Library filed under Taxes & Subsidies from Germany
At least one green energy developer recognizes that these stimulus subsidy programs have a record of doing more harm than good, and he isn't reluctant to say why. Patrick Jenevein, CEO of the Dallas-based Tang Energy Group, posted a Wall Street Journal article arguing that "the sequester offers Washington a rare opportunity to roll back misguided subsidies and maybe help reverse wind power's stalling momentum."
Under the law, German electricity users pay a charge that goes towards funding renewable energy generation. Competition Commissioner Joaquin Almunia believes that exemptions granted to some energy-intensive German companies from those charges run counter to EU law. The Commission plans to launch proceedings and also require companies to repay the charges they were exempted from in the past.
Solar energy is notoriously unreliable as a power source and Germany has seen its market hobbled by oversupply and ferocious competition from players such as China. Merkel, campaigning for a third term, has promised an overhaul of subsidies for renewable energy after the September general election ...Berlin "has so far invested 216 billion euros ($A308.24 billion) in renewables
Germany's plans to pioneer green energy seem to be suffering a setback. The government's push to expand renewable power sources is being bankrolled by the taxpayer. RT's Peter Oliver reports, many are questioning whether that money is being wisely spent. Duration: 3 minutes 13 seconds
Because producers of renewables are paid a fixed price, their subsidy rises as the spot price of electricity falls. On cloudy days Germany relies ever more on brown coal. ...The cost of this mess is passed on to electricity users. Household fuel bills have gone up by a quarter over the past three years ...because the contracts guaranteeing renewables prices are set for 20 years, the problem will get worse as more supplies come on stream.
Merkel's policy to wean Europe's biggest power market off fossil fuels and to embrace renewables has led to a boom in green energy sources, but ballooning costs have led to calls for cuts to feed-in tariffs and for industry to pay more. "Dealing with the renewable energy reform is the most urgent of the energy topics, in my view."
The costs of start-up financing for green energy and the compensation for expansion of the power grid are added to customers' electricity bills in the form of a special tax. The entire subsidy system is supposed to come to an end when green energy becomes competitive. That, at least, is the theory. But the reality is different. No longer can one simply describe the tax as a way to get renewable energies off the ground. Indeed, following Berlin's decision two years ago to shelve nuclear energy and accelerate the expansion of renewables, the EEG has become a giant redistribution machine.
Shortly after a blade came loose at the Ocotillo Express Wind facility in Imperial County earlier this month, facility operator Pattern Energy deftly handed the matter off to turbine builder Siemens Energy. With a muted press statement issued Friday, it looks as though Siemens is now trying to pass the buck as well.
Merkel's main opponent in the election, Peer Steinbrueck of the Social Democratic Party, is capitalizing on discontent with the energy switch. In December, he said at an SPD summit that Germans now live in fear of power outages because of government missteps. One month later, the SPD beat Merkel's CDU in a vote in Lower Saxony -- the third straight regional defeat for the incumbent party and a sign that its lead in the national election may be eroding.
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."
Bayerische Motoren Werke AG will harness winds whipping across eastern Germany to secure power -- and defend profits -- as costs rise due to Germany's 550 billion-euro ($740 billion) shift away from nuclear energy.
A joint proposal to cut the costs of increasing Germany's renewable energy capacity has been presented by the federal economy and environment ministers. If the measures are implemented, renewable energy association BEE fears a massive market collapse for investment in renewables.
With Spain in the grips of recession, the government wants to lower consumers' light bills. In Germany, Chancellor Angela Merkel faces an election in September and hopes to win points with voters by putting a stop to rising electricity bills. The independent steps have been slammed by businesses as German and Spanish politicians move to finance cuts for consumers by passing on the costs to companies.
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.
The main reason for the increase in energy costs is the simple fact that generating electricity with wind parks and solar arrays is more expensive. But allowing so many exemptions is taking its toll as well, and a better solution is overdue -- especially because this envious discussion over who's paying and who's not has the potential to chip away at support among the general public for the transition to renewable energy.
In total, the network operators hope to collect more than 20 billion euros to subsidise renewable energies. ..."The increase in this charge is manageable for many households, but there are also very poor, low-income households which could be negatively affected by this type of price rise," she said.
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.
German Chancellor Angela Merkel's decision to cap taxpayer subsidies for renewable energy is aimed at limiting the political fallout. ...Merkel's government, already preoccupied with tackling the debt crisis in the euro area, is struggling to justify the rising costs to phase out nuclear power and replace it with more expensive wind and solar plants.
Germany's energy revolution is the government's only major project -- but the problems keep piling up. The pace of grid expansion is sluggish, and electricity costs for consumers are rising. The environment minister wants to fundamentally alter the way green energy is subsidized, but will it mean putting the brakes on the entire project?
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.