Germany’s push for wind and solar and its retreat from nuclear power is driving electricity costs to untenable levels and destroying support for the green agenda, the International Energy Agency (IEA) has warned.
“The fact that German electricity prices are among the highest in Europe, must serve as a warning signal,” said the IEA. “The transition to low-carbon energy requires public acceptance, and therefore retail electricity prices to remain at an affordable level.”
Germany’s so called “Energiewende” aims to raise the share of electricity from renewables to 50pc by 2030 and 80pc by the midcentury, a huge challenge for a country with an energy-hungry industrial base.
Environment minister Peter Altmaier says costs could reach €1 trillion by 2039, though this could be trimmed to €700bn by slashing feed-in tariffs. The vast sums have begun to alarm German taxpayers while industry fears that heavy reliance on wind power in the North Sea could prove exorbitant and risk an energy crunch.
“The German power system is structurally broken,” said a report by Macquarie. “There are not enough cables to bring the electricity to the main industrial centres in the Ruhr and Rhine regions, and the patchwork grid cannot cope.”
Electricity costs rose 11pc last year, in part to fund subsidies for wind and solar. This is doing little to create jobs at home since China’s solar upstarts have swept the market while Germany’s solar pioneers go bust.
The IEA said the reserve margins for generators would erode after 2015, implying blackouts. Germany’s decision to close eight nuclear plants has also led to surge in high-CO2 coal imports.
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