The grand coalition for a democratic transition to renewable energy?
The coalition contract one-sidedly favors big corporations to the detriment of small producers. Not a word is dedicated to the question as to how private households should be protected from high energy prices. As regards the chapter on the energy transition, the basis of the German Social Democratic Party should not agree to the coalition contract
Are energy bills going to be lower?
No. There are two very good and one mediocre possibility to reduce electricity prices. None of these three is part of the contract.
- A new law could oblige energy providers to pass on the low market prices to end consumers. The prices at the electricity market in Leipzig have fallen in the last years. There have even been days with negative prices. Nothing of that was perceived by private consumers. Rates were not lowered. To start here would be a quick possibility to save households from high bills and the further expansion of renewable energy would not be hindered at the same time.
- Only a part of the higher prices is caused by renewables. These benefit from guaranteed feed-in rates, paid by all electricity consumers in Germany. To be precise, they are not paid by all. A list of many companies is excluded and many companies pay less. On the list are companies that are very capable of paying the market price, and would not move abroad. A prominent example is the German Meteorological Service.1
The share of private households in paying for the feed-in tariff would drop immediately, if companies would pay a little more (even if still less than private consumers). This is not mentioned with even a single word in the coalition contract. On the contrary, it mentions repeatedly that the industry exceptions will not be touched.
- The third possibility would have been a lowering of the electricity tax. Compared to the other two possibilities that was only the third best because the public budget would lose the tax income. Nevertheless, the rate for households could decreased slightly and quickly. The social democrats were asking for this, but it is not part of the contract.
Are electricity prices going to increase?
- A continued moderate increase in electricity prices is likely because the mechanism shifting costs from households to industry will not be changed. Furthermore, an extra burden for all households would be the compulsory installation of smart meters in all houses (to be paid by households) as asked for by the federal ministry for economic affairs in a recent publication. The costs,
of up to 72 Euro per year for the installation of the meter would be covered by households.2
- A long term cost-risk has not been eliminated. The contract does not mention that the private operators of nuclear power stations are obliged to save for the eventual deconstruction of their power stations while they are still being operated. It cannot be ruled out that the companies will privatize the profits from the power stations still running, leaving no money for the expensive and long lasting de-construction process. There is thus a risk that the expenses for de-construction will be socialized, e.g. via higher electricity tariffs. The contract only mentions that the government expects “responsibility” and “cooperation”. The logic of markets however, as often enough proven, do not tend to “responsibility” but towards the socializing of costs, as long as no strong laws pose a counterweight. Such a strong legislation is not implied by the contract.
Why is the government portraying Energiewende as a cost-increaser
The debate around energy poverty and electricity tariffs serves, it seems, as an argument to reform the energy market in favor of the four great fossil (coal, nuclear) companies. In 2013, smaller electricity providers, among them many cooperatives and municipal city utilities, were responsible for approximately ¼ of the electricity market. Most of all, they have utilized the Renewable Energy Act to produce electricity from wind, sun and biomass. If Renewable Energy Act (German: EEG) is weakened and finally abolished, as designated in the contract, this will rather benefit the large nonrenewable energy providers and rather harm the many smaller energy producers which have invested in wind and solar power.
Is a democratic energy transition possible with this coalition?
If the contract is realised as proposed, offshore wind parks will benefit and those on land will be discriminated against. Residents, municipal communities and small cooperatives though have so far only invested on shore (except the utility of Munich) because offshore wind turbines are too expensive for them. Preferring offshore therefore means that large investors will be preferred to small investors.
Will the Energiewende continue?
Yes, but much slower than is possible.
Until 2020, a renewable share of 47% in electricity production is possible in Germany.3 The contract mentions 40-45% until 2025. That roughly halves the pace of expansion in the coming 12 years. From 2025-2035 only an expansion of up to 55% is planned. That would mean an increase of only 1% per year, which is very little.
What does the coalition mean by Energiewende?
Nothing more than turning off the nuclear power stations, but not a 100% renewable energy supply.
The socially and ecologically highly problematic import of coal, e.g. from countries like Colombia, where miner unionists have been murdered more than once, would continue, as well as the burning of local lignite and thus the destruction of villages and landscapes in open cast mines in Rhineland and Lausatia. Despite the possibility of a full supply with green electricity by 2035, as shown by several reports,4 his is not opted for by the contract. Because open cast mines and power plants have to be planed long in advance, villages will be destroyed for mines that shall supply power stations that don´t yet exist. And this all will take place despite the fact that new mines and power stations are technically no longer necessary thanks to renewable energy.5
Will Germany remain a role model in transitioning to renewable energies?
That depends on the parliament elections 2017.
If the goals named in the contract persist until the middle of the next decade, Germany is likely to fall back in international comparison and lose its status as a role model. Scotland has already set a goal of consuming 100% renewable electricity by 2020 and is on a good track.6
No. Germany would be a retardant in climate protection.
Initiated by the liberal party (FDP) in the former government, Germany has blocked a reduction of CO2 certificates in European Union for a long time. Since the liberals (FDP) failed to be re-elected, at least a reduction of 900 million certificates was agreed to on EU level with Germany´s vote.7 Environmental NGOs criticize this as being too little. Despite that, the coalition contract wants to step back even from that small commitment. There one can read: in the scheduled “withdrawal of 900 million certificates from CO2 trade (backloading) it has to be assured that this is a nonrecurring (…) interference.” The “certificates should not be removed from the market long-term.”
Does fracking play a role in the Energiewende?
Despite a wide rejection of fracking by the German population, it has not been ruled out in the coalition contract. Instead, the possibility of fracking is created and a new field of conflict is established. Only substances for fracking that are “provably environmentally toxic” are rejected by the contract. There could therefore be legal disputes on what is “provable environmentally toxic” and what is not. A simple ban of fracking would have been much stronger in a legal sense. In Austria, tests were carried out to frack without toxic substances, only using sand and water. But the contract does not even explicitly state that only water would be allowed in fracking.
Conrad Kunze, Sozialwissenschaftler, 3.12.2013