Germany’s Revolution in Efficiency and Renewable Energy

author amory lovins

Amory B. Lovins

© Rocky Mountain Institute

The March 2011 Fukushima accident destroyed four and shuttered most (currently all) of Japan's 54 nuclear plants. Japan replaced nuclear energy with discomfort, sacrifice, and costly fossil fuels, because utility oligopolies suppressed renewable competitors and national energy efficiency languished. Two and a half years later, power reserves, though easing, remain tight, fuel bills exorbitant, and carbon emissions elevated.

In contrast, Germany, the world's fourth-largest economy, launched a purposeful, careful, and successful energy transition in 1991, and agreed in 2000 to shut down nuclear power over a couple of decades. The pace quickened in 2011, when all political parties agreed to shut down the oldest 41% of Germany's nuclear capacity immediately, the rest by 2022. But unlike Japan, Germany offset its entire 2011 nuclear loss in the same year—three-fifths by added renewable power—remaining a net exporter of competitive electricity.

In 2011, Germany's economy grew 3% and stayed Europe's strongest, boosted by 382,000 renewable energy jobs, many for exporters. Power reliability remained the best in Europe—about ten times better than America's. Efficiency gains (plus a mild winter) cut Germany's 2011 energy use 5.3%, electricity consumption 1.4%, carbon emissions 2.8%, and wholesale electricity prices 10–15%.

Repeating 2011's renewable additions for a few more years would displace Germany's entire pre-Fukushima nuclear output. With one-ninth Japan's high-quality renewable resources per hectare, Germany achieved nine times Japan's renewable share of power generation—How?—By giving renewables fair grid access, promoting competition, weakening monopolies, and encouraging citizen and local ownership (now two-thirds of renewable capacity, which rivals peak demand). Germany's pump-priming investments triggered global scaling-up that Deutsche Bank predicts in 18 more months will let solar power compete without subsidy in three-fourths of global markets. With 30 billion watts of solar rooftops, German installed prices last year were half those of America.

MerkelIn 2012, Germany's nuclear generation reached a 20-year low while net power exports hit a new high. (Only Germany consistently exports net power to France.) Renewables rose to 23% of generation, passing every rival except lignite (soon to fade as its subsidies end). Wholesale prices plummeted 30% in two years to near 8-year lows, attracting energy-intensive industries. Real GDP, damped by the Eurozone crisis, grew just 0.7%, but electricity use fell 1.3%. Power plants and industries emitted no more carbon. Weather-adjusted total German carbon emissions fell, though a frigid winter raised absolute emissions 1.6%.

The bottom line: since German reunification in 1990, real GDP rose 37%, weather-adjusted primary energy use fell 11%, and carbon emissions fell 25.5%. By 2050, Germany intends to cut carbon emissions 80–95% compared to 1990 levels, double its total energy productivity from the 2020 level, and produce 60% of its total final energy consumption from renewable sources.

Giant utilities, their profits squeezed and business models upended by the renewables they bet against, mounted a vigorous disinformation campaign. Critics claimed Germany had replaced lost nuclear power with coal. Actually, the brief and modest coal uptick was due to pricier gas and a flood of American coal displaced by cheaper gas in the United States (and, nearly twice as importantly in 2012, more-efficient energy use). German coal-burning remained below its 1990–2007 high, no new coal plants were ordered, and the few added units generally shut down more, less-efficient, and dirtier coal-plant capacity.

Critics claimed German industry was fleeing—it wasn't—and renewables were destabilizing the grid—they're not. Big German industries continued to enjoy highly reliable and ever cheaper electricity: their political patrons generously exempted them both from grid fees and from paying for the renewable expansion that slashed wholesale power prices. This favoritism modestly raised the renewable surcharge on households (whose bills are half taxes), inspiring the absurd election-season fiction that renewables have made electricity a luxury good and tipped Germany's poor into energy penury. All untrue—yet on 18 September 2013, even The New York Times echoed Der Spiegel's breathless fabrications.

Germany isn't the only renewable success story: Denmark's 2012 electricity was 41% renewable, and in the first half of 2013, Spain averaged 48% and Portugal 70% renewable (up from 17% in 2005). A solar power boom is evading utility barriers in Japan. Last year, China made more electricity from wind than nuclear power, and added more electric generation from non-hydro renewables than from all fossil-fueled and nuclear plants combined.

Half the world's new generating capacity has been renewable since 2008. Today, three of the world's top four economies—China, Japan, and Germany, as well as India—produce more electricity from non-hydro renewables than from nuclear power. Globally each year, non-hydro renewables win a quarter-trillion dollars of private investment and add more than 80 billion watts. Electric generators have become a modular mass-producible manufactured product, scalable even faster than cellphones. This accelerating revolution provides strong market evidence that efficiency and renewables can protect the climate not at a cost but at a profit, because saving or displacing fossil fuel costs less than buying it.

Thus a 2.6-fold bigger 2050 U.S. economy could eliminate coal, oil, and nuclear energy and reduce natural gas use by one-third, triple energy efficiency, shift from one-tenth to three-fourths renewable supply, emit 82–86% less carbon, and save $5 trillion. This could all be achieved without new inventions or Acts of Congress, the transition led by business for profit. That blueprint (detailed in our business book Reinventing Fire) and the European Climate Foundation's similar Roadmap 2050 show how climate change, energy insecurity, energy poverty, and nuclear proliferation—four key threats to global security and prosperity—are artifacts of not choosing the best buys first. But even America is shifting: its electricity and gasoline demand peaked in 2007, and electricity per dollar of GDP fell 3.4% in 2012 alone.

Carbon pricing and international agreements could help achieve these goals, but China had its own reasons for making energy efficiency its top strategic priority for national development back in 2005: rather, her leaders understood that otherwise their nation couldn't afford to develop. Efficiency needs about 10,000 times less investment than expanding electricity supplies. Buying cheap negawatts (saved watts) instead of costly megawatts could turn the power sector from a black hole, gobbling a fourth of global development capital, into a net exporter of capital to fund other needs. That's the biggest lever ever discovered for global development, and the greatest bonanza for private enterprise—if only we see it and let it flourish.


Physicist Amory B. Lovins is cofounder and chief scientist of Rocky Mountain Institute (, which transforms global energy use to create a clean, prosperous, and secure future. He is a member of the National Petroleum Council, an advisor to the Chief of Naval Operations, and in 2007, one of Time’s 100 most influential people in the world and Foreign Policy’s 100 top global thinkers.


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