The American Interest
Analysis by Walter Russell Mead & Staff
Bad News Piling Up for Germany's Energiewende

Germany’s “green revolution,” or energiewende, was supposed to be a proof-of-concept for renewable energy policy. The green movement, for its part, holds Germany up as a successful example of how much can be accomplished—how many gigawatts of solar and wind energy capacity can be installed—if governments just ditch dirty fossil fuels and get on the zero-emissions bandwagon.

Unsurprisingly, reality is proving to be more complicated than the green policymakers anticipated. Given current technologies, wind and solar are more expensive energy sources than coal, oil or gas. Germany is propping up renewables with feed-in tariffs, but the costs of this plan are mounting, and Germany’s households and its industry that are footing the bill. Reuters reports:

So attractive are the [Germany's green energy incentives], or feed-in tariffs, that the rapid expansion of renewable power has driven up the surcharges which fund them and are paid for by consumers. The charge rose by 47 percent this year alone. [...]

Export-oriented German industry, already disappointed that shale gas is being shunned due to environmental fears, is angry about high energy costs, although exemptions help many firms in the cement, steel, paper and glass sectors. [...]

“Energy-intensive industry, which employs over 900,000 people, will have to leave Germany in the medium term if it does not get sustainably competitive energy prices,” said the head of the BDI industry association last month.

This is what happens when you let pie-in-the-sky dreams dictate policy. We can all agree that it would be wonderful if we figured out a way to cheaply and efficiently harness the sun’s power with solar panels and wind turbines. But we’re not there yet, and government subsidies won’t change that (though government grants to research and development might). Germany has to come to terms with the fact that it made a wrong turn with its energiewende. Expect that reckoning to come sooner rather than later.

[Angela Merkel image courtesy of the European People's Party]

Published on August 31, 2013 10:35 am
  • Corlyss

    “was supposed to be a proof-of-concept for renewable energy policy”

    Well, it was. The only problem is the sponsors just haaaaate what it proved! Now they have to go back to the drawing board to come up with some other cock-and-bull reasons to scalp taxpayers, reward sinkholes of unproven technology, and mortgage their industrial prowess to. Fear not, however, they are tireless fabulists who will stop at nothing to realize their anti-prosperity goals.

  • ephena

    The only problem with this, to my mind, is that non-renewable energy is not sustainable long-term, and our reliance on fossil fuels is going to cause an economic and humanitarian nightmare in the coming decades that makes the problems the Germans are having now look like tea and cookies. At least they will have put in the time and funding for more efficient and workable solutions, while the US has steadfastly refused to invest in new, sustainable technologies. Green Energy will come. The US will just be far behind and woefully unprepared. The Germans don’t have the execution right yet, but they will clearly get there before us.

  • Paul Nelson

    The U.S. (and every industrialized country) has a very large investment in a “traditional” electrical energy infrastructure (fossil/hydro/nuclear). To develop a “renewable” electrical energy infrastructure, four vast new sets of investment must be made: Wind, Solar, Power Storage, and Transmission From Remote Sites for Wind and Solar. All the while, utilizing and maintaining the existing “traditional” infrastructure. (After all, where would “renewable” Germany be without it on a cold, windless, snow-covered December 21st while the new infrastructure is being built over the coming decades?)

    In effect, take current “traditional” investment (trillions of dollars) and multiply by far more than four. To amplify “more than four”, recognize that economical Power Storage does not yet exist and is not even realistically on the horizon for “nation-wide” application.

    Germany is, indeed at the forefront of developing the “renewable” electrical energy infrastructure, but has barely begun to start to meet the power demands of a modern economy from those “renewable” sources.
    Yet, already the impossible economics of a “five infrastructure” strategy are becoming quite clear, dragging down German global competitiveness, and imposing fuel poverty on an increasingly large segment of the population.

    It can’t go on, so it won’t. Let us in the U.S. learn the truth early.

    • LouAnnWatson

      billionaire t boone pickens abandoned wind energy investment when he realized the per mile cost of building transmission lines from the wind source to the distant distribution point. he just walked away…now he’s on the natural gas bandwagon…telling.