German Green Decision on Abolishing Renewable Law

As Klimareporter explains, the recent proposal by German green politicians to abolish the law on renewable energy has found a majority at their recent party convention.

They are going after one of the key elements of the 2000 law, which is funding by electricity users, as opposed to funding by taxpayers.

They want to reduce the surcharge by 5 cents by July of this year, passing the bill for that to the German federal taxpayer. Fortunately, these Green politicians are not now in charge, the Green party is in opposition.

Again, this is a very bad idea. The German federal budget will be massively strained by the corona crisis. Even if the Federal Government listens to the German Federal Constitutional Court, who just put a brake on the idea of Germany paying for the big corona-deficits in other EU Member States’ budgets, contrary to the present way of handling these costs, there is no guarantee that the necessary funds can be found.

This idea was rejected for a reason when the law was enacted in 2000.

At the time, people did not know that the EU Court of Justice would see this as decisive for the question if Member State legislation on renewable energy needs EU Commission approval, effectively denying the German legislators another important power and transferring it to the EU, with the consent of said German legislators very much in doubt.

But now we know. The Court decided in March last year that the present system is not State Aid because it is not financed by taxes. Changing that as this Green proposal wants gives the EU Commission again veto power over German renewable energy law.

At the time the reason was simply that the system would be way more stable that way. If you need to find money in each year’s federal budget, there is no way for investors to be sure they get the tariffs promised for 20 years.

I still think that is a valid concern.

On the other hand, if this Green proposal succeeds in getting rid of one of the most important elements of the 2000 law, the damage is mitigated a lot by the simple fact that the law has been working as intended for more than a decade. Even if all federal support for renewable energy stops tomorrow, nothing can change the massive reduction in prices already in place.

But it still feels odd to see the Green party of all possible actors to disregard the warning of Hans-Josef Fell and push for this reckless experiment. Not quite as disappointing as having Michael Moore publish an anti-renewable propaganda piece (and get massive attention for that garbage), but it comes close.

Published by kflenz

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

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