No prosperity without energy

What impact does the energy transition have on our prosperity? In the course of time, one thing became very clear: no prosperity without energy.

Man could always improve wealth if he was able to use energy to his advantage. This process was very tedious and began with the mastery of fire about 700,000 years ago. This enabled the Stone Age people to cook as well as keep their cave warm in winter. So he increased his prosperity by using energy. It lasted until around 3000 BC. until bronze could be melted with fire and further processed. Until the processing of iron around 800 BC. Iron took it for more centuries.

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Use of energy ushers in a new age

One can say that the use of energy in the form of fire has ushered in new ages. The next step took several centuries again. This was with the construction of water wheels around 400 BC. And the much later construction of windmills. Every use has thus massively improved people’s prosperity. But it was not until the invention of the steam engine in the 17th century and later with the combustion engines that industrialization began. Every single step has made people’s work easier and thus the struggle for daily life.

Prosperity through the use of energy. It all started with the use of fire. Insecure energy supply endangers prosperity.

Prosperity through the use of energy – only high increase with electricity

But it was only through the availability of electricity that there was a drastic improvement in life and a significantly faster increase in prosperity. At first electricity was only used to generate light. But with the invention of the electric motor, it was possible to convert electricity into kinetic energy and drive all sorts of things. The development now proceeded at breakneck speed: telegraphs, telephones, radio, television, computers, internet and much more were invented. None of this would be possible without electricity.

Prosperity only with a secure energy supply

All of our prosperity depends on a safe and reliable power supply. It is impossible to imagine what would happen to us in the event of spontaneously unplanned power interruptions, as in a developing country. Manufacturing processes would be interrupted and possibly entire batches of products would become unusable. Companies would inevitably withdraw from our country and go where the power supply is secure. The economic damage would be considerable because as long as no electricity is available, the entire economy comes to a standstill.

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High energy costs reduce purchasing power

Another aspect is the cost of energy. In our globally networked world, the countries have a close economic relationship. However, the competitiveness of companies is heavily dependent on energy prices. If one country breaks away and increases energy prices significantly compared to all others, this inevitably affects its trade balance. But this also puts jobs in the country at risk. Energy costs are in absolutely every product that we buy or export abroad. Energy is needed to extract raw materials, to manufacture intermediate products and to complete the end product. And you have to transport all of these goods, and you also need energy for that. So if energy costs rise, so do the cost of living. And that brings us to the social aspect.

Rising energy costs primarily hit the socially disadvantaged. In 2019, electricity was cut off to 300,000 households because they could no longer pay their electricity bills – and with the energy transition, the costs continue to rise from year to year.

Energy transition at the crossroads

The energy transition in Germany, as soon as it is now showing its effects, is thus going in a direction that will reduce the prosperity of all of us. With the limitation of electricity purchases already defined by the Ministry of Economic Affairs in the Energy Industry Act, entry into the shortage economy has already begun. For this, Peter Altmaier used the trivializing term “tip smoothing”. Obviously, it is clear to those involved that with the energy transition, the power supply is no longer guaranteed and politicians are already accepting this. With the mandatory installation of smart meters, in households with more than 6000 KWh consumption per year, the technical basis for entry into defect management has already been laid.

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Hope for storage facilities for electricity

In the meantime, there is hope for future storage options such as hydrogen, synthetic fuel, power-to-gas and battery storage, all of which are neither feasible nor affordable on the required scale.

The steadily rising energy costs through CO2 tax and EEG surcharge not only cost us purchasing power, but also reduce our competitiveness. The consequences will not be absent. Rising unemployment figures, more socially disadvantaged people and a middle class, who have to pay the costs through taxes and duties, will be the result.

Waiting for the first blackout

At the latest with the first blackout in the entire European power grid, which will inevitably come when nuclear and coal-fired power plants are switched off again, politics must show a clear edge. Will one simply accept the economic damage, as with the Corona lockdown, and simply carry on as before, or will it finally be realized that physics cannot be replaced by ideology?

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