Germany’s new energy policy includes far more than just phasing out nuclear power by 2022. The expansion of renewables like wind and solar power (80% of the energy mix by 2050) and the reduction of greenhouse gases (80% by 2050) planned by the German government will require a wide range of measures – measures that will have to fit together perfectly like the parts of a puzzle.

Germany has been called “the world’s first major renewable energy economy”. Renewable electricity in 2010 was 101.7 TWh including wind power 36.5 TWh, biomass and biowaste 33.5 TWh, hydropower 19.7 TWh and photovoltaic power 12.0 TWh.

Germany has reinforced this initiative more than any other country and much of that came from the disenchantment with nuclear energy, which supplies about a quarter of the country’s electrical needs.

The rapid expansion of renewable energies is widely seen as the main driver of rising energy prices in Germany, triggering a barrage of criticism from consumer groups. German citizens are outraged by the soaring prices in their electric bills.  This is a result of phasing out nuclear power and mandating renewable energy. Consumers in Germany are facing the biggest electricity price increase in a decade and those price increases will continue. It is estimated that by 2030, Germany will have spent more than 300 billion Euros on green electricity. About 800,000 German households can no longer pay for their energy bills.

Criticism of the policy

A 2009 study from RWI Essen of the effects of the Renewable Energy Sources Act concluded with various overarching problems. First, using photovoltaics in emission reduction is 53 times more expensive than the European Union Emission Trading Scheme’s market price, while wind power is 4 times more expensive, thereby discouraging other industries from finding more cost-effective methods of reducing emissions. Second, although renewable energy subsidies increase retail electricity rates by 3%, they reduce the profits of German electrical utilities by an average of 8%, making them less competitive with other European utilities. Third, despite lavish subsidies, Germany’s photovoltaic industry is losing its market share to other countries, particularly China and Japan. Lastly, it stifles renewable energy innovation by arbitrarily awarding subsidies to different technologies, instead of according to their cost-effectiveness.

Sources

http://online.wsj.com/article/SB10001424127887323751104578149144050909144.html

Germany's Energy Policy: Man-Made Crisis Now Costing Billions

http://spectrum.ieee.org/energy/policy/germanys-green-energy-gap