- GERMANY NEEDS TO ADDRESS ITS GEOGRAPHIC VULNERABILITIES. THIS IS ONE OF THE REASONS WHY GERMANY HAS FOCUSED SO MUCH ON RENEWABLE ENERGY TECHNOLOGIES.
- GERMANY BELIEVES THAT RENEWABLE ENERGY TECHNOLOGIES ARE ONE OF ITS NATURAL STRENGTHS THAT IT CAN EXPLOIT. THE ARGUMENT IS THAT THE PRODUCTION OF RENEWABLE ENRGY TECHNOLOGIES CAN HELP OIL IMPORTERS REDUCE THEIR DEPENDANCE ON GLOBAL SUPPLY CHAINS.
1. THE ENERGY TRANSITION IS NOW IN FULL SWING AND CAN NO LONGER BE REVERSED
The energy transition in Germany has many implications for industry. But it also affects the end users of electricity, such as households. The energy transition will also bring many changes in hydrocarbon imports. From a geostrategic perspective, Germany is vulnerable to changes in the energy industry because:
1.) Germany imports all of its hydrocarbons from abroad and is dependent on global supply chains
2.) Germany has shifted decisively to renewable energy sources, which can be unreliable at times and require expansion of grid infrastructure, high and low voltage transmission lines.
3.) Germany needs more BESS to ensure that electricity is stored when there is an oversupply of wind and solar energy, although the overall costs and energy losses must be considered
4.) Many more high-voltage lines need to be built to transport electricity from the north of the country to the south, where many more industrial facilities are located, although industry is generally spread throughout the country and no particular location can be said to lead the way industrially.
Germany has already addressed some of the issues arising from grid instability that also affect Germany’s neighboring countries. The reason for this is grid interconnection with other EU countries, which allows cost savings. The problem is that Germany either produces too much electricity from renewable energy sources or not enough electricity due to intermittency.
This also means that countries like France will have to supply Germany with power when there is not enough electricity to provide the 50 Hertz needed to stabilize the grid. At the same time, Germany is planning to shut down its nuclear power plants, and coal-fired power plants are being phased out. To some extent, this creates an overdependence on other EU member states. It may also create incentives for investment in new power plants nearby, but not in the German market. Price regulations may favor such a solution, as one can benefit from more than one energy market.
We can also refer to another article we wrote on this topic that looks at German energy policy in the context of global supply chain disruptions, such as the tanker that recently disrupted trade flows in the Suez Canal.
Germany has focused so much on renewable energy technology because of its geopolitical vulnerability.
Renewable energy technology is leading to major changes in the way we generate, distribute and consume electricity. Germany still has to find a way to make this work.