Letter Re: An “Energy-Independent” Village in Germany

Mr. Rawles:
As an engineer interested in long term sustainability I was most interested in the item from Troy H. mentioning Juhnde, Germany. I took a look at their web site and ran the numbers to look at whether such an installation is commercially viable.

The capital costs listed were EU 5,400,000 or about USD $7,900,000 at present exchange rates; It’s not clear when the overall system was constructed but the hot water pipeline system was built around 2005. Apparently, and I will have to look into this further, all of the capital costs were from public funds. This translates out to about $10,395 per resident in capital expenses, excluding operating and maintenance costs. Amortized out over 20 years, straight line amortization with no interest cost, the principal cost would be ~$520 per resident per year. If you included reasonable capital costs, a 20 year fixed 6.0% mortgage would cost $74.51 per month per resident. It might be possible to play with the financing costs and rates to find a sweet spot, but I thought that was sufficient for a first assessment.

Assuming an average family of four, this would mean about $3600 per year (about $2,080 for principle and $1,500 interest) for heat and electricity capital cost plus the unknown operating costs, which I would estimate by rule of thumb for large installs at 50% of the amortized capital expenses. That is $5,400 per year per family, not for housing but just for heat and electricity.

If we include the return from the electrical power (an estimated annual surplus of 2,500,000 kWh) that is a total annual savings of $150,000 at $0.06 per kWh or $197 per resident per year, for an estimated net cost of around $4,600 per family for heat and electricity. (Obviously, electrical costs vary tremendously and affect the analysis)

My costs for my home’s physical plant, which include a propane furnace with electric heat pump and associated tanks, duct work, woodstove and chimney, etc., were about $13,000 to support a family of four. My annual energy cost, electricity, propane, and the costs of cutting/splitting wood are about $1,400 per year. (Yes, I have good insulation, and I also don’t have a huge house, and I turn off the lights!) Plus an allowance of $500 for repair and replacement. Using the same logic and rates, my mortgage cost for heating is $93.14 per month or ~$1,120 per year capital expenses plus $1,900 in operating expenses including preventative maintenance (PM) and repair allowance. This totals $3,000 per year.

What this analysis tells me is that interesting as Juhnde is, it is not economically sustainable. Sustainable designs have to be sustainable from an economic perspective as well as a technical and biological one. A truly sustainable solution offers economic benefits and a competitive advantage. Now, a highly productive society such as present-day Germany may be able to afford to subsidize a 50% increase in energy costs and a 25% reduction in crop output, at least in a small area over the short term, and this example may be useful as a ‘proof of concept’ test bed, but in my judgment this is not a viable long term solution for the USA. The real push behind this may be found in the proud statement that the village has reduced it’s carbon output by 60%. Regards, – Larry

JWR Replies: Also missing from the grand cost accounting equation are the costs of the fossil fuels used in producing and transporting the crops used in biodigesters. Traditional agriculture in a partially forested region (for firewood) with good topsoil and reliable rains provides a much better shot at true local mutigenerational sustainability. But of course that flies in the face of the uber-greens that are fixated on carbon emissions. Talk about missing the forest for the trees. Our forests are enormous solar energy collectors, renewably providing countless billions of BTUs, there for the taking.