes in the introduction. He then turns to such everyday activities as baking and cooking. “Avoid preheating and utilize residual heat,” Altmaier advises. TV viewers can also save a lot of electricity, albeit at the expense of picture quality. “For instance, you can reduce brightness and contrast,” his booklet suggests.Altmaier and others are on a mission to help people save money on their electricity bills, because they’re about to receive some bad news. The government predicts that the renewable energy surcharge added to every consumer’s electricity bill will increase from 5.3 cents today to between 6.2 and 6.5 cents per kilowatt hour — a 20-percent price hike.

German consumers already pay the highest electricity prices in Europe. But because the government is failing to get the costs of its new energypolicy under control, rising prices are already on the horizon. Electricity is becoming a luxury good in Germany, and one of the country’s most important future-oriented projects is acutely at risk.

After the Fukushima nuclear accident in Japan two and a half years ago, Merkel quickly decided to begin phasing out nuclear power and lead the country into the age of wind and solar. But now many Germans are realizing the coalition government of Merkel’s CDU and the pro-business Free Democrats (FDP) is unable to cope with this shift. Of course, this doesn’t mean that the public has any more confidence in a potential alliance of the center-left Social Democrats (SPD) and the Greens. The political world is wedged between the green-energy lobby, masquerading as saviors of the world, and the established electric utilities, with their dire warnings of chaotic supply problems and job losses.

Even well-informed citizens can no longer keep track of all the additional costs being imposed on them. According to government sources, the surcharge to finance the power grids will increase by 0.2 to 0.4 cents per kilowatt hour next year. On top of that, consumers pay a host of taxes, surcharges and fees that would make any consumer’s head spin.

Former Environment Minister Jürgen Tritten of the Green Party once claimed that switching Germany to renewable energy wasn’t going to cost citizens more than one scoop of ice cream. Today his successor Altmaier admits consumers are paying enough to “eat everything on the ice cream menu.”

Paying Big for Nothing

For society as a whole, the costs have reached levels comparable only to the euro-zone bailouts. This year, German consumers will be forced to pay €20 billion ($26 billion) for electricity from solar, wind and biogas plants — electricity with a market price of just over €3 billion. Even the figure of €20 billion is disputable if you include all the unintended costs and collateral damage associated with the project. Solar panels and wind turbines at times generate huge amounts of electricity, and sometimes none at all. Depending on the weather and the time of day, the country can face absurd states of energy surplus or deficit.

If there is too much power coming from the grid, wind turbines have to be shut down. Nevertheless, consumers are still paying for the “phantom electricity” the turbines are theoretically generating. Occasionally, Germany has to pay fees to dump already subsidized green energy, creating what experts refer to as “negative electricity prices.”

On the other hand, when the wind suddenly stops blowing, and in particular during the cold season, supply becomes scarce. That’s when heavy oil and coal power plants have to be fired up to close the gap, which is why Germany’s energy producers in 2012 actually released more climate-damaging carbon dioxide into the atmosphere than in 2011.

If there is still an electricity shortfall, energy-hungry plants like the ArcelorMittal steel mill in Hamburg are sometimes asked to shut down production to protect the grid. Of course, ordinary electricity customers are then expected to pay for the compensation these businesses are entitled to for lost profits.

The government has high hopes for the expansion of offshore wind farms. But the construction sites are in a state of chaos: Wind turbines off the North Sea island of Borkum are currently rotating without being connected to the grid. The connection cable will probably not be finished until next year. In the meantime, the turbines are being run with diesel fuel to prevent them from rusting.

In the current election campaign, the parties are blaming each other for the disaster. Meanwhile, the federal government would prefer to avoid discussing its energy policies entirely. “It exposes us to criticism,” says a government spokesman. “There are undeniably major problems,” admits a cabinet member.

But this week, the issue is forcing its way onto the agenda. On Thursday, a government-sanctioned commission plans to submit a special report called “Competition in Times of the Energy Transition.” The report is sharply critical, arguing that Germany’s current system actually rewards the most inefficient plants, doesn’t contribute to protecting the climate, jeopardizes the energy supply and puts the poor at a disadvantage.

The experts propose changing the system to resemble a model long successful in Sweden. If implemented, it would eliminate the more than 4,000 different subsidies currently in place. Instead of bureaucrats setting green energy prices, they would be allowed to develop indepedently on a separate market. The report’s authors believe the Swedish model would lead to faster and cheaper implementation of renewable energy, and that the system would also become what it is not today: socially just.

