Germany built LNG terminals in months. Wind turbines still take years.



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HEIDE, Germany — After seven years of planning, permitting and construction, Matthias Frauen’s two newest wind turbines finally began turning in the very last days of 2022.

His was a protracted process compared to another energy project just 60 miles further along the North Sea coast, where Germany’s first liquid natural gas terminal recently started pumping after a turbocharged 10 months.

“It’s really extremely fast,” Frauen said of the streamlined procedures that are helping Germany to replace natural gas that once flowed through pipelines from Russia with gas shipped from countries including the United States and Qatar.

But when it comes to wind energy, the sector has been “collapsing,” complained the grain farmer turned wind-farm developer. That’s despite the desperate shift in European energy policy triggered by Russia’s war in Ukraine, and despite the bold targets for renewables set by a German government with Green Party politicians directing energy policy.

In addition to onerous planning procedures, costs for making wind turbines have jumped by about 40 percent, making it practically impossible to secure financing for new projects. And across Europe, crushing costs have meant that firms supplying materials to build turbines have posted billions in losses while slashing jobs.

It’s a “misconception” that the wind industry has seen a big upside from the energy crisis sparked by Russia’s war in Ukraine, said Mirko Moser-Abt, chief policy officer for the German wind energy association BWE. “Even if it gives a new vision for renewables on a policy level, it has disrupted supply chains and driven up costs.”

After failing to fill two-thirds of the reduced number of tenders it offered for onshore wind projects in December, the government this past week boosted the guaranteed electricity rate for the industry, hoping that would encourage banks to give project loans.

But experts say more still needs to be done if Germany is going to meet its goals.

When it came into power a year ago, Germany’s government, which includes the Greens as a junior coalition member, set out the most ambitious legislative package to boost renewables that the country had ever seen. Within that plan, Robert Habeck, a Green Party politicians named economy and climate minister, announced plans to dedicate 2 percent of the country’s land area for wind production.

The war in Ukraine — which highlighted Germany’s painful exposure to Russian pipeline gas — further fueled the government’s green ambitions. The coalition set a goal of deriving 80 percent of the country’s energy from wind and solar by 2030, up from 47 percent last year.

But to get there, experts say Germany would need to add about 1,500 wind turbines each year — a challenging feat under current conditions.

“In eight years, we have to build more than what we have in the last 22,” Moser-Abt said. “This is beyond ambitious.”

The northern state of Schleswig-Holstein, where Frauen’s two new turbines began operating last week, is seen as a bright spot. The region already produces 160 percent of its electricity from renewables. But in the patchwork of local authorities that make up Germany’s federal system, others are far behind.

And even in the north, where towering turbines dot the coastline, the development process has grown more cumbersome over the years, Frauen said, as he drove his hybrid Mercedes through the snow last month to one of his newly finished projects.

Planning a wind turbine involves paperwork with roughly 50 different agencies, he said, each with the ability to stall and delay. Back in 2006, he built his first wind turbine on his land near Heide in a comparatively speedy three years.

While 2021 was a record year for renewable energy production for electricity, that was largely “weather related” rather than due to structural expansion, according to a report this past week by Agora Energiewende, a think tank that tracks Germany’s energy transition.

Germany’s carbon emissions for the year stayed stagnant, despite a drop in energy use, because the government fired up coal power plants to make up some of the shortfall left by Russian gas.

Agora warned that Germany is heading for a “massive gap” in the expansion of renewables. “In particular, the expansion crisis in wind energy continues,” said Simon Müller, the think tank’s Germany director. “The government must decide now and make improvements quickly,” he said.

The government has pledged to speed up permitting. And the European Union is bringing in a new two-year deadline for the approval of new permits in the sector. But in Germany’s decentralized federal state system, implementation is challenging.

The industry would like to see things move faster — more akin to what’s happening with liquefied natural gas. The LNG platform at Wilhelmshaven is one of three set to be completed by early this year. The industry is “super jealous” of the speed of the LNG terminal construction, said Moser-Abt.

“We need to see LNG speed in wind too,” he added.

“There is a realization from governments that you cannot reach their very ambitious targets if you do not simplify the permitting rules and procedures,” said Giles Dickson, chief executive of WindEurope, which represents 400 companies in the industry. “Germany do know what they need to do, they just haven’t implemented it all yet.”

Frauen said he was only able to participate in bidding to develop a new turbine last year because he bought materials before the war in Ukraine sent prices soaring. Otherwise, it would have been impossible to convince banks that his project would be profitable and worthy of financing.

What the government did this past week — raising an electricity price tariff that factors into financing decisions — should bring some immediate relief for those who build and develop wind farms. Now, a lot of projects have become financially viable again, said Moser-Abt. “It’s a really big deal,” he said.

But it won’t do much to help manufacturers, who have been struggling with high costs.

In June, Nordex had to stop blade production at its site in the northern Germany city of Rostock.

Some have called for subsidies to support the industry. “We do not want to stop a dependency on Russian fossil fuels for a new dependency on Chinese wind turbines,” Dickson said.

Spiraling prices have also hit adjacent sectors. The town of Heide had been picked last year by Swedish start-up Northvolt as the site of a new plant for “sustainably produced” lithium-ion batteries. The company said the plant would run in part on locally-generated wind power and employ 3,000 people. But due to increasing energy costs, and the lure of incentives from President Biden’s Inflation Reduction Act, the firm is now looking at the United States instead.

It’s a disappointment, says Frauen, who had hoped it would cement the area as a green energy hub.

Still, the war in Ukraine has also brought some fundamental attitude shifts that experts hope will help counter structural problems in the industry.

Even in Germany’s southern state of Bavaria, one of the most reticent to embrace wind energy, legal hurdles to new projects are being loosened. A law that prevented wind turbines being built at a distance of less than 10 times the height of the turbine away from a dwelling has been eased. Last month, the German government relaxed rules to allow turbines to be put closer to air traffic control systems.

And the nimbyism that has helped hold back expansion appears to be dissipating.

“People on a local level are now really asking their local councilors to build wind farms,” said Moser-Abt. “The mood has really changed a lot.”

Frederik Seeler contributed to this report.



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