What now for Germany?
Germany isn’t going to stay on track, and will instead halt its switch to renewables. That, at least, is what many European advocates of renewable energies fear as a result of the acrimonious election campaign that started early this year. Even the US media reported on how Germany seems to be having a problem financing the transformation of its energy system. The debate on the cost of renewables was fuelled by the classically liberal Free Democratic Party (FDP), the conservative Christian Democratic Union/Christian Social Union (CDU/CSU) and the Initiative for a New Social Market Economy (INSM) and has had a long-lasting negative impact all over the world. The discussion saw arguments being twisted and the public misinformed, while the benefits of solar, wind and other renewables were swept under the carpet. And the debate is not over yet – the election results may be in, but the amendment of the Renewable Energy Sources Act is still on the “to do” list.
As environment minister in the last administration, Peter Altmaier immediately jumped in, talking about the huge costs of the switch to renewables. He said the process could cost up to EUR 1 trillion, sending ripples of shock across the country. Meanwhile, the FDP was threatening a moratorium on all renewables expansion, and there was speculation on an “electricity price brake”, which would keep the Renewable Energy Sources Act surcharge at this year’s level in 2014 and limit it to an increase of 2.5 percent in the following years. Right up until the election on 22 September, industry associations never tired of pointing out how higher electricity prices would put pressure on households and industry. There was also plenty of talk about how the switch to renewables would damage Germany as a business location and make socially disadvantaged people even worse off.
At the same time, Germany’s Monopolies Commission called for the system to be changed in order to completely abolish the feed-in tariffs currently guaranteed for 20 years for electricity generated by wind and solar power. And Germany’s most powerful energy lobby, the German Association of Energy and Water Industries (BDEW), wasted no time in putting its views across after the election. In a long-awaited strategy paper, the association called for a reform of the Renewable Energy Sources Act, even though this law has provided stable conditions for the sector so far.The BDEW is now saying that renewable energy plants should sell their power at the market price set by the stock exchange. It also suggests paying a fixed premium on fluctuating yields. This premium would be reset at regular intervals in auctions.Investors from Germany and abroad are horrified by such talk.
Germany as a shining example
“To a certain extent, Germany is a shining example of efforts to make the switch to renewables. We aren’t seeing much renewables expansion elsewhere in Europe, with the possible exception of Denmark. Now people are worried about a policy reversal. Europe will have to make important decisions on climate policy soon,” says Oliver Geden, an energy policy expert from the German Institute for International and Security Affairs, talking about the energy and climate goals that have yet to be defined for the decade after 2020. “The prospects for a binding renewables target don’t look good,” he adds. To make matters worse, Germany – unlike other countries – has not yet contributed a statement to the European Commission’s consultation process on its green paper on climate and energy policies due to the ongoing bad relationship between the environment ministry and the economics ministry. This means that the German government has not yet been involved in the process of setting new climate goals.