Germany’s Green Energy policy
The rapid expansion of renewable energies is widely seen as the main driver of rising energy prices in Germany. Germany already produces more than 25% of its electricity from renewables such as wind and solar power, but is planning a complete exit from another low-carbon energy source, nuclearpower, over the next 10 years because of safety concerns. But the urgently needed expansion of the grid, as well as the development of replacement power plants and renewable energy sources is progressing very slowly.
A growing number of economic experts, business executives and union leaders are putting the blame squarely on the shoulders of Merkel’s coalition, However, do to the huge radical transformation of Germany’s energy supply toward renewable sources, it will require billions of euros of investment in new power plants, renewable technology and grid infrastructure over the next decade alone.
Also, many in the governing coalition, as well as the big energy and industrial companies, argue that a decentralized system powered by renewable energy would be extremely expensive and insecure to replace the current centralized one, which is based on a few large coal, gas and nuclear plants. However, in that case, these main industrial companies had no option but to accept Germany’s new direction. The energy supply is now “the top risk for Germany as a location for business,” says Hans Heinrich Driftmann, president of the Association of German Chambers of Industry and Commerce (DIHK).
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. And consumer groups are complaining that about 800,000 German households can no longer pay for their energy bills.Because renewable technologies are not economic compared to traditional fossil fuel technologies, Germans have had and will continue to pay an additional increasing premium for their use. Because of this premium, electricity prices are expected to increase by over 10 percent next year—the largest increase in a decade.
yulung.y
January 30, 2013 - 4:21 am
I like how you write up this post. You did a really good job of explaining and making it more easier for me to understand, really appreciate it. I also like how you said everything very detail. For example, how you mentioned that the consumers are facing the biggest electricity price increase in a decade and what will be happening for the next 10 years. One more thing is, what do you think of spending billions of euros for new power plants and renewable technology etc?
llseymore
January 30, 2013 - 4:26 am
This was a nice read I learned a lot of info in reading this
lndonascimento
January 30, 2013 - 3:41 pm
You did a nice job at bringing up these issues and facts on Germany’s Green Energy policy and made it very easy to grasp what their plans are and how they plan on doing it. You were very detailed and brought up important key points of what they have planned to do; you also brought data into your post which gives it credibility. What is your opinion on the price increase on energy bills? Will it pay off or will it create debt?
mdsuarez-peralta
January 30, 2013 - 4:18 pm
Thanks for the comments, I believe that Germany’s energy policy is just all an unnecessary expense.
It is obvious that it is an extreme high expense for the country where the debt it will face now and in 10 years along the way will be harmful and it will continue to increase every year they create new energy resources. This will leave the middle class and even the poor with more expenses which they don’t deserve for them having to look for another alternative to get good energy. In that case, I don’t believe that spending billions of euros in improved energy resources is necessary, they should definitely find other alternatives to this issue.
msindhu
February 9, 2013 - 11:03 pm
I like how you wrote about the topic your explaining the economics of it all as well as high lighting the monetary aspect of the issue is something not a lot of blogs have discussed or taken into consideration. The estimated rise in prices that you write about and the fact that 800,000 German households are unable to pay their energy bills is quite shocking however I would like to point something out to you the expected rise in prices even though high will have long term rewards for consumers. The point that you fail to mention in your analysis is that the investment that Germany is making is in renewable energy that will continually provide electricity to the country for decades to come. The rise in prices and expected premiums is only to pay for the dismantling of nuclear plants and installation of more wind and solar turbines, however twenty to forty years from now when Germany is using 80% renewable energy while the rest of the world is starving for oil its people will be much better off and glad they paid these exorbitant premiums.