What Can We Learn From Germany's Big Bet On Renewables?

by ROB McMANAMY | Nov 5, 2016

When UL Chief Economist Erin Grossi spoke at our SmartWorlds: Future Energy event earlier this fall she detailed a fascinating civic experiment, now taking place on a grand scale in Germany that promises to yield actionable results for the rest of our planet and, well, the future of you and me. That subject is the focal point of her new free white paper, Putting the Pieces Together: Transition and Transformation in Global Energy Markets, now available for download here.

As lead economic researcher for the 121-year-old, Northbrook IL-based, global safety and science consultant formerly known as Underwriters Laboratories, Grossi recently studied what makes Germany so unique in its extraordinary, "all-in" bet on renewable energy. So the lessons it is learning now will benefit not just Germany, or even Europe, but possibly all of us. “Many studies have looked at the differences between the U.S. and Germany in terms of scale, policy and existing energy infrastructures, but what we wanted to learn was why Germany would take such significant economic risks on renewable energy, why its government believes it will ultimately be successful, and what the U.S. and other markets could contribute to and learn from it,” she explains.

Germany stands out because it has set aggressive national goals to replace its nuclear plants with renewable sources of energy. Already, in terms of overall renewable energy use, the country passed the 30% mark in 2014, and is aiming for 50% by 2025, and 80% by 2050. Last spring, Grossi traveled to Germany to study first-hand the evolving transformation of its energy ecosystem and to conduct interviews with policy makers and implementers. Their insights, and hers, inform this paper.

“While the U.S. lacks an aggressive national plan to transform our energy market, we are home to the technology innovations and disruptors that other countries will ultimately need”

— Erin Grossi, UL Chief Economist

“What we ultimately uncovered is that, while the U.S. lacks a similarly aggressive national plan to transform our energy market, we are home to the technology innovations and disruptors that Germany (and other countries) will ultimately need to support their own transformation efforts,” she notes. “Specific innovations we looked at were battery storage, intelligent transformers and inverters, sensors and data analytics, and their associated standards.”

The white paper describes the overall differences between Germany’s environmental and security views, its razor-sharp focus on maintaining grid sustainability, and the rise of its virtual power plants to solve some of the more sophisticated engineering challenges. However, the study also shows there are some energy blind spots Germany will have to address to meet its energy goals—and this is where the U.S. can both learn and benefit, notes Grossi.

Encouraged by what she has seen abroad and encouraging about what she believes can be achieved here, she concludes that a much more distributed, resilient and smarter energy future globally will take hold over the next decade. Why? Because it is now technically feasible with all of today’s many mechanical and electrical engineering advances, and the continuing increase of information technology resources. In other words, we need only the will to "put the pieces together".

The full white paper is available for download here at UL’s online library.