CLIMATE-PROTECTING JOB GENERATORS NEED TO BE FUELLED BY POLITICS
The EU States want to satisfy 20 per cent of their overall energy needs with renewable sources by the year 2020. Two considerations are behind this: On one hand, between 600 and 900 million tons of CO2 can be saved per year according to the EU Parliament website; on the other, this will make the member states less dependent on imports of increasingly scarce fossil fuels.
What this climate-protection package envisages is both an urgently necessary and ambitious goal. There is still a long way to go to achieve it, however, since the urgency of employing renewable energy is perceived differently by the citizens of individual states. To accelerate growth, meaningful legislated incentives and stable political framework conditions must be put in place that are attractive to investors and offer sufficient security of investment.
A success story
The cornerstone of the expansion and encouragement of renewable energy was already made at the beginning of the 1990s in Germany with the Energy Buyback Act. This came into effect on 1 January 1991 and, for the first time, stipulated payment for renewable energy buyback. The Act was replaced in 2000 with the Renewable Energy Sources Act. The principle is simple: Users who feed regenerative energy back into the public mains receive a legally fixed fee from their energy provider. The size of this fee is determined at the time of installation and remains constant for the incentive period, a maximum of 21 years, ie 20 calendar years plus the year of first operation. This makes even the solar system installed in a single-family detached home a good and easily calculated financial investment. The difference between the fee and the market price of electricity is equally split between the energy providers, who then add this to the end-user electricity price. “For a four-person household, this makes a difference of 5.95 euros a month (2010 figure) in the electricity bill,” according to the Federal Environment Minister, Norbert Roettgen (CDU).
The Renewable Energy Sources Act also implies an ‘incentive’ for the manufacturers of renewable energy systems: The progressive lowering of the incentive amount — the systems installed in any one year receive a lower compensation fee than those installed in the year before — forces them to undertake cost-reduction measures and, as a result, introduce technical innovations. This has been successful, since this progressive lowering of compensation has led to considerable sinking of the overall cost in recent years. A good example of this is the cost of photovoltaic systems, which, at the end of 2009, cost up to 20 per cent less than the year before.
Development of new industry profits as well
This incentive law is not only an important driver in increasing the share of regenerative energy in the total energy mix. It is also an important framework for innovations that create momentum for growth. According to the German Solar Industry Association, the demand for photovoltaic systems in the country, even in these crisis times, again increased in the second half of 2009.
At the same time, the Renewable Energy Sources Act stimulates sustainable business in Germany and thus acts as a measure that has excellent future economic prospects.
Success in central Europe has also brought the lesson home to other countries. In the meantime, the German model has developed into an export hit: Over 40 states, including France, Spain, Portugal and the Czech Republic, as well as China and Brazil, have taken feed-in tariffs as the model on which their own incentive programmes are based.
Success depends on the political will
Things become considerably more interesting when future developments are discussed. No one denies that in the mid-term green electricity will become competitive without buyback and, indeed, it must become so to achieve the necessary acceptance. International energy experts expect that energy from a solar roof will become just as cheap as conventional electricity from the mains socket within a few years. Solar energy is getting closer to this so-called ‘grid parity’ in giant steps, and it will first be reached in regions with high insolation and high electricity prices.
Several actions are essential if this aimed-for development is to continue:
• The proven incentive systems, particularly the feed-in tariffs, must continue to exist. It is exactly these systems that have made a massive contribution to renewable energy, since they guarantee long-term investment and planning security for the companies involved. Insecure legal framework conditions are counter-productive with regard to the goals that the EU has set itself for 2020.
• For increased use of renewable energy that eventually can continue without ongoing incentives, it is urgently necessary to unequivocally implement the liberalisation of the European electricity markets. This will allow both smaller and new providers access to the market and give them the opportunity to maintain themselves there, ensuring greater competition and less expensive prices overall.
• No less essential is a comprehensive modernisation and expansion of the mains-grid infrastructure. Smart Grid is one of the main keywords here. A modern electricity grid must, therefore, be aimed at supporting a decentralised supply of energy in order to integrate green electricity optimally into the grid.
• In addition, research into new energy technologies must be more strongly supported. Above all, we need more efficient electricity storage technologies to make the full potential of renewable energy usable and to utilise production peaks in their entirety.
The EU is on the right path with its new guidelines for the encouragement of the use of renewable energy. All of its member states must, however, take this path together.
