At Work in Germany: Wind, Solar … and Jobs

Walking down the cobblestone pathway that connects the buildings of the Potsdam Institute for Climate Impact Research (PIK), Dr Brigitte Knopf looked up at the white stucco Einstein Tower looming above her. Built in 1920, the observatory was designed to celebrate the mysteries of the universe that Einstein was helping to uncover. Today at PIK, researchers like Knopf are working through an issue that rivals the importance of the work done by Einstein: solving the climate crisis quickly and economically.

Knopf, who primarily studies the economic impact of climate change mitigation efforts, is working on a Regional Modelling Comparison Project that examines the feasibility of different climate stabilization scenarios. Unveiling the first assessment models for four climate protection strategies through to the year 2100, within each scenario, Knopf mixes and matches a variety of technological options that include fossil energies, nuclear, renewables, energy efficiency and carbon capture, and storage.

‘There is no silver bullet. But what we see from our modelling results is that mitigation of climate change is possible,’ stated Knopf. ‘The models show that this is technically feasible – and perhaps more important – also economically feasible.’

According to the models, the impact of these mitigation efforts on the global economy would be moderate, representing a range of between a 1% gain in global GDP to an almost 2% loss, depending on how and when the scenario is implemented. ‘This makes me very optimistic from this point of view that we can do something,’ said Knopf.

Political machinations

Climate scientists with such a positive mindset can make solutions to climate change seem easy; that is, until the politicians and various interest groups come to the table. For instance, while Knopf revealed the findings of the first assessment models, about 300 km away in Poznan, Poland, political leaders from all over the world were attempting to work out a framework for a climate change mitigation strategy.

German chancellor Angela Merkel, the head of a country that has long been considered a leader in climate and renewable energy policies, caused a stir by announcing that Germany is pulling back from earlier commitments on the structure of a carbon cap-and-trade programme. In order to protect Germany’s large industrial base from higher carbon prices, Merkel is urging the EU to give away more allowances than originally proposed. Without additional protections, she argued, steel manufacturers, chemical producers and shipping companies could lose their competitive edge, thus shedding jobs. Her position has steadily shifted over the last year as the EU works out the details of its carbon reduction plan. Inevitably, climate protection advocates have criticized the German government for its inconsistent message to the international community.

In Hamburg, Peter Lindlahr, head of central co-ordination on climate issues for the city, reflected on the direction of the European climate negotiations, partly driven by Germany’s evolving stance on giving away emissions permits to companies in the industrial sector. ‘Angela Merkel … said that jobs come first and then climate – and this is the wrong message,’ said Lindlahr, adding: ‘It’s her responsibility to keep the jobs through a progressive and innovative climate strategy.’

While Merkel has been lambasted for weakening the framework and allowing certain industries a free pass, other members of the business community say that she has not gone far enough in changing the targets – a stance that could damage the competitiveness of the largest exporting country in the world. The chancellor bounced back and forth, trying to appease both sides.

‘As long as we have no clear position toward the mechanisms of emissions trading, it’s very difficult to establish something meaningful,’ Lindlahr said. He continued: ‘We need to have a clear message as we move into the Copenhagen Climate Conference.’

Despite the backtracking at Poznan, Germany is still recognized as one of the most progressive countries in addressing climate change, especially compared with the US’s stance over the last eight years. As part of its commitment to the EU 20-20-20 targets, Germany has a goal of reducing carbon emissions 30%–40% by 2020, depending on how effective other EU countries are at reaching their targets.

Lindlahr recognizes the important role that Germany will play as developed countries debate how aggressively to tackle climate change. But the election of Barack Obama as the US President will dramatically change the dynamics of negotiations, he says.

‘We cannot say we are the opinion leader [in climate change] … I think America will have a very dominant role in the next few years,’ said Lindlahr.

The next step for Germany and other European countries will be to forge a close relationship with the US and craft a meaningful climate protection strategy that satisfies all parties. That goal, says PIK’s Knopf, may be more difficult than figuring out any of Einstein’s theories. ‘We know that the solutions are available. But the political process is very complex and will certainly make it hard to implement them,’ said Knopf. ‘We just hope that the politicians in Germany and in other countries will stay committed.’

