One of two succinct and hard-hitting presentations by Volkmar Lauber explaining the abrupt U-turn of the German government on the use of feed-in tariffs to drive the Energiewende.
Lauber has been observing and writing about Germany’s use of feed-in tariffs for more than a decade (see below) from the other side of the German-Austrian border in Salzburg. His presentations will resonate with those of us in the English-speaking world who have stared in disbelief as Germany has unraveled the world’s most successful renewable energy policy—and one that granted opportunity to all German citizens not just corporate titans in Frankfurt and Berlin.
The presentations confirm a truism: elections do make a difference.
The SPD is the Social Democratic Party, equivalent to the Democrats in the US and the Liberal Party in Canada. The CDU is the Christian Democratic Party, more akin to the right wing of the Democratic Party (Blue Dog Democrats) in the US and the Liberal Party in Canada. The FDP is the Free Democratic Party, Germany’s official neoliberal party. They resemble the Republican Party in the US and the Conservative Party in Canada. The current German government is composed of a grand coalition between the CDU and the SPD. Whereas there have been CDU-SPD coalitions in the past, this one is quite different.
Below are some highlights adapted from Volkmar Lauber’s presentation for 19th REFORM Group Meeting, Salzburg, 1-5 September 2014. For more by one of the world’s leading authorities on feed-in tariffs in Europe see the entire presentation. See also Lauber’s previous presentations on this topic.
Brief Summary or Take-Away
EEG 2014 is a break with the past, not a continuation. It means the victory of those forces that objected to EEG logic in 2000-2004-2008-2011 and almost prevailed in 2012 but were stopped by the Bundesrat.
Professed Purpose
Make Energiewende affordable” by a planned transition + market integration
Save suffering German industry from disaster by stabilising the surcharge and limiting its burden on industry
Unstated Purpose
1. Set up myth of unchanged RES-E deployment while in fact slowing it down
Until EEG 2014: Minimum targets regularly over-achieved
- EEG 2000: 12% by 2010 (achieved in 2005)
- EEG 2004: 20% by 2020 (achieved in 2011)
- EEG 2008: 30% by 2020
- NREAP 2009: 38.6% by 2020
2. Reduce hardships for coal and nuclear-based incumbents by slowing RES-E deployment; also new collision rules with RES-E in case of negative prices.
3. Privilege incumbents’ access to renewable power sector in future.
4. Stabilise competitive advantage of German export industry through low cost of power
5. Keep intact a system that inflates extra costs from RES-E for small consumers.
Conclusion
- The introduction of these instruments represents a major victory for electricity incumbents
- believers in neoclassical/neoliberal precepts
- But not necessarily for the efficiency and effectiveness of RES-E regulation
Provisional hypothesis to explain SPD shift
- Weakness of party in 2013 election
- Coalition negotiations on energy led by Hannelore Kraft, governor of (North Rhine Westphalia), Germany’s most populous state where coal plays big political role
- Close links between NRW SPD and RWE (a major German utliity)
- Incumbents may have stepped up pressure in light of their drastic situation
- Growing estrangement between SPD and PV industry
- SPD conversion to neoclassical/neoliberal philosophy on RES-E?
Lasting effects of pre-2014 EEG
- Probably no German government would have dared to directly introduce as much competition in the electricity sector as caused by EEG
- EEG undermined the oligopolistic power, profitability and technological inertia of the electricity incumbents locked into fossil fuels
- PV breakthrough benefits entire world
Good bye EEG—May you rest in peace.
More by Volmar Lauber
Switching to Renewable Power by Volkmar Lauber–A Review
Three decades of renewable electricity policy in Germany by Volkmar Lauber
European Union Policy on Support Schemes for Electricity from Renewable Energy Sources
Einspeisetarife und Quoten-/Zertifickatsysteme by Volkmar Lauber und David Toke
