The coming German energy turnaroundAny plan that aggressively supports expansion in the renewable sector and replaces decommissioned coal-fired plants with natural gas power stations will be expensive. Total investment over the next decade for such an energy turnaround is estimated to be roughly €200 billion (or almost $290 billion). There is good news connected to that estimate, however. The investment can come mostly from private sources, with only a partial subsidy by government. And the German Institute of Economic Research calculates that electricity prices will rise only slightly as a result of the energy turnaround, giving existing businesses little incentive to move production outside the country and potentially creating hundreds of thousands of jobs in the German renewable-energy and sustainability sectors.
Of course, not all the energy news out of Germany is good, or clean. At the moment, more than 20 new coal-fired power plants are being planned or already under construction; together, they would achieve a total output of 10 gigawatts and could, in terms of power supply, replace nuclear power plants that are still operational. But coal-fired power plants do not fit into the concept of the sustainable energy turnaround that the government has put forward. They produce far more climate-endangering greenhouse gases than other sources of energy -- for example, double the amount that natural gas produces.
Gas-fired power plants would be far more suitable for the transition period. They are less emission intensive and more easily combined with fluctuating renewable energy sources like wind and solar, because gas systems can be powered up and shut down quickly. Also, there is an overabundance of gas in the international market, and prices are accordingly low. (The price of gas is comparatively high in Germany because it is still tied strongly to the price of oil. Sooner or later, however, international developments will bring down Germany's gas price.)
Whether coal becomes a declining source of German electricity in coming decades, however, will depend on the success of the government's plans to greatly increase renewable energy production. The goal is to increase the renewable share of the energy mix from today's 17 percent to 80 percent within the next four decades. The goal is feasible in principle. Such a transformation, however, would require vastly expanded electrical grids and more energy storage facilities -- for example, the so-called pumped storage plants that move water to higher levels for later hydroelectric generation and that are already being used in Germany and Scandinavia. New forms of energy storage that are currently in development may also become part of the German system. For example, batteries in electric vehicles can be used as storage units when they simultaneously make use of the "vehicle to grid" option, i.e. when they feed stored power back into the grid. Such a program, however, would require a rebuilding of infrastructure to allow a "smart" electrical distribution system. New fuels may also help store energy in different forms. At peak periods of renewable energy generation, excess electricity could be used to produce hydrogen or methane, which could then be used to power cars and trucks.