To summarise: Germany barely got through 2012 without serious blackouts; voltage has become highly unreliable in many parts of their complex grid system; heavily subsidised renewables have trashed the German wholesale power market; neighbouring markets are also suffering as a result of unpredictable surges of German wind-power exports; Germany is building a large number of big new coal- and lignite-fired power stations to cope; in the interim, they have become dependent on large-scale imports from some very dirty old lignite plants in Eastern Europe; and to crown it all, their CO2 emissions are increasing!
How has this come to pass?
On major issues like energy, German policy is generally framed by big, set-piece legislation that lays down what is in effect a national plan. The last coherent German energy plan dates back to the 1980s, and more recent policies have been layered on top in an ad hoc fashion. That's how it's often done in the UK and other countries, but for methodical Germany it is anomalous: and intelligent Germans view the resultant mess as inevitable.
The most recent nonsense was the sequence of on-off-on-off nuclear decisions, culminating in a post-Fukushima bombshell: the summary closure of a large part of the nuclear fleet. This was always going to leave a big gap to fill in a hurry - hence the immediate increase in imports, which naturally come from neighbours with surplus capacity: France (nuclear, of course), Poland and the Czech Republic (coal, some of it dreadfully polluting lignite). The ironies are obvious, and one hopes the anti-nuke greens are proud of themselves.
But the subtler and even less tractable issue is the unforeseen impact of large amounts of 'must take' wind- and solar-power, financed by whopping subsidies. (The electricity doesn't even need to be generated - the producer merely needs to install the plant. There are many windfarms in northern Germany that are completed but not connected to the grid - the system cannot accommodate them, and they lie idle - getting paid anyway.)
Key to the situation is that the marginal cost of wind- and solar-power is close to zero. Unsurprisingly, at times of the day when large quantities of zero-cost power are being fed into the grid (foisted on utilities who must take it, irrespective of its market value), the impact on the wholesale market price is to reduce it substantially - not just to zero, it sometimes actually goes negative, so that people are being paid to take power off the system
The timing of wind generation is notoriously unpredictable, but solar is straightforward: it peaks around noon. In Germany (though not in all countries) this at least coincides with peak demand. The impact on wholesale prices is clear.
Why this was not foreseen is a matter for conjecture. (Personally, I reckon - and have offered evidence elsewhere - that many Germans who should know better genuinely do not understand how markets work.) But of this we may be sure: its impact is highly destabilising.
PART FOUR (CONCLUSION)
PREVIOUS: PART ONE
Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.