Climate Change: The Power Game Still Lies Ahead!

A pile of sandbags lies in front of the entrance to the pool bar at the fancy beach hotel in Tobago, one of the island states in the Caribbean Ocean. The beach is not wider than four meters. The pool bar was built in the 1960’s in safe distance from the seashore, but the water is coming markedly closer. This year they had to add another layer of sandbags to ensure that tourists did not get wet feet when standing at the bar.

Climate change is a visible reality in Tobago and other small islands, with sea levels rising and hurricanes more powerful than ever. The Maldives just recently announced that they are already preparing themselves for a mass evacuation of the population and that they are trying to purchase new land for their people.

The islands in the Pacific and the Caribbean Ocean are only geographically far away from Europe and Germany. In the context of climate change, however, they are just next door as the energy sector of industrialized countries has caused the bulk of global CO2 emissions that cause global warming and sea level rise. While there is no need to go through each of the doom and gloom scenarios on the impacts of climate change in this article — many of these have already been outlined in the UN Report on Climate Change — yet I wonder if we really understand the urgency of undertaking concrete action.

Why is that? The answer is that a future energy market that is fully sustainable would require a fundamental transformation of the current energy sector in many, mainly industrialized, countries. For 200 years, industrial production has relied on the combustion of cheap fossil fuels, utilizing coal that is burned in huge power plants. While Germany boasts a flourishing renewable energy sector that contributes some 14% of the total electricity, one should not forget that the country still derives almost 50% of its electricity from coal-fired power plants.

The electricity sector in Germany is divided into four “sovereign territories” each one “governed” by one of the four big utilities Eon, RWE (Germany) Vattenfall (Sweden) and EnBW (Germany/France). Theses corporations extract fossil fuels, such as coal and lignite or natural gas, from the earth and then transport, refine, process and burn the fuel in huge centralized power plants in order to produce electricity, which is then sold and transported through “power grids” to their customers, domestic and industrial. In Germany, utility companies own the power plants, the power grids and the electricity produced.

Therefore German utilities have the freedom to set prices for the electricity they sell, and favor the continuation in fossil fuel exploitation over renewable energy production. In fact, they are planning more than 20 new coal-fired power plants, which would produce more emissions than Switzerland’s total annual emissions.

Germany’s chancellor Angela Merkel´s goal of reducing emissions in Germany by 40 percent compared to 1990 levels will never be achieved if these plans for new coal-fired power plants are executed. Its true that the new power plants are expected to replace older, dirtier plants. However these plans represent a direct contradiction to the climate goals formulated by Germany’s Chancellor Angela Merkel. While a natural gas-fired plant produces just some 400 grams of CO2 emissions per kilowatt hour, lignite emits more than 1000 grams. Renewable energy does not add any CO2 to the atmosphere.

The idea of developing new power plant technology that can capture environmentally harmful carbon dioxide in the power plant and store it in underground geological reservoirs has therefore become popular among the pro-coal lobby.

Energy companies that focus on coal, such as RWE and Vattenfall, are already planning pilot plants for CO2 capture although the development of this Carbon Capture and Storage (CCS) technology will need another ten years to be developed, according to experts. So whatever one might think about CCS, at the moment this technology serves mainly for green flagging new coal power plants as these plants will fail to protect the climate for the next ten years, a crucial period in tackling climate change.

On the positive side of Germany’s energy politics is the “Renewable Energy Act” incorporating the “feed-in tariff,” which has initiated a massive uptake of renewable energy. In taking this path Germany garnered respect and recognition throughout the world. Key features of this legislation are guaranteed tariffs for renewable power producers and the obligation of energy companies to purchase electricity from these producers. It has created 250,000 jobs in the last seven years — in no other branch of industry have so many and such highly skilled jobs been created.

However, limits to growth in the renewable energy sector correspond directly to the lack of brave politicians willing to challenge the plans for massive coal power plants. Admittedly politicians are limited in what they can do to stall the construction of the new power plants as, according to German law, the authorities normally have no choice but to authorize the construction of any new power plant once it meets the legally proscribed standards. It would only be possible to change this regulation if the governing coalition were to change the law at the federal level. Such a step requires strong political will.

One of the reasons for the lack of the required political will is an internal conflict within the German Social Democrats (SPD), which is a junior partner in the current German government headed by Chancellor Angela Merkel. Workers in the coal sector, who are members of the powerful trade unions for mining, chemistry, energy and services, are traditionally SPD voters. The SPD is therefore extremely reluctant to make political decisions that would potentially hurt their main constituency. I call this the “clientele-conflict” of the Social Democrats, where politicians in favor of centralized big energy companies and those who call for a decentralize, clean and renewable energy future belong to the same party.

Wolfgang Clement, former Minister for Economic Affairs and most visible advocate of the coal industry, is a supporter of the former, while Hermann Scheer, long time committed to renewable energy and recipient of the Alternative Nobel Prize supports the latter. The gap between their political portfolios is as wide as the Grand Canyon.

Just recently one could observe a fierce confrontation between these political views, and most specifically these two politicians at the regional elections in Hesse. Hermann Scheer, figurehead for the programmatic target for a massive uptake of the renewable energy sector in Hesse had to withstand massive internal SPD resistance to his program. Wolfgang Clement, who interestingly became a board member of Germany’s biggest coal company RWE after having left the Ministry for Economic Affairs, publicly urged people not to vote for his own party, as he disagreed with their plans to transform the energy sector.

The SPD in fact won the elections, but the margin of majority was too slim (also because of Clements statement) to form a government and therefore it is very likely that the conservative government of Hesse will remain in power. Such an appeal to the people of Hesse to refrain from voting with his own party had never occurred before. Clement was rightly criticized, but the SPD did not take any major consequences. It was Clement himself who has left the party just recently.

While the case of Hesse might be an exclusively German narrative, the enormous resistance of energy companies to decentralization and the rapid development of renewable energy holds true for many other countries as well. In Europe today, around 55% of electricity is generated from fossil fuels in conventional power stations. Nuclear power plants generate around 30% of our electricity. Most of the generation capacity is concentrated in the hands of just ten energy supply companies. These figures alone reveal the overwhelming market domination of these corporations with their single-minded focus on the use of fossil and nuclear energy resources. It also gives an indication of the powerful economic interests driving the commitment to maintaining existing supply structures.

A sustainable energy market will naturally lead to a more decentralized system, where energy is harnessed and fed into the electricity grid all over the country. Power should no longer be produced in massive fossil fuel power plants. Instead people ideally should start producing renewable energy themselves. A veritable example of “power to the people” — in both senses of the phrase!

Monopolistic energy companies like E.ON (Germany) or EDF (France) are still averse to the concept of an energy market with thousands of small energy producers. They simply fear a dramatic loss of power. But climate change and the question of energy security urges us to build our future on a more solid ground. The era of fossil fuels has come to an end. Modern energy companies need to jump on the train and help pave the way towards a sustainable energy market so that future generations will be able to exist.

Stefan Schurig works as Climate Energy Director for the World Future Council. In this position he started the international campaign on renewable energy and the promotion of “Feed-in tariffs” as one of the best policies for a massive uptake of renewable energy. He also coordinates the international Expert Commission on Cities and Climate Change in collaboration with the Hamburg Hafen City University. He lives in Hamburg and Berlin.

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