Analysis: Renewable "gold rush" powers Germany's north shore

ROSTOCK, Germany Mon Oct 17, 2011 1:04am EDT

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ROSTOCK, Germany (Reuters) - Renewable energy has created a "gold rush" atmosphere in Germany's depressed north-east, giving the country's poorhouse good jobs and great promise.

The natural resources attracting investors and industry are of a simple variety: wind, sunshine, agricultural products and farm waste such as liquid manure.

The rush to tap green resources in Mecklenburg-Vorpommern state is reminiscent of the frenzies that came with gold or oil discoveries in past centuries. The buzz can be felt in towns and sparkling new factories across the Baltic shore state.

"Renewable energy has become extremely valuable for our state," said its premier, Erwin Selling, in an interview with Reuters. "It's just a great opportunity -- producing renewable energy and creating manufacturing jobs.

"From an industrial point of view we'd been one of Germany's weaker areas. But the country is abandoning nuclear power. That will work only if there's a corresponding -- and substantial -- increase in renewables. It'll be one of Germany's most important sectors in the future. We want to be up there leading the way."

The federal government did an about-face on nuclear power after the accident at the Fukushima Daiichi nuclear complex in Japan, set off by the March 11 earthquake and tsunami. Germany shut eight nuclear plants and will close the other nine by 2022.

Germany is a world leader in renewable energy and wants an even larger share of the $211 billion global market. A fifth of its electricity comes from renewables, up from 6 percent in 2000, and it aims to boost this to 35 percent in 2020.

There are some clouds on the horizon. State-mandated incentives, which fueled a private investment boom, have been cut, squeezing margins in sectors such as solar energy.

There have also been delays in expanding and upgrading the national grid of high-voltage transmission lines from sparsely populated coastal regions such as Mecklenburg-Vorpommern to areas where the power is needed in the west and south.

The federal government is working to remove infrastructure bottlenecks, but if the grid is not expanded soon it could cause problems later when more off-shore wind power goes on line.

ECLIPSING SHIPYARDS

Renewables -- especially wind energy -- are injecting new optimism into Mecklenburg-Vorpommern, reflected in a word that often comes up in conversations with business and political leaders: "Reindustrialisierung" (re-industrialization).

In a state with a sea-faring heritage, there are now more jobs in renewable energy than in shipyards: 6,000 jobs at 704 firms, expected to nearly quadruple to 22,000 by 2020.

Companies are building, designing, maintaining and operating wind turbines and photovoltaic and biomass plants -- for which farmers are growing crops and harvesting animal waste. There are more than 1,200 wind turbines on land, and a new push into off-shore wind energy in the Baltic will further fuel that growth.

Many new jobs are at firms such as Nordex, which employs 1,000 in Rostock making lightweight wind turbine rotor blades up to 65 meters long. It has invested 100 million euros expanding its plant and exports some 95 percent of its output.

These are sorely needed, highly skilled jobs in a sparsely populated state whose industrial base was devastated by the economic upheaval accompanying Germany's reunification in 1990. There were 32,800 jobs in the once bustling shipyards around the port city of Rostock when the Berlin Wall fell in 1989.

But most were wiped out when the east German shipbuilding industry collapsed in the face of surging labor costs and fierce western competition. There are only 3,300 shipyard jobs left, and the industry's demise epitomized the east's decline.

Mecklenburg-Vorpommern became one of Germany's poorest regions. The jobless rate soared to 20 percent in 2004 -- double the national average -- and the population fell by 250,000 to 1.6 million as mostly young, well educated people moved to the more prosperous west in search of jobs. More than 8,000 left the state in 2008, but only 3,500 moved away in 2010.

The prospect that some areas could turn into ghost towns was an explosive issue, but the gloom is lifting as unemployment has been nearly halved. The state with the worst jobless rate of Germany's 16 states in 2007 is now ahead of Berlin and Bremen.

"There's a new sense of optimism thanks to sectors such as renewable energy, and the migration westwards was slowed if not completely stopped," said Edeltraud Guenther, a professor for environmental management at Dresden's Technical University.

POWER EXPORTING STATE

Juergen Trittin, a leader of the Greens in Berlin, said a renewables law drafted by his party in 2000 had proved unexpectedly successful in creating jobs across the east.

"All of the east is benefiting from that," he said. "The jobs growth is going to continue with the push into off-shore."

Germany's first commercial off-shore wind park, 'Baltic 1' -- a 48 million euro project with 21 turbines made by Siemens and operated by EnBW -- began pumping enough power for 53,000 households into the grid in May from 16 km north of the coast.

By 2013, utility EnBW aims to complete 80 more off-shore wind turbines in the 'Baltic 2' development, 32 km offshore.

Germany expects to have some 25 megawatts of off-shore wind energy capacity by 2030, produced by 4,000 wind turbines.

Mecklenburg-Vorpommern already gets half of its electricity from regenerative sources -- nearly 4 gigawatt hours. That is a five-fold increase since 2000.

It aims to cover its entire electricity needs by 2015 to 2017 and then export surpluses to other states. By 2020 it expects to have 12 gigawatt hours of renewable energy -- enough for 3 million households. Mecklenburg-Vorpommern will then produce enough power for itself and two neighboring states.

"The natural conditions for renewable energy here are good," said Sellering. "The first goal is to cover our own electricity requirements. Then we want to be an energy-exporting state."

(Additional reporting by Stephen Brown, editing by Jane Baird)

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Comments (4)
BillWoods wrote:
“Germany expects to have some 25 megawatts of off-shore wind energy capacity by 2030, produced by 4,000 wind turbines.”

One of those numbers is wrong. (Or those are teeny, tiny turbines…)

Oct 17, 2011 4:55pm EDT  --  Report as abuse
Nullcorp wrote:
This is great news, I hope that it’s “sustainable” and provides a model for other countries and regions. People give Obama (and many others) a lot of flack for trying to push an agenda like this, but it’s true that there is a lot of money to be made, and a lot of emissions to be cut, by putting governmental and civic will behind renewable energy products. The question is simple: do you want to use energy sources that will run out one day, or use the sources that will basically be around forever? No matter what side of the political spectrum you’re on, there’s only one common-sense answer to that question.

Oct 18, 2011 12:15pm EDT  --  Report as abuse
Sasher wrote:
BillWoods you are right – it’s 25 GigaWatts, not MegaWatts. The reporter is wrong.

On the larger point of this article, this is exactly the same point I and others have made in our criticism of Obama and Bush: see article here:
http://www.minyanville.com/businessmarkets/articles/alternative-energy-us-solar-manufacturing-solar/9/6/2011/id/36741

Oct 18, 2011 4:07pm EDT  --  Report as abuse
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