German govt officials: It’s time to cut our losses with these renewable subsidy programs already
posted at 1:21 pm on February 27, 2014 by Erika Johnsen
In the full throes of realization that their top-down, heavily subsidized energy-sector transition from fossil fuels and nuclear power to renewable sources has directly resulted in energy prices around three times higher than those in the United States — not to mention a resurgence of coal to close the practicality gap left by those renewables — the German government has been looking for a way to steeply revise the Energiewende program of which they were once so loud and proud. On Thursday, a group of German government officials submitted their recommendations to Chancellor Merkel for saving Germans some of the tens of billions of dollars they’re losing in renewable energy “investments” every year, including ideas for just getting rid of entire facets of the program. Via Bloomberg:
Germany should scrap its clean-energy subsidies because the system has driven up electricity costs for consumers and hasn’t spurred innovation or reduced greenhouse gases, a group of government advisers said.
Adding renewable-energy plants in Germany doesn’t cut Europe’s emissions because they’re released elsewhere, the Commission for Research and Innovation said in a report handed to Chancellor Angela Merkel today. The uncapped aid provided by the system known as EEG — about 23 billion euros ($31 billion) last year — doesn’t encourage new technologies, it said.
“The EEG isn’t a cost-efficient instrument for climate protection nor does it have a measurable impact on innovation,” the commission said in the report. “That’s why there is no basis for the continuation of the EEG.” …
The European Commission, the EU’s regulatory arm, is pressing Germany to auction off aid instead of granting fixed, uncapped subsidies, Merkel said today, according to a transcript sent by the government’s press office. “The EEG in its current form will be replaced by an auctioning system and will therefore also qualitatively change,” she said.
A similar industry report also came out this week, recommending that Germany stop cutting itself off at the knees by eschewing heightened natural gas production and instead jump on the bandwagon that’s helping to keep costs so much lower in the United States, via Reuters:
Germany’s current policy of rapidly deploying renewable energy should be redesigned to prevent its industry from losing global market share because of high power costs, a report by international think-tank IHS said on Thursday. …
The report said that if the policy was changed to focus on domestically produced gas and the expansion of technologically mature renewables such as onshore wind and solar power, Germany could still shift to low-carbon energy while reaping more benefits from exports, jobs, incomes, tax and royalties.
“Germany’s current path of increasingly high-cost energy will make the country less competitive,” Dan Yergin, IHS vice chairman who headed the study, said in a phone interview. …
Germany’s industrial power prices have risen around 60 percent since 2007, while those in the United States and China have risen less than 10 percent.
This has hit manufacturers that accounted for 21 percent of Germany’s economic output last year, one of the highest shares for a developed country, IHS said.
Despite Germany’s relatively strong manufacturing and export performance compared to the rest of the European Union, the report estimates that their mandated shift to renewables has cost them “€52bn in net export losses for the six-year period from 2008 to 2013.” Dang. That translates to a huge loss of competitiveness for the nation currently ranking as the economic leader of the EU, and if they’d like to keep it that way, they have some serious rethinking to do.
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