Japan and Germany Failed Transition to Auction Models

(repost, copied from the backup at the LIbrary of Congress Archive of this blog, because I lost posts between 2016 and 2020 when moving to this new site. First posted October 23, 2018).

Japan and Germany have one thing in common.

Both countries managed to record declining investments in renewable energy in 2017. As the Global Trends in Renewable Investments 2018 report by Frankfurt School of Management and Bloomberg shows, Germany clocked another 35% decline, with Europe as a whole declining 36%.

The report sees “uncertainty over a shift to auctions for onshore wind” as a reason.

And it cites exactly that reason for the decline in Japan as well, down by 28%.

If you want conclusive proof that a shift to auction models will delay and brake renewable energy development, one could not ask for much more.

Meanwhile, China invested $126.6 billion with most of that ($86.5 billion and up 58%) going to solar projects.

Germany remains with the positive record of having financed the development of the mass solar market that enabled the price reductions, which in turn now make this massive boom in China possible. And having spent that money back when solar was expensive.

Doesn’t make much sense to stop now with prices down. Germany should learn from China and install a solar panel or two again. Every once in a while.

And Japan should look at this picture and go back to a pure feed-in tariff model. That model works. It gets fast results.

Japan and Germany have another thing in common. Much less nuclear power than a decade ago. Not a good time to be hitting the brakes with the useless and harmful auction model instead of keeping what has fueled the first renewable boom in Germany in the first place.

And they have another thing in common. Both governments claim to be worried about global warming.

Their actions leave those claims open to some doubt.Posted in: European and German energy lawJapanese energy law

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Published by kflenz

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

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