Keeping the Lights on in Germany

Technicians are struggling to get the lights back on in New York and elsewhere in North America after an unprecedented blackout on Thursday, but Europe -- and Germany -- have had troubles of their own.

The recent heat-wave in Europe has taxed energy production facilities across the continent. The Netherlands came dangerously close to large-scale outages and issued its highest level warning for the first time.

In Germany, several atomic energy facilities, including Heiler Brunsbüttel, Isar I, and Obrigheim, reduced output by up to 50% because the rivers, from which they pull water to cool their facilities, were too warm.

Environmental conditions also hindered the production of energy from alternative sources: low water levels caused by the drought and calm winds meant energy generated from water and wind could not fill the gap.

Energy companies assure worried Germans

Energy companies in Europe and elsewhere turned to buying extra reserves from the European Power Exchange, otherwise known as the Spot-market, based in Leipzig, where peak hour prices doubled to twice their weekly average.

Yet all through the crisis, utility company executives stressed that -- although they were operating at reduced capacity -- there was no danger of falling short of the need. Following the crisis in New York, experts reiterated that a similar crisis in Germany was highly unlikely.

The Chairman of the Association for Energy Technology, Prof. H. J. Wagner said: "Our energy-production facilities are secure. As soon as one generator falls out, another springs into action; if multiple facilities malfunction, our European neighbors provide us with energy."

Prof. Wagner went on to explain that the Europeans benefit from a networked system, which allows them to draw upon other country's facilities at times of crisis. Such a network does not exist in the United States.

Power shortages and higher prices?

But it wasn't just fears of power outage that had consumers concerned. Talk that the cost of energy on the openly traded Spot-market in Leipzig was trading at such astronomical levels also worried consumers not wise to the ways of the industry.

Consumers needn't worry, John Lane, an analyst who monitors the European energy market for Datamonitor, a London-based consulting firm, told Deutsche Welle.

"The price is not passed on to the consumer, because they pay a flat rate," said Lane. "But the utility companies take the loss."

One would think that energy companies would, therefore, be motivated to diversify their facilities, by investing in renewable energy, and giving themselves the choice to switch from source to another, depending on environmental conditions. Not so, says Lane, because the cost of investing in new facilities is so high. "It's more cost effective to take that kind of hit every now and then than to invest in new technology that is not so weather sensitive."

The latter point is up for debate, as the German government is discussing the path of the country's energy industry. The heads of Germany's top four energy companies met with Chancellor Gerhard Schröder and his economics minister for dinner Thursday evening to discuss how Germany will be powered in the future.

The atomic facilities which proved so troublesome this past week are due to be phased out, but industry executives and those at the Environmental Ministry are at odds over how to fill the gap -- through renewable energy or traditional fossil fuel -- and provide reliable energy under all conditions, at the right price for consumers.