A group of experts appointed by the German Bundestag (parliament) has slammed the country’s Renewable Energy Sources Act (EEG), saying it is neither cost effective nor has any measurable impact on innovation.
The Expert Commission on Research and Innovation gives a number of reasons for its radical decision, including that spiralling Green energy subsidies (up to €22 billion last year) are ineffective, and the threat from climate change has been over-estimated.
The EEG grants large subsidies to the renewable energy industry, thus enlarging the market for renewable technology. The report found that, far from inspiring innovative new ways of exploiting renewable energy, these subsidies are causing companies to stick with existing technologies, thus strangling innovation.
The committee conclude: “The EEG cannot be justified in its current form, not least from the perspective of innovation policy.”
It also adds: “The Renewable Energy Sources Act does not produce any additional climate protection but it makes it much more expensive.”
This is due to the fact that the EU’s carbon dioxide trading policy already caps carbon dioxide emissions for energy-intensive industries. Thus any expansion in renewable energy caused by the EEG subsidies will do nothing to avoid additional CO2 emissions, merely shift them.
German governments have heavily promoted renewable energy over the past decade. In final half of 2012, renewable energy counted for 22.9 percent of all energy produced in Germany, up from just 6.3 percent in 2000.
Governments on both the left and right of German politics have done much to encourage renewable energy in preference to other forms, with Angela Merkel closing down several nuclear power stations since becoming chancellor.
This report is therefore a huge blow both to her and the wider German political establishment.
It is not yet known whether Merkel will heed the committee’s advice.