Surcharge paid by German households and SMEs
First, let’s hear from the ultra-leftist New York Times. (H/T Dennis Prager)
It is an audacious undertaking with wide and deep support in Germany: shut down the nation’s nuclear power plants, wean the country from coal and promote a wholesale shift to renewable energy sources.
But the plan, backed by Chancellor Angela Merkel and opposition parties alike, is running into problems in execution that are forcing Germans to come face to face with the costs and complexities of sticking to their principles.
German families are being hit by rapidly increasing electricity rates, to the point where growing numbers of them can no longer afford to pay the bill. Businesses are more and more worried that their energy costs will put them at a disadvantage to competitors in nations with lower energy costs, and some energy-intensive industries have begun to shun the country because they fear steeper costs ahead.
Newly constructed offshore wind farms churn unconnected to an energy grid still in need of expansion. And despite all the costs, carbon emissions actually rose last year as reserve coal-burning plants were fired up to close gaps in energy supplies.
A new phrase, “energy poverty,” has entered the lexicon.
“Often, I don’t go into my living room in order to save electricity,” said Olaf Taeuber, 55, who manages a fleet of vehicles for a social services provider in Berlin. “You feel the pain in your pocketbook.”
Mr. Taeuber relies on just a single five-watt bulb that gives off what he calls a “cozy” glow to light his kitchen when he comes home at night. If in real need, he switches on a neon tube, which uses all of 25 watts.
Even so, with his bill growing rapidly, he found himself seeking help last week to fend off a threat from Berlin’s main power company to cut off his electricity. He is one of a growing number of Germans confronting the realities of trying to carry out Ms. Merkel’s most ambitious domestic project and one of the most sweeping energy transformation efforts undertaken by an industrialized country.
[…]The cost of the plan is expected to be about $735 billion, according to government estimates, and may eventually surpass even that of the euro zone bailouts that have received far more attention during Ms. Merkel’s tenure. Yet as the transition’s unknowns have grown, so have costs for the state, major companies and consumers.
[…]With consumers having to pay about $270 each in surcharges this year to subsidize new operators of renewable power, the hardest hit are low-wage earners, retirees and people on welfare, Mr. Gärtner said. Government subsidies for the plan amounted to $22.7 billion in 2012 and could reach $40.5 billion by 2020, according to John Musk, a power analyst at RBC Capital Markets.
[…]Part of the reason consumer prices have risen so sharply is that, for now, the government has shielded about 700 companies from increased energy costs, to protect their competitive position in the global economy.
Industrial users still pay substantially more for electricity here than do their counterparts in Britain or France, and almost three times as much as those in the United States, according to a study by the German industrial giant Siemens. The Cologne Institute for Economic Research said there had been a marked decline in the willingness of industrial companies to invest in Germany since 2000.
Note that German industry has been EXEMPT from paying the green energy surcharge. Households and small-to-medium-size enterprises are paying it.
The key part of the article, I think, is this:
One of the first obstacles encountered involves the vagaries of electrical power generation that is dependent on sources as inconsistent and unpredictable as the wind and the sun.
And no one has invented a means of storing that energy for very long, which means overwhelming gluts on some days and crippling shortages on others that require firing up old oil- and coal-burning power plants. That, in turn, undercuts the goal of reducing fossil-fuel emissions that have been linked to climate change.
Last year, wind, solar and other nonfossil-fuel sources provided 22 percent of the power for Germany, but the country increased its carbon emissions over 2011 as oil- and coal-burning power plants had to close gaps in the evolving system, according to the German electricity association BDEW.
Didn’t anyone think of that problem before starting out this crazy plan? No. Because they important thing was feelings – politicians had to feel good about solving a made-up crisis.
Cost of renewable wind and solar energy
Why can’t leftists learn from the failed experiments of others?
Government-subsidized green energy scams have been tried before in Spain and Denmark. Did they work?
Well, we know that in Spain, the green jobs programs failed. (H/T ECM)
Subsidizing renewable energy in the U.S. may destroy two jobs for every one created if Spain’s experience with windmills and solar farms is any guide.
For every new position that depends on energy price supports, at least 2.2 jobs in other industries will disappear, according to a study from King Juan Carlos University in Madrid.
U.S. President Barack Obama’s 2010 budget proposal contains about $20 billion in tax incentives for clean-energy programs. In Spain, where wind turbines provided 11 percent of power demand last year, generators earn rates as much as 11 times more for renewable energy compared with burning fossil fuels.
The premiums paid for solar, biomass, wave and wind power – – which are charged to consumers in their bills — translated into a $774,000 cost for each Spanish “green job” created since 2000, said Gabriel Calzada, an economics professor at the university and author of the report.
“The loss of jobs could be greater if you account for the amount of lost industry that moves out of the country due to higher energy prices,” he said in an interview.
The Heritage Foundation cites a study from Denmark, which shows that wind power has also failed.
But according to a new study from the Danish Centre for Political Studies (CEPOS), commissioned by the Institute for Energy Research, the road to increased wind power is less traveled for a reason. The study refutes the claim that Denmark generates 20 percent of its power from wind stating that its high intermittency not only leads to new challenges to balance the supply and demand of electricity, but also provides less electricity consumption than assumed. The new study says, “wind power has recently (2006) met as little as 5% of Denmark’s annual electricity consumption with an average over the last five years of 9.7%.” Furthermore, the wind energy Denmark exports to its northern neighbors, Sweden and Norway, does little to reduce carbon dioxide emissions because the energy it replaces is carbon neutral.
The study goes on to say that the only reason wind power exists in Denmark is “through substantial subsidies supporting the wind turbine owners. Exactly how the subsidies have been shared between land, wind turbine owners, labor, capital and its shareholders is opaque, but it is fair to assess that no Danish wind industry to speak of would exist if it had to compete on market terms.”
But there’s a cost involved. When government spends more money, it necessarily diverts labor, capital and materials from the private sector. Just like promises are made in the United States about green jobs creation, the heavily subsidized Danish program created 28,400 jobs. But “this does not, however, constitute the net employment effect of the wind mill subsidy. In the long run, creating additional employment in one sector through subsidies will detract labor from other sectors, resulting in no increase in net employment but only in a shift from the non-subsidized sectors to the subsidized sector.”
And because these resources are being diverted away from more productive uses (in terms of value added, the energy technology underperforms compared to industrial average), “Danish GDP is approximately $270 million lower than it would have been if the wind sector work force was employed elsewhere.”
Why do people keep voting in leaders who don’t know what they are doing? Why are people surprised when emotional craziness and moral preening doesn’t work out financially?
Previously, I blogged about how Obama was causing our electricity prices to skyrocket by effectively banning coal power. Not to mention blocking the Keystone XL pipeline. Keep that in mind when you are lighting your house with 5 Watt light bulbs. This doesn’t happen by accident – you need politicians to wage war on the free market system in order for this to happen. And that’s what we’ve been voting for in the last two elections.
Filed under: News, Denmark, Germany, Green Energy, Solar Power, Spain, Wind and Solar, Wind Power