Last updated: September 28, 2010 6:22 pm

Germany to wean itself off fossil fuels

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The German government has signalled its ambition to wean one of the world’s largest economies off fossil fuels by pledging to generate enough renewable energy to meet 60 per cent of the country’s energy needs by 2050.

Norbert Röttgen, environment minister, said it was “the most ambitious energy programme ever seen, not only in Germany”.

At the heart of the plan – seven bills overseen by five ministries, agreed by cabinet on Tuesday – lies the extension of the lives of Germany’s 17 nuclear power stations, the last of which was meant to close in 12 years.

This contentious decision will increase the life of each nuclear plant by an average of 12 years, but also allow Berlin to divert some extra profit from Eon, RWE, EnBW and Vattenfall to the public purse – €30bn ($40,8bn) until 2036.

While the government has earmarked half of this sum for budget consolidation, it plans to use the remainder to set up an energy fund to finance energy projects and research into new areas like energy storage.

On top of this, the government has earmarked for its plan German revenues from European Union emissions trading, which start in 2013, and is eventually expected to render the finance ministry €2bn-3bn a year.

But, even with tens of billions of euros in public money behind the plan, Berlin knows success will hinge on the willingness of industry and citizens to invest in energy sources and energy efficiency alongside the government.

The government reckons it will cost Germany an annual €20bn until 2050 to reduce emissions by four-fifths compared with 1990, and to raise the share of electricity from renewable sources from 16 per cent to 80 per cent.

To kick off investment in off-shore wind power and “smart” electricity grids, Berlin pledged €5bn in cheap loans for ten offshore wind parks – the country currently has only one – and to ease planning of energy lines.

With 40 per cent of energy used to heat Germany’s 18m buildings, the government plans to raise subsidies for insulation, cutting energy use for heating homes and buildings by 80 per cent over the next forty years.

Mr Röttgen said the energy plan would ensure Germany’s energy security, protect the environment and provide an innovative boost which would help German companies in the renewables sector remain competitive.

But many voters are upset about longer lives for nuclear power stations. In Berlin 100,000 people recently took to the streets to protest about changes to the “nuclear exit” agreed by Social Democrats and Greens a decade ago.

The Social Democrats recently agreed to file a complaint to the Constitutional Court against the government’s refusal to let the Bundesrat, parliament’s upper chamber in which it lacks a majority, have a vote about the plan.

The associations representing municipal power companies and renewable-energy generators complained that small operators would suffer as the four major energy groups got to run their nuclear power stations longer.

But Eon chief executive Johannes Teyssen called the government’s measures “steps in the right direction” in an “extremely ambitious” plan, although he warned energy changeover would “not come free of charge”.

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