Tom Blees concluded: without considering how the intermittency will be compensated he estimates the German taxpayer is being stuck with about 70 times the cost of modern nuclear.
For reference, read the November 2009 study published by Ruhr University on “…the German Experience” [PDF].
Abstract
The allure of an environmentally benign, abundant, and cost-effective energy source has led an increasing number of industrialized countries to back public financing of renewable energies. Germany’s experience with renewable energy promotion is often cited as a model to be replicated elsewhere, being based on a combination of far-reaching energy and environmental laws that stretch back nearly two decades. This paper critically reviews the current centerpiece of this effort, the Renewable Energy Sources Act (EEG), focusing on its costs and the associated implications for job creation and climate protection. We argue that German renewable energy policy, and in particular the adopted feed-in tariff scheme, has failed to harness the market incentives needed to ensure a viable and cost-effective introduction of renewable energies into the country’s energy portfolio. To the contrary, the government’s support mechanisms have in many respects subverted these incentives, resulting in massive expenditures that show little long-term promise for stimulating the economy, protecting the environment, or increasing energy security.
The first fourteen pages of the study examines the German history public financing of solar and wind.
(…) the government’s support mechanisms have in many respects subverted these [market] incentives, resulting in massive expenditures that show little long-term promise for stimulating the economy, protecting the environment, or increasing energy security.
If you do not wish to read the detailed analysis, then section 3.3 summarizes the study’s conclusion that the photovoltaic solar (PV) subsidies have been a very bad deal for the German taxpayer.
3.3 Cost-Effective Climate Protection?
The estimates presented in the previous section clearly demonstrate that producing electricity on the basis of renewable energy technologies is extremely costly. As a consequence, these technologies are far from being cost-effective climate protection measures. In fact, PV is among the most expensive greenhouse gas abatement options: Given the net cost of 41.82 Cents/kWh for modules installed in 2008 (Table 4), and assuming that PV displaces conventional electricity generated from a mixture of gas and hard coal with an emissions factor of 0.584 kg carbon dioxide (CO2) per kWh (Nitsch et al. 2005:66), then dividing the two figures yields abatement costs that are as high as 716 € per tonne.
The magnitude of this abatement cost estimate is in accordance with the IEA’s (2007:74) even larger figure of around 1,000 € per tonne, which results from the assumption that PV replaces gas-fired electricity generation. Irrespective of the concrete assumption about the fuel base of the displaced conventional electricity generation, abatement cost estimates are dramatically larger than the current prices of CO2 emission certificates: Since the establishment of the European Emissions Trading System (ETS) in 2005, the price of certificates has never exceeded 30 € per tonne of CO2. Although wind energy receives considerably less feed-in tariffs than PV, it is by no means a cost-effective way of CO2 abatement. Assuming the same emission factor of 0.584 kg CO2/kWh as above, and given the net cost for wind of 3.10 Cents/kWh in 2008 (Table 6), the abatement cost approximate 54 € per tonne.
Read the whole thing, then write your elected representatives “please don’t repeat the German mistakes here”.
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