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Renewing the Globe? Europe Leads the Way in Energy Alternatives
(Released April 2012)

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  by Ethan Goffman  

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Germany's Tangled History

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If Europe has been at the heart of the global move toward renewable energy, Germany has been at the heart of Europe’s effort. Notably, “Germany aims to generate 50 per cent of its electricity from renewable sources by 2030” and is on track to do so (Peel). Indeed, from 6% in 2000, renewable energy has jumped to nearly 17% of Germany’s energy; however, to fully utilize this, grid capacity will need to be greatly expanded (Fuhrmans).

Photovoltaic cells in use on top of a building in Berlin
Photovoltaic cells in use on top of a building in Berlin
In 1990, Germany instigated probably the most effective stimulus for renewable energy, the feed-in-tariff, in which buyers of solar panels who feed surplus energy into the grid are guaranteed a price above market value, made up for by a surcharge on electricity prices. This scheme has been remarkably effective; in 2011, Germany’s solar capacity increased by 7,500 megawatts. However, solar panels are heavily subsidized; they pay homeowners approximately .24 euros (.31 dollars) per Kilowatt Hour (KwH), compared to.5 euros on the open market (Blume). Still, the feed-in tariff subsidy will shrink year-by-year and is set to reach zero in 2030. Although the subsidies came to some 8 billion euros ($10.2 billion) in 2011, solar parks and roofs take care of just 3 per cent of Germany’s overall electricity needs (Blume; Neubacher). With solar installation costs plummeting, these subsidies may no longer be necessary; over what time period and how much to lower, or even halt, them is being furiously debated. These subsidies do stimulate the economy; they are estimated to have created “almost 300,000 green jobs in the last four years alone” (Baker).

While Germany’s solar explosion may have helped move the world toward solar by spurring inexpensive mass production, it may also be seen as a textbook case of the inefficiencies that government subsidies can create. Solar may not be the best form of energy for cloudy Germany; rather, Spain produces nearly double the energy from the same amount of installed solar (Photovoltaic Barometer), while North Africa is even more efficient. Indeed, “some 56 per cent of all green energy subsidies go to solar systems, which produce only 21 per cent of subsidized energy” (Neubacher). Furthermore, solar shuts down in winter, at which time Germany must import electricity from nuclear plants in France and the Czech Republic (Neubacher). In March of 2012, German officials announced a cutin solar subsidies of up to 29%,on top ofan earlier 15% cut (Birnbaum and Faiola).

Germany has long relied on nuclear power; its 17 reactors generated 23% of the country’s electricity in 2011 (Fuhrmans). Crucially, nuclear does not generate greenhouse gas emissions; yet it has long been particularly controversial in Germany. Following the 1986 Chernobyl disaster, when radioactivity drifted across much of Europe, the country had planned to abandon the technology, although the center-right government of Angela Merkel began to reverse course. However, the recent disaster at Japan’s Fukushima nuclear plant led to another reversal in 2011, with Merkel ordering eight of the country's nuclear reactors shut down, followed by the announcement “that the remaining reactors would be phased out by 2022” (Wiener). This leaves Germany with a major energy gap; how to fill it remains a problem. Meanwhile, Germany faces tremendous financial pressure as a result of the European debt crisis. Perhaps something will have to give?

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