Massive German energy challenge

Germany has set aside more than €260 billion ($275 billion) to deal with the immediate risks of an energy crisis triggered by Russia’s war in Ukraine, but the ultimate fix will be much costlier — if the country can pull it off at all.

The pending price tag for future-proofing the country’s energy system is projected to amount to over $1 trillion by 2030, according to BloombergNEF. The costs include investments in upgrading power grids and above all new generation to manage the phase out of nuclear and coal plants, handle increased demand from electric cars and heating systems, and meet climate commitments.

The transition will require the installation of solar panels covering the equivalent of 43 soccer fields and 1,600 heat pumps every day. It also needs 27 new onshore and four offshore wind plants to be built per week



I have to wonder how it’ll work out over time. If Germany invests the $1T over the next 7 years, and then becomes energy secure. But then in 2031, some emergency in France occurs (let’s say having to shut down 10 nuclear plants for maintenance), will the Germans reduce their use of electricity so they can also supply France with what they need?

And that’s just the good scenario because presumably France will be able to pay the very high price necessary to get that emergency electricity. But what if it’s a more southern country, like Greece, that really needs the electricity, but can’t quite afford the high prices and comes to the EU for aid to pay for it? In the end Germany not only made the massive investment for their own energy security, but they also made it for others. Are Germans willing to do so?

The message is diversification is your friend. Noone knows the future. Equipment wears out. New risks and hazards can change preferences or even requirements.

Changing from fossil fuels alone requires massive investment and that requires years to implement. Does anyone expect Germany to issue massive amounts of debt to do all this faster?

So of course keeping older systems serviceable until the new is installed makes sense.

We wish them well but everyone knows the risks. That could force changes in the time schedule.

How often have you read the German press in the last two years?
It’s true that it’s no longer credible, but to get an idea, you should have read it.
You could have had an idea.
Not about the general situation of the country, but about the general attitude of the press about the general situation of the country.

Germany has been antinuclear for decades. Ban the bomb dates from the era of mutually assured destruction. Germans realized they were ground zero and destined to be anihilated.

Add to that a strong comitment to the environment and political power of the Greens.

These policies paint them into a corner giving them few good options. Now the economic impact of that becomes clear.

Inflation, high prices, and high unemployment are the downside risk. If that happens, how will they respond? Is there an easy solution? What do they adjust?