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Green Technologies: Can Germany keep its edge?

Sally McGrane · 8 Apr 2010, 17:08

Published: 08 Apr 2010 17:08 GMT+02:00

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When it comes to renewable energy, Germany is a perfect ‘10’ – at least during 2010.

This year marks the tenth anniversary of the passing of Germany’s comprehensive Renewable Energy Act (EEG), which has helped cover over 10 percent of the country’s total energy consumption from sources like wind, solar, water, or biomass.

And renewable energy in Germany isn’t just about fewer carbon emissions or energy independence, either: along the way, Europe’s largest economy has built up an industry that leads the world in exporting renewable energy technology, providing some 280,000 jobs worth an annual turnover of €40 billion.

In what is widely considered a success story for developing renewables in the industrialised world, Germany has demonstrated that a strong political will can kick-start and sustain a “green” technological revolution.

“The public really supports renewable energy,” said Claudia Kemfert, energy expert at the German Institute for Economic Research. “There’s no political party in Germany that doubts it’s a success.”

There have, of course, been hiccups. Chancellor Angela Merkel’s centre-right coalition has backpedalled on Germany’s decision to phase out nuclear power and aims to cut feed-in tariffs subsidising solar power by 16 percent starting in July, which could lead to a wave of insolvencies in the domestic photovoltaic industry. Citizen groups have also sprung up lamenting how wind and solar farms are a supposedly a blight on otherwise bucolic Teutonic landscapes. But none of these issues change Germany’s fundamentally green credentials.

With laws first passed in 1990, Germany pioneered the feed-in tariff system as a political tool for encouraging the development of renewable energy. Under a feed-in tariff, producers of renewable energy are guaranteed that they will be able to sell the electricity they create at relatively high prices that remain fixed for twenty years. The additional costs are spread to all electricity consumers, who pay about €0.011 cents per kilowatt hour as a ‘renewable energy surcharge.’

“Critics might say it’s an intrusion into the free market,” Jörg Mayer, director of Germany’s Renewable Energy Agency, told The Local. “But supporters say that climate change can’t compete on the free market. That the real external costs are not covered by the amount we are otherwise paying.”

The idea behind the feed-in tariff, overhauled and extended in 2000, is simple: Create reliable demand, and supply will appear. This strategy has paid off, with more than 15 percent of German electricity now supplied by renewable sources. And the feed-in tariff has become a model for fifty countries, from Israel to Uganda.

While a desire to lower carbon emissions was a key motivator behind the feed-in tariff legislation, there was a business model at work, too. For one, a strong German renewable energy sector would create jobs. Additionally, went the thinking, if developed early on, Germany’s companies would gain a first-mover advantage on the global market. “There’s the strategy of providing the right environment, one that’s good for their own companies,” said Angus McCone, an analyst at New Energy Finance, based in London.

Indeed, as the rest of the world began to go renewable, they have bought road-tested German technology. But now, as the Untied States and China enter the field, some of Germany’s early advantage has eroded, particularly in the field of solar voltaics. “The problem is that other countries are seeing that strategy,” said McCone. Still, “the Germans have a head start.”

Given the financial crisis and its dramatic impact on the German economy last year, there is a certain danger that the political will to nurture developing technologies until they are competitive may waver. And cost is always an issue: developing technology is more expensive, at least in the short term, than using fossil fuels, coal, or nuclear power. While the expectation is that these technologies will become competitive as they mature, some wonder how long that will take.

“Costs of the EEG are high and currently further rising,” said Jochen Diekmann, Deputy Head of the Department of Energy, Transportation, and Environment at the German Institute for Economic Research. “However, these costs will decrease in some years. To hold additional costs low is one challenge for the future.”

Domestically, technical problems must be solved in the near future if the current industry goal of nearly 50 percent of energy consumption to be renewable by 2020 is to be met. These include building a new, decentralised smart grid, and finding a mix of energies that won’t leave renewables out in the cold.

Key terms and sectors

Story continues below…

What exactly are feed-in tariffs?

Solar is big in grey Germany.

Wind power is more than just a stiff breeze.

Germans are exploring the potential of bio-energy for green fuels.

Can the proud German car industry become an e-mobility leader too?

Sally McGrane (news@thelocal.de)

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Your comments about this article

01:38 April 9, 2010 by Logic Guy
Well, the thousands of brand new jobs that can be gained by creating clean energy industries certainly makes this industry worth while. It creates independence as well, take a look at the Danes.

