Green Energy

If there is one topic on the global economic and political agenda these days it would have to be climate change. For years climatologists and their political allies have insisted that unless something is done about the issue of greenhouse gas emissions those of us on earth are all doomed. Others say that the environmentalist’s claims about the planet are woefully exaggerated. As a result governments are quickly legislating policy to battle greenhouse gas emissions and create renewable green energy programs. Leading the way in the E.U. has been Germany but as a result there have been some consequences that have observers wondering if it will all be worth it.


The government of Gerhard Schröder introduced in 2000 a plan to provide subsidies to companies that helped to produce green or renewable energy.  In 2011, a survey found that 66 percent of Germans believe that climate change is a “very serious” problem.

The points of the plan outlined in the German governments report ‘Energy Transition

The German Energiewende’  include ‘Fighting Climate Change’ as a result of the damage being done by burning coal, oil and gas that has led to the warming of the planet.

‘One major aim of the Energiewende is to decarbonize energy supplied by switching to renewable sources and reducing demand by means of greater efficiency.

Second is a reduction of energy imports which accounts two thirds of Germanys power needs through renewable energies such as solar and wind. But also important in the plan is energy security for Germany especially in regards to Russia. In 2014 Deutsche Welle reported that almost 39% of Germany’s imported oil was from Russia as well as 36% of its natural gas. The main transportation route for energy sources is through Ukraine and political tensions along with war have led to concerns about energy disruptions.  Additionally the hope has been for Germany to take the lead to stimulate a new industry of renewable technologies and create employment opportunities.

Energy security also stretches to the growing number of emerging countries such as China and India with their large populations may decimate supply. A large problem for Germany because of its need to import such large amounts of its energy and would cause energy prices to spike.

Probably the most important aspect is the elimination of nuclear power plants. The Energiewende stating,

‘Germany rejects nuclear power because of the risks, the costs and the unsolved waste issue. In addition, nuclear power does not have the potential to play a major role in future world energy supply.

The report cites the usual problems including risk of nuclear accidents, plutonium proliferation, limited uranium resources, waste storage and radiation. One other issue is the cost of funding new nuclear power plants due to the expense and risk that financial institutions do not want take on.

Due to the nuclear situation at Fukushima in 2011 Angela Merkel shut down eight nuclear reactors leaving nine in operation with those being phased out of operation by 2020. The report assesses the overall nuclear power generation issue this way,

‘In the end, however, it does not matter whether you believe 100 percent renewables is possible or not. Nuclear power is simply too small a player on global markets; it does not even account for six percent of global energy supply right now, and more plants are scheduled to be taken off-line over the next decade than are expected to go online.

However the plan sees a potential for Renewable energy that will ‘consist of numerous small, distributed units, but it can also consist of a small number of large, central plants. In the latter case, the power stations can be gigantic solar arrays in deserts or large wind farms on coastlines.’

For local communities the plan would be of benefit as they invest in their own local renewable energy programs citing the outcome of a U.S. report in 2009,

‘When communities invest in projects themselves, the economic payback is much greater than when large, out-of-town firms invest. According to a study produced by the US National Renewable Energy Laboratory in 2009, the “operations-period impact is on the order of 1.5 to 3.4 times” greater than in absentee-owned projects.


The German government has supported the producers of renewable energy with almost 20 billion euros a year in subsidies. As a result the growth of the renewable energy has caused natural gas burning power plants to become less profitable because of an overcapacity of energy produced. The result of the phasing out of nuclear power has led Germanys four utility RWE AG, E.ON SE, EnBW AG and Vattenfall AB of Sweden caused a shift to increase use of inexpensive and unfriendly to the environment-coal increasing carbon dioxide emissions.

One of the drawbacks to the government’s renewable energy subsidies is that the consumers have to pick up the cost. This has caused energy prices to increase and has put a particular burden on German industry whose energy costs have spiked 30% since 2010. German households are now paying almost twice as much for electricity as their counterparts in the United States.

In March 2015, an opinion poll by the firm Emnid showed ‘that a large majority (81 percent) of the German population were still in favour of the government’s decision to exit nuclear power. Only 16 percent of those questioned by polling firm Emnid believed the phase-out was wrong.’

To their credit the German people seem steadfast in their support for the Energiewende program with full results expected by 2050. And it could very well be that the program has them no longer reliant on foreign energy imports in the years to come. At this point renewable energy now represents a very favorable result of 27% of the electricity production.

Article by Kevin Murphy:

Wealth & Finance Newsletter
Register for our newsletters to receive details of our latest Wealth & Finance promotions.


Please enter your comment!
Please enter your name here