Illiquid oceans : the risk of liquidity shortages for the expansion of offshore wind energy in Germany

Abstract: The German transition to renewable energies has so far been an example of a successful energy transition of a major economy. Even though this transition is criticized for being only a half-hearted solution, it is an important example of the attempt of a major economy to transit towards renewable energies and is therefore worth studying in its own rights. Thus, my aim in this thesis is the identification of obstacles on the pathway towards renewable energies to contribute to a more stable transition to a fossil free economy, as one of the most urgent issues of our time. This research is relevant to the broader question, of whether it could be a suitable strategy to reform the energy sector without reforming related sectors such as the FS. Focusing on the financial basis of the renewable energy transition, I claim that the German transition is at risk, as its financing relies on the unstable financial system. Private capital sources are expected to finance most of the necessary investment in renewable energies. Those capital sources, however, are volatile and instable, as described by Minsky’s instability hypothesis, which was supported by the strong evidence of the latest financial crisis. I analyse the financial basis of the German energy transition from a structural as well as a discursive dimension. Both dimensions are consistently embraced by the framework of Critical Discourse Analysis, as developed by Fairclough, which I apply in my research. I use offshore wind energy as a case which allows me to conduct an in depth problem analysis. My structural analysis clearly showed strong financial linkages between the financial system and key companies operative in the energy transition. Standing on the shoulders of Minsky’s instability hypothesis, I follow that those linkages destabilize the energy transition. My discursive analysis pointed to a lack of problem awareness amongst the key agents of the energy transition. Thus, also the importance of risk mitigation is hardly emphasized in their discourse. The problem of financial instability of the German transition to renewable energies demands a problem awareness that results in further research and ultimately structural changes. Acknowledging the interconnectedness between the energy and the financial system is a first step in finding holistic problem solutions. On this note, my research puts sustainability into a new light: By tackling sustainability problems, all connected systems can be changed for a better. It is time to end thinking in trade-offs.