Germany has been rapidly increasing its green energy production but hasn’t gotten the results it planned.
The Switzerland-based FAA Financial Advisory AG looked at the consequences of Germany’s “Energiewende” and found that the $412 billion effort did “not provide net savings to consumers, but rather a net increase in costs to consumers and other stakeholders.”
“Over the last decade, well-intentioned policymakers in Germany and other European countries have created renewable energy policies that have slowly revealed themselves to be unsustainable, resulting in profound, unintended consequences for all industry stakeholders,” reads FAA’s report which was prepared for the Edison Electric Institute and other European groups.
“Accordingly, the United States and other countries should carefully assess the lessons learned in Germany, with respect to generous subsidy programs and relatively rapid, large-scale deployment and integration of renewable energy into the power system,” FAA warns.
Germany was once touted by President Obama as a shining example of green energy policy. The country aims to get 80 percent of its power from green energy by 2050 in an effort to drastically cut its carbon dioxide emissions, which scientists say cause global warming.
A mix of subsidies and production quotas have allowed the country to rapidly expand its green energy production, growing from 4.3 percent of total energy consumption in 1990 to a whopping 23.5 percent in 2012 (this includes hydroelectric power). But the cost has been astronomical to consumers.
Consumer energy bills have been spiking for years to the point where electricity in the country has been called a “luxury good” by major media outlets. German households have seen electricity prices more than double in the last decade “increasing from €0.14/kilowatt hour (kWh) ($0.18) in 2000 to more than €0.29/kWh ($0.38) in 2013,” according to FAA. This is compared to U.S. household prices, which have been stable at $0.13 per kilowatt hour over the last decade.
FAA also reports that German consumers will pay $31.1 billion for energy subsidies this year alone. Furthermore, in the past five years Germany has suffered $67.6 billion in net export losses from high energy costs — a huge blow to an export-led economy like Germany.
“While these policies have created an impressive roll-out of renewable energy resources, they have also clearly generated disequilibrium in the power markets, resulting in significant increases in energy prices to most users, as well as value destruction for all stakeholders: consumers, renewable companies, electric utilities, financial institutions, and investors,” FAA notes.
FAA also points out that while Germany was successful in cutting carbon dioxide emissions, recent years have seen their emissions increasing as economics turns against their energy policies.
“From 2005 to 2011, Germany’s CO2 emissions declined by 99 million metric tons, or 12 percent,” reports FAA. “Yet, since 2009, a number of factors have led to an increase in German emissions: low prices for CO2 certificates, low coal prices … larger power generation needs due to the increase in electricity consumption in response to the economic recovery, the decommissioning of nuclear plants, and the increase in power exports.”
While Germany’s emissions have been increasing in recent years, the U.S. has seen carbon dioxide dramatically reduced because of the increased use of natural gas brought about by hydraulic fracturing.
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact [email protected].