On the final day of the German-mandated Renewable Energy Law (EEG) in May, the nation’s parliament approved an extension of its generous feed-in tariffs (FITs). It is also easier for wind and solar entrepreneurs to expand beyond Germany’s small-scale installations.
According to a report in Reuters, the extension of FITs has already led to 25,000 new windfarms in the world’s biggest solar and wind-power market:
The extension of the tariff will give German wind turbine and solar-power operators an easier time winning subsidies and installing capacity than they have had in the past, and make the country even more attractive to investors in those industries, which are racing to develop new, cleaner power sources, even as they seek government support.
(Particularly encouraging, in my view, is this sentence: “It has also helped a new breed of startups that are running new versions of these projects.” This is probably related to the fact that half of German startup funding goes to companies that are run out of co-working spaces:
Germany’s political consensus means that the current fee for electricity from wind and solar sources, the “feed-in tariff” (FIT), is not about to be pared back, and certainly not dramatically, even if President Donald Trump has had a bone to pick with the deal.
“The FIT is not going to get cut,” Christian Sprenger, a member of Germany’s centrist Free Democratic Party, told Reuters. “It’s already too generous.”
But the important thing is not that renewable energy will continue to grow, but that it will continue to dominate.
The core reason is Germany’s offshore wind power business. In May, Reuters reported:
The announcement marks the end of a six-year battle by offshore wind developers to secure funding for the equivalent of 35 GW of new capacity to be built by 2030, and is expected to be seen as a success by European rivals in the offshore market. Under the proposal, the government will continue to extend the subsidy system for at least four years. The number of large-scale developments is also being extended to 1 GW from 7 GW. The expansion of wind power aims to put the country, which has no nuclear power stations and relied on nuclear energy until it shut them down after the 2011 Fukushima disaster, on a par with other European countries by 2050.
More to the point, the program’s extension was bigger than the ending of a previous program:
The development, which had started back in 2012, was meant to see new offshore wind farms from South Korea, Britain, Denmark, Italy, Switzerland and Spain.
As Reuters noted, the extension was driven by domestic concerns, not by the desire of foreign competitors.
In this case, it’s hard to see why it makes any sense for American politicians to question the efficiency of the renewable energy boom in Germany.
In the United States, subsidies have led to massive overinvestment in solar and wind. Renewable power has been making gains, but is far from achieving a level playing field with fossil fuels.
That is why Republican support for restrictions on the expansion of renewable energy is so puzzling.