Germany has made a big push for renewables, but done little to cut coal use.

Photographer: Markus Heine/nurphoto/getty images

Germany and the U.S. Have Different Ideas About Energy

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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The share of Germany's electricity generated from renewable sources has tripled during the past decade, to 30.1 percent. That's impressive, especially when compared with what has happened in the U.S.

On the other hand, the percentage of Germany's electricity generated by burning coal isn't all that much lower than it was a decade ago, and is higher than it was in 2010. In the U.S., coal's share has been falling a lot in recent years.

Both countries are going through major shifts in how they keep the lights on, but they're very different shifts. Germany is in the midst of a large-scale, government-driven energy transition toward renewables (the "Energiewende").  The U.S. has also favored renewable energy with tax incentives and other subsidies, but the effort has been modest compared with Germany's. Here, the big news has been rising natural gas production thanks to fracking, plus pressure on utilities from the government and private groups  to shut coal-fired power plants.

So which country is doing a better job of shifting its energy mix? It depends on your priorities. The Germans have long been uncomfortable with nuclear power, and in 1998 made plans to phase out its use by 2022. There was some hemming and hawing in subsequent years, but after the 2011 Fukushima reactor accident in Japan, the government recommitted to the 2022 phase-out. Since 1998, nuclear power has gone from supplying 27.5 percent of German electricity to 18.1 percent.

German authorities have also committed to weaning the country from fossil fuels and reducing carbon emissions, but the nuclear phase-out is making that hard to do. Coal use has, as already noted, stopped declining. And one of the country's main renewable fuel sources, biomass -- which in Germany mainly means wood -- isn't exactly carbon-free.

In the U.S., building a political consensus around reducing carbon emissions has so far proved impossible. But the fracking boom has allowed natural gas to supplant dirtier, more carbon-intensive coal as the No. 1 source of electrical power (it didn't yet for the full year 2015, as is apparent in the chart below, but gas has been ahead of coal every month but one since last July), while wind has made substantial gains, too:

If your top priority is slowing climate change, then, the shifts in U.S. power generation over the past few years have arguably been more encouraging than those in Germany. (That's if you believe that the reductions in carbon emissions achieved by swapping out coal for natural gas more than make up for the impact of more methane leaking into the atmosphere -- about which there is some debate.)

Before we Americans get all smug about this, it's worth noting that Germany uses a lot less electricity per capita than the U.S. does (7,019 kilowatt-hours to 12,985) -- in part thanks to their cooler summers, but also because Germans live in smaller houses with smaller fridges and are generally less profligate with natural resources.
Solar Energy

Germany's experience also demonstrates that it is possible (albeit not without costs) to move to renewables much faster than the U.S. has. Consider solar power, the absence of which from the above charts surprised me a little. In frequently overcast Germany, solar actually isn't too far behind biomass, generating 5.9 percent of the country's electricity in 2015. In the generally much-sunnier U.S., though, solar accounts for just 0.6 percent of utility-scale power generation; if you throw in estimated distributed generation from homeowners and businesses with solar panels on the roof, that brings it up to 0.9 percent. The U.S. can do better than that, can't it?

  1. Germany releases data on gross power generated, while the U.S. releases net data. But I think the percentages are roughly comparable, and on the energy source for which they're most likely not to be comparable -- hydroelectric -- the U.S. data separates out energy used to pump water uphill, and I left it out of my calculations.

  2. It was a U.S. Energy Information Administration article this week on Germany's big rise in renewables that got me digging into this data.

  3. Among them Bloomberg Philanthropies, the charitable-giving organization founded (and funded) by Michael Bloomberg, founder and chief executive officer of Bloomberg LP, which publishes Bloomberg View.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor responsible for this story:
James Greiff at jgreiff@bloomberg.net