I May Have Overreacted On the IEA Germany Report

I recall that I reacted very strongly to a statement by IEA “Executive Director” Maria van Der Hoeven when introducing a new IEA report on German energy policy. My answer was “Get Lost, IEA”.

The statement that infuriated me was this:

The rapid, uncontrolled deployment of PV has become a major policy concern and represents a significant cost for consumers.

That sounds just like something an enemy of solar energy like German Economy Minister Rösler would say. I didn’t even bother to reply on the substance last week.

Let’s do that now.

The first part of the statement asserts that there might be something wrong with rapid deployment of solar. That is wrong. We need all the speed possible when deploying solar. I recall that we have a crisis with the potential of at least ending civilization and potentially all life on the planet at hands. It is called “global warming”, for those who may not have heard about it. With Germany phasing nuclear out, it is completely impossible to conceive something like “too rapid” deployment of solar.

That’s like complaining about the speed of a fire engine rushing to start pumping water when the whole town is already burning.

The second part of the statement asserts that there is a problem with the cost of solar. There is no such problem. As recently explained by Member of Parliament (Bundestag) Göppel, renewable energy will save Germany over EUR1 trillion in fossil fuel cost until 2040. The cost of around EUR200 billion for the feed-in tariff until 2030 is a bargain, even not accounting for the vast damages to be expected from global meltdown.

If the IEA report contained such an infuriating statement, I would be right in dismissing it. Actually, I was so angry that I didn’t even bother checking the Executive Summary (the part not hidden behind a EUR60 paywall).

But now I reconsidered.

That’s because Green Party German Member of Parliament Hans-Josef Fell showed a positive reaction to the IEA report in his latest “Infobrief” mail magazine.

Fell said that the IEA finally showed some reasonable analysis. Fell is especially pleased that the IEA has stopped opposing the decision to phase out nuclear in Germany, and that the IEA now acknowledges the contribution of the Law on Priority for Renewable Energy.

So I actually read the Executive Summery. It is only a couple of pages long.

The above infuriating statement is found nowhere in the text. Instead, it says this:

Together with energy efficiency improvements, large-scale deployment of renewable energy is at the heart of the Energiewende. Since its inception in 2000, the Renewable Energy Sources Act (EEG) has proven very effective in introducing renewable energies; notably electricity generation from biomass, wind energy and solar photovoltaics (PV). This policy instrument has also proven successful in bringing costs down, as reflected in particular in the decrease in feed-in tariffs (FITs) for PV as a response to the rapid growth in take up of the technology overthe past four years.

That’s a completely reasonable description and evaluation of German renewable energy policy. I agree with Member of Parliament Fell that the IEA acknowledges the contribution of feed-in tariffs here.

On the failed proposal by Ministers Altmaier and Rösler, the Executive Summary has this to say:

In February 2013, the Federal Minister of Economics and Technology and the Federal Environment Minister presented a joint proposal for a short-term amendment of the EEG to claw back the rising EEG surcharge and expressed their will to fundamentally alter the EEG in the long term.

Again, that is true, though they should of course mention that that proposal is completely dead. At least they don’t support it, like Maria van Der Hoeven did. While slightly misinformed, the actual report fails to irritate by trying to meddle in German politics (not what the IEA is supposed to do).

They get one minor point wrong. They write:

Electricity intensive industries that consume more than 100GWh, and whose electricity bills represent more than 20% of total costs, may pay the lower surcharge on all of their consumption.

For a detailed discussion why that is wrong see this previous post.

The “Key Recommendations” of the “Executive Summary” are largely uncontroversial. I won’t discuss them here. The IEA has no business anyway to tell Germany what energy policy it should take. That is for the German voters to decide in the upcoming elections. We will either see more of the same slow and incompetent development of renewable energy by the present government, or we will see the black/yellow parties defeated, like Dortmund in the recent Champions League final. In the latter case renewable energy in Germany will get a large boost by reverting to competent management.

Published by kflenz

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

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