Why Germany may retreat from renewables - and why you may want to also

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By: SGN Staff

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Quick Take:I am a committed environmentalist... but not at any cost. I think we have to find solutions that are economically sustainable as well. That's why I was interested to read an editorial from Dr. Robert Peltier in Coal Power Magazine. He had the courage to question the wisdom of Germany's policy on renewables. He says that it has been so expensive that industry is moving out of the country due to the high price of electricity.

 

According to Peltier, German residential customers pay 35 cents/kWh. Industrial customers average 17 cents. He then goes on to explain some of the disastrous consequences. From where I sit, the situation is even worse than Peltier explains, because he fails to consider the impacts to the grid. The influx of renewables has put an enormous stress on the regional grid, one that will cost billions to fix.

 

It's a good warning for other countries. By all means move rapidly and forcefully towards renewable energy. But do it in a way that is economically viable, or you could bankrupt yourself in the process. Here are Peltier's opening remarks. - By Jesse Berst

 

Readers of this column have surely noticed that I have used Germany as the exemplar of the European Union’s (EU’s) disastrous energy policies. The reason I do this is simple: Others continue to hold up Germany’s Energiewende as an example the U.S. should emulate. Even Bloomberg has fallen for the chimera that 80% of electricity from renewable energy sources by 2050 can be achieved without economic chaos.

In the May 15 Bloomberg article “U.S. Energy Policy Should Take a Lesson from Germany’s Energiewende,” the writers propose three lessons the U.S. should learn from Germany’s experiment:

Germany has a national vision and commitment to renewable energy.
Germany’s policies are consistent, but still flexible.
Germany is showing that transforming the electricity system can be done economically and affordably.

I believe the facts make each assertion disingenuous. The Bloomberg writers have fallen into the familiar trap of mistaking commitment to a national political goal with the well-being of its citizens, the prime purpose for the existence of any government. Just because something can be done, doesn’t mean it should be done, particularly when the collateral damage to its citizens and economy are ignored.

 

Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.

 

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