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PROCEEDINGS 165
Roundtable
Energy Change:
What Are the Consequences
for the German and U.S. Innovation Systems?
Chair:
Tim Stuchtey
Director, Brandenburgisches Institut für Gessellschaft und Sicherheit
Seth Winnick, Counselor for Economic Affairs, Embassy of the United States
Sylvia Kotting-Uhl, Green Party; Member, Committee for Education, Research,
and Technology Assessment
Albert Rupprecht (CSU) Committee for Education, Research, and Technology
Ernst Dieter Rossman, Social Democratic Party, Schleswig-Holstein (SPD);
Member, Committee for Research, Education, and Technology
Arati Prabhakar, Partner, U.S. Venture Partners
Mr. Stuchtey introduced the members of the roundtable, who included
two representatives of the German Bundestag, and noted that for this session
speakers would be using their native language. He gave a brief summary of the
topics discussed during the two-day workshop, and asked Mr. Winnick to begin.
SETH WINNICK
Mr. Winnick began by noting that energy policy is an area “ripe for
innovation,” and where innovation will “very much drive what happens over the
next years and decades.”
His first observation was that the United States and Germany share
similar goals, but approach them from different perspectives. A shared goal is to
“make a transition to a low-carbon economy and society.” The approaches differ
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166 MEETING GLOBAL CHALLENGES
in areas such as risk, risk management, tax policy, incentives to renewal energy,
and application of federalism to national energy policy.
For example, while there is heightened concern with U.S. security
following the Japanese nuclear disaster at Fukushima, “there is every intention
to not only continue operation of the existing nuclear fleet, but also to resume
construction of new plants.” The first two plants are nearing the beginning of
construction, and others are seeking approval. Research also proceeds on nuclear
reactor technologies, including thorium-fueled reactors and mini-reactors.
In terms of energy efficiency and controlling emissions, he continued,
Germany has relied on market-based mechanisms, especially the feed-in tariff
system to promote solar energy, and the aggressive use of tax policy and
gasoline taxes to incentivize efficiency. “I find it ironic that the United States,
which believes in market forces above all else and opposes regulation, uses
regulatory tools for energy efficiency and emissions.” For example, he said, the
mandated corporate average fuel economy (CAFÉ) standard is the key
instrument in reducing fuel usage in transportation. Heavy taxation of gasoline
to foster conservation is not politically acceptable, he said.
Similarly, while Germany has promoted increased use of renewables
done through a market mechanism, the feed-in tariff, while the United States has
used what is basically a regulatory approach—but at the state level. More than
half the states have mandated that a percentage of energy consumption must be
produced by renewables by a specific date, varying from 5 to 40 percent or even
higher. For example, California, one of the most aggressive states, requires that
1/3 of its electricity be produced by renewables by 2030. “So if Germany is
disappointed in the U.S. Congress for not passing a comprehensive climate bill,”
he said, “there is at least extensive action at the state, local, and also corporate
levels.”
His second observation was that the degree of U.S.-German
cooperation in science and technology is “huge.” Each heavily invests in the
other’s energy systems, he said, as well as research, development, and
innovation. He gave “representative examples” in both directions, with Siemens
and E.ON investing in wind energy in the United States, and First Solar Arizona
making a large investment in Frankfurt on der Oder. Solar World in Bonn has
production facilities in the United States, and Sulfur Cell based in Berlin has
received substantial investment from Intel Capital.
In research cooperation, the National Renewable Energy Laboratory
(NREL) and three Helmholtz Association laboratories have agreed to conduct
joint research in photovoltaics, solar cells, and concentrating solar power.
Fraunhofer opened a center for Sustainable Energy Systems in Cambridge,
Massachusetts, several years ago. Finally, he said, the two countries signed a
“significant S&T cooperation agreement” in 2010, which will be implemented
over several years. “So our S&T cooperation is a big story for innovation
policy,” he concluded, “and for our transformation to a low-carbon economy.”
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PROCEEDINGS 167
SYLVIA KOTTING-UHL
Mr. Stuchtey turned to Mrs. Kotting-Uhl, and asked about the
implications of Germany’s decision to abandon nuclear energy. “What impact
will this have on our research, development, and innovation system here in
Germany?”
