TCS Daily

Politics Over Economy

By Joseph Tom Goeller - June 20, 2003 12:00 AM

KARLSRUHE, Germany -- A key decision earlier this month by the German Supreme Court, or Bundesgerichtshof (BGH), is a boon to the nation's expensive wind energy industry but a disaster for consumers. Thanks to the ruling, every conventional utility company must continue to buy all of the "renewable" industry's eco-electricity, no matter how much of it is produced and offered.

Actually this "deal" has been around since 1990, when the conservative government of Chancellor Helmut Kohl passed a bill that forced regular utilities to buy electricity produced by regenerative energy sources. However the eco-socialists in Berlin felt it was necessary to boost the shaky trade between the eco-energy producers and the conventional utilities. In spring 2000 the German government passed the so-called Renewable Energies Bill (EEG), which forced the old utility companies not only to buy the eco current but also to pay whatever price the providers demanded.

That led of course to a boom, especially in the German windmill industry. Because the price of eco-energy is far above the market price of regular produced current (by coal or nuclear power plants), the amount of windmills -- especially in Northern Germany along the coasts of the North and the Baltic Sea -- multiplied fast. Today wind energy employs more than 35,000 people. Because so many small eco-energy producers -- based on the EEG Bill -- could easily exploit the big traditional utility companies, the profits of the latter sank. Eventually the northern German utility company Schleswag refused to cooperate any longer with the eco-current providers. The company brought an action against the drastic EEG Bill at the German Supreme Court, arguing the bill enforces "an unreasonable demand" and is "unconstitutional."

The Court decided, however, that the EEG bill as a whole is constitutional and found its demands reasonable. But the EEG Bill is hardly that. That it requires utility companies to buy eco-energy at all costs is unworthy of a Western democracy founded on the basic principles and virtues of the free market.

What's more, the decision is not even in the interests of the people it's meant to serve. Germans, usually the most vocal ecologists on the world policy stage, have almost no interest in ecological energy. Only every 150th household in Germany gets its electricity from renewable energy sources such as solar, biogas, wind or water power.

And even this infinitesimal number would be lower without the EEG law, a de facto subsidy of the renewables sector.

Germany, which likes to point the finger at the U.S. because President Bush walked away from the Kyoto Protocol in 2001, is no environmental model itself. The country is constantly admonished by the European Commission for failing to fulfill its environment responsibilities according to the terms of the European treaties. No, the willingness of Germans to pay more for everything that carries the prefix "eco" is as low as it is in other countries. Only 300,000 customers changed to the more expensive eco current tariffs. Opinion polls, however, reveal that two-thirds of 80 million Germans stand firmly for clean environment.

The artificially high price for eco-energy, guaranteed by law, boosted windmill production in 2002 by 20 percent. But without this massive support that the EEG bill provides, without the possibility to enforce the sale of the eco-energy, the German windmill industry would have been bankrupted a long time ago.

As it is now, a steadily increasing number of gigantic windmills dominates more and more hills and coast lines of the romantic German landscape: symbols in steel of a completely failed energy policy -- but exactly the right national sign-board for the self-righteous German eco-government.

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