What the US Can Learn from Germany

Osha Davidson who has recently written a book called Clean Break, Germany’s Energy Transformation and What Americans Can Learn from ItHere is the first chapter of the book.

Davidson reports that Germany will quite likely meet its target of producing 80% of its electricity from renewable sources by 2050.  After all, Germany has met all of its targets so far ahead of schedule.  He also points out that 65% of renewable power capacity is in the hands of small businesses, farmers and household producers, while the big utilities in Germany only control about 6% of renewable generation.

This was all deliberately designed into Germany’s system.  The country’s feed in tariff system costs rate payers money in their electric rates, but the system also allows those same rate payers, down to the individual household, to capture that higher use cost by becoming producers of their own, local solar and wind power.

While regulators in the US cry about renewable power raising rates, Germans have created a system where people can recover those costs right away by becoming producers themselves.  And that is what has happened.  Check out the interview and the book.

6 thoughts on “What the US Can Learn from Germany

  1. Will do. So, on the same subject (more or less), I heard on the radio this morning the Governor of Maryland (maybe East Virginia) bemoaning the fact that folks are using less gas and consequently the State is seeing less gas tax revenue to maintain or improve roads, etc.

    Perhaps I’m missing something but it almost sounds like we have designed a system that not only pollutes but penalizes us for not continuing to pollute. Any thoughts on how to change that paradigm? Thanks.

    • Joe,
      I think you may be referring to WV and the severance tax from natural gas not being able to offset the steep declines in the severance tax from coal that are anticipated as coal production declines. The low revenues from severance taxes are the result of low gas prices, even though production has risen. The real problem is that WV’s tax revenues are dependent on the unstable markets for extractive industries. If we had a more diversified economy, the ups and downs of these industries wouldn’t matter as much. Of course, you could always raise the tax rates, but the industry lobbyists would scream bloody murder.

      • So your earlier point gets right to the issue. We have built a tax system on gasoline that actually penalizes conservation. And, yes, that is a problem. We have the same thing in the electrical industry. In a regulated state like WV, power companies can recover the costs of their power plants and other overhead. But if electrical use goes down, there isn’t enough electricity to bill to recover those costs. Those costs are real, and the law says power companies can recover them, so they come up short. In a deregulated state, that isn’t an issue, because there is no direct cost recovery from rate payers in this way. In regulated states, there has to be some provision to allow power companies to recover their capital costs even when power consumption drops.

      • Or you can do what the Germans have done. Commit to 80% renewable power by 2050 as your only goal. If that is your priority, then everything else gets adjusted to that. If something doesn’t work to give that result, you change it. The Germans have proven themselves to be flexible, creative and willing to tell the big corporations that they will have to fall in line with the national agenda. None of those things exist in the US at this time.

  2. … because in the U.S., big corporations tell legislators what to do while filling their pockets with campaign contributions. The legislators tell the regulators what to do. Corporate America has become our shadow government. Why do the people continue to allow this to happen?

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