Clusters of tall white wind turbines spin gracefully atop
green hillsides. Solar photovoltaics (PVs) are integrated
into windows and rooftops of modern homes, factories and office
blocks. Even the old renovated seat of government is fitted
with solar panels.
A utopian fancy? No, just Germany today. Remarkable considering
that in 1990 Germany had virtually no renewable-energy industry
and appeared an unlikely candidate for it. Utility monopolies,
entrenched nuclear and coal industries and a general conservatism
made Germany appear barren ground for renewable-energy advocates.
Joschen Twele, a wind-energy expert recalls: 'When I started
my job in wind energy [in the 1980s] I thought it had only
a chance in remote areas of developing countries. So I concentrated
on Africa.'
Yet by the end of the 1990s, Germany had transformed itself
into a renewable-energy leader. With a fraction of the wind
and solar resources of the U.S., Germany now has almost three
times as much installed wind capacity (38 percent of global
capacity) and is a world leader in solar photovoltaics as
well.
And it has created a new, multibillion-dollar industry and
tens of thousands of new jobs. The German wind industry now
employs more people than nuclear power (an industry that provides
30 percent of the nation's electricity) without a commensurate
increase in electricity costs.
Germany now generates 4.5 per cent of its electricity with
the wind and appears on track to meet government targets of
25 per cent by 2025. The government also considers solar photovoltaics
an option for future large-scale power generation.
What's more, the government recently pledged to reduce its
carbon dioxide emissions to 40 percent below 1990 levels by
2020, much of this to be achieved by switching to renewable
energy. Not quite the 60 percent many climate-change experts
say is required worldwide, but vastly more impressive than
commitments made thus far under the Kyoto Protocol.
How has Germany done it?
The main obstacles that keep renewables from producing more
than a small share of energy in most of the world are lack
of access to the transmission grid, high up-front costs, lack
of information, and biased, inappropriate and inconsistent
government policies.
Germany's dramatic success has been achieved through a combination
of consistent, ambitious policies designed to address these
barriers and create a market for renewable energy. These policies
were driven by the public's rising concerns about global climate
change, risks associated with nuclear power, and a need to
reduce dependence on imported fuels.
Most significant has been the grid access and standard pricing
law, enacted in 1991 and inspired by effective Danish policies.
Under this law, renewable energy producers receive above-market
payments for power they feed into the grid and the costs are
shared among all electricity consumers in Germany. These preferential
payments for renewables are not considered subsidies, but
means of internalizing the social and environmental costs
of conventional energy and providing compensation for the
benefits of renewables.
But some barriers remained. For example, as the number of
wind turbines skyrocketed in some regions, local opposition
and lengthy, complex siting procedures had the effect of stalling
the development of new projects. The government responded
by encouraging communities to zone specific areas for wind
energy-a step that addressed concerns such as noise and aesthetic
impacts and assured prospective turbine owners that they would
find sites for their machines.
To address the start-up costs barrier, the German government
has offered long-term, low-interest loans and income tax credits
to projects and equipment that meet specified standards.
These initiatives have drawn billions of dollars to the renewable
energy industry, while technology standards have reduced risk
and created confidence by keeping out substandard machinery.
The government has also promoted awareness of renewable technologies
and available subsidies through publications and training
programs.
Such rock-solid policies ended uncertainties about whether
producers could sell their electricity into the grid and at
what price. They also provided investor confidence-attracting
investment money and making it easier for even small renewable
power producers to obtain bank loans. Germans from diverse
backgrounds and income levels have been able to invest in
renewable energy projects, leading to a surge in installed
capacity and associated jobs, and reinforcing political support.
Increased investment has also driven improvements in technology,
advanced learning and experience, and produced economies of
scale resulting in dramatic cost reductions. Between 1990
and 2000 the average cost of manufacturing wind turbines in
Germany fell by 43 percent. Between 1992 and 2001, PV capacity
experienced an average annual growth rate of nearly 49 percent.
German PV manufacturers plan to expand their facilities significantly
over the coming years to meet rapidly rising demand, a step
that will further reduce costs and increase employment.
Germany has demonstrated not only that it is possible for
renewable energy increasingly to meet the energy needs of
industrialized society but also that the transition to a more
sustainable energy future can happen rapidly with political
will and the right policies. To begin with, policies must
be consistent and long-term. On-and-off policies in the US
have created market cycles of boom and bust, making it difficult
to develop strong domestic industries. As a result, the U.S.
is the only country where total wind-generating capacity has
actually declined in some years.
Market creation must also be prioritized. Germany began funding
research and development of renewable energy in the 1970s
but saw little commercial development until market incentives
were enacted two decades later. Today at least 300 companies
are involved in supplying solar panels. Last year Germans
installed more than 2,000 new wind projects, all of them feeding
into the grid. It is estimated that more than 100,000 Germans
own shares in wind energy projects, while many own shares
in solar PV and other renewable projects as well.
The issue of who owns the production and distribution of
electricity is highly significant. When a nation's electric
system is centralized and utility-owned, power is concentrated
in the hands of a few, both literally and politically. In
the U.S., for example, some of the most politically powerful
voices are those of the various energy-related industries.
But when almost anyone can be an energy producer, as in Germany,
the public can play a greater role in decision making, creating
a more democratic society.
Renewables now generate eight percent of Germany's electricity
and the country has nearly two-fifths of the world's wind
capacity. But the share of total wind capacity owned by large
companies is also rising, as the sizes of machines and projects-and
thus costs- increase.
The advantages of shifting away from conventional energy
and towards greater reliance on renewables are numerous and
enormous: climate stability, air quality, health, job creation,
political and economic security, to name but a few. Renewable
energy also offers models for diverse and democratic ways
of producing, buying and selling power. Yet change is never
easy and there are strong forces globally-including politically
powerful industries-that wish to maintain the status quo.
While resistance to change is inevitable, the world cannot
afford to be held back by those who are wedded to energy systems
of the past.
Janet L Sawin is an energy and climate change writer and
researcher based at the Worldwatch Institute in Washington
DC.