"The less that you have of your own, the more dependent you are upon others".
09:41 April 9, 2010 by khassi
Renewables can not be addressed just like that as a bunch, maybe it would have been worthwhile to mention in this article that the feed in for onshore wind energy is between 5 and 9 €cent while for photovoltaic it is between 35 and 45 €cent, so any decision or opinion can not be made for both of them together leave out biomass hydro .. so while the one or the other is competitive and makes sense regarding german natural resources other could be completely out of sense.
16:52 April 9, 2010 by andrew Beutmueller
the cut in feed-in tariffs whilst a setback is well overshadowed by the visionary Desertec Project, again demonstrating that Germany is far ahead of the the curve when it comes to Green Tech innovation and putting its tech into practice; over the next decades a large percentage of the EU's power will come from a network of wind, solar and geothermal and even refuse derived fuel (RDF) plants from the Sahara all the way to Iceland. Furthermore, Germany is already importing rubbish from less technical able neighbors to create its own electricity via RDF - the Feed-in tariff problem is OVERSTATED: read more at http://gruenscene.com/blog/
22:50 April 9, 2010 by PierceArrow
Germans, please keep the feed-in tariff in place until you do not have to import any oil at all! Bitte! Bitte! Bitte! Keep the nuclear plants in operation as well, until you do not have to import any oil. Moreover, please show us lazy and gluttonous Americans how to implement a feed in tariff until we do not have to import any oil!

On a more LOL note, I am still waiting for Barack Obama the Annointed One and his Lord High (Neville) Chamberlain, Al Gore, to use their legendary powers of persuasion to convince the Iranians to abandon nuclear power and implement renewable energy.
23:54 April 9, 2010 by aelfheld
Cut the massive government subsidies & then see just how much of a 'lead' Germany's got in 'green' technologies & how many 'thousands of brand new jobs' are created when the sluice gates are closed.
05:54 April 10, 2010 by MarcJeric
This ciommunist conspiracy has lasted by now 40 years.

1) It started by the global cooling scam in the 1970's; when that failed the government-paid drones came up with

2) global warming hoax; after 11 years of cooling it was

3) climate change flimflam - so whatever happens they must nationalize all private industry; and now we got

4) cap & trade power grab.

See Internet under "Global Warming Petition Project" to read the names of 31,478 US independent scientists, including 9,029 PhD's, who say so.
11:03 April 11, 2010 by dbert4
@aelfheld - "Cut the massive government subsidies & then see just how much" that oil TRULY costs!

Most of the US defense budget is spent preserving access to oil, add in the environmental and health costs of oil and what does one have? It makes solar a bargain!!

The TRUE US defense budget is about 1 trillion dollars. The largest user of energy is the DoD........
06:36 April 15, 2010 by wenddiver
@dbert4- I don't know where you get your ifo, but the US military is minescule compared to a large US city like LA or New York.
14:48 April 15, 2010 by Hebbellover
dbert4 wow another well informed German...not!
11:56 April 16, 2010 by dbert4
@wenddiver - There are multipule sources to confirm this, GOOGLE IS YOUR FRIEND and will help you to find them.

Since you seem to be of limited intelligence allow me to help, you and your "biatch-Boy" Hebbellover.

"US military energy consumption- facts and figures

by Sohbet Karbuz

As the saying goes, facts are many but the truth is one. The truth is that the U.S. military is the single largest consumer of energy in the world."

16:57 April 16, 2010 by Hebbellover
dbert4 did your statistics include the Wehrmacht?

"biatch-Boy" AKA Hebbellover
19:23 April 30, 2010 by Lochinvar
Interestingly enough, the US Navy's capital ship fleet (submarines and aircraft carriers) use no fossil carbon and consume no oxygen for their propulsion systems.

Their engines are strictly nuclear powered, and can go about three years without refueling.

The greenest electricity production in Europe is done in France.

Over 70% nuclear.

Well, perhaps Norway can compete for the title. Most of their electricity comes from hydro. But if you count in the impact upon migratory fish, it's not so good.

Wind turbines kill bats and big birds, and they destroy the beauty of any good skyline, which tends to be where they get put.
04:39 May 10, 2010 by derExDeutsche
Maybe USA should pull their troops from Germany. Bitte Bitte Bitte!

Then Germany can pay for its own defense. Yes!!

Love that idea!
15:19 June 15, 2010 by lickmyamericanballs
End NATO, cut europe from the US public dole, watch it collapse into post-World War I standard of living from my living room in the GREAT SATAN. LOL! Relish the thought!!
02:06 December 20, 2010 by vandeg
Don't listen to Gore, he was a politician and I didn't trust him then and I still won't trust him now.
14:16 March 10, 2011 by michaelhol
Comment removed by The Local for breach of our terms.
05:15 April 26, 2011 by jihao
Comment removed by The Local for breach of our terms.
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