Global environmental challenges
Will Germany kill the goose laying the golden eggs?
Germany is understandably proud of its renewable energy sector — wind and solar power supply more than 15 percent of the country’s electricity. Its Renewable Energy Act (EEG) has fuelled its rapid growth over the past decade and been copied by more than 40 countries around the world.
But is the party over?
A new centre-right government announced plans to slash the EEG’s guaranteed feed-in tariffs (FIT) that utilities are required to pay the myriad of producers of solar energy, many of whom feed the modest amounts of solar power from their roofs into the local grid. The EEG already foresees a FIT decline of about 10 percent per year — a built-in incentive to keep overall costs falling.
Environment Minister Norbert Roettgen wants an additional 15 percent cut in April on top of the 10 percent from Jan. 1, 2010 and ahead of the next 10-percent cut on Jan. 1, 2011. In the past decade, the previous two environment ministers from the Greens party and the centre-left Social Democrats (SPD) worked closely with the solar industry before making changes.
Roettgen made it clear those days of compromise were over. He said he spoke to solar firms last week before proposing the cuts, but rejected their offer to a one-off mid-2010 cut of 5 percent. “This is not a compromise,” he told journalists in Berlin on Wednesday. “It’s a bullseye.” He said the cuts would save consumers about 1 billion euros a year over the next decade. Consumer groups and some industry groups had wanted deeper cuts, Roettgen noted.
Solar companies in Germany, which have until now worked closely with the government on reducing the tariffs the utilities pay to producers of green electricity, criticised the cuts which amount to about 35 percent within 13 months. They fear they will cripple the sector and kill jobs. Roettgen said he wants solar power, which now generates about 1 percent of Germany’s electricity, to be providing 4 to 5 percent by 2020 even though the support is being slashed by one-third in the course of 13 months. He portrayed the cuts as if he were doing the industry a favour.
Several leading German companies — such as SolarWorld, Q-Cells and Solon — said there were dark days ahead for the solar industry. They pointed out that prices, and support, were already falling steadily and would reach grid parity by the middle of the decade. Why, they asked, ruin a good thing? Frank Asbeck, CEO of Germany’s biggest solar company by revenue SolarWorld, called the plans unacceptable. As my colleague Christoph Steitz reported here, the cuts would cause problems for solar companies around the world.
Carsten Koernig, managing director of the BSW solar industry lobby, said “a radical cut like that will rob German companies of the foundation for business”.
Claudia Kemfert, an energy policy expert at the independent DIW economic research institute, said: “This level of 15 percent is quite problematic. It means a 25 percent cut within a few months and I consider that to be too much. It’s going to hit the small and medium sized companies very hard. It’s going to bring a lot of uncertainty into the market.”
The German Renewable Energy Association also used strong language, saying: “The radical cuts endanger the expansion of renewable energy.”
Is it a done deal? It’s hard to say at this point. There could be a lot of resistance from key conservative-ruled states such as Saxony, Saxony-Anhalt, Thuringia, Bavaria and Baden-Wuerttemberg. They have important solar power industries and in the past succeeded in watering down attempts to cut the FIT.
Germany is still at the top of the class when it comes to solar power, according to a new report by nonprofit Global Green USA.
The group graded 16 countries plus the state of California in terms of how much solar power they added in installations and what kind of policies they have for future development.
But Germany’s Renewable Energy Act has given that phrase a whole new meaning. I’ve discovered that you can get paid for capturing the sun’s energy on your roof, converting it into CO2-free electricity with the help of special equipment, and feeding it into the grid — and watch the investment yield handsome long-term returns.
After nearly 25 years in the computer science and aerospace industries, including a stint at NASA’s Jet Propulsion Laboratory, Doug Caldwell decided to pursue a career-long dream of putting his engineering skills to use for the environment. So the Southern California native left his own start-up, a company that builds cameras for spacecraft launch systems, to explore his options.
He didn’t have to look far, or for very long. Within months Caldwell had landed work on a solar power development project, recruited by an old buddy from his days launching model rockets in the desert. Perhaps more ironic is the company he ended up working for — Boeing Co.
A “gold-rush-like” buzz has spread across Germany in the last week over tentative plans to invest the staggering sum of 400 billion euros to harvest solar power in the Sahara for energy users across Europe and northern Africa. Even though European and Mediterranean Union leaders have been exploring and studying for several years the idea of using concentrated solar power (CSP), the Desertec proposition suddenly captivated the public’s attention a week ago when German reinsurer Munich Re announced it had invited blue chip German companies such as Deutsche Bank, Siemens and several major utilities to a July 13 meeting on the project. The 20 companies aim to sign a memorandum of understanding to found the Desertec Industrial Initiative that could be supplying 15 percent of Europe’s electricity in the decades ahead.
Germany’s deputy foreign minister, Guenter Gloser, has been the government’s point man for the project. I had the chance to talk to him about it.
It was a disarmingly simple question but, embarrassingly, I didn’t have a clue when first asked that 18 months ago. Even though I’d have to describe myself as a genuine tightwad when it comes to expenditures, I simply had no idea, strangely enough, about how much money my four-person household was spending on electricity — nor how much carbon dioxide was being produced.
Now, after a year of carefully tracking the daily use of electricity, I’ve discovered a bit about when and where power is being used and, in theory, saved — without much pain. It seemed like a no-brainer and it honestly was not hard to cut our consumption by 1,000 kilowatt hours in 2008 to 5,000 kWh — saving about 200 euros and 500 kg of CO2 in the process. There were only minor sacrifices: rigidly turning off “standby” switches and unused lights, pulling plugs on little-used appliances, putting in energy-efficient lightbulbs, using the washing machine sparingly and the dryer only rarely, and replacing an inefficient dishwasher with a low-energy model.
Every once in a while you run into someone with so much energy that you find yourself wishing you could plug something into them to tap a bit of that excess power. On a dark, cloudy December afternoon, I spoke to Frank Asbeck, the chairman of SolarWorld and dubbed the “Sonnenkoenig” (Sun King) by a leading newspaper in his native Germany for turning an idea (mass use of photovoltaic) into a multi-billion euro corporation with 2,500 employees — in little over a decade.
Asbeck, 49, easily the most entertaining chief executive I’ve met in Germany, lit up the room with a 90-minute surge of ideas, witty comments and untempered optimism about solar power — a delightful respite from the economic doom and gloom of the current era.
You know the wind is changing for renewables — so to speak — when the head of Europe’s biggest power producer becomes an advocate — and then even decides to reduce his own personal reliance on fossil fuels by powering and heating his new house with photovoltaic and geothermal energies.
Wulf Bernotat, the chief executive of E.ON, admits he became rather belatedly an advocate for renewable energy, even if his company still gets the lion’s share of its 70 billion euros in annual turnover in 30 countries from burning fossil fuels. The reasons for the change of heart? It’s one answer to climate change, it’s the way the political winds were blowing, and there are profits to be made.
Solar power companies have been working around the clock to drive down the price of clean electricity from the sun so it can one day be as cheap as the energy we get from dirtier sources, like coal plants.
Until we get there, however, some solar panel installers have come up with a solution that they say will give more people access to solar energy. How are they doing it? By allowing customers to lease, rather than buy, the photovoltaic solar panels for their roofs.