A resilient renewable energy leader

The one policy which has seen Germany become a leader in installed renewable energy capacity has been the introduction of a renewable energy feed-in-tariff (REFIT). This has stimulated growth in a broad range of technologies.

Interest from both individual citizens and corporate developers has resulted in approximately 23,300 MW of installed wind capacity and 40 TWh of wind-generated electricity each year. That makes up about 7% of Germany’s electricity demand. Hundreds of thousands of citizens have pooled their money and invested in wind farms – making Germany a world leader in wind, only recently losing the number one spot to the US. One of the early movers was Hermann Albers, currently the president of the German Wind Energy Association (BWE). When Albers inherited his father’s 80 hectare farm in northern Germany in 1981, he soon realized that it would be necessary to supplement his income, but it took until the early 1990s, with the introduction of the first REFIT, that he found his answer – wind power.

His three new 5 MW turbines (with which he replaced his original 11 smaller machines) produce 60 GWh a year, providing a sizable revenue stream that has allowed him to expand the original farming operations he inherited. Albers observed with a chuckle: ‘I took the chance. I was young enough and stupid enough to do this. Now it doesn’t seem so stupid.’ Albers continued: ‘When I first started out, we had no idea how wind would function in the whole. The utilities said ‘there will be no change.’ But we did it. And now we are producing 7% of consumption and are working toward getting 25% by the year 2020.’

Reaching that goal will mean doubling current onshore capacity to 45 GW and adding around 10 GW of offshore capacity. Although there is limited space for land-based wind farms, said Albers, much of the new capacity will come as sites are re-powered and old, smaller turbines are replaced with new, higher capacity machines.

Germany is in a good position to reach these targets, but its market is much more mature than most others, which means new wind projects are being installed at a slower pace. New capacity additions have slipped in recent years, and the momentum of the industry has switched to countries like the US and China.

Financing issues associated with the credit crisis have also reduced expectations for the German market for this year. Industry professionals were hoping that an increase in the tariff price for wind of more than €0.01 would get the market moving faster, but it appears that the financial crisis could dampen some of those hopes in the short term.

‘For a variety of reasons, the German market is not growing as quickly as it once was,’ says Peter Wasmuth, CFO of turbine manufacturer REpower Systems. ‘But that means other market opportunities are opening up and REpower and other companies are expanding their presence in those countries.’

German manufacturers represent almost 40% of the global market, so even though the domestic market has slowed, the country’s technical know-how ensures that it will continue to be a major player on the worldwide renewables scene. Indeed, while a slowdown is inevitable: ‘We are still going to grow by 30%–40% as we export these turbines to a variety of promising markets. That says a lot about how strong the wind industry is,’ said Wasmuth

Katrin Evers, manager of public relations for the Berlin-based photovoltaic module manufacturer Solon SE, says she sees the same thing happening in the global solar industry. Standing on a catwalk above the floor of Solon’s 50 MW capacity manufacturing plant, she described the company’s positive, yet cautious, outlook for 2009: ‘The books are full … but it would be naive to think of course that we won’t feel it … we will see an impact due to problems in the financial markets. That is why we’ve adjusted our figures accordingly,’ said Evers. She said that Solon may grow around 60% in 2009 – less than the 90% growth the company has seen over the last few years – but still impressive.

Other manufacturing companies in the solar industry are reporting similar growth adjustments due to financing issues between banks and project developers. Q-Cells, the world’s largest manufacturer of photovoltaic cells, said sales dipped by around 10% in 2008. The company also lowered its 2009 growth projections to 40%, down from massive 50%–60% growth rates in recent years.

‘We can’t be sure any more whether our customers will be able to get the financing for the large projects,’ says Solon’s Evers. ‘These are problems that all companies are seeing in Germany and throughout the world.’

