Germany has been one of the most successful countries in the world at both reducing its greenhouse gas emissions and building an economy based around renewable energy. In 2008 it exceeded its Kyoto protocol targets for carbon emissions reductions. Yes, that’s right, exceeded. The same year saw about 280,000 Germans working in the renewables sector (more than the number working in the German auto industry) and about $25 billion Euros of economic activity in renewable energy.
So how did they do it? How did Germans top not only international targets, but even their own goals? (After aiming for a 12% share of electricity from renewable sources by 2010, Germany clocked in at 14% in 2007.) The short answer is, they tried. The first step to this sort of massive growth and change is just plain old political will, said Dr Christine Woerlen on Wednesday evening in Halifax. About 200 people gathered at Dalhousie University to hear the former head of the German Renewable Energy Agency explain the policies that led to Germany’s renewable energy success, and gleen how they might be applied in Canada and Nova Scotia.
Woerlen focussed on just a few of the key policies in Germany’s 29 point strategy, about 2/3 of which has been implemented to date. Far and above the most successful policy, according to Woerlen, has been Germany’s feed-in tariff system and its supporting regulations.
A feed-in tariff is a sort of direct-to-market subsidy system. It works by requiring utilities to pay a set rate, usually a premium, for renewably-sourced electricity being fed in to the electrical grid by anyone who can produce it. The rate is set according to factors like how desirable the energy is (ie. how clean it is) and how expensive the technology is to produce it. The idea being, you subsidize the expensive technologies until they get cheaper, and in doing so, you help them get cheaper by creating economies of scale and increasing demand. The system works right through the regular workaday market. Because subsidies come in the form of premium price, they only go to those actually producing renewable energy, not those planning or promising to produce it.
The higher rate paid by the utility can be covered via lump sum government funding, or passed along and spread out among energy consumers, as happens in Germany. Woerner presented slides depicting the cost breakdown that German power users see on their monthly bills, showing how much they are paying in taxes, how much for traditionally source power, and how much in susidized power. Currently, the cost to German households for the feed-in tariff system is about 2 Euros per month. It’s expected to rise to about 3 Euros by 2020, and then level off. The system is designed to level off, because as new technologies come online and become more affordable, the premiums on their rates are reduced. Until, eventually, the premium levels off or disappears.
Woerner noted that Germans aren’t known to complain about their extra 2 Euros per month because they are able to see in power cost breakdowns that the larger price increases are occuring with conventional power production. And, she added, the push for renewables is something most Germans are happy to take part in, with widespread understanding of the link to carbon emissions and climate change.
One of the key laws that makes Germany’s feed-in tariff system work is a regulation that gives all Germans the right to sell power back to the grid. There was a precedent for the practice in Germany, where many small hydro producers (former mill owners and farmers) have held the right for many years.
In Nova Scotia, access to the grid is not guaranteed, and feed-in tariffs don’t yet exist. In some cases, NS Power will allow something called net-metering, which allows small scale residential or commercial renewable energy producers to feed their excess electricity into the grid for credit to be spent on energy consumption. But limitations on net-metering in Nova Scotia significantly extend the pay-back period of most small scale projects. While NS Power customers can net meter up to 100Kw/h, which could power up to 20 homes, meters cannot be combined over several properties or several bills. And in addition, credits are not carried over from year to year.
Woerner also touched briefly on other German policies and regulations that have contributed to their success in emissions reduction and energy sector growth. Germany has adopted national policies pertaining to new buildings – a sort of green buidling code. There are caps on the energy consumption of newly built or renovated houses, and requirements for those to get a share of their heat (for space or water) from renewable energy sources such solar hot water, geothermal or heat recovery systems, among others.
Woerner’s visit to Halifax was coordinated by Climate Action Network Canada.
