German households and businesses will be paying more for their electricity next year as providers are set to hike the green surcharge levied on customers’ power bills. As part of the country’s Energiewende, Germany has rapidly increased its wind and solar energy industries by guaranteeing producers long-term, above-market rates. But those feed-in tariffs, as they’re called, have come at great expense, and the costs ultimately trickle down to consumers in the form of a green surcharge, which next year will rise by 6.354 euro cents per kilowatt.
Germany already pays some of the highest electricity costs in Europe, making this rate hike especially painful. This increase will be felt most keenly by the poor, whose energy bills make up a larger percentage of their overall budget. Businesses will also be eying this news askance. Cheap power is a basic economic interest across most industries, and rising rates could have some German companies asking whether they might be better served relocating outside the country. It’s difficult to stay competitive in a global market when those rates keep rising.
Moreover, while the Energiewende has boosted Germany’s green “cred” by stimulating renewables, it has also dramatically increased coal consumption as a result of the country’s decision to shift away from nuclear power production. As John Gapper points out in an FT column, this rise in coal consumption means that the country’s emissions are actually climbing. “The perversity of the Energiewende,” he writes, “is that Germany is on a path to achieving the hard task while flunking what should be the simple one — reducing its coal production.”
Germany is fully exploring one of those mythical policy sour spots that, against all odds, seems to make less sense with every new angle from which it’s viewed. From a cost perspective, this has been disastrous, and efforts to curtail those green power bill surcharges are clearly failing. But it’s also failing on its eco-merits, too, as, again, it’s had to burn record amounts of an especially dirty variety of coal to replace zero-emissions nuclear plants.
Greens tend to see economic growth and green achievements as mutually exclusive, that progress on one front must necessarily come at the expense of the other. That’s a self-defeating argument, and the most compelling environmental policies seek to capitalize on the confluence of environmental and economic interests. But the flip side of that, apparently, is that there are policy configurations that are neither growth-friendly nor environmentally desirable. In that sense, Germany’s Energiewende has taught the world a valuable lesson, though no doubt it’s not the sort of example it hoped it would set.