German Chancellor Angela Merkel delivered today on one of the key issues in last year’s elections: the runaway costs associated with the country’s green energy program. Under these new reforms to the country’s energiewende, subsidies handed out to renewable energy producers will be curtailed, and certain exemptions to electricity surcharges for energy-intensive industries will be revoked. Berlin is still placing a heavy emphasis on renewables to meet its energy needs in the wake of its post-Fukushima nuclear drawdown, but has now placed upper limits on the solar and wind energy it will incentivize.To be sure, these are crucially important reforms for what has become a disastrous green energy policy. To kick-start renewables, Berlin guaranteed long-term, above-average rates for solar and wind energy producers, and many savvy Germans took advantage. The costs of these so-called feed-in tariffs were passed on to consumers in the form of a green surcharge, resulting in skyrocketing electricity prices for German households and businesses. It became readily apparent that something had to be done, and retracting some of these pie-in-the-sky green ambitions became a hot-button campaign issue last year.But while Merkel’s coalition government may have trimmed the fat, the energiewende‘s skeleton remains. The emotion-driven decision to shut down the country’s nuclear reactors deprived Germany of a readily available source of zero-carbon baseload power. Renewables may share the zero-carbon moniker, but they can’t replace the steady supply of energy that nuclear plants provided—they only supply the grid when the sun is shining or the wind is blowing. To compensate, Germany is now burning coal in record quantities, and barring some battery breakthrough, will continue to have to rely on dirtier fossil fuels to keep its lights running in the coming years. Watering down its green policies was a step in the right direction, but its vision for a green future remains marred by faulty environmentalist biases.
Energiewende CostsGermany Reforms Its Broken Green Energy Scheme