Germany's energy experience has lessons for Emirates



Realpolitik and zeitgeist are German terms that have entered the English lexicon. Now another may join them - energiewende, or energy transition, a term for Germany's ambitious plan to phase out nuclear power by 2022 and replace coal and gas with 80 per cent renewable sources by 2050. As the UAE is, in a way, embarking on its own energy transition, it is the ideal time to look at the German experience.
The energiewende's fundamental goal is to reduce greenhouse emissions dramatically. It is also hoped to deliver lower and less volatile bills (eventually), job creation and greater energy security.
Whether the plan can, or even should, aim at these secondary goals is dubious. But in exploring the path to a low-carbon future, Germany's experience is critical.
At times, solar power now meets half of German demand, and a quarter of electricity overall comes from renewable sources. The UAE should be glad that Germany's heavy investments have driven down photovoltaic panel prices dramatically. In housing, the passivhaus - or rigorous standard for energy efficiency in a building - design is ultra-effective.
By 2020, the renewable sector is expected to support 300,000 jobs and German companies, with a long tradition of engineering excellence have become leaders in wind and solar manufacturing.
The energiewende has, of necessity, assembled broad political support, or it could never have been sustained.
Because of renewable energy subsidies, ordinary German consumers have among the highest electricity bills in Europe - Dh1.36 per kilowatt-hour, compared to the top rate in Dubai of Dh0.44, or 44 fils. Meanwhile, heavy industry, although largely shielded so far, worries about rising costs and competitiveness. This coalition means, perhaps inevitably, some strangely conflicting goals. The roots of the Green Party in the anti-nuclear zeitgeist of the 1960s means that Germany is giving up one of the largest sources of zero-carbon electricity.
Germany is consequently building more plants fired with lignite coal, the dirtiest fossil fuel. At the same time, for largely ideological reasons, it has ignored carbon capture and storage to clean up coal, and resisted the use of shale gas.
Some advocate decentralising the electricity system via small-scale local solar and wind installations - either for good technical reasons, or for disguised protectionism or to achieve social goals of curbing big business.
Local campaigners oppose power cables to get north German wind power to the south, leading to massive flows of electricity along the path of least resistance - and annoying Poles and Czechs who find their own grids destabilised.
The UAE is only just embarking on its own transition. It is driven by the country's very high carbon footprint, but also by the realpolitik of economic imperatives - the price and volumes of imported gas are rising sharply, and overall energy demand is growing unsustainably fast.
The UAE's - still embyronic - future energy plan looks more like the US president Barack Obama's "all of the above" than Germany's focus on renewable energy. It features a large civil nuclear power programme, growing use of solar power, exploration for shale gas, carbon capture and storage, and perhaps clean coal.
What is missing? Domestic energy prices have to rise to market levels - but simultaneously efficiency has to improve dramatically to limit the impact on consumers.
Electricity tariffs at German levels would be intolerable. Future energy plans have to be communicated clearly, and in detail, to government, business and the public.
To reap the economic benefits, the UAE needs to consider how to assemble something like Germany's mittelstand of small and medium enterprises, and its culture of engineering expertise, vocational training and scientific research.
The Arabian Gulf context is very different - in politics, climate and the reality of an oil and gas-driven economy. Still, with some imagination, the UAE can learn from both the achievements, and errors, of Germany's energiewende.
 
Robin Mills is the head of consulting at Manaar Energy, and the author of The Myth of the Oil Crisis and Capturing Carbon

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