Early in his first term, President Barack Obama held up Germany as a role model for green energy policy and combating global warming. However, following Berlin’s lead on green energy could lead to skyrocketing energy prices, say conservative groups.
“At precisely the moment that Europe comes to a sobering recognition of its failed energy policies, the Obama administration is punch drunk on expensive green energy,” said Benjamin Cole, spokesman for the Institute for Energy Research. “Next month, Obama will return to Berlin for another speech, this time at the Brandenburg Gate. Maybe he’ll look at Berlin this time, and back away from the European-style energy policies that will harm the U.S. just like they have Germany.”
Germany has seen energy prices go through the roof as the result of the government’s green energy subsidies and mandates. On Wednesday, German Chancellor Angela Merkel said that she would rein in Germany’s green subsidies to ease the burden that has been placed on consumers.
“Dealing with the renewable energy reform is the most urgent of the energy topics, in my view,” Merkel said at a conference. German subsidies support the government’s goal to produce 35 percent of the country’s power from renewables by 2020 — and 50 percent by 2030.
German citizens and businesses have become increasingly burdened by the costs of subsidizing more green energy production. Since 1998, taxes and government charges on energy consumption have risen 243 percent in Germany, and now make up more than half of the price of electricity in the country.
The main culprit behind the rising tax burden is the Renewable Energy Levy — a subsidy for green energy production — which cost German households 7.2 billion euros this year alone and cost German industry 6.1 billion this year, according to the German Association of Energy and Water.
“If we don’t get on top of the country’s energy transition to renewables and are not able to rein in energy costs in the process, German industry’s competitiveness stands to suffer,” Ulrich Grillo, who heads the Federation of German Industry, told “Handelsblatt.”
Grillo said that many German firms could start to invest in the U.S. where a boom in natural gas has kept energy prices low. However, the Obama administration has been promoting renewable energy production.