What Can the U.S. Learn from Germany’s Energiewende?

energiewendeLast week, at the invitation of The American Council on Germany, I had the chance to participate in a roundtable discussion with Mr. Jürgen Trittin, a current member of the German Bundestag (Parliament) and former federal Environment Minister [covering energy (traditional, nuclear, and renewables), water, land conservation, species protection, air quality, pollution, urban development, and buildings.] Curiously (to me), Mr. Trittin was succeeded in his post as Environment Minister by Angela Merkel, now Germany’s Chancellor.

We had a good, robust conversation and here are just a few salient points I took away from it.

Referring to Germany’s Energiewende (Energy Transition), I asked Herr Trittin if he had any suggestions for the USA, or even for this region, with respect to setting an energy policy. He said the key was to set some goals – set them and then create policy to support them, but let everyone opt in voluntarily. An energy policy will work best when fueled (pun intended) by peer pressure and a common sense of aspiration. As an example, he mentioned that Germany has a goal to reduce CO2 emissions by 40% by 2030. Part of this has translated into having 40% of all source energy generated as renewable energy. These are two big goals (of several) to which the entire country can aspire.

He went on to say that one of the larger obstacles in Germany is the limited size of its grid. The German grid is not large enough, nor does it have sufficient interconnections, to balance the electric loads – especially as evermore renewable energy is added. Inter-country connections with border countries or even an EU-wide grid (all of which are in the works) would help address many transmission and distribution (T&D) issues.

Herr Trittin noted that Germany has deployed many more combined heat and power (CHP) generation facilities than the USA. They represent a nice technology, he said, on the path from fossil fuels to renewables and greater energy efficiency. I noted that Mayor Peduto, Volker Hartkopf, Bill Recker, Mike Mihuc, and I had visited several of these last year during our visit to Germany and that the mayor was impressed and inspired to try to identify opportunities for these facilities here in the region.

From Herr Trittin’s perspective, the biggest obstacle facing the USA is that cheap fossil fuels continue to delay the transition to renewable energy, energy efficiency, and other solutions to the climate change challenge.  Germany never had this issue since they have always had to import a great deal of expensive power from other countries (France, Austria, et al.). Higher energy prices would create more incentives to find alternatives to fossil fuels, he stated.

I asked if the solution, then, was a carbon tax? His response was: maybe. He likes the concept of the carbon tax, but noted that it hits the transportation sector too hard (impacting most severely those most unable to withstand the burden) and that in Germany, at least, there were too many potential loopholes with respect to business vehicles and the odd historical artifacts of how that country taxes or does not tax personal versus business vehicles. A better solution, he suggested, would be to stabilize the existing Emission Trading System, which currently has too many credits on the market and does not provide sufficient incentives for change. He further noted that German engineers could certainly design and build better, more efficient vehicles (he was quite proud of the high quality reputation of German engineers) if only they had the proper motivation (as in government policies that required greater fuel efficiencies and fewer emission impacts).

Many thanks to Paul Overby, Honorary Consul of the Federal Republic of Germany, for the invitation.

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