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A Nuclear Surprise After German Elections?

Merkel Warns On Green Energy Costs



Spiraling costs in Germany for developing renewable energy sources could damage the country's economic competitiveness and need to be scaled back, Chancellor Angela Merkel said Wednesday—without elaborating much on how. Energy policy has become a hot issue in campaigning for Germany's parliamentary elections in September, with households and businesses alike complaining about big energy bills. Many European companies are also concerned that high electricity costs at home are becoming increasingly unsustainable, particularly as their U.S. rivals benefit from lower energy prices resulting from the shale gas boom. --Jan Hromadko, The Wall Street Journal, 14 June 2013
Germany urgently needs to scale back its financial support for the development of renewable energy to contain the spiralling costs of its move to a low-carbon economy, Chancellor Angela Merkel said Wednesday. Addressing an energy conference in Berlin, Ms. Merkel called for reducing government spending on energy like wind and solar power to keep Germany economically competitive. She said this should take priority over reforming the European Union’s trading scheme for industrial emissions of carbon dioxide, a cornerstone of the bloc’s effort to reduce dependence on fossil fuels. The scheme has floundered amid low carbon prices. --The Wall Street Journal, 13 June 2013 Germany’s Energiewende bodes ill for the country’s European leadership. Businessmen say it will kill German industry. Power experts worry about blackouts. Voters are furious about ever higher fuel bills. The chaos undermines Germany’s claim to efficiency, threatens its vaunted competitiveness and unnecessarily burdens households. It also demonstrates Germany’s curious refusal to think about Europe strategically. --The Economist, 15 June 2013

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Germany’s green energy transition is ever more increasing the cost burden of German consumers. According to the recent electricity price analysis by the German Association of Energy and Water (BDEW), taxes on electricity consumption will increase by about 25 percent to a record level of 31.6 billion Euros this year. By far the largest cost block is the Renewable Energy Levy (EEG), which subsidises green energy production. According to the BDEW numbers, the “EEG levy” rose from 14.1 billion to 20.4 billion Euros in just one year, radically like never before. --Daniel Wetzel, Die Welt, 10 June 2013 The CDU-led coalition government has accelerated the country's push toward green energy during a period in which German industry has flourished relative to its European peers. Unfortunately for Germany, this energy transformation has also spurred a flight of German industry outside the country—not least to the United States. IG Metall, Germany's most important metalworkers' union, warned Thursday that 200,000 jobs are in danger if energy costs aren't brought under control. --The Wall Street Journal, 14 June 2013 German business is starting to realise just how expensive the shift to renewables will be, particularly if the mix of low carbon sources excludes nuclear. Some of Germany’s biggest manufacturing businesses whose operations are energy intensive are considering moving some of their operations to other countries where environmental commitments are weaker and energy costs lower. In a country whose industrial base matters, the competitive cost of energy is crucial. One provocative answer to the problem is now being floated. The most likely partnership after the election in September is a Grand Coalition of the CDU and the SPD. With a sufficient majority such a coalition could decide to extend the life of some or all of the nuclear plants which at the moment are set to close by 2022. --Nick Butler, Financial Times, 9 June 2013 David Cameron has hinted he would like to cut green subsidies that force up energy bills, after questioning the “sanity” of onshore wind farms. The Prime Minister said he would “think very carefully” about green subsidies for energy sources such as wind farms and solar panels, as they “end up on consumer bills”. He admitted that fuel bills are being driven up by green subsidies, even though the Department of Energy and Climate Change largely blames the rising cost of gas for soaring energy costs. --Rowena Mason, The Daily Telegraph, 13 June 2013


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