Trouble Paying the Bills

When Stefan Becker of the Berlin office of the Catholic charity Caritas makes a house call, he likes to bring along a few energy-saving bulbs. Many residents still use old light bulbs, which consume a lot of electricity but are cheaper than newer bulbs. “People here have to decide between spending money on an expensive energy-saving bulb or a hot meal,” says Becker. In other words, saving energy is well and good — but only if people can afford it.

A family Becker recently visited is a case in point. They live in a dark, ground-floor apartment in Berlin’s Neukölln neighborhood. On a sunny summer day, the two children inside had to keep the lights on — which drives up the electricity bill, even if the family is using energy-saving bulbs.

Becker wants to prevent his clients from having their electricity shut off for not paying their bill. After sending out a few warning notices, the power company typically sends someone to the apartment to shut off the power — leaving the customers with no functioning refrigerator, stove or bathroom fan. Unless they happen to have a camping stove, they can’t even boil water for a cup of tea. It’s like living in the Stone Age.

Once the power has been shut off, it’s difficult to have it switched on again. Customers have to negotiate a payment plan, and are also charged a reconnection fee of up to €100. “When people get their late payment notices in the spring, our phones start ringing,” says Becker.

In the near future, an average three-person household will spend about €90 a month for electricity. That’s about twice as much as in 2000.Two-thirds of the price increase is due to new government fees, surcharges and taxes. But despite those price hikes, government pensions and social welfare payments have not been adjusted. As a result, every new fee becomes a threat to low-income consumers.

THE FALCON IS FLYING

I got up at 5:00 this morning to watch the SpaceX launch. Regardless of how this mission ultimately goes in a few minutes the future of Space Exploration, of course, lies in the private sector.

GOING ALL THE WAY

Reasons to Land on a Comet: What the Rosetta Mission Can Learn

November 12, 2014

The Agilkia landing site is seen on this image of Comet 67P/Churyumov-Gerasimenko, taken with Rosetta’s navigation camera, just days before its lander, Philae, makes its historic descent to the surface

Courtesy European Space Agency

The Agilkia landing site is seen on this image of Comet 67P/Churyumov-Gerasimenko, taken with Rosetta’s navigation camera, just days before its lander, Philae, makes its historic descent to the surface

After a journey that took more than a decade, the world is scheduled to witness a first when the European Space Agency’s Rosetta mission attempts to land a small spacecraft on the surface of a comet. The attempt will take place on Wednesday, at speeds of about 34,000 miles per hour.

The mission is a potential breakthrough in the study of comets. These chunks of ice and dust are leftovers from the formation of planets, often considered space “icebergs” given their age and distance from the sun. The water that resides in comets is likely the key to sustaining future deep-space missions—a celestial gasoline station, in a sense. Beyond water, comets such as the now-famous 67P are thought to harbor complex organic molecules, some of the ingredients needed for the formation of intelligent life.

“I think that humans have to go into space more and take ownership of the solar system,” says Denton Ebel, chairman of the division of physical sciences at the American Museum of Natural History, calling efforts such as Rosetta “the logical next step” of human space exploration.

There is yet another reason underlying the space agency’s financial and engineering feat: to prove it’s possible. Before attempting to land on the comet, the spacecraft will have whipped around the earth three times, followed by Mars, to obtain the necessary gravitational acceleration to rendezvous with a comet. The Rosetta craft will discharge a 220-pound landing probe, called Philae, to settle in a relatively clear spot only about 1/3-mile square.

“It’s technically one of the most difficult missions ever,” Ebel says. “This mission is amazingly ambitious.”

Other reasons to visit a comet include getting a better understanding of how massive space rocks are constructed, which could prove crucial if future earthlings ever need to intercept and prevent a doomsday scenario. There is also the issue of manned deep-space exploration and using the abundant resources found in comets and asteroids, mainly water and noxious gases but also precious metals. “How is the water locked up in a comet? We don’t really understand that at all,” Ebel says.

Future space explorers will almost certainly need to stop for water en route. Bring water from earth into space costs about $23,000 per pound, according to Planetary Resources, which plans to mine asteroids. The hydrogen and oxygen in water is also the basis for rocket fuel that will be produced in space.

The Rosetta mission was launched in March 2004 and reached Comet 67P/Churyumov-Gerasimenko on Aug. 6, where it has been orbiting about 14 miles from the surface. The comet is about 2.5 miles across at its widest point.

Confirmation of the Philae lander’s fate is expected to arrive at about 10:36 a.m. EST at the mission control in Darmstadt, Germany, following a seven-hour descent to the comet. The agency has deployed a full array of social media to chronicle the landing, including collaborating with a futuristic film dramatization starring Game of Thrones actor Aidan Gillan and a soundtrack of the sub-audible magnetic emissions from the comet, sped up so they can be heard. Come Wednesday, there will be tweets.