German expert: Estonia should immediately end subsidies for solar, wind energy

TALLINN - At a conference hosted by Estonian shale oil producer Viru Keemia Grupp (VKG) earlier this month, German commodities trader and former wind farm manager Lars Schernikau argued that the current green transition narrative is leading Europe to ruin.

He also asserted that Estonia should stop listening to Brussels and responsibly utilize its own natural resources, including oil shale, Postimees reported.

Schernikau noted that while he publicly criticizes the extensive development of wind and solar farms, it is ironically in his financial interest for more of them to be built. His company trades in commodities, including coal.

"People say, of course you're saying this because you come from the coal sector. But how does a trader make money? A trader profits when market prices are high and volatile, and that is precisely what wind and solar farms introduce to the market. For me, this is actually good," he said.

The problem for him, he says, is that the European green transition threatens the continent's economy.

Schernikau pointed out that he has managed a wind farm in the past and even heats his own swimming pool with solar panels, so he does not believe solar or wind power is inherently bad. For him, the issue is one of scale, and he argues that the proportion of renewable energy in the system must be limited.

From a technical standpoint, any electricity system must be designed to handle peak hours. These peaks cannot be reliably covered by renewables because there is no guarantee of sufficient wind or sun. This means that if a country aims for all its consumption to be met by renewables, specifically wind and solar, it must invest enough in renewable capacity to cover total demand. Simultaneously, it must also invest in dispatchable power plants to provide backup during peak hours or when, for example, the sun is not shining.

Maintaining grid frequency also becomes a problem, according to Schernikau. Traditional power systems are built on the physical inertia of rotating generators, which can continue spinning for a few moments during a sudden failure, stabilizing the grid. In contrast, wind and solar power are managed by computers and lack this physical inertia. If a fault occurs, the system can go dark instantly -- which he believes is what happened in Spain this past spring.

Schernikau sharply criticized politicians who focus solely on the price per kilowatt-hour.

"A single unit, one kWh, might be cheap, but the system as a whole -- including grids, frequency maintenance fees, and the cost of maintaining backup power plants -- is expensive. Ultimately, consumers have to pay for all of it," he stated.

Schernikau described Germany's decision to shut down its nuclear power plants while betting on green energy as illogical, arguing it has led to a massive spike in electricity prices under which both the economy and consumers are suffering. According to Schernikau, while this issue is now being discussed more openly in Germany, the problem is that politicians have already committed to their positions and are unable to reverse course, preferring to see it through to the end, no matter the cost.

Regarding the EU, Schernikau noted that some changes are becoming visible, but "it remains to be seen how bad the situation will get before major corrections are made." For instance, the EU already has a carbon tax, and in two years, it plans to introduce a new tax on motor fuels and some forms of heating (ETS2), which will make them significantly more expensive.

"This is a gigantic mistake. I don't care about politics, whether left or right -- this tax does nothing measurable for the environment and serves only to raise costs for consumers. And who gets hit the hardest? The poor! This should be an issue for the political left; they should be fighting for cheap energy and people's ability to cope. But instead, the fight is against CO2, and there's a belief that importing expensive LNG from the middle of the US is somehow greener. In my view, energy policy is one of the key reasons for the current success of the right-wing in Europe," he said.

"The US is changing. China is doing things differently -- yes, they are installing a lot of solar power, but they are also building many coal plants to manage peak demand and keep the system stable. There is no way Europe can succeed with its current energy policy. In an energy system, the laws of thermodynamics dictate what you can do, not wishful thinking," Schernikau stated.

Schernikau argued that since Estonia has oil shale, a resource whose price it can control, the country should not let the EU dictate its policies but should instead do what is best for itself. If Estonia can produce biogas from waste, it can honestly be called green, but not if it uses biomass. All European carbon taxes that artificially raise the cost of living must end, he said. Likewise, state subsidies for wind and solar farms must be abolished.

"Governments should not create barriers for technologies but give all of them an equal chance. If a solar or wind farm can compete under those conditions, then by all means, let it," Schernikau said. "Why are you making yourselves more dependent? You have everything you need locally -- use it."

In his view, European countries must do two things: first, invest in research and development to find truly sustainable energy solutions, and only then phase out gas and coal. Second, they must continue to develop existing technologies to make them more efficient and cleaner.