German Green Revolution Is Running Out Of Money

Renewable Energy (Other Energy Resources) / Economics, Batteries

Date posted: 07/05/15

Michael Bastasch reports that recently President Obama was pointing to Germany as an example of how the U.S. should develop green energy. That was before news that the European biggest economy might be running out of money for its green-energy revolution. The German $412 billion plan to power itself with green energy may be running low on cash, according to financial consultants, as consumer energy prices skyrocket and traditional power plants require more subsidies to stay in business. The necessary equity funds for the expansion of the network infrastructure and offshore wind can probably be provided only with the participation of alternative and international investors, warns a report by consultants with Roland Berger and the World Energy Council. For years, Germany has been trying to force more wind and solar energy onto its electrical grid, but what started as a well-intended effort to fight global warming devolved into an expensive labyrinth of subsidies and special interest politics. The idea was that once the grid was transformed to power more green energy, costs would go down as new technologies and efficiencies came onto market. But the report by Roland Berger and the World Energy Council cautions that at least 280 billion euros will be needed in the next 15 years to meet the German goals. And that is with sustained political support, the report warns that without it, the transformation could get even more costly. If so, trouble. That is only the tip of the cost-berg, the report warns, as well as funding for offshore wind farms facing high risk and market entry barriers, and a significantly tighter economic situation. Germany and other countries are increasingly relying on offshore wind farms for electricity, especially as nuclear power plants are phased out. I2M predicts that these countries will eventually see the economic and practical aspects of un-shuttering their nuclear plants and opening the natural gas pipelines once again for competition.