Library filed under Impact on Economy from Germany
With consumer power bills increasing and Merkel facing elections in September, Germany's energy policy is rising on the political agenda. The cost of developing wind farms in the North Sea has surged following construction glitches and delays in linking turbines to the grid. "The entire energy switch has derailed," Marc Nettelbeck, an analyst at DZ Bank AG, said this week by phone from Frankfurt. "The difficulties connecting offshore wind farms to the power grid reduces their profitability and renders the original investment calculations of utilities invalid."
But six months before a federal election, questions remain, not least how to pay for the shift. Consumers are wary about the extent to which they will foot the bill and Merkel wants to reassure voters that she is trying to curb steep rises in power prices caused in part by subsidies for renewable energy.
Germany's transition to renewable energy may cost up to 1 trillion euros ($1.34 trillion) in the next two decades, the environment minister said on Wednesday, piling pressure on his opponents to back plans to cap power price rises before the election.
The price of weaning the country off nuclear energy by 2022 is crushing the so-called Mittelstand, the three million small and medium-sized businesses like Worlee that account for about half of gross domestic product. "It could be the proverbial straw that breaks the camel's back," Chief Executive Officer Reinhold von Eben-Worlee said in an interview.
Germany plans to exempt 1,550 large firms from a power price surcharge that covers part of the cost of switching to renewable energy. Critics say the list of exemptions is spurious and unfair to households and small businesses. It risks undermining faith in the government's switch to clean power.
The country's four main grid operators said Monday that households will from January see a nearly 50 percent rise in the tax they pay to finance the switchover - from €3.6 cents to €5.3 cents ($6.7 cents) per kilowatt hour. A typical family of four will pay about €250 ($324) per year under the tariff, including a sales tax.
Wednesday's proposals also coincide with a debate about spiraling electricity costs for private households ...Holger Krawinkel, head of energy issues at the Federation of German Consumer Organizations, said that the plan to pass on costs will further increase the bills that householders have to pay for the planned expansion of renewable energies.
Grid operators are reluctant to build power lines at sea because they have to pay compensation should they break down. So many wind farms could lack the means to transfer the power they are generating back to the mainland. The government is trying to pass on those costs to power consumers to reduce the risk for investors.
Green energy used to be Germany's great hope for its economic future. But now the German solar industry is in trouble amid huge losses, job cuts and the threat of bankruptcies. Chinese firms are gaining an ever greater share of the German market -- and are benefiting from German subsidies for renewable energy.
"It is important that we remain competitive in comparison with other countries. If not, a company of global stature like Bayer can think about moving its production to countries where energy costs are lower," he said.
The study by the WBGU is utopian because it requires a high degree of idealism, altruism and sacrifice by both individuals and society that goes beyond the normal dimensions of the reality of life. It is impossible to realize democratically. Why should people around the world voluntarily give up their demands for material welfare and security? Consequently, the WBGU admits frankly, that the decarbonization of the society can only be achieved by the limitation of democracy – both nationally and internationally.
Like solar, wind generation varies greatly depending on weather conditions. Power prices have dropped to negative values already at times of extreme wind supply and low demand. ..."If Germany adds 5 GW of solar this year, we may end up with over 50 GW of volatile wind and solar capacity that can't be controlled according to demand."
Europe's energy consumers must pay 20 cents per kWh generated, plus an additional 5 cents per kWh for transmission costs. They must pay this regardless of whether they need the electricity at the moment, and despite the fact that a kWh of wind electricity is worth less than 3 cents on the Leipzig Power Exchange, due to the intermittent and highly variable nature of wind.
German savings banks are handing out more loans to renewable-energy projects as corporate rivals retreat from financing the world's biggest solar-panel market. The 438 savings banks financed 45 percent of the 5.3 billion euros ($7 billion) invested in solar and wind power projects in 2008, while loans from major corporate lenders including Deutsche Bank AG shrank to 0.8 percent.
If wind energy really is the energy of the future, as the developers claim, it must prove itself in the market without government subsidies. This has not yet happened anywhere; the projections are all based on artificial models with hidden costs -- costs for you and me, the taxpayers and consumers.
Concept for a step-by-step extension of the transmission grid in Germany for the connection and integration of wind turbines onshore and offshore taking into account the production and power station developments and the necessary regulating and reserve power. Introduction: A reasonably priced and reliable electricity supply is an important location factor for the development of an economy. Against this background, it is necessary to investigate the demands placed on the entire system for the generation and transmission of electrical energy, which in future must again be optimised for the integration of the inevitably increasing amount of electricity generated from wind energy. The economic effects resulting from this must also be determined. Maintaining the current level of reliability of supply must be included here as an important boundary condition....