The German Parliament passed a new energy package last Friday that cuts back on support for the country’s booming solar energy industry, while shifting incentives to geothermal energy, insulation and combined heat and power systems.
The new package is meant to stimulate a wider range of renewable power technologies to help Germany reduce greenhouse gas emissions 40% below 1990 levels by 2020 and produce 30% green energy by the same year. The European nation has already reduced emissions 20% below 1990 levels and hopes to achieve an additional 10% by 2020, a level that would surely put it ahead of most countries in the world.
Feed-in tariffs, which Germany successfully used to boost its solar industry to the global forefront, were increase in the new legislation for land-based and offshore wind generation. However, the tariffs were cut for the solar industry, which policy makers obviously feel is capable of thriving with less government support.
Geothermal energy generation, which makes use of heat beneath the earth’s surface, was awarded the highest tariff gains with a basic tariff of €0.16/kWh, an early starter bonus of €0.04/kWh, a CHP bonus of €0.03/kWh and a technology bonus of €0.04/kWh.
Tele-heating, through which power stations pipe their surplus hot water into homes during the winter, is also supported, with a goal that 25% of electricity stations will repurpose their hot water to heat homes by 2020.
The new legislation would enter into force in January 2009, if it passes the Bundesrat upper house, where the 16 state governments hold sway.
Environment Minister Sigmar Gabriel admitted that the new energy package was likely to increase power bills for German citizens, a risky move, perhaps, with elections coming up in 2009. However, the country has so far demonstrated a commitment to greenhouse gas reductions that is match by few others on the international scene.
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