Mrs. Kotting-Uhl said that the trend away from nuclear power was at
least a decade old, and that the events in Fukushima had only strengthened the
Greens’ belief that “the nuclear phase-out was, and remains, the correct path.”
She said that because she is “primarily an environmental and energy politician,”
for her the “biggest task before civilized and highly industrialized societies is to
stop climate change. This means that the goals dictated by climate change are
the ones we need to focus on; they’re the ones indicating where research is
primarily needed.”
Whether nuclear energy is part of this mix or not, she said, a conversion
of the energy system toward renewables is essential. “This requires much
research,” she said: “How are we going develop storage technologies? Electric
mobility? Other ideas are larger renewables power plants, large power storage
ability, perhaps even storage power plants in Norway. There are many ideas and
I think a lot of money should be directed toward them.”
She added that it was wrong to bet on nuclear projects, including
nuclear fusion. “The energy system that we need for 2050 is an energy system
that shows we have learned to handle precious energy with great awareness, and
sparingly, without lowering our quality of life, but in an economic and efficient
way.”
In terms of climate, she said that by 2050 the country should be
converted 100 percent to renewable energy. “This means that we should already
be laying the groundwork today. We can no longer afford to do any non-
application-oriented research regarding the ‘great task.’ That is, we must know
what we need by 2050 and we must align our research accordingly.”
By then, she said, nuclear fusion might just be coming into feasibility,
but that to count on it “would mean counting on suddenly having loads of
energy in 2050—and we won’t need this amount of energy within the [more
efficient] system we will have by then. So even if fusion worked, it won’t be
necessary at that time. This is why I am of the opinion that it is a waste of
research energy and money. I think we will be well advised to focus all our
energies on the system of decentralized, renewable energy with storage
technologies, and networks.”
She said that her conclusion was “to think from the point of view of the
goal: what do we need in 2050? What is the great task we must fulfill? And what
does this mean for the research funds and brains in which we’re investing? On
these issues, we cannot afford any detours or dead-end streets.”
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168 MEETING GLOBAL CHALLENGES
ALBERT RUPPRECHT
Mr. Stuchtey introduced Mr. Rupprecht, an economist and member of
the CSU from Bavaria. He had served in the Bundestag since 2002 where he is a
member of the Working Group on Education and Research. Mr. Stuchtey asked
Mr. Rupprecht for his assessment of what the phase-out of nuclear power and
the increasing role of renewables would mean for the innovation system in
Germany.
Mr. Rupprecht offered to formulate the issue the other way: what
abilities do we have to meet our goal of a renewable energy economy? In terms
of research, he said, Germany is well positioned. Since the physicist Angela
Merkel became Chancellor of Germany in 2005, he said, the budget available
for research and education through the end of the current legislative period had
grown by 74 percent. This is “historically unique, one-of-a-kind,” he said, “and
even in an international context remarkable.” Some of the important areas
affected by this increase, he said, were in the energy sector, and it is a point of
emphasis of the High-Tech Strategy, as is the “sub-domain of electric mobility.”
A continuing problem, he said, is the “lack of a systemic, overall view.
We have many universities with high research standards and excellent results,”
he said, “but the research results don’t flow into a systemic ‘big picture.’ I want
to compare this to the financial crisis. If we hadn’t had, during those times,
institutions such the Federal Bank and EZB to monitor financial trends with a
systemic overall view, the financial system would have collapsed altogether.”
Currently, he said, Germany is trying to resolve “the great world
question of climate change and energy by saying ‘Yes’ to this type of energy—
yes to wind energy, no to nuclear energy, yes to biodiesel, and so on. But only
by having a systemic approach will we move forward.” He concluded that, on
the whole, “Germany is very well positioned in the areas of research and
innovation.”
ERNST DIETER ROSSMAN
Mr. Stuchtey then called on Mr. Rossman, saying that while driving in
Mr. Rossman’s state, he had seen signs that read, “Stop CCS” [carbon capture
and sequestration]. He asked whether CCS will be necessary, along with more
coal-fired power plants, now that nuclear energy will be phased out.
