I guess the problem with a long article, even an interesting long article like the one submitted here, is that it is hard to read to the end. Near the end of the submitted article is this paragraph:
"A second problem is that even when it comes to alternative energy sources, Germany doesn't reward carbon dioxide reduction. Rather, its policy establishes well-defined subsidies for specific technologies: a kilowatt-hour of solar power is rewarded more than power from offshore wind, which in turn earns more than power from onshore wind. Even though solar subsidies have been reduced to rates far lower than the ones Leurs locked in, solar power still pays the highest rates. If reducing emissions were the focus, however, more money would be directed toward reducing energy use. 'If you could choose the optimal instruments, focusing on those areas first where you can achieve your goals most inexpensively, you would focus not so much on renewables but much more on efficiency,' says Pittel, the energy economist from Munich."
and generally the advice of any thoughtful scholar on how to improve worldwide energy efficiency. The German Energiewende plan is a remarkable example of intentionally wrong policy choices that waste the money of German taxpayers and utility rate-payers and delay innovation. It's a good thing that other countries have differing policies that better encourage innovation, especially innovation to reduce energy consumption.
AFTER EDIT:
Another subthread here talks about the economics of importing energy versus producing it domestically. An astute HN participant mentioned the principle of comparative advantage. For onlookers who may not have seen a good reference on comparative advantage, I suggest "Ricardo's Difficult Idea,"
by an economist who has been awarded the Nobel memorial prize in economics, an essay that explains why trading for resources is generally much, much better than trying to produce all resources within national borders.
There are some other good explanations of the principle of comparative advantage easily found via an online search:
We do have quite a couple of taxes and regulations aimed at improving energy efficiency, so the subsidies for renewable energies are a more of a complement for those. We have tax breaks for cars that use less fuel, we do have extra tax for fuel consumption, we do have support for energy efficient housing, ... All in all we're doing pretty fine on that side. Primary energy usage in Germany has been dropping since the eighties and is now close to what we consumed in 1970 (309 mio toe in 1970 vs 319 mio toe in 2010) while the USA have been rising pretty steadily with a small drop-off since 2008 (1627 mio toe in 1970 vs 2285 mio toe in 2010). [1] There's a limit where the ROI in reducing energy consumption is lower than the ROI in producing renewable energy and after that we're still going to need energy, so I think while reduction should be the first priority, we still need to invest into second and third priorities pretty much right now. And that's what we're doing.
The different subsidies are explained by the fact that the subsidies are intended to support the uptake of those technologies. Solar energy just needed more of a push to achieve critical mass and so does offshore wind. Now that solar panels are cheaper and more efficient, the subsidies get lower and lower each year. There are still a plethora of problems surrounding this approach, but I must admit that I don't see how other approaches would have less problems.
There certainly a couple of contributing factor to that:
Geographical factors:
* larger distances. In Germany you can barely travel 1000km in one direction without leaving the country. This implies higher population density which keeps energy consumption for travels and transports at a lower level.
* milder climate: We don't need as much heating as the people in Alaska do and less air conditioning than California or Florida
Man-made/political factors:
* higher energy costs. We pay roughly 2USD per liter fuel. That implies that people are actually trying to buy fuel efficient cars. We don't drive pickups - in fact, I couldn't really afford the fuel cost if I would. Same is true for all sorts of energy.
* better insulation on houses. The standard american house seems to be the wood-frame-kind that's cheaper and quicker to build but is not expected to last for centuries. Here, houses are expected to last for ages. The one I currently live in dates back to somewhere around 1900, the one I'll move to was built in the late 1850s. This is quite common for Berlin actually. That implies thick, well insulated stone or brick walls.
There's certainly more things that affect energy usage, but the important point is that there are some factors that can be influenced while others can't. The Canadians for example will always have a higher need for primary energy since it's pretty cold there on average. The more interesting point is whether the consumption rises or falls and how we produce that energy.
This isn't a decision grounded in economics, obviously. This is about minimizing side-effects from energy production. The sun blasts roughly 10,000 times our electricity needs at us each year. (And that's just what directly impacts the surface.) I'd say we have some wiggle room in which it makes sense to focus on being cleaner rather than more efficient.
