Monopolkommission’s Failed Proposal of a Renewable Portfolio Standard

When discussing the German Monopolkommission’s new paper published yesterday, and its proposal to abolish the successful Law on Priority for Renewable Energy and introduce a renewable portfolio standard (quota system), the first thing to note is that they proposed exactly that last year.

You wouldn’t know from reading the paper, but this was discussed at Cabinet level of the German government, and rejected last year. This is a failed proposal. The only party backing this is the known enemy of renewable energy FDP.

So even if the FDP is not booted out of the Bundestag in the elections coming up this month (they are between 5 and 6 % in the latest polls) and we are stuck with another four years of incompetent management of the energy transition, this proposal is unlikely to actually get adopted.

Basically, there is nothing wrong with setting quotas. The law on Priority for Renewable Energy sets quotas in Article 1, for example the requirement of 35% electricity coming from renewable until 2020, and 80% until 2050. It also has a double quota in Article 39 Paragraph one.

I would be happy to support a renewable portfolio standard that required at least 10 % of electricity coming from solar until 2020. Of course on top of the existing feed-in tariff.

The failed proposal of a renewable portfolio standard says that saves money.

For one, money is not an issue. Speed is. If anything, Germany has a moral obligation to pay more to get the countermeasures to global warming kick in faster, coming from the fact that Germany has high historical cumulative per capita CO2 emissions.

Also, this is true only in the short term. Solar panels will produce electricity long after the feed-in tariff periods are over. Then they will deliver electricity at basically zero cost, potentially for centuries to come.

Renewable portfolio standards are a very short-sighted policy. Yes, they may save some surcharges in the short term. But with that comes that only the cheapest technology will be built under them. Solar would never have been able to take off under such a failed policy.

But for a transition to renewable to work, we need all potential technologies to be developed at full speed. Wind and solar complement each other nicely. Most wind in Germany is available in the winter months, when solar is down. And you don’t get such a balanced system with a “technology-neutral” failed renewable portfolio standard proposal.

Of course, while the CDU/FDP government rejected this proposal last year, they might reconsider after the election (if they keep their majority). We might lose the successful feed-in tariff system. The enemies of renewable in the FDP and the Monopolkommission might still win.

But even if that happens, the fourteen years of feed-in tariff Germany had already will have already succeeded in bringing prices for solar way down. They will already have succeeded to give solar the power to provide for around half of peak noon power demand in summer. These successes are irreversible. The enemies of renewable power at the Monopolkommission will never be able to get solar back to over 50 cents a kWh, even if they somehow get a majority for their failed policy proposals.

 

Published by kflenz

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

4 thoughts on “Monopolkommission’s Failed Proposal of a Renewable Portfolio Standard

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