The answer to a cold, dark, German winter? Windfall taxes — on green-energy producers

Source: Hot Air

From the very first moment German diplomats at the U.N. smirked at Donald Trump warning them that their determined reliance on Russian natural gas, and fickle Green technology – but MOSTLY Russian natural gas – was going to buy them a world of hurt, it seems as if all the auguries have been leading up to this vindication of his prediction. The German overconfidence in heavy investment in alternate energy sources were myriad and fail safe, no?

The wind doesn’t blow? No worries! The sun will shine! Biomass, in the meantime, will just keep perking along, bubbling up loads of go-juice.

Shut all the other noxious, fossil fuels, or glow-in-the-dark stuff down. Meanwhile, source the natural gas to back all this up/keep stovetops making wiener schnitzel in December from those guys over there. Assurances everything will always be hunky dory are accepted.

The gas will flow.

Germany proudly touted her credentials, both carbon and greenhouse gas emissions reductions (helped along by the Pandemic), and Green energy replacements. But, as Sarah Lohman at the American Institute for Contemporary German Studies pointed out last year, they didn’t do the math:

With all of Germany’s technological innovation, and with a chancellor who is a physicist by training, how could it come to such shortfalls? It is certainly not for a lack of will. Germany is leading Europe in cutting greenhouse gases as it strives to keep up with its commitments to the Paris Climate Agreement. It has set a goal of being greenhouse gas neutral by 2045. Germany has targeted cutting gas emissions by 65 percent by 2030 from 1990 levels – 10 percent higher than what the EU considers legally binding as part of the Green Deal – and enshrined this in their national climate law passed in 2019. Currently, they are ahead of their goal, with emissions 40.8 percent below 1990 levels. Germany is leading Europe in its renewable energy generation, with 45 percent of its electricity coming from renewables in 2020. In 2020, 27 percent of that came from wind, with 29,844 wind turbines and 181 offshore wind farms. Germany’s investment in photovoltaics, or solar energy, has had a mixed return, but in good weather months like June 2021, it provided 20.6 percent of Germany’s electricity generation.

So, with all that progress, where is the rub? The pandemic-induced emissions declines are not set to continue. Emissions from electricity generation were up 25 percent in the first half of 2021, while coal power plant emissions were up 36 percent and those from gas power plants increased 15 percent. And just because a country has built a lot of wind farms and solar panels, does not mean there will be enough wind and sun to make up for the investment. With wind power production down 25 percent in the first half of 2021, and little sunlight charging solar panels in the same period, renewables are not having the impact hoped for. So, with an already large energy gap to fill, Germany’s renewables energy output fell over 8 percent in the first half of 2021. Coal’s energy generation increased by 35.6 percent over last year as bad weather increased demand and the nuclear energy phaseout continued. Even Chancellor Merkel has had to admit two months before the end of her term that Germany is not the leader in stable green energy and climate policy that she wanted it to be at this point.

Serious shortfalls, and NOW they’re staring down the real possibility of a brutal winter, all the while having not regained wind and solar power generation to any extent. On top of which, Russia has shut off the Nordstream pipeline “indefinitely.” POOF!

The head of Uniper, Germany’s so-called ‘energy giant,’ spent this morning assuring the world via CNBC, “You ain’t seen NUTHIN’ yet”

German energy giant Uniper on Tuesday warned the worst is still to come as concerns over Russian gas supplies to Europe through fall and winter continue to push up prices.

“I have said this a number of times now over this year and I’m educating also policymakers. Look, the worst is still to come,” Uniper CEO Klaus-Dieter Maubach told CNBC’s Hadley Gamble at Gastech 2022 in Milan.

“What we see on the wholesale market is 20 times the price that we have seen two years ago — 20 times. That is why I think we need to have really an open discussion with everyone taking responsibility on how to fix that,” he added.

The German government has already bailed Uniper out with a $15B euro rescue deal in July, taking a 30% ownership stake.

What are they proposing to do now that the Russians have closed the spice gas tap, perhaps permanently?

Financial Times reports they’ve announced a windfall profit tax on GREEN ENERGY PRODUCERS to try to pad the hurt headed to German energy consumers.

The German government is to impose a windfall tax on electricity producers and use the proceeds to finance a new €65bn package of relief measures to soften the blow of soaring inflation and higher energy bills.

The new package brings the total cost of the aid measures Germany has enacted since Russia invaded Ukraine in February to €95bn — one of the largest support programmes in the developed world.

Speaking in Berlin on Sunday, German chancellor Olaf Scholz said the government would impose a cap on the profits of energy producers who generate electricity from wind, solar, biomass, coal and nuclear energy rather than gas.

Such companies were making “excessive” profits because the market price of electricity was determined by the price of gas. Proceeds from the tax would go towards an “electricity price brake”, allowing private households to enjoy a basic volume of electricity at reduced prices, he added.

…He said the government would also make €1.5bn available for a continuation of the €9 ticket scheme, which allowed Germans to travel for just €9 a month on all local and regional public transport during the summer months. A national ticket priced at between €49 and €69 is currently under discussion.

The government also agreed to make one-time payments of €300 to pensioners to help them with energy costs — a measure it said would provide €6bn in total relief. Students will also be entitled to a one-off payment of €200 each. Child allowance will also be increased.

I don’t see how it makes up the shortfall in the money your average German is going to have to fork over. Our son is stationed in Germany. He lives in a small town, and is already hugely concerned. As a meteorologist, he’s been watching weather long enough to see a truly difficult winter coming – mornings are already in the 40’s. His heating system is forced warm oil like our hot water baseboards, and the oil he ordered over a month ago in anticipation of things going sideways has YET to be delivered. Fortunately, the cord of hardwood for the fireplace was, and is stacked in his garage. But the kitchen stove is natural gas (we have chamois shirts and shearling slippers on order for him.). He, like everyone in town, would appreciated the lights on.

Is this handout going to be enough to keep the folks from losing patience, especially with recalcitrant Greens insisting on shutting the remaining nukes down? Or is this a financially catastrophic snek that bites its own tail?

Bailouts to the left of me, jokers to the right, here we are – stuck in the middle…huddling for warmth in the dark.