I’m Trevor Kirsten, and I lead our Renewable Energy Systems Team in Munich. My team is responsible for researching new energy technologies, but with a special eye on the European market. Germany specifically has an energy market that is very dynamic, and quite different from the U.S., Asia, and developing economies. I thought I’d take a minute to share with you my observations on the ever-changing energy scene in Germany and Europe, and how that impacts technologies my team is developing.
In summary, fossil fuel subsidies are high while consumer subsidization of renewable energy grows but some German Industry is excluded. Fossil plants continue to become more flexible and coal power grows in Poland. The German electricity grid capacity needs to increase. Possibly the most important question is, will natural gas fracking be allowed in Germany? Here are some details.
Global fossil fuel subsidies in 2011 were equivalent to $110 (€85) per ton of carbon emitted. In comparison, global subsidies for renewables amounted to less than 17% of fossil fuels. The CO2 price recently hit a low of €2.81 ($3.75) per metric which is far below the €30 / ton needed for investment in technologies to cut carbon emissions.
To encourage investment in renewables, the German government allows operators of renewable energy plants to sell their electricity at a guaranteed fixed price or feed-in tariff that is above the market price. Energy consumers pay the difference via a renewable power surcharge on their electricity bills. To date, there has been no upper limit on Germany’s subsidies for renewables. The surcharge has grown to a record 5.28 cents per kilowatt hour of electricity this year. The German government will exempt some 1,550 industrial companies from paying the special surcharge. Coal appears to be Warsaw’s main strategy when it comes to energy with major investments in coal-fired power plants of €24 billion over the next eight years.
A member of German Chancellor Angela Merkel’s cabinet is calling for a radical solution to the desperately needed expansion of high-voltage power lines across the country, a critical infrastructure project that has stalled in recent months. The German government is planning to accelerate an end to the virtual moratorium on the controversial natural gas extraction method called fracking, according to Spiegel Online. For the moment, Germany is far away from allowing large-scale fracking. It is currently being tested at a single site.
I hope you can see from the above items that the Germany energy market is interesting from many aspects and leads the world debate in many areas. Global Research in Munich is active in waste heat recovery research to improve power generation efficiency as well as large scale energy storage in the German funded ADELE project that will help with renewable integration into a congested grid. GE is well positioned to expand its product in the natural gas space in Europe, if fracking is pursued. GE is already supporting customers who perform fracturing with improved pumping, water cleaning, energy management, fracturing fluids and other technology advances.