Mr. Rossman noted Mrs. Kotting-Uhl’s insistence that Germany
“completely switch over to renewable energy—and that this is the first, second,
and third priority.” He said that the country does have multiple approaches to
this goal, including research and innovation; market incentives, from the eco-tax
to the promotion of renewable energy; and regulatory measures. “I believe that
we need to make a greater effort” that will work only “when we have an energy
policy consensus because this will make our research strategy more reliable over
a longer period.”
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PROCEEDINGS 169
He raised the “critical question” of CCS, which is an EU-wide issue.
Unlike America, he said, “with a quasi-half-continent of its own,” Europe is
very diverse, with the expectation that research facilities and equipment will be
shared among countries. While there is currently nothing in legislation, he said,
the SPD “is of the opinion that we should not exclude the possibility of
conducting controlled research in the CCS area, but only research.” This policy
would reflect the perspective that “we shouldn’t be moving toward making this
energy conversion” because research could reveal that this is not a reliable way
to move forward. What we do know very well, he said, is that in terms of
savings and efficiency, “renewable energy can help us achieve the main
objectives that we are setting for ourselves politically.”
In terms of research, he addressed Mrs. Kotting-Uhl’s assertion that
Germany should only conduct applied research specifically related to
renewables. There is an extensive system in place for fundamental research, he
said, in the Max Planck Institutes and research universities. He questioned
whether it is sensible to “completely step away” from fundamental research,
including nuclear energy research. While the Greens desire and predict an
energy system based solely on renewables in 2050, and would like to focus
research on that system alone, “we don’t want to eliminate all the options until
we have come to a conclusive point with our energy research, both in regards to
nuclear fusion and CCS. The Social Democratic Party, he said, preferred to
support a broad portfolio of fundamental research “because we believe we
should not exclude insights that can become important in a more distant future.”
Mr. Stuchtey asked the speakers whether Germany should continue to
do nuclear research in order to improve the safety of nuclear waste repositories,
and whether such work would provide careers for young people in nuclear
science.
Mrs. Kotting-Uhl said this was a dilemma, because a nuclear phase-out
would require additional research on safety, and the reactors in operation would
still run for another decade or more. She did agree that a nuclear career was no
longer an attractive option for the long term, but hoped that young nuclear
engineers would be able to transition to related fields. Mr. Rupprecht basically
agreed, while Mr. Rossman emphasized the opportunity for Germany to gain
expertise in matters of long-term waste management and safety. Mr. Stuchtey
asked whether research reactors, too, would be closed, and whether this would
impair many related branches of research, such as nuclear medicine. Mr.
Rupprecht agreed that this work is necessary, and worried that too few scientists
would pursue it.
ARATI PRABHAKAR
Mr. Stuchtey turned to Dr. Prabhakar and asked her, as a venture
capitalist, whether she would now look more closely at Germany for new
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170 MEETING GLOBAL CHALLENGES
investment ideas, or whether she would favor China or India, “where
discussions are sometimes a little shorter than in this country.”
Dr. Prabhakar said that China and India would certainly have to be
included in a systems view of energy and environment. From the point of view
of a VC and investor, she said, “the key question is always about the markets
and where capital is being deployed. For that reason, Germany is a very
important market for the VC sector to understand. “The work that’s been done
here to drive photovoltaics through FIT,” she said, “has been a dramatic step
forward. The vibrant activities from the research stage through deployment are
very promising. But of course China is moving even more aggressively, creating
the most rapidly developing market for clean energy technologies in the world.
If you look today at venture investments, they are very cognizant of where those
end markets are.”
DISCUSSION
Mr. Stuchtey opened the floor for questions. Dr. Wessner noted several
issues around Germany’s decision to forego nuclear power, including whether
Germany would (1) need to rely on the willingness of Russia to provide more
natural gas, (2) need to buy electricity from France and other nuclear neighbors,
and (3) be prevented from totally closing down nuclear power by the need to
address continuing issues of waste and safety.
