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April 10, 2014

Germany's Green Energy Failure

April 10, 2014
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WASHINGTON – The Institute for Energy Research today released the first entry in a new series of case studies on Europe’s green energy programs. For years, some policymakers have pointed to Europe as an exemplar of good energy policy, arguing that the U.S. should subsidize renewables through programs like the wind production tax credit or green energy mandates. Now that Europe’s green energy policies have been in place for years, IER decided to see how they were working.

The first case study focuses on Germany’s energy policies and finds that these policies are driving up energy prices and forcing hundreds of thousands of people into energy poverty. Specifically, the study found:

  • Residential German electricity prices are nearly three times higher than electricity prices in the U.S.
  • As many as 800,000 Germans have had their power cut off because of an inability to pay for rising energy costs.
  • Germany’s feed-in tariff scheme provides lavish subsidies to renewable energy producers.
  • On-shore wind has required feed-in tariffs that are in excess of 300 percent higher than market prices.
  • Germany’s Renewable Energy Levy, which subsidizes renewable energy production, cost German households €7.2 billion ($9.6 billion) in 2013.
  • The cost to expand transmission networks to integrate renewables stands at $33.6 billion, which grid operators say accounts “for only a fraction of the cost of the energy transition.”

To read IER’s full case study on Germany, click here.

To read IER’s recent analysis titled, “Europe Slashing Renewable Subsidies”, click here.

To read IER’s first look at Germany’s energy policies, click here.
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