I’ve been hearing for some time about the serious problems which Germany is experiencing with its green policies — and indeed the problems they are creating for adjacent countries like the Czech Republic, which has to cope with power surges through the network when the wind actually blows. Now the FT reports on the latest difficulties.
Of course Germany is seen as a champion of green policies. But following their decision to close Germany’s nuclear sector following Fukushima, Germany is now building or refurbishing 25 coal-fired power plants (a small part of the 1200 or so new coal-fired plants in the pipeline around the world). It seems that Chancellor Angela Merkel wants to freeze renewable subsidies — equivalent to €16 billion last year — ahead of the elections. Household energy prices are higher and subsidise industrial consumers, but prices have risen following decision to abolish nuclear power.
Currently (as in Britain) there’s a plan for industrial intensive energy users to pay a minimal part of the necessary surcharges, with a bigger share falling on households. The German Coalition sees the danger to its industrial base, and wants to protect companies. But the Greens and the Social Democrats want to ease the burden on households, and put more costs on industry, apparently oblivious to the competitiveness risks.
(Our policy would be to ease the burden on both households and industry by dropping renewables and renewable subsidies entirely – see www.affordable-energy.eu). Peter Altmaier, German Federal Minister for the Environment, says “The debate about electricity prices is smothering any discussion about the chances of the energy transformation.”
It’s clear that German households’ ability to absorb the cost of the renewable energy programme is reaching breaking point, and is becoming a major political issue. German industrial consumers currently pay around the EU average for their electricity, so their competitiveness will suffer as a consequence of taking the cost burden.
Curiously, there does not yet seem to be substantial party political discussion about the mistakes of German energy policy — only disagreement about who should pay. Give it time.