Debunking Myths about Germany’s EEG
Reading the press or comments these days in French or English, the tone about Germany’s energy policies is a mix of the gleeful (of the “schadenfreude” kind) and the contemptuous. Germany was naive (to trust Putin), mercantilist / corrupt (its elite selling their soul or themselves for the “cheap gas” that its industry craves), or in thrall to the perverse ideology of the “commie greens” (who pushed to close nuclear and promote useless renewables).
While it is clear that the current situation, with Russia wilfully reducing gas volumes to Europe, hits Germany quite hard, and will impose harsh choices on its industry and population this year, how much of the above criticism makes sense?
The study thus basically further documents the real reason for the shift from feed-in tariffs to auctions: it wasn’t about price, as lots of people assume; the goal was to give policymakers a way to control, and hence limit, the amount built annually.
All the stats you ever wanted to know about Germany’s energiewende (auf Deutsch)
This chapter in The Triple Challenge for Europe focuses on the German Energiewende which was designed as a long-term strategy in support of a transition to sustainability in energy supply. It was also a response to the challenge of globalization in that it aimed to improve Germany’s competitive position by stimulating the development of new capital goods industries and reducing fossil-fuel imports. Hence, Energiewende is a way to meet the triple challenge in the field of energy. During its first decades, it was successful in enabling the deployment of a range of new technologies, the formation of innovative capital goods…
However, the international Energiewende reporting makes me want to rub my eyes. If one is to believe those reports, industry is fleeing because energy costs are going through the roof.
The feed-in tariff, or “FiT”, is financed through a levy on the electricity bills of households and small enterprises. It is not paid out of public budgets, nor does it diminish fiscal revenue. By its nature, the feed-in tariff is thus not a subsidy.
The desperate attempt to reframe the Energiewende as an “energy mess” shows what the real threat is: Germany is poised to prove that a low-carbon future without nuclear is the best option for a thriving industrial country.
Second, there has been no surge in coal power during the nuclear phase-out. In fact, total coal power production (both lignite and hard coal) fell by six percent last year alone.
Germans consume only a third as much electricity as Americans do. Their power bills are thus not so large.
