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Germany, the model for Ontario’s wind and solar developments, now regrets its spending spree
Germany – the country on which Ontario modelled its approach to renewable energy development – has a $412-billion lesson for Ontario. That’s the amount the country has spent on subsidies in support of solar and wind energy, among other renewables, over the past 20 years, all in the push to wean the country off fossil fuel and nuclear generation.
On the surface – and according to many news sites – the program has been a success, and not just because of the 378,000 people renewables now employ.
By the end of 2012 (the most recent year for data), wind and solar provided about 13% of all German electricity consumption. Adding in hydro and biomass, renewables provided more than 23%. And in May, headline writers around the world proudly trumpeted that renewable energy provided 75% of the country’s total electricity consumption.
But scratch a bit below the surface and an entirely different picture emerges – one with households being pushed into “energy poverty” as renewable subsidies lead to soaring power bills, handouts to the country’s big businesses and exporters so they can avoid paying for those subsidies and a systematic bankrupting of traditional utilities. As for that one day in May when headlines celebrated that 75% of power generation came from renewables, well, it was a Sunday when demand for power is at its lowest level.
Germany’s decision to support renewable energy at all costs has, ultimately, cost the country’s ratepayers billions of dollars and led to a doubling of monthly electricity bills over the past decade. Households now pay the second highest rates for electricity in the EU – second only to Denmark, the world leader in wind turbines. The country’s feed-in tariff program – which offers renewable energy producers a guaranteed rate for their power – has already cost $412-billion, but could, according to one estimate from the former Minister of the Environment Peter, produce an $884-billion price tag by 2022. Germany will hand out $31.1-billion of renewable energy subsidies in this year alone.
The price of electricity paid by German households has increased from 14 cents (euro) per kilowatt hour in 2000 to 29 cents per kilowatt hour last year – marking a 107% increase, while inflation over that time period was about 22%. The biggest reason for that increase is the renewable energy subsidy, which amounted to 1.4% of the total bill when it was first introduced in 2000, but now accounts for 18%. That renewable levy now costs the average household in Germany more than $320 a year.
For the rest of this article, click here: http://business.financialpost.com/2014/08/12/achtung-ontario-renewables-are-a-money-pit/