We should worry about efficiency if we have serious scarcity issues, but I don't think we really have a scarcity problem at the moment. (We could definitely get there surprisingly quickly, but I think the cleanliness risk is serious and immediate, and we shouldn't focus on hypotheticals.)
This 10,000 times figure is meaningless because it is theoretical; in reality that energy comes in diffuse rays which make it very difficult to capture anywhere near the amount of electricity that is actually needed. Hence the need to turn on coal power plants, which are harmful to the environment (very unwise to have turned off those nuclear plants IMO). Therefore, we SHOULD worry about efficiency, to avoid such things as much as possible.
We haven't turned off nuclear plants (yet). Those which are currently off have either reached EOL (1 or 2 IIRC) or are down for scheduled maintenance or because of unexpected failure of critical components.(pretty much all the rest)
But yes, we actually had some days where we were running without nuclear power. And I don't think it's unwise to turn them off. Few people are actually aware but in 1977 we had a catastrophic failure with a similar characteristic as the Fukushima accident: Block A of the Grundremmingen [1] nuclear plant suffered a power failure followed by a catastrophic loss of main coolant. The block had to be given up since it was not economic to repair and refit it. So while it may be true that a safe reactor can be built, I'm absolutely certain that humans can never safely operate it. We just make too many errors.
[1] Close to Ulm and Augsburg, smack in the middle of Stuttgart and Munich. No more Octoberfest if that blows up.
You and the article are missing several things, Germany is already one of the most energy efficient industrial country in the world and the regulations are drastically forcing companies and people to save energy. Houses which are built nowadays are nearly passive house and this by law. Also, the German bank for development is giving everybody around 100k€ loan at about 1% to improve the energy efficiency of old and new houses.
Germans are extremely serious about energy use and savings and they know how to do an energy balance. I wish this level of engineering would cross the border to France a bit more often.
"A second problem is that even when it comes to alternative energy sources, Germany doesn't reward carbon dioxide reduction. Rather, its policy establishes well-defined subsidies for specific technologies: a kilowatt-hour of solar power is rewarded more than power from offshore wind, which in turn earns more than power from onshore wind. Even though solar subsidies have been reduced to rates far lower than the ones Leurs locked in, solar power still pays the highest rates. If reducing emissions were the focus, however, more money would be directed toward reducing energy use. 'If you could choose the optimal instruments, focusing on those areas first where you can achieve your goals most inexpensively, you would focus not so much on renewables but much more on efficiency,' says Pittel, the energy economist from Munich."
This ignores the advice of Amory Lovins
http://www.rmi.org/Amory+B.+Lovins
(Amory Lovins profile page at Rocky Mountain Institute website)
http://www.ted.com/speakers/amory_lovins.html
(TED profile)
http://www.ted.com/talks/amory_lovins_a_50_year_plan_for_ene...
(TED Talk video "A 40-year plan for energy")
and generally the advice of any thoughtful scholar on how to improve worldwide energy efficiency. The German Energiewende plan is a remarkable example of intentionally wrong policy choices that waste the money of German taxpayers and utility rate-payers and delay innovation. It's a good thing that other countries have differing policies that better encourage innovation, especially innovation to reduce energy consumption.
AFTER EDIT:
Another subthread here talks about the economics of importing energy versus producing it domestically. An astute HN participant mentioned the principle of comparative advantage. For onlookers who may not have seen a good reference on comparative advantage, I suggest "Ricardo's Difficult Idea,"
http://www.pkarchive.org/trade/ricardo.html
by an economist who has been awarded the Nobel memorial prize in economics, an essay that explains why trading for resources is generally much, much better than trying to produce all resources within national borders.
There are some other good explanations of the principle of comparative advantage easily found via an online search:
http://www.econlib.org/library/Topics/Details/comparativeadv...
http://www.wto.org/english/res_e/reser_e/cadv_e.htm
http://iang.org/free_banking/david.html