Germany and Spain Move to Curb Green-Energy Supports

[FBaggins]

More than a decade ago, Germany and Spain created similar laws to aggressively promote the adoption of renewable energy. The two countries were again marching in step on Thursday—this time to fix a web of subsidies and compensations they created for green energy that had the unintended effect of driving up household electricity bills.

With Spain in the grips of recession, the government wants to lower consumers' light bills. In Germany, Chancellor Angela Merkel faces an election in September and hopes to win points with voters by putting a stop to rising electricity bills. The independent steps have been welcomed by German consumer groups, but have been slammed by businesses as German and Spanish politicians move to finance cuts for consumers by passing on the costs to companies.

Germany subsidizes producers of renewable energy such as solar and wind power in part by imposing a surcharge on household electricity bills. As the industry has grown, demand for the subsidy increased, driving the surcharge higher. In January, the surcharge, which amounts to about 14% of electricity prices, nearly doubled to 5.28 euro cents per kilowatt hour. Large energy-intensive industries are exempted.

That means ordinary consumers shoulder the lion's share of the costs for what the German government calls its "energy revolution."

http://online.wsj.com/article/SB10001424127887323478004578304181995426900.html

[happyslug]

1. Translation from the language of Wall Street. Cut the subsidy so taxes can be lowered

Austerity is the present call of the Right Wing as how to handle the Recession. Most economists are saying that is just plain wrong, but these Right Wingers do not care, they want to cut taxes and that means cutting expenses, which include the cost to convert to Solar and Wind Power. This has less to do with "Saving" money for Consumers, then in reducing Government Spending in the name of Austerity.

[GliderGuider]

2. Who didn't see this coming?

The system always drives to access the lowest cost energies first and most copiously, with the fewest impediments. This is just another example of that principle in action. Renewables have a higher overall cost (not just monetary, but system-level efficiency cost) than fossil fuels. That cost is being exposed to consumers in monetary terms in order to drive a shift back towards the lower cost energies of coal and NG.

The environment? Too bad, so sad. One of the ways the system keeps the efficiency of energy use up is by not dealing with the question of waste products any more than it has to.