German MPs adopt cuts for green energy subsidies

Jun 27, 2014 by Kate Millar
German lawmakers adopted a law to reduce renewable energy subsidies as the government seeks to keep its green "energy transformation" on track, curb rising prices and fight nagging criticism

German lawmakers adopted a law on Friday to reduce renewable energy subsidies as the government seeks to keep its green "energy transformation" on track, curb rising prices and fight nagging criticism.

The reform of the "Energiewende" is one of the first big projects of Chancellor Angela Merkel's third term, together with a national minimum wage, and has been a political hot potato both in Germany and with the European Commission.

The law, overwhelmingly approved in the Bundestag lower house of parliament, aims to provide new impetus to the energy shift under which Europe's top economy plans to meet 80 percent of its energy needs with renewables by 2050.

"We're reducing the costs and that is also urgently needed," Energy Minister Sigmar Gabriel told MPs.

Merkel acknowledged this week that Germany was facing a "herculean" task, while Gabriel, who is also her vice-chancellor, said the energy transformation was increasingly being viewed with scepticism by the rest of the world.

Germany introduced a generous system of subsidies for green energies in the late 1990s, a move which has borne fruit—27 percent of the electricity used in the first quarter of this year came from renewable sources—but is costly.

The subsidies are funded by a tax levied on customers' electricity bills, which has driven up energy prices in Germany to count among Europe's highest.

Under the new law, the subsidies will be substantially reduced from August 1, while producers of green energy will also gradually have to sell competitively on the market rather than enjoying priority treatment with guaranteed prices.

Merkel took the surprise decision in 2011 to gradually scrap nuclear power for renewables in the wake of the Fukushima disaster but has faced pressure over how to pay for the clean energy drive.

To offset the phasing out of nuclear energy and the time needed to build up , Germany has also increased consumption of cheaper fossil fuels such as coal which has hit its image for environmental protection.

"A first step in the right direction," cheered the BDEW federation, which represents conventional energy producers, while the reform is criticised by the ecologist Greens party, clean energy associations and environmentalists.

"Sigmar Gabriel is the wrecking ball which is damaging here in this country," Greens lawmaker Oliver Krischer said.

Berlin is also likely to face opposition from the EU Commission, which argues that a tax levied by Germany on imported electricity, including green forms, is, effectively, a barrier to free trade.

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freethinking
1 / 5 (3) Jun 27, 2014
You have affordable energy. This affordable energy allows prosperity, increases living standards for even the poor, it even allows you to clean up the environment. Then progressives come in and they subsidies green energy, then they remove nuclear and regulate out of existence coal. Then no longer able to afford subsidizing "green" energy (which by the way really isn't green.... all those dead birds and other unmentionable things), they remove the subsidies. Prices go up, poor people now poorer, environment is destroyed for people can no longer afford to take care of it.

Only idiots vote progressive!
Tessellatedtessellations
3 / 5 (2) Jun 27, 2014
Free your mind freethinking. From what I've read, energy costs in Germany have gone down since their green revolution. Part of why residential power bills are high is because of taxes that don't subsidize green energy. Instead of lowering subsidies, Germany should have reduced the bills by lowering the overall utility tax while restructuring it such that the subsidies could have continued. They could have also shifted some of the cost to industrial power users because they are currently freeloading off of taxes on residential users. Idiots voting conservative prevent reasonable fixes from happening. Idiots vote for conservative people who will ruin their futures.
Eikka
1.5 / 5 (2) Jun 27, 2014
Merkel took the surprise decision in 2011 to gradually scrap nuclear power for renewables in the wake of the Fukushima disaster


Gradually? It was already being gradually shuttered with the government set energy quotas on how many kWh each reactor was allowed to produce in its lifetime, thereby fixing the price of new nuclear power beyond economically sustainable and the old ones doomed to close.

Merkel's reaction to the Fukushima disaster was full on hysterical panic brake.
Modernmystic
1 / 5 (3) Jun 27, 2014
Free your mind freethinking. From what I've read, energy costs in Germany have gone down since their green revolution.


Energy prices in Germany are sky high, second only to Denmark (another "green" country) in Europe.

Merkel's reaction to the Fukushima disaster was full on hysterical panic brake.


Indeed...

Nothing feeds the news cycle like histrionic news anchors blathering on about a "nuclear disaster"....

They can milk those for months if they do it "right".