Germany can fend off rationing this winter, secure its energy independence and have net zero electricity by 2035 without resorting to coal power, according to new modelling from Finnish power giant Wärtsilä.
The group’s urges Germany to ramp-up liquefied natural gas (LNG) supplies through floating sites while maintaining its ambitious renewable goals – instead of reverting to the world’s most polluting fossil fuel.
It has called on Europe’s largest economy to boost its renewable capacity 10 per cent year-on-year through wind and solar energy, in order to ensure its medium-term energy independence.
Wärtsilä’s modelling suggests such a boost in renewables could cut coal usage by a further 20 per cent – with Germany aiming to phase out coal usage by the end of the decade.
Heavy cuts in Russian supplies of natural gas to the continent has left the European Union scrambling for solutions ahead of the cold winter months to meet its energy needs and stave off blackouts.
Reflecting this heightened state of concern, Germany’s Economy Minister Robert Habeck has pledged to ramp up coal supplies and offer heavy subsidies to gas giants to ensure the country can meet its energy needs this winter.
City A.M. spoke with Oula Lehtinen, Power System Analyst at Wärtsilä Energy, about the group’s proposals, and why it disagrees with Germany’s decision to use more coal.
Q: How can Germany ramp up LNG supplies ahead of this winter?
What is clear is that Germany should begin making plans now. While there are still a lot of unknowns, Germany must have the proper infrastructure in place before the end of the year to support the storage and regasification of LNG. Our modelling is designed to provide a practical pathway to phasing out both coal and Russian gas, with LNG available from 2023. Modelling can help to guide the steps, but it is up to the Government to implement the action.
Q: The continent’s LNG network is far from perfect, so how can this be improved in a matter of months ahead of this winter?
The clear short-term solution to scaling up LNG in a sustainable way is through floating storage and regasification units (FSRUs), which can be installed on ships rather than on land. FSRUs avoid the risk of stranded assets, providing a lighter option than land-based infrastructure. This will be essential as LNG is gradually phased out in favour of sustainable fuels such as green hydrogen. Germany has already announced plans to charter four FSRUs, which will support the LNG volume set out in our modelling.
Q: Doesn’t LNG dependency make Germany highly dependent on overseas suppliers – which is anathema to supply security?
The ultimate solution to the security of supply issue is a net zero power system where homegrown renewable energy generates almost all of the electricity. The sooner this can happen, the less dependent Germany will be on energy imports. LNG provides a short-term bridge as Germany scrambles to rapidly decrease its Russian gas consumption, in effect filling the hole in supply until renewables can be scaled up to meet demand.
With LNG in the mix, Germany can accelerate its renewable capacity to free itself from the shackles of fossil fuels. Under our LNG scenario, Germany is free to choose between electricity imports or self-generation depending on the diversity of supply, lowering the system cost and risk of capacity shortage. In the longer term, Germany can implement the renewable capacity target in the Easter package and become self-sufficient by 2035.
Q: What are the main concerns with a short term boost in coal? After all – the phasing out will still happen, it’s a temporary measure.
Continuing to rely on coal late into the 2020s will lead to 30m tonnes of additional CO2 being produced by 2045, according to our modelling. Crucially, many of these emissions will occur in this decade – a period in which we need to see emissions plummet to keep the 1.5C goal alive. What’s more, Germany will send an implicit message that other countries can also ramp up coal use at a time when developed countries should be leading the way by phasing it out.
By reneging on its global commitments, Germany risks harming confidence in net zero. Short-term action is essential, and all efforts should be directed towards reducing the use of the world’s dirtiest fuel. This must be done by rapidly increasing the renewable pipeline and scaling up the supporting technologies, such as flexible balancing capacity.