Nonetheless, Germany may be better equipped to bounce back from the current slowdown than countries like the US. Small- to mid-sized rooftop installations make up more than 80% of Germany’s solar market. Those projects are generally easier for banks to finance because of the country’s 20-year guaranteed payments for solar electricity. These tariffs have made Germany one of the most attractive places for companies to invest, according to recent renewables investment attractiveness index from analysis firm Ernst and Young. Conversely, while the US remains attractive, because incentives for solar and wind are based on tax obligations, the economic downturn has reduced the number of individuals and corporate entities eligible for the credits.

Christian Junior, senior vice president of Commerzbank AG, concurs: ‘Larger projects are still extremely hard in Germany, but the smaller projects are much less difficult right now. There are many reasons for this, but the feed-in tariff plays an important role. We do expect there will be a significant turn-around after winter [2008–2009] and for the German market to be resilient.’

The future wind power workforce

Germany already has more than 23 GW of wind capacity and, if all goes according to plan, about 32 GW more onshore and offshore capacity will be installed over the next 11 years. It’s going to take a lot of technicians to service those turbines.

Nils Peters, managing director of BZEE, a training school for wind technicians, estimates that Germany needs about 600 additional service technicians today. Adding the 22 GW of onshore and 10 GW of offshore capacity projected by the German Wind Energy Association through 2020, means that there could be a serious shortage of workers to keep a wind-heavy electricity mix reliable and profitable.

Every six months, 15 students from technical colleges around Germany come to the BZEE site at Husum, in northern Germany, for a set of intensive courses that give them the skills necessary to engage the front lines of the renewable energy revolution. These technicians will work throughout Europe, helping keep the turbines spinning in Germany as well as nearby countries like France and the UK.

‘If we look at the growing demand for wind in Germany and around the world, we will face an even greater shortfall of service technicians if we don’t focus on training them today. These jobs are becoming more and more important,’ said Peters. These skilled workers are important not just because they’ll help keep the lights on; they will ensure that Germany retains its role as a technical leader in renewable energy.’

Trainers from all over the world come to learn from the German experience and take that knowledge back to their home countries. Jerry White, a former tractor mechanic from the UK, is one of them.

‘A lot of what the Germans have learned can be very useful in our country,’ White said, adding: ‘The UK is perhaps where Germany was in the 1990s.’ With a UK target of installing 33 GW of offshore capacity by 2020, the installation of even half that amount will require a large increase in technicians to keep the machines running.

Right now, if an onshore or offshore turbine has a problem in the UK, a technician from Germany or Denmark usually has to be called in to fix it. These workers deal with constant travel, complicated problems and high stress levels in the field. ‘We have to learn not only how to fix the machines, but how to deal with the entire process … the technician who works on a turbine has to be a particular kind of animal,’ said White.

Working long hours in cramped, high-up places that are often far away from home may not sound particularly appealing. But that hasn’t slowed the surge in demand for training programmes like BZEE’s. By the start of 2009 the global wind industry passed the 120 GW capacity mark. If growth rates continue as expected, there could be as much as 500 GW of wind capacity installed around the world by 2020. That’s a lot of secure, high-paying jobs.

Andy Dibling, an instructor from Canada’s Prince Edward Island, knows how important those jobs are for local economies. Built on farming, fishing and tourism – all industries that have taken a big hit as the financial crisis has rippled through the global economy – an aggressive focus on wind energy could reverse some of the economic problems the province has faced, says Dibling. ‘We need these jobs. We have the ability to make wind an economic driver within the province and also to use it as an export resource,’ he says.

Although Prince Edward Island currently has 50 MW of installed wind capacity, the province is looking to install 500 MW by 2013. With a peak demand of only 220 MW, that additional capacity will allow electricity export to north-eastern US states. That could mean C$40 million (US$33 million) in economic activity over the next 25 years.

‘We definitely have a shortage of skilled workers to achieve those goals,’ says Dibling. ‘So we’re looking to fill some of that need. That’s why this programme is so important.’

‘Without these technicians, there wouldn’t be a wind industry,’ said Peters, concluding: ‘We’ve already done a lot with wind here in Germany. Now we are trying to spread some of that knowledge to others so that they can do the same.’

Stephen Lacey is staff writer for RenewableEnergyWorld.com
e-mail: rew@pennwell.com

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