Tuesday 21 February 2012

German experience: clean energy requires subsidies

www.theage.com.au
18 Feb 2012

AN ARCHITECT of Germany's rapid growth in clean energy-it has nearly half the world's rooftop solar power-has warned that Australia's climate policies will not alone drive a switch to greenhouse-gas-free electricity. Germany reached its 2020 target of generating a fifth of its electricity from renewable sources nine years ahead of schedule, largely through feed-in tariffs that guarantee new power forms an inflated rate for the power they use to make them competitive.

It installed 3 GWs of solar photovoltaic panels in December alone-roughly enough for 1.5 million homes. Australia has less than half this in total. Hans-Josef Fell, an author of the German Renewable Energies Act introduced in 2000 and a Greens MP, backed the Australian carbon price as a positive step that would start to factor in the cost of burning fossil fuels to the climate and people's health. But he said the experience of the European emissions trading scheme suggested Australia's laws alone would not trigger the uptake of clean energy.

Speaking in Melbourne, he said feed-in tariffs were needed to help solar, wind, biomass and geothermal power overcome barriers that made them more expensive than fossil fuel energy. He cited International Energy Agency data that found global subsidies for fossil fuel energy increased to $US409 billion in 2010 ($A380 billion), compared with $US64 billion for renewable energy.

''In the beginning, all new technologies are more expensive than existing technologies, so we must help them,'' Mr Fell said. ''We must make money available for renewables and lower the tax subsidies for fossil fuels and nuclear power.'' The Australian laws-dubbed the ''clean energy future package'' by the government-include a carbon price of $23 a tonne charged to about 500 big emitting companies. It starts in July and will evolve into an emissions trading scheme in 2015.

The package also includes a $10 billion Clean Energy Finance Corporation to invest in and underwrite the development of fledgling technologies. But the government opposes feed-in tariffs and is reducing a national solar incentive scheme. State solar feed-in tariffs have been wound back. In Germany there is a debate over how quickly to reduce its solar tariff given the cost of panels is falling rapidly. It installed 7.5 GWs last year. Renewable energy increased German power prices by about 10%. Mr Fell said analyses showed the rise would have been greater without investment in clean sources.

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