The Nuclear Phase-out
Mrs. Kotting-Uhl said that “these are not new arguments being used
against us.” Do we need nuclear power eight or fourteen years longer than the
old nuclear phase-out, or can we do without it? she said. Should we use gas from
Russia, or nuclear power from France? Germany currently had nine nuclear
power plants, she said, along with orders and international contracts. “The
bottom line is we are a full-time exporter of electricity, and from time to time,
electricity importer. But the goal remains, she said, to switch to renewable
energies as soon as possible.”
The nuclear phase-out, she said, will depend both on how long society
thinks is reasonable, and how quickly society learns to trust the alternatives.
“My personal opinion is that the policy goals we set for ourselves, the ones we
are very serious about, must sit just a tad above that which we consider realistic
at the moment. That way it will exert a bit of pressure; otherwise there will be
no innovation.”
One kind of pressure, she said, was the Renewable Energies Act
(EEG), an instrument that allowed renewable energy to enter the market by
guaranteeing that producers of renewable electricity can sell their power at a
profit. This triggered a boom, and generated “a great learning curve” for the
public, introducing many new concepts, such as “photovoltaic.”
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PROCEEDINGS 171
“This really gave people a chance to enter the market,” she said, “even
though the technologies were not marketable initially because of the price. The
technologies quickly became cheaper, and wind energy, for example, became
marketable. A similar pressure exerted by a nuclear phase-out will bring about
alternatives that much faster.”
Imported Gas or Electricity?
Mr. Stuchtey followed up on Dr. Wessner’s question about the
reliability of imported gas, and “whether our freedom is curtailed when it comes
to foreign policy or other strategic decisions.”
Mr. Rupprecht agreed that it was crucial to weigh different objectives
and risk factors; to understand dependencies and how to avoid them. He cited
the example of a solar energy generator in North Africa distributing power to
European networks. “Who would have thought, a year ago, that there would be
so much instability in North Africa? And so I would advise everyone to apply
the idea of risk diversification to energy.”
Mr. Rossman agreed, citing the uncertainties generated in the United
States by its dependency on the oil from the Gulf of Mexico, from Saudi Arabia,
and elsewhere. “This is why the economic connection to Russia and its gas isn’t
reassuring, and why we are trying to steer Germany toward renewable,
decentralized energies by 2050 in the most economical and efficient way. We
social democrats are not specifically advocating for a ‘shutting off’ of the coal
plants, but rather for a combination of coal and gas in the transition to 2050. If
you fear such dependencies, the answer lies in renewable energy and
decentralized, preferably regional energy production and supply.”
Mr. Winnick commented that when a field is seen as “closed, in
decline, or otherwise off limits, people don’t go into it.” He said that despite
Germany’s great technical capabilities in the nuclear sector, “it’s hard to
imagine a student who starts university next year deciding to go into nuclear
engineering.” In the same way, he said, the United States has had the benefit of
European researchers in agricultural biotech moving abroad as the field
gradually weakens in Europe.
The Problem of Disposing with Nuclear Reactors
Mrs. Kotting-Uhl agreed that those issues were indeed difficult. “We
do have to face the problem of what to do with these nuclear reactors. We have
not developed a strategy for breaking them down, dismantling them, and
disposing of them. We have to take into account the costs and consequences of
doing this, and subsequent problems, and the nuclear waste we will have to
dispose of, without knowing how.”
Mr. Rossman confessed that while the Green Party had been aware of
such problems for some time, many in his own party were still learning of the
need to dispose of nuclear reactors, and the desire to continue using radioactive
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172 MEETING GLOBAL CHALLENGES
materials in medicine and many other fields. “The political direction and priority
is to phase out the nuclear power energy supply, not to step out of the
surrounding field of radioactivity, which is somewhat different. We should be
reassured that Germany exercises strict control over the use of radioactive
materials, and that its use is limited to a few fields, including travel, research,
and healthcare.”
Mr. Winnick said that the United States and Germany would have to
deal with such problems in their own local ways, and that the partnership in
trade would continue. “Products made in Germany that work will still be bought
in the United States, and things made in the United States that work will
probably continue to end up in Germany. I don’t expect a sudden planting of
biomass diesel fuel crops here in Europe, and even if we move to a FIT system,
you probably won’t see a lot of solar panels going up in the far North of the
United States; that doesn’t mean we won’t do it in Arizona. This is not a
competition. We’re all going to win in this together. That’s what a partnership in
innovation means.”
