Bruce Upbin at Forbes Gets One (1) Fact About Germany Right

That’s worth a headline since in my experience people writing for Forbes usually get everything wrong when writing about German energy policy. This tweet by Energywende Germany pointed me to another collection of anti-renewable falsehoods.

Upbin has just published an article titled “The Most Important Energy Developments in 2012”, where he puts the cost for offshore wind in the right ballpark area of between 14 and 19 cents US per kWh. The feed-in tariff pays 15 cents euro, so he is not completely off base in his estimate.

But then he follows up with this:

All things considered, offshore wind in a range between $140 and $190 per MWh is a very expensive way for Germany to generate electricity, and solar is at least twice the price. (Emphasis mine).

That’s completely clueless. Solar feed-in tariffs are below the 15 cents euro paid for offshore wind already (at around 13 cents euro) and will be further reduced, until they end in a couple of years once the newly introduced ceiling of 52 GW is reached.

He then has this to say about prices:

 As a result, the proposed shift to renewable energy may further increase electricity prices for both residential and commercial users. There’s not enough data yet to measure the impact so far.

Actually, there is quite a lot of data to measure the impact. It is quite clear that renewable energy substantially reduces electricity prices at wholesale level. This is well known as the merit order effect of renewable energy. And it is also known by anyone paying a minimum of attention that prices for consumers go up marginally by the cost of surcharges.

Another interesting paragraph:

Germany’s goal: raise the contribution of renewable energy from 20% to 35% by 2020, and to 80% of total consumption by 2050. The total cost of financing this transition is estimated at 800 billion Euros by DIW Berlin. The first stage, from now until 2020, is supposed to cost 200 billion Euros. At a time when commitments to save Spain and the rest of the Periphery are adding up, it is unclear how Germany will accomplish all of its goals simultaneously. That’s probably why the ECB has been doing the heavy lifting in the European bailout: that approach doesn’t look like it will cost Germany any money (yet…..)

Does he even know that there is no funding from taxes in the German feed-in tariff system? His text reads as if he thinks there is. Again, anybody with even a basic level of understanding knows that “Germany” pays nothing for the feed-in tariffs and all costs are paid by consumers of electricity over the surcharges.

Well, it’s Forbes. I don’t expect much different from an article published there.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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