Automakers Generate Their Own Energy in Germany

As Germany moves to eliminate nuclear energy and keep renewable energy growing, one of the positive if unintended results is that manufacturers are developing independent energy systems to power their plants.

Rather than pay increasing rates for energy from the grid, BMW, Volkswagen and Mercedes-Benz are stepping up investments in their own on-site energy sources. 

"Every second German industrial producer either generates its own power or is considering doing so because of Merkel’s energy switch," Sebastian Bolay, an energy policy analyst with a local manufacturers trade group told Bloomberg. "Generating your own power is not only cheaper in most cases, it could also protect you from grid failures."

The transition from nuclear, which requires grid upgrades and more renewable energy will cost about 550 billion euros, and is being partially funded through surcharges on power use. And that transition is also causing less reliable power and power outages in the short run.

Germany’s goal is for renewables to supply 40% of its energy by 2020, while also phasing out nuclear by then. 

Germany’s clean energy surcharge could rise 47% this year (which pays for the country’s feed-in law) – it’s risen six-fold since 2006, says Bloomberg. 

The 47% rise reflects the fact that renewable energy supplies an increasing share of the country’s electricity, which is bought from producers at guaranteed above-market rates. 

But the domestic auto industry is struggling with slow sales in Europe – last year’s sales were the lowest in decades. The surcharge alone could cost them $1 billion this year because their plants consume lots of electricity.  

Therefore, about a quarter of the electricity to run BMW’s Leipzig plant – where it will soon build its first electric car, i3, among other vehicles – will soon come from four of its own 2.5-megawatt wind turbines.

BMW eventually plans to source all its power worldwide from renewables. In the US, it is one of the leaders in on-site renewable energy.

So far, Daimler AG (Mercedes’ parent) and Volkswagen are investing in their own on-site natural gas plants instead of using renewables.

“We’re planning to expand our own generation step by step,” Raimund Wunder, who heads VW’s power-plant unit, told Bloomberg. “This gives us access to a secure energy supply and makes us more independent.”

Last August, Volkswagen announced it would invest nearly EUR 1 billion in renewable energy for its plants worldwide. In the US, it just started getting power from the Volkswagen Chattanooga Solar Park, the biggest solar system installed by an automaker in the US. The manufacturing plant there is the first auto plant in the world to earn LEED-Platinum.

Plenty of other manufacturers are also considering producing their own power, including aluminum producers, breweries and bakeries.

Last month, Germany expanded the feed-in law to support  energy storage tied to small solar systems, a measure meant to take pressure of the grid.

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