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Germany's Green Plan is Crumbling


The wheels are falling off of Germany’s green energy revolution. In recent years Europe has attempted to position itself as a first mover and global leader in renewable energy, and Germany has led the way with ambitious domestic programs to boost solar and wind energy. But green hopes are giving way to economic realities: Europe is now considering walking back from some of its stated green goals, (rightly) concerned that the costs of renewable energy will make European industry less globally competitive. This is especially true in Germany, where some of Europe’s highest electricity prices have many companies considering jumping ship to cheaper locales like shale-rich America. The Economist has a must-read in-depth report on the failings of Germany’s energy revolution:

Businessmen say the Energiewende [Germany’s energy revolution] will kill German industry. Power experts worry about blackouts. Voters are furious about ever higher fuel bills. The chaos undermines Germany’s claim to efficiency, threatens its vaunted competitiveness and unnecessarily burdens households. It also demonstrates Germany’s curious refusal to think about Europe strategically.

And it’s not just German businesses that are suffering:

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, to 40-50% above the EU average. And because the contracts guaranteeing renewables prices are set for 20 years, the problem will get worse as more such supplies come on stream. Thomas Vahlenkamp of McKinsey reckons that the cost of the Energiewende will double over the next decade. Rising electricity bills will dampen German consumers’ spending, exactly the opposite of what is needed to rebalance the economy.

The Economist does an excellent job painting the grim picture, but it draws the wrong conclusions, suggesting that Germany should push for “a European, rather than a national, vision for the Energiewende.” That could be disastrous for Europe, which is already struggling to find its footing in the wake of the recent debt crisis.

Instead, Germany—and Europe, for that matter—might consider developing domestic shale reserves, and start diverting government subsidies for wind and solar towards the research and development of the technologies underpinning these resources.

Germany’s struggles with green energy should be a warning to leaders and policymakers around the world. Renewable energy isn’t ready for primetime, and no amount of government subsidies or green pie-in-the-sky hopes are going to change that.

[Angela Merkel image courtesy of Wikimedia]

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  • Atanu Maulik

    Reality always messes up the best laid out plans of the left, no matter which coloured cloak they are wearing. Hopefully this green madness will soon end and a new era of honest science and progress will begin.

  • Pete

    Do you think Germany will reconsider its retreat from nuclear power?

  • Corlyss

    “Instead, Germany—and Europe, for that matter—might consider developing domestic shale reserves:

    The Europeans are more in the grip of green ideologues than the US is – and we’re in a bad way. The Europeans are determined to make peak oil a reality if they have to commit economic suicide to do it. While the few adults dither about what to do, what to do, economies continue to decline and angry voters elect Greens to office because they’re the “outs” who are not tarnished by the callous and craven policies of the major parties. This situation is only going to get worse.

    • Atanu Maulik

      The greens can be divided into two groups.
      1. The usual reds hiding now in a green cloak. For them green tech. is just another way to promote the big government, high tax, more regulation.
      2. A closet death cult. For them *WE* are the pollutants and must be removed from the face of the planet. Really scary stuff.

      • Corlyss

        Agree. The ones with political savvy are the former. The spiritual and emotional motivators are the latter. Both are dangerous and the movement should be eviscerated.

  • bigfire

    “The problem with Socialism is that soon or later you run out of other people’s money”. Guess Maggie’s timeless description of Socialism also applies to wishful Greens policy.

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