Germany Sets Aside $130 Billion for Renewable Energy
By John C.K. Daly
October 19, 2011
German Chancellor Angela Merkel announced on 30 May that Germany, the world's fourth-largest economy and Europe's
biggest, would shutter all of its 17 nuclear power plants between 2015 and 2022, an extraordinary commitment, given that
they currently produce about 28 percent of the country's electricity.
Underlining the government's seriousness in changing the country's energy matrix, Germany's Kreditanstalt fur
Wiederaufbau (German Development Bank) is to underwrite renewable energy and energy efficiency investments in Germany
with $137.3 billion over the next five years, Germany Trade and Invest reported. Overall, the German government's 6th
Energy Research Program has made an extraordinary $274.6 billion available for joint funding initiatives in energy
storage research over the next three years.
It is by any yardstick an extraordinary (and expensive) commitment that may well have the collateral benefit of
unlocking similar funding worldwide for renewable energy projects.
The new Kreditanstalt fur Wiederaufbau loans and projects are designed to underwrite a broad array of energy areas,
including energy efficiency and smart grids, as well as wind and solar energy generation. Last year Kreditanstalt fur
Wiederaufbau financed 40 percent of all photovoltaic installations in Germany.
Germany is already the world's strongest photovoltaic market and also accounts for Europe's largest share of installed
wind capacity. Moving resolutely into the field of renewable energy, by 2020, renewable energy sources are expected to
account for 35 percent of Germany's energy output, soaring to 80 percent by 2050. Germany now produces 20 percent of its
electricity from renewable energy sources, now, up from just 6 percent in 2000. The effort is in turn creating thousands
of jobs and new industries.
Industry expert Tobias Homann observed, "With the decision to abandon nuclear power earlier this year, it was clear that
the road ahead would be challenging. But Germany is in a very promising position to be the first industrialized country
to rely entirely on renewable energy."
One of the current major shortfalls of the renewable energy market is its inability to store generated energy but
Germany is working on this dilemma, focusing on the development of battery and smart grid technology.
According to Germany Trade & Invest CEO Jurgen Friedrich, "Germany has established the ideal prerequisites for the rapid development of the energy
storage industry. The unique combination of renewable energy generation, innovation and implementation through such
projects makes Germany an optimal location for companies looking to enter this budding industry."
Germany is also assiduously pursuing improving solar technology. Germany's photovoltaic installations and solar
facilities recently surpassed hydropower in Germany's total energy generation matrix.
In the area of offshore wind power generation, Germany projects 4,000 turbines off its Baltic coast producing
electricity by 2030. Germany's northeastern Mecklenburg-Vorpommern state on the Baltic will produce 100 percent of its
electricity from renewables by 2015-2017, and then export the excess to other German states. Mecklenburg-Vorpommern
premier Erwin Selling told reporters, "Renewable energy has become extremely valuable for our state. It's just a great
opportunity - producing renewable energy and creating manufacturing jobs. From an industrial point of view we'd been one
of Germany's weaker areas. But the country is abandoning nuclear power. That will work only if there's a corresponding
and substantial increase in renewables. It'll be one of Germany's most important sectors in the future. We want to be up
there leading the way."
The picture is not completely rosy, however - there have been delays in expanding and upgrading the national grid of
high-voltage transmission lines from sparsely populated coastal regions such as Mecklenburg-Vorpommern to areas where
the power is needed in Germany industrial and densely populated western and southern regions. While Berlin is working to
remove infrastructure bottlenecks, if the nation's electrical grid is not expanded soon it could cause future problems
when more off-shore wind power goes on line.
Such problems aside however, Germany, as Europe's leading creditor nation and technological powerhouse is surging
forward on weaning itself off of nuclear energy and strongly moving towards alternative renewable energy sources, an
experiment that will doubtless be watched by other industrialized societies from Tokyo to Washington.
ENDS