With just a 48-hour notice delivered by a personal phone call to Ms. Merkel on a Saturday, the CEO of E.ON, the largest German and European power producer, let it be known that the company had decided to split itself in two, one part grouping fossil and nuclear power generation and a second part encompassing the “politically correct” activities in the field of “renewable” energies. Sort of a “Bad E.ON” / “Good E.ON” move. The intention is to get rid of the “bad” part as soon as possible by putting it up for sale. At the same time, this also means the “good” part will cease to be duty bound to ensure a stable power supply under all circumstances. Obviously, such a liability is not enforceable from an entity whose only power sources are unstable wind and solar power plants. In a nutshell, the message behind this move is that the silverback of the “big four” German energy producers who group the bulk of the country’s conventional and nuclear power production is about to close shop at short notice. The others will probably follow suit.Germany has made a big deal out of getting most of its power from solar and wind, at the expense of nuclear and conventional (coal/gas) generation. The restrictions on the conventional sector have increased to the point that the major players are threatening to exit the market. The major players represent perhaps 80% of Germany's generation capacity.
Outlines currently emerging suggest that:I would add the following: (E) German heavy industry that replies on power as a significant cost of production (chemicals, manufacturing) will continue to relocate to the USA.
A) Nuclear power will remain banned. More than 30 years of demonization of the technology probably cannot be reversed,
B) Plans to rein in the soaring price of electric power prices will be abandoned. A key representative of the ruling CDU party has already warned that price hikes will continue.
C) The hope of the government that highly flexible combined cycle gas-fired power plants can be deployed in large numbers to offset the highly volatile production from wind and solar plants has gone up in smoke since these entities have much higher costs than coal-fired units. They thus were the first to succumb to the market distortions brought about by the heavily subsidized “renewable” technologies.
D) The government now implicitly recognizes that in the years to come, coal and lignite fired plants will play a substantially bigger role in securing the country’s power supply than projected. The obvious hope is that it may be possible to stabilize the vessel without having to explicitly admit the core pieces of the previous strategy have to be scrapped.
I guess this is a case study that even the Germans couldn't make GOSPLAN work. Err, and that whole DDR thing is another case study that they couldn't make it work ...