This piece seems to be propaganda. The citation for "30-50%" below 2005 emissions by 2020, the first year of the rule, is an article describing the overall 30% reduction goal for 2030. Steven, I'd love to see real numbers so that we can debate actual policy rules, not made up numbers.
Stefan, you have a mistake in your piece: Germany's power RATES are the 2nd highest in the EU, but their average power bills are actually quite a bit lower since it's a very efficient economy. This is a big difference b/c rates are not what matters, the actual bill amount is what matters, as well as the bill amount in relation to average income.
This makes my heart warm, knowing that renewable energy is allowing people around the world to develop in meaningful and affordable ways.
Nice piece Paula. You of course left out a key recommendation and a key observation: the amazing growth in solar PV in the last five years has been due almost entirely to feed-in tariffs and, accordingly, feed-in tariffs will be and should be a big part of the solution moving forward. China, Japan and Germany are the three biggest markets today (though the US may well edge out Germany) and these three countries all rely almost entirely on feed-in tariffs. I know you have historically been averse to feed-in tariffs but I would hope you are finally coming around since you in this piece acknowledge that growth has been phenomenal and needs to continue to be phenomenal.
Ben, how much would the integration adder have to be in order for new geothermal contracts to be competitive with wind and solar?
I'm not sure how seriously we should take a report that talks about the costs of the FIT program and ignores the benefits, including the very obvious benefit of providing power to people. The costs figures cited in the article don't even include the value of the electricity provided. Germany's FIT program has been the single biggest force in driving PV costs down worldwide to the point that solar is now at grid parity in many jurisdictions -- including in Germany. These cost comparisons will continue to become more favorable over time so I feel pretty confident that any net cost from the first 15 years of Germany's FIT will be made up many times over with net savings in the coming decades.
As one good example of the benefits of the FIT program, here's a quote from the report, which the report ironically lists as a detriment without realizing its contradiction of their own theme: "wholesale prices in Germany for base load have fallen dramatically from €90-95/megawatt hour (MWh) in 2008 to €37/MWh in 2013." Wholesale prices have fallen b/c solar and wind have pushed out higher cost fossil fuels. That's good!
Michael Keller, it's all but certain that Germany's FIT program will demonstrate a profound reduction in GHGs over time. Even if they have seen a temporary uptick in GHGs from new coal plants (which is itself debatable) Germany is on a clear path to 80% renewables by 2050 or sooner. Time will tell if I'm right, but either way it's far too soon to critique the FIT as not succeeding in its GHG reduction goals. Germany is headed for 30% renewables very soon, in just 15 years or so. This is remarkable. Cost is the debate, but as I mentioned below I'm also quite confident that in just a few years we'll be able to look back and say the net benefits of the FIT were very positive.
Steven, there's very good evidence that Germany was the major driver in reducing solar prices globally, benefiting all of us. Solar prices have dropped consistently about 20% for every doubling of delivered product (known as Swanson's Law). http://en.wikipedia.org/wiki/Swanson's_law.
Since Germany was responsible for about half of the global market for a number of years they were directly responsible for a very large portion of the recent reduction in prices.
As for Germany's wholesale price reductions, do some number crunching and extrapolation and I bet you you'll find that the reductions observed in Germany's wholesale prices far outweigh any premium paid for renewable energy from FITs.
As for grid reliability, Germany's grid is actually extremely reliable. There is discussion pending about providing capacity payments to fossil fuel plants that need to stay on line as backup, like is done already in many jurisdictions. Given Germany's track record on grid reliability and engineering issues more generally I'm pretty confident they'll keep the lights on even as they continue with the energiewende.
Steven, you're failing to see the contradictions in your argument. Why did overcapacity occur? Because producers scaled up due to the demand from Germany and other markets. Without the German FIT we wouldn't have had China coming online like it did with production. The long-term Swanson's Law holds, I believe, very well, though I agree with you there was an increase in price for a few years, prompted by a bottleneck in silicon supplies. But once silicon markets scaled up, the long-term price decline trend kicked back in. The end result: thanks to German's demand from its FIT program, and China's massive ramp up in PV panel production, we now enjoy around the world solar panels that provide power increasingly at grid parity or even lower cost in many circumstances. In Germany, solar power for "self-consumption" generally costs less than grid power. Stay tuned for the "solar singularity" as installations soar around the world in the coming years.
Steven, you're missing the point of Swanson's Law. It's not about R&D, it's about deployment and scale. R&D can still help but solar panels have long been efficient enough to be useful once costs of production came down enough. The massive scale that Germany's FIT directly promoted was directly behind the observed cost trends quantified by Swanson's Law. Does that make sense? So, no, we wouldn't have seen the same cost trends for PV without Germany's FIT.
As for Germany's cost of power, yes, their cost per kWh has gone up but their bill amounts on average are far lower than the US and many other countries b/c they're so efficient. There's far more than renewables behind German and European price increases more generally. Maybe you've noticed that energy prices are going up around the world in general? Just as in CA, higher prices prompt greater efficiency (within reason, of course), along with good policies to help conservation and efficiency. So a focus on the c/kWh alone is misplaced. What really matters is what we pay as percent of income, and by that measure both CA and Germany do very well. And we have a lot more renewables than most jurisdictions too. Hmmm, maybe policy does matter.
Last, what boom and bust in Germany? There has been no bust, only boom. Going from 7.5 GW to "only" 3 GW of solar is hardly a bust. And of course wind power and biomass have been growing apace at the same time, so there is no bust in Germany's renewable market. They're set to soon surpass 30% renewables, in just fifteen years of the FIT being in place. I hope you'll pay attention to the facts and one day see what a success Germany's programs have been not only for Germany but the world as a whole.