As the United States debates it own energy policies, a number of voices continue to point to other nations as models for American development. A popular reference is China, which green energy advocates tout for that nation’s robust investment in technologies such as wind and solar. More recently, though, Germany has taken China’s place as the nation du jour for its stance on solar feed-in tariffs and its imminent abandonment of nuclear power.
But does Germany deserve admiration for its energy policy? Has that nation achieved outcomes that are in the best interest of businesses and consumers?
Germany has long been known as a European leader in advancing the installation of renewable technologies such as solar PV, providing aggressive government subsidies to equip rooftops with solar panels. Advocates of U.S. solar subsidies like to point to Germany’s efforts, especially considering that solar maps of Germany aren’t particularly flattering. In fact, a look at a solar resource map of Germany makes one wonder why the nation made such a hard push for solar in the first place. They ask: If the Germans can do it, why can’t we?
The truth is that German consumers are paying dearly for their nation’s energy policies. In fact, as PACE pointed out in this blog post, they have seen their electricity prices double in the past 10 years, now having the second highest power rates in all of Europe behind only Denmark. Germans today pay an average of 32¢/kWh for electricity. This article by Grist makes the point that Germans don’t seem to mind paying this steep premium, but it’s clear that Americans are not in the mood for higher power rates. Maybe we’re just different.
In recent weeks, in the wake of the Fukushima nuclear incident, Germany has continued its march toward poor energy policy, deciding to draw down its nuclear portfolio by shuttering eight nuclear plants. What will be the result? This article makes it clear that Germany’s nuclear shutdown will mean more coal, more natural gas, and more energy imports. Energy that could have been generated within Germany’s borders, using German resources, will now be generated somewhere else. Replacing 140 terrawatt hours of generation, it seems, isn’t that easy. And it won’t be cheap.
Want more irrationalism from the Germans? The nation has a stated policy of reducing CO2 emissions by 40% by 2020, double the European goal, but is shutting down its only carbon-free source of baseload electricity. Hans-Werner Sinn, president of the Ifo Institute at the University of Munich states, “The climate goals announced by (Chancellor) Angela Merkel at the Heiligendamm Summit will not be reachable.”
To recap. It appears that Germany is going backward in meeting its emission reduction goal. The nation has made itself more – not less – energy dependent. German consumers continue to pay some of the world’s highest electricity prices. American policy makers would we wise to pay attention to those outcomes and take our nation in a different – perhaps even an opposite – direction, while there is still time.




