Germany: McKinsey says: do less and save money

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In January, McKinsey issued a new study on the German “Energiewende” Zukunftspfad Stromversorgung and presented it in Berlin earlier this week at a local energy conference. The study is in German, but the summary is below.

 

McKinsey’s key outcome in Lars’ words… 

“GERMANY: PLEASE INSTALL 150 GW LESS SOLAR/WIND AND 50GW MORE GAS AND SAVE THE GERMAN PEOPLE 150 BLN EUROs UNTIL 2035.”

 

  • Currently, the German government plans to build 500GW wind and solar and REDUCE dispatchable capacity by 20GW all by 2035

 

Is McKinsey really telling us we can save money by installing less solar and wind? Why? They are the cheapest, aren’t they?

 

No, they are not and McKinsey put it in numbers with a new “model” detailed in their report

 

  • I was recently asked, should Germany “limit” new solar? I said, YES, it should urgently (1) to avoid costs spiralling out of control and (2) to avoid energy starvation.

 

What else did McKinsey communicate? Despite their many good thoughts, below are just mentioning 3 fundamental assumptions made by McKinsey, that I still disagree with:

 

  1. Wrongly assuming that hydrogen, solar and wind are zero CO2 to meet Germany’s 2045 “Energiewende Target” of “zero CO2”.
  2. In their Energy Trilemma chart on page 10, showing “sustainability” above reliability and affordability, implying that “sustainability” is the most important… forgetting that first comes reliability, then affordability, and only after that can we optimize sustainability (only when you have energy available that you can afford, you can optimize the sustainability)
  3. Wrongly assuming that imported LNG is better than domestic coal… even if you believe climate models, this is, incorrect, simply because of the methane footprint of LNG vs domestic coal.

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