Germany’s Green Dream Is Becoming A Nightmare
Berlin urged to revise its energy policies as soaring costs threaten industry
Germany’s top economic adviser has called for a radical rethink of the country’s energy policies, warning that the country’s green dream is going badly wrong as costs spiral out of control.
“We need a drastic policy shift,” said Christoph Schmidt, chairman of Germany’s Council of Economic Experts. “They haven’t paid any attention to costs. These are now huge.”
The government has vowed to break dependence on fossil fuels and source 50 per cent of all electricity from wind, solar, and other renewables by 2030, and 80 per cent by mid-century. But cost estimates have reached 1 trillion euros ($1.4 trillion) over the next 25 years. “It is a worthwhile goal, and the whole world is looking to see whether Germany can do it, so we can’t fail. But there have been so many mistakes,” Schmidt said.
He said Germany has no margin for error since its own growth “speed limit” has dropped to one per cent, and the country will face an acute aging crisis over the next decade.
The concerns were echoed by Germany’s powerful industry federation, the BDI, which said that it can no longer remain silent as green romanticism plays havoc with Germany’s power supply.
The group said in a new report that the costs of the so-called Energiewende have already gone beyond tolerable limits. “The international competitiveness of German industry is in danger,” it said.
The report said feed-in tariffs for new wind and solar installations should be abolished, and demanded a “strategic reserve” of fossil fuels to ensure a dependable base of power stations for the German grid. “The government’s policy is not joined up,” said BDI chief Markus Kerber.
The group demanded action from the government to address “urgent concerns” within 100 days of this week’s elections, according to Handelsblatt.
The Energiewende has already led to chaos, with surges of subsidized wind and solar power overwhelming the grid. Utilities E.ON and RWE have threatened to shut down plants producing 23,000 megawatts. German electricity costs are ratcheting up faster than elsewhere in Europe, and are now twice U.S. levels. Households and the Mittelstand (mediumsized companies) backbone of the economy are carrying the burden, paying cross-subsidies to exempted sectors of heavy industry. “Spiralling energy costs will soon drive us into the wall. It has become dangerous,” said the German Chemical Industry Association.