EnBW boss: Acceptance for the mammoth energy transition project is crumbling

 "The boss of Germany's third-largest energy company, EnBW, sees the energy transition at risk due to rising costs and a lack of social acceptance. He sees implementation problems with the plans for a future "electricity market design".

 

In the opinion of EnBW boss Georg Stamatelopoulos, public approval of the energy transition is declining precisely because of rising energy costs. There has always been local resistance to wind turbines, for example. But now the criticism is becoming more global, he told the German Press Agency. "People don't understand why all of this costs money." The statement that sun and wind don't send a bill is true. "But it can also be misleadingly interpreted."

 

Here it is important to explain that the expansion of renewable energies on the one hand also requires the expansion of networks and decentralized storage systems, which increases costs. And on the other hand that there are opportunities for savings - for example if power lines are laid above ground instead of underground. In his opinion, politicians certainly understand this. The problem, however, is social acceptance. "If we lose people, the mammoth energy transition project will be made more difficult."

 

Over 1.2 trillion euros: "That's too much for all customers"

 

Investments in infrastructure are long-term - only when it is built will the positive effect of renewables having no fuel costs come into effect. Since electricity demand will continue to rise due to electrification in transport and heating, infrastructure costs are also spread over a broader basis. "That means that in the long term we will see falling energy prices," said Stamatelopoulos, who took over as head of Germany's third-largest energy group six months ago following the surprise departure of Andreas Schell.

 

It makes sense for the state to support the necessary high investments in infrastructure in the phase when consumption is not yet so high. The Federal Association of the Energy and Water Industry and the consulting firm EY have estimated the investments required to achieve the energy transition goals by 2035 at more than 1.2 trillion euros. "This is too much for all customers, not just industry," said the 54-year-old.

 

Stamatelopoulos did not want to say whether a special fund was necessary to drive forward the further financing of the energy transition. That is a task for politicians. There are a number of proposals as to how parts of the costs can be spread. "We need to talk about that. For us at EnBW, too, financing the investments in this decade is a real Herculean task." However, the high financial requirements are undisputed.

 

Climate protection, security of supply and affordability

 

The energy transition must be pushed forward more quickly. Progress is being made, the manager stressed. And the share of renewable energies in gross electricity consumption, which has grown to over 50 percent, also shows that it is working. "There are no power interruptions, the system is stable." 

 

Nevertheless, the issue of disposable power - i.e. power plants that are switched on as needed - has long been neglected.

 

For a long time, the focus was primarily on climate protection, which forms a triangle with security of supply and affordability. This was in keeping with the general mood and was not just due to the Greens' policies. "The conflict in Ukraine has contributed a great deal to rediscovering the two other dimensions of the energy triangle," said Stamatelopoulos. "We must neither jeopardize security of supply nor take the issue of affordability lightly."

 

If the price of electricity gets too high, this could result in cuts in climate protection, meaning that Germany will not become climate neutral until later. "Then it might not work out exactly by 2045," said the CEO. 

 

"But we should not give up on the goal. We have the opportunity to find pragmatic solutions."

 

Criticism of plans for capacity market

 

According to the EnBW boss, the Federal Ministry of Economics' plans for the future "electricity market design" also show implementation problems. By 2028, a mechanism is to be developed to reward suppliers for providing so-called controllable power plant capacity to meet demand at times when wind and solar do not provide enough energy. A kind of fire brigade for the system, he said.

 

"Given the time pressure, I cannot understand why we are not following existing and functioning models," said Stamatelopoulos. "There are role models in the EU." The European Union has also approved the capacity market in the United Kingdom, which is structurally is relatively comparable with the German one. "But again Germany wants to take its own, extremely complicated path," criticized the CEO. "In return, we accept that it will be more expensive and that it will probably not be finished in 2028." [1]

 

At first, German chancellor Scholz cut off the cheap Russian  energy, shouting about Zeitenwende. Then we figured out that to make a new energy system, you need a lot of cheap old energy. Otherwise anything we make isn't competitive on the market and is rejected by the customers in a globalized world. It is just not practical. All German industry begins to slide into bankruptcy. The energy transformation is stuck. The power of Mr. Scholz started getting shaky because of that.  Oops. 

1. EnBW-Chef: Akzeptanz für Mammutprojekt Energiewende bröckelt. Frankfurter Allgemeine Zeitung (online) Frankfurter Allgemeine Zeitung GmbH. Sep 6, 2024.