German Wind Energy Sector Struggling To Find Growth
The German wind power sector is currently struggling, and the German Government and wind power industry representatives recently met up to try and solve the issue.
One of the representatives for the wind energy industry, Hermann Albers (president of the German Wind Energy Association), believes that the government made a ‘fatal mistake’ by introducing a law that meant wind turbines must be located 1km away from any residential areas. Others to believe that the once promising industry is currently in danger and pressures are growing to try and save it.
Recent meetings have meant that there is now better understanding between the government and those in industry, however it has still left a lot of issues unresolved and demanding answers.
Renewable energy is on the way up in Germany, the first three quarters of 2019 there was a record 43% of energy consumed which came from a renewable source. But this impressive headline is unfortunately not consistent with how the wind energy sector has been performing. In the first 6 months of 2019, only 35 new turbines with a total capacity of 290 megawatts were built, that is an 80% decrease from the same time period in 2018 and the lowest levels in 20 years. Inland wind power auctions have also been massively undersubscribed in recent times, showing the drop in demand within the industry.
The German wind energy sector is seen as being very unique to other wind power markets in other countries. The markets are full of more small localised projects, compared to more larger ones. The way the market currently is has led to increased regulations and waiting times longer on authorities granting permission for new projects.
The German Renewables Association believe that 4.7 gigawatts of wind power needs to be added to the countries total capacity each year to meet the nations Wind power targets.
By 2030, the government aims for 65% of Germanys electricity to be produced from renewable sources. To meet these targets, it’s predicted that 75% of the additional capacity will have to come from wind power projects.
If the wind sector in energy carries on at the slow steady rate that it currently is, not only will Germany struggle to meet their renewable energy target by 2030 but it will also lead to a predicted loss of 27% of jobs within the whole industry. For example, Enercon have recently cut 3000 jobs in the wind energy sector in Germany. This slow growth will also lead to more effects on the wider economy, causing a predicted reduction in Germanys GDP of EUR 700 million.
The first 3 months of 2019 only saw 400 megawatts of new wind farm permits issued, which are historically low numbers. Furthermore, there are about 11 gigawatts of wind farm projects which are currently stuck in the process of getting their permits issued. This capacity would equal the entire capacity of the Netherlands and Denmark combined! The slow issuing process could be one of the major key issues that stops Germany reaching their 2030 renewable energy targets especially paired with the new and controversial 1km building law. Other European countries have a 500m or less rule in place which is seen as a better alternative for the industry.
Permitting processes which used to take around 10 months are now taking over 2 years to complete. This is because of the new stricter regulations but also reduced staffing in some locations.
Hopefully the wind energy sector and the German government can come to some agreements to allow the wind sector to thrive and expand again within Germany.