Germany's Energy Policy - English

Good Intentions, Turned Sour

By Stefano Casertano19.05.2013Europe, Media

Germany’s new energy policy brings out the best in the country’s politics – and the worst. Too often, politicians have embraced prestige projects but neglected the unglamorous pursuit of energy efficiency.


Mark Sebastian

Nothing expresses Germany’s leadership better than the country’s enthusiasm for “committees.” When faced with a problem, representatives from different parties and specializations are selected to team up and explore the matter from every angle. The process is recognized abroad and respected as an excellent sign of Germany’s civil development.

Most notably, foreigners are impressed by the relative independence of these committees. But most remarkable might be the fact that politicians embrace committee recommendations surprisingly often. A decade ago, the so-called “Hartz Commission” set the guidelines that informed the labor market reforms of the Social Democratic (SPD) government (the recommendations were so controversial and influential that the SPD was later voted out of office). Peter Hartz, the brain behind the committee, currently refuses to speak to the press about the outcome of his reform proposals.

Germans like to say that they have a passion for committees, so much that they need one even to turn a screw. For foreigners, this might be puzzling. But the consensus is that Germans have the ability to take a decision and implement it with a pace and a commitment uncommon to any other industrialized country.

A model of right and wrong

All of this is (famously and infamously) evident in the discussions about the “Energiewende,” Germany’s attempt to move from nuclear energy and fossil fuels towards renewables. Several years ago, Germany faced a choice: The country could either try to establish itself as the primary innovator in the field of renewable energy, or it could rely on its developed industrial sector. The country was hard-hit by Chinese technology imports, and had begun to move toward renewables earlier than most countries even before Fukushima. After the tsunami destroyed the forty year-old nuclear plant in Japan, Germany accelerated its transition away from nuclear energy – after a committee recommended it, of course. Now, as the costs of transition continue to rise and burden tax payers, Germany might reconsider.

Throughout Europe, German energy policy is considered a model about everything that can go well and wrong in the energy sector. Germany has been praised for its ability to become the global leader in photovoltaic installations, notwithstanding its lack of sun hours. Germany has been envied for its capability to develop a renewable policy together with an industrial policy, fostering the growth of new industrial champions. Germany also serves as a reminder that good policy can turn sour if incentives are uncontrolled and uncoordinated. The concept of “the more, the better” does not work with renewables if their introduction is not integrated with other energy production sources.

Of course, another committee has already been organized to “oversee the “Energiewende.” Germany’s advantage is that all its problems are shared by other European countries that have introduced serious energy policies. Energy costs are rising, and this may impact the competitiveness of energy sectors that consume large amounts of energy. Europeans can do little to counter cheap imports from China.

Germany’s challenge is to revise its approach to renewables to make its policies more efficient. Moreover, the country should recognize that there is no national solution. As long as Asian energy is still cheap – largely because the widespread availability of cheap and dirty coal – competitiveness remains an issue. And if Asia imports out-perform European producers, the consequences will be felt across the continent and not just in a single country.

Efficiency is key

The solution is both diplomatic and technological. On a diplomatic level, decisions have to be taken on whether or not it makes sense to invest in renewable energy, only to see emerging countries consolidate their fossil fuel portfolios with total emissions increasing year after year. Lately, climate conferences have been ossified by bureaucrats (there’s a reason why Bono doesn’t show up to those conferences anymore), and the lack of real pressure is evident.

In relation to technology, it’s about time to recognize a simple fact: The money invested in renewable energy installations isn’t well spent. Solar panels and wind mills (widespread in Southern Italy, Spain, and Germany) are fancy and politically important, but they aren’t necessarily the best investment into the future. Billions of euros are spent every year in subsidies to install solar panels on the roof of private homes. Imagine if that money went to research and development! Energy transition won’t be accomplished by constructing more ten-story wind mills but by investing money into high-efficiency boilers, thermal insulation windows, and new construction techniques. Yet those changes are often invisible to the untrained observer and thus don’t carry a lot of political capital. Still, their development could spawn new industrial clusters, reach durable results, and distribute money to a wide range of businesses that focus on production, installation, and maintenance. German exporters might benefit as well.

The key to a sustainable future lies above all in the pursuit of increased efficiency. Coincidentally, that’s what the energy transition commission recommended as well.



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