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Germany

Germany

Making History

With the business world's broad acceptance of a new dawn in the world of power generation, the massive opposition to wind energy of the German utility sector is becoming ever more perplexing. While Preussenelektra has lost all the legal skirmishes in the war against renewables so far, the effort required of the wind lobby to fight a never-ending rearguard action against an all powerful foe is placing it under enormous strain. But this is the uncomfortable reality of backing a support system based on price protection rather than market forces.x

Slowly but surely the business world is realising that renewable energy has come to stay. There are signs of the times in plenty. Oil giants like Shell and BP are now seriously diversifying into renewables, with Shell prophesying that half its business will eventually be in clean power. Enron, a major trend setter in the energy world, chose to add wind to its gas portfolio in both Europe and America in readiness for the green power market. And even tradition-bound electric utilities, fed by the views of a new generation of middle management, are beginning to see renewables as an opportunity, rather than a threat: the most recent example is that of a Dutch utility lambasting its government for not stimulating the development of wind energy enough (page 23).

The trend is clear even to those outside the renewables business. Last month The Economist, an international news magazine, proclaimed that, "Big energy companies are more interested in renewables than ever before," and that "wind power is now just about competitive with fossil fuels in some markets."

With all this broad acceptance of a new dawn in the world of power generation, the massive opposition to wind energy of the German utility sector is becoming ever more perplexing, especially when seen from outside the country. Yet again Preussenelektra is taking up legal weapons against the law which obliges it to buy electricity from renewables at a premium price (page 6), despite being told by government that it is the duty of utilities to distribute green power. While Preussenelektra has lost all the legal skirmishes in the war against renewables so far, the effort required of the wind lobby to fight a never-ending rearguard action against an all powerful foe is placing it under enormous strain. This is the uncomfortable reality, however, of backing a support system based on price protection rather than market forces.

Preussenelektra claims its opposition to wind power is not because of the technology, but because of what it deems to be an unfair subsidy system which not only flouts competition rules, but also puts a large share of the cost of the system on a few utilities in the windy north, where there are lots of wind plant. Instead of subsidies, Preussenelektra advocates the setting of mandatory quotas for the amount of renewables in the electricity supply mix -- with free trading of quotas between power suppliers. Interestingly, The Economist, a champion of liberal markets, is not against giving renewable energy a helping hand. "In principle, supporting renewables is no bad idea," states the magazine in an editorial comment. But the editorial takes issue with the policies adopted so far, referring to them as a "muddle: a hodge-podge of subsidies, tax tweaks and regulatory favours. Germany's approach is the most absurd."

To comprehend not only Preussenelektra's die-hard opposition of wind energy, but also the wind lobby's stubborn clinging to subsidies rather than a quota system, is not easy. Perhaps, though, it requires an insider's understanding of the history of energy use in Germany. Hermann Scheer, a member of the European Parliament and very much a live wire in electricity politics, has produced a 16 page treatise in support of renewables entitled "A Windy Protest -- the future potential of wind energy versus egotistical and traditional grounds for opposing it." The document sheds some (often irreverent) light on the scene.

It's been seen before

Scheer draws a series of analogies with the present day from as far back as the Middle Ages. At that time, windmills began to dot the European landscape and "represented a major step towards increasing economic productivity." Nevertheless, they were extremely controversial. Erected by the common people, the windmills competed with watermills operated by feudal lords who enjoyed a natural privilege -- and these lords protested vehemently, doing their best to block the spread of the newfangled technology. In fact, the windmills "helped to liberate the economy from the privileges of the landed gentry," says Scheer. He quotes an abbot from the time, Samson von Ipswich, remonstrating with a vassal who had had the temerity to erect a windmill: "But you're chopping off my legs. Now the burghers will come running to you to have their grain ground just as they please and I have no right to prevent them from doing so."

Today's Germany has changed very little, argues Scheer, the difference being that it is giant utilities and not feudal lords preventing progress. "As the numbers [of private wind plant] grow, it is becoming increasingly difficult to run the existing nuclear and coal-fuelled power plants at full capacity, thus jeopardising the business interests of the big power corporations. Wind energy plants also attack their commercial monopoly [and] eat away at the substance of today's power industry," claims Scheer.

No wonder, perhaps, that Wolf Hatje, Preussenelektra's policy analyst, was last month prepared to put his life on the line to fight the country's Renewable Energy Feed in Tariff. "We will do everything possible to stop it, even if you stone me for it," he told participants at a renewables seminar at the Hannover Trade Fair.

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