January 14, 2017
Germany

Energiewende row looms as auditor warns on cost controls

By Bernd Radowitz in Berlin | Recharge | 13 January 2017 | www.rechargenews.com

Germany’s Federal Audit Office has triggered what could become an ugly cost debate in the run-up to federal elections in the autumn, as a report seen by Recharge accuses the government of having no overview of the costs of the country’s transition from nuclear to renewable energy (Energiewende).

The audit office is responsible for examining the income and expenditure of the government.

Most of the costs of Germany’s renewables build-up is born by surcharges on renewables and for grid fees on top of consumers’ power bills, not through direct taxes, so the auditors looked mostly into administrative costs of the Energiewende, such as salaries for experts, and administrative aspects.

The verdict of the still-unpublished 39-page report to the budget committee of parliament is a slap in the face for energy minister Sigmar Gabriel, who in two major reforms of the country’s Renewable Energies Act (EEG) over the past three years has tried to push down the cost of the energy transition.

“The BMWi (economics and energy ministry) has no overview over the financial impact of the Energiewende,” the report states, adding that fundamental questions such as what the energy transition does or should cost the state remain unanswered.

The audit office points to a risk that Energiewende costs could increase more and more, laments a lack of co-operation between the federal and state governments that leads to a doubling up of efforts, and notes that the government hasn’t succeeded in building up functioning cost-control mechanisms.

The auditors call upon Berlin to rapidly get a comprehensive overview of the financial impact and the affordability of the Energiewende, and criticises inefficient and overlapping support programmes.

An energy ministry spokeswoman in a statement to Recharge rejected the criticism, and said cost effectiveness in the renewables expansion has been the priority of both EEG reforms.

“Through more competition [and efficiency] the energy system could be made fit for the future and the cost dynamics of previous years has been broken,” she said.

The energy transition is a large and complex project over several generations, making an exact assessment of its cost impact impossible, the ministry added.

Also, the cost of support has continuously fallen through in-built degression mechanisms, and will be pushed down further by a new tendering system valid for most renewable installations from this year on, the energy ministry argues.

The report immediately reignited calls from parts of Chancellor Angela Merkel’s governing Christian Democrats (CDU) to rethink or even abolish the support system laid down in the EEG, with CDU energy expert Thomas Bareiß calling the Energiewende a “monster”.

By contrast, Julia Verlinden, the energy policy spokeswoman of the opposition Green Party in the Bundestag, said the CDU politicians are engaging in a misguided debate, mixing up investments with costs, and ignoring cost savings arising from the Energiewende.

“The (actual) green electricity financing anyway isn’t borne by the state, but by consumers,” she stressed, but acknowledged that the audit office is right in a point of its critique that some support for the heating sector wrongly goes to fossil-fired heating that harms the climate.

Germany will elect a new parliament in the autumn, and the Energiewende likely will be an issue as not just elements of the CDU, but also great parts of the opposition Free Democrats (FDP) and the rightwing-populist Alternative for Germany (AfD) party are demanding an end to RE support.

Both the FDP and the AfD currently aren’t in the Bundestag, but have good chances to enter parliament this time.