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The Development of Renewable Energies and Supply Security

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The Development of Renewable Energies and Supply Security

A Trade-Off Analysis

Ifo,

15 min read
10 take-aways
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Germany’s entire electrical system is going green, but what will it cost and how reliable will it be?

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Economist Luise Röpke studies the impact that the greening of Germany’s electrical system has on the grid’s reliability and cost. She says renewable energy confronts a “trilemma” – the interrelation of environmental impacts, network reliability and electricity prices. Using existing indexes and original calculations, Röpke unveils the significant economic and social costs of power outages. She explains why introducing renewable energy into the existing grid assures service deterioration unless Germany invests more money in its electrical grid network and she urges a re-evaluation of the entire national renewables program. Though this paper is burdened by techno-lingo and at least one Gordian knot of a data graph, getAbstract suggests that energy specialists and policy makers should read it, as should observers from other nations who seek lessons from Germany’s green experience.

Summary

Behind Germany’s Energy Initiative

Most Western governments are including provisions for the consequences of climate change in their energy-planning activities. Modern environmental concerns, now crucial to multitudes of people, add to the headaches of officials concerned with providing low cost, reliable electricity.

In Germany, the government’s green initiatives focus largely on the environmental impact of alternative energies – a rather shortsighted view. In fact, a realistic effort to introduce renewable sources of energy must clear three hurdles: their effects on the environment, the price of the electricity and the reliability of the energy supply. Unfortunately, German officials have proceeded without clearly understanding the interconnection of these three sides of “the energy-political triangle,” – a “trilemma” where trouble can lurk.

Measuring energy-supply reliability is a vexing challenge, since planners cannot directly connect it to price. As a result, they generally consider only the technical perspective: When outages occur, for how many minutes do customers lack service? Experts have not reached a consensus about the public or social cost of outages...

About the Author

Luise Röpke is an economist with the CESifo Group Munich. Her research focuses on energy economics, climate and resources.

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