Photo shows the Solar Settlement in Freiburg, Germany, which generates 420,000 kWh of solar energy from a total photovoltaic output of about 445 kW peak per year. (Photo/permiegardener via Flickr)
If, in 1945, you were to make a prediction as to which country – the United States or Germany – would have a better grasp on the fundamental principles governing politics and economics in the twenty-first century, you’d be forgiven for thinking there was no way that Germany – traumatized by fascism, ruined by war and split in half by two conquering armies — would be leading the modern world into the future. You would also be wrong.
To understand why, one has to go no further than comprehending the very German word energiewende, which translates into English as ‘energy transition.’ The word is shorthand for the complete transformation of Germany’s energy infrastructure into one that is 80-percent fueled by renewables by 2050. While fossil-fuel advocates here in the United States may scoff at such tie-dyed dreams, the Germans are well on their way to achieving that goal and could actually do so ahead of schedule if technology and mass production continue to push the boundaries of what is possible for renewable power.
Consider the facts: As of today, Germany has reached the point where 27 percent of its energy resources come from domestically produced wind, solar, bio-fuel and hydroelectric power. By 2020 – just seven years from now – most German policy experts believe their country will have reached 35-percent dependence (if that is the right word) on such power sources. Furthermore, Germany is planning to hasten the transition by mothballing its aging nuclear power plants while, at the same time, the country is shutting more coal-fired plants than opening new ones.
While obstacles remain, the vision of a Germany totally independent of fossil fuels is closer to reality now than ever before – and much farther along the road to completion than similar efforts in the United States or the rest of Europe. How, exactly, did the Germans do it? How did they manage to convert so much of their energy demand away from fossil fuels and nuclear power to renewable energy?
This is no small question for a number of reasons. As the economic heart of an integrated continental economy, Germany is no Denmark – a tiny European country that has also made great strides in weaning itself off fossil fuels. Indeed, Germany is an industrial superpower of 82 million people and one of the world’s leading exporters of everything from high-tech machine tools to luxury automobiles.
As a point of comparison, it is as if the population and economic output of California and Texas were to have nearly a third of their combined energy demand produced by renewable power – with none of the sunshine or rich wind resources that both states readily enjoy.
Policy, politics, culture
A new book explaining why this transformation has occurred in Germany and not in either of these two highly entrepreneurial and tech-savvy U.S. states is Osha Gray Davidson’s Clean Break: The Story of Germany’s Energy Transformation and What Americans Can Learn From It. While short, the book argues that three factors lay behind Germany’s renewables revolution – politics, policy and culture.
On the politics front, it is clear that while Germany has its own system of vested interests like any other Western democracy, it lacks the chokehold on reform that the fossil-fuel lobby wields in the United States. This is due to a number of factors, all of which mutually reinforce one another, such as the lack of a major German oil producer like BP in Britain or Exxon Mobil in the United States, its parliamentary system lack of an obstacle-ridden system of checks and balances, its highly representative electoral system that allows for third- and even fourth-party representation in the halls of power, and, not least, the much lesser role organized money plays in deciding outcomes in German politics.
What all these political differences add up to is that when the fossil-fuel lobby and skittish industrialists tried to scuttle reform with the exact same arguments and tactics used in the United States, their organized political power could not override the wishes of the vast majority of German voters who, like those in the United States, see a transition to renewable power as highly desirable. The effect was to create a systematically different policy environment than that which exists in the United States today.
The best and most important example of this policy difference is Germany’s national feed-in tariff, which creates financial incentives to consumers to adopt wind, solar, and bio-fuel energy sources at the expense of traditional fossil fuels. How it works is simple – every energy consumer in Germany – except those exempted by law such as Germany’s industrial export sector – have to pay somewhat higher electricity rates than they otherwise would. These funds are then then used by utilities to purchase renewable energy from producers who sell their energy into the national electrical grid.
Renewable energy production in Germany is thus subsidized through electricity ratepayers, not via taxes or direct government subsidies. This is a key point because it creates not just a steady flow of money for the funding of renewables adoption, but a stable, long-term policy environment not subject to the health of government budgets or political shifts in who controls them. Contrast this with the renewable sector in the United States where the wind industry, for instance, has to fight for its tax credit every couple of years or face a crushing change in the operating economics of its business model.
The effect that Germany’s feed-in tariff has had on bootstrapping wholesale adoption of renewables is remarkable. Overnight, it made solar, wind and biofuel competitive with traditional sources of power and made the installation of such consumer items as rooftop photovoltaic panels cost-effective for most Germans.
Not only do such installations make much more sense financially (thanks to the tariff), but it also has the effect of turning every super-efficient, renewable-energy home into a mini-utility that gets paid for the power it feeds into the national grid when a home’s power production exceeds power consumption.
The result has been a sudden, dramatic trend reversal in a vital economic sector that for over a century has known only consolidation and centralization into bigger, more powerful corporate entities. This is revolutionary, and has the potential to not just decentralize the production of electricity away from the big utilities, but to democratize power production. Instead of Big Power, consumers can now have their pick among any number of little producers and, if they so desire, can even become a producer themselves by joining any one of the power cooperatives now dotting the German countryside.
It is this resulting competition that has done most to keep the retail price of power relatively low and comparable to what many in the United States pay for electricity and points to just how much control big, centralized, oligopolistic utilities have over wholesale and retail electrical prices. Furthermore, fears of blackouts and a debilitating power crisis touted by those skeptical of the new energy regime have pointedly not been raised — because a stable and rational policy environment has been wedded to systematic investment in transmission infrastructure. As a result, the German electrical grid is as or more reliable than those found in the United States – all without sacrificing economic productivity or competitiveness.
All this, of course, depends on continuing to expand and modernize the German grid to keep up with renewable production. Solving the intermittency problem is also an issue, since fossil fuels – mostly natural gas – and nuclear power still are still the big providers of base-load power, but, again, German officials are optimistic about overcoming the problem. It is, they insist, not an “obstacle” to a 100 percent renewable future but, a “task” that, with enough pragmatism and effort, must and will be completed.
Paying taxes in good faith
This mentality explains the cultural element at work in powering Germany’s renewables revolution. It is hard to imagine a polarized, distrustful, highly individualistic and economically insecure American population having enough solidarity, social capital, patience and trust to see an energy revolution through to completion. Ours is a society where not only are the interests of the many often subsumed by the wealth and will-to-power of the few, but one where distrust, fueled by the money of vested interests, in such a basic institution as science is big enough to call into question the very idea that climate change actually exists.
In Germany, such beliefs are considered ridiculous, and while it has been the Green Party leading the retreat away from fossil fuels and nuclear power since the 1970s, social consensus on energy issues is broad enough that it is currently a conservative government, led by a one-time advocate of nuclear power, that has doubled-down on remaking the German energy order by 2050. German conservatives, unlike our bought-and-paid-for corporate reactionaries, acknowledge both scientific and political reality. Indeed, one may argue it is their very level-headed pragmatism in the face of such reality that has made the German renewable effort so successful.
Can the United States match the German energiewende with one of its own? Certainly the building blocks are there, but the real answer boils down to whether Americans trust enough in the future and in one another to agree to pay just a bit more for electricity, through something like a feed-in-tariff. The other option is remaining with the known, but terrible, status quo.
Given the dismal state of our corrupted, dysfunctional political system and the devolution of social norms that once held that solidarity with our fellow citizens was a good thing, the answer to that question remains cloudy at best. As they say in Vegas, don’t bet on it.
The views expressed in this article are the author’s own and do not necessarily reflect Mint Press News editorial policy.
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