Dr. Ebinger said he wanted to “add some reality” to the discussion.
First, he said, German is part of the EU, which has broad energy goals. The
International Energy Agency projects that the world is still going to derive about
85 percent of its energy from fossil fuels in 2050, even if Germany meets its
targets for renewables. He said that Germany, as a great technological nation,
could make valuable contributions to the science of CCS from coal and natural
gas, the dominant fuels. “If we don’t solve those problems,” he said, “it doesn’t
matter what else we do about climate change, we’ll all burn together.”
Germany as a Model and Exemplar
Mrs. Kotting-Uhl replied that Germany’s best contribution to the global
effort to lower carbon emission is as a model and exemplar. “I think that there
has to be a country, among the highly-industrialized, which shows, first,
economic standards and exports and success; secondly, a high quality of life;
third, climate protection; and, fourth, a nuclear phase-out. Germany is on track
to model all these features. If we ask ourselves, where should the world be in
2050, we should care not so much about countries like Germany, France, and the
Scandinavian countries, which are all relatively small, but the developing and
emerging nations, which are still developing their energy systems, standard of
living, and economic power. If they reach for coal and nuclear, the risk is too
high. If a high-tech country like Japan is not in a position to protect their nuclear
power from the forces of nature, then I don’t think that any nation can disregard
this. The only way to guarantee safety—and a long, extremely cheap,
economical energy supply that can also create many jobs—is renewable energy
combined with efficiency technology. Some country must follow this path, and I
will be happy if this is Germany.”
Mr. Rossman said he wanted to make three additional points. First, he
recalled as a young socialist protesting against nuclear power and reading a book
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PROCEEDINGS 173
by an adviser of U.S. President Jimmy Carter favoring energy conservation,
especially in nations that thought energy was always in surplus. “I was very
impressed,” he said, “because I thought that there was, finally, in this big,
admirable country, a world perspective that included responsibility for all.”
Later, he said, Al Gore also thought in terms of common responsibility.
Second, he said that Germany was very much in the tradition of the
Carter doctrine and the practice of Al Gore, a path toward renewable energy and
energy efficiencies. That is a true international perspective, he said, enabling all
countries to share the most modern technological options to develop what they
need.
The alternative is to advise them to take the path of large coal and
nuclear plants. “This cannot be a development perspective,” he said, “and is
why, from the German and European viewpoint, renewable energy should be the
priority. We should serve as a model for these countries that renewables
represent a secure, tradable energy supply, providing for mobility, health, and
education in every country.”
100 Percent Renewables: ‘For Now, It is Just an Idea’
Third, he recalled being severely shaken by the nuclear accident at
Three Mile Island, near Harrisburg, Pennsylvania in 1979. And since the disaster
in Japan, he said, he thinks often about California, and the likelihood of a large
earthquake catastrophe there. “Wind energy, photovoltaics, and biogas just don’t
pose these catastrophic questions of nuclear meltdowns and radioactive clouds.
So I see myself there, aligned with America’s earliest ideas for reform.”
Mr. Rupprecht said that nuclear energy is evaluated in Germany
differently than it is in neighboring countries. He said his constituency lives near
the border of the Czech Republic and its nuclear plants, and if Germany
switches off its power plants, his people will still live closer to the Czech plants
than to the plants in Bavaria. “On what grounds can I can argue for this phase-
out in terms of safety?” he asked. Given the many uncertainties, he said it would
be 10 or 15 years before the German model could be judged a success.
“Right now,” he said, “we argue self-consciously and offensively.
Nothing guarantees that this route will be successful.” While the phase-out has
been delayed to 2020 or beyond, he worried about “whether the burden will fall
on the population: the construction of pipeline networks, support of wind
turbines, etc. It will take about fifteen years until we can see whether Germany’s
path is really attractive and whether it can be a model for other countries. For
now, it is just an idea.”
