Germany went overboard on renewables — SA, take note
No country has, or should have, the vision of a hermit. Countries learn from each other by replicating what has worked and avoiding what hasn’t. Ideally, each country should take only the best foreign practices and adapt them to its own circumstances.
In terms of the application of energy generation innovations, SA has learnt a lot from Germany. We owe our industrialisation that began in the 1920s to German ingenuity. But a closer look at recent developments in Europe, particularly the implementation of energy transition from fossil fuels to renewables, suggests we should learn to avoid Germany’s costly mistakes. Let’s look at Germany’s 20th-century lessons, which SA adapted with great success to its circumstances, and the 21st-century ones we must still learn.
First, Germany was indirectly instrumental in the establishment of Eskom. It was in Germany that Eskom’s founding chair, the eminent industrialist Hendrik van der Bijl, was trained in engineering.
German innovation was also instrumental in the establishment of Sasol. German scientists Franz Fischer and Hans Tropsch, leaders in coal-usage research, were behind the technology that is used to convert coal to petrol or diesel and extract chemicals from it. Patented in 1925, the Fischer-Tropsch process triggered the interest of scientists across the world. Among them was Etienne Rousseau, a science student at Stellenbosch University.
In 1950, with oil rationing introduced in SA after World War 2 , the government established a committee to investigate producing liquid fuel from coal. Fuel independence was considered a national priority.
Rousseau was part of the committee. While other members of the committee toured the US and Britain to search for solutions, Rousseau turned to Germany. The committee recommended that a state-owned company be established to take over the coal-toliquid fuel venture that Anglovaal had abandoned.
In late 1950, Sasol was established, with Rousseau as its founding head. The company would go on to use the German invention on a larger commercial scale than the Germans had imagined. Germany had invested heavily in coal-related research & development. Coal powered its industrialisation, alongside nuclear power and gas. With a reliable and affordable energy supply, German’s Mittelstand (small and medium enterprise) manufacturing plants performed their magic without much effort. Germany produced hi-tech export products.
But then came the need to transition from fossil fuels to renewable energy sources. Germany, like SA, is a signatory to international instruments aimed at curbing climate change mostly attributed to fossil fuels.
As Germany embarked on the transition to renewables, it provided a third lesson for SA. This time, it’s not clear that SA is carefully taking notes. During her visit to SA in 2020, then German chancellor Angela Merkel encouraged SA to transition from coal to renewables.
But Merkel sounded a warning based on Germany’s experience — renewables needed careful management because they produced power intermittently. By then, Germany had embarked on an ambitious renewable programme and decommissioned its coal plants more quickly than it installed alternative energy sources. With nuclear energy having become politically unpopular, it, too, had to be phased out. Germany was going to be overly reliant on renewables and natural gas from Russia pumped through the Nord Stream pipeline.
This transition cost Germans dearly. By last year, the median household in the country was paying 43% more than the average power bill in 27 other countries in the EU, according to Sarah Lohmann at Johns Hopkins University. At least 50% of a German electricity bill was an additional levy to help pay for the transition to renewables. Lohmann noted that Germany paid a record $38bn for green electricity in 2020 and projected a further increase.
Something was not right with the Germany’s transition. Lohmann suggests that Germany’s mistake was to elevate passion over numbers, citing the German federal audit as having said Germany was at risk of grid blackouts from this year to 2025. The audit said more than $600bn would be needed through 2025 to maintain a stable grid and warned that the “energy transition will endanger Germany as a business location”.
Germany was transitioning from being an energyindependent country to being energy-dependent. It would rely predominantly on France’s nuclear and Russia’s gas supplies.
After Russia invaded Ukraine this year it reduced gas supplies to Germany, and there were fears it might cut the flow completely. Theoretically, Germany’s installed renewable capacity should help it stand up to Russia’s Vladimir Putin. In practice, however, renewables capacity cannot replace baseload provided by gas, coal and nuclear.
In response to its energy dilemma Germany postponed the decommissioning of its remaining nuclear plants and reopened its mothballed coal-fired power stations.
No country in Europe teaches a more valuable lesson about the importance of baseload and the need for a well-thought-out transition to renewables. In SA, we ignore these lessons at our peril. Eskom’s plans show we may have entered the territory of the imperilled. The company is planning to reduce baseload coal generation, hold nuclear generation constant and increase variable renewable power at a cost of more than R1-trillion.
In building Eskom, Van der Bijl learnt from the Germans, as did Rousseau with Sasol. It’s time we sent Eskom leaders to Germany to study the performance of renewable capacity. They must use the German lessons to advise our government to adopt facts-based policy instruments suitable to our circumstances as a developing country that aspires to industrialise and create much-needed jobs. Policy must be keep abreast of technological changes and most importantly, it must not place fanaticism above science.
Both Eskom and Sasol were inspired by German innovation. Now Germany has a different kind of lesson to teach us