German Economics Minister Philipp Rösler is standing in the boiler room of a row house in the town of Hönow, near Berlin. He doesn't look at all pleased with what he's seeing: an un-insulated heating pipe. What a waste of money and energy!
The owner of the building, Petra Röfke, 54, and her partner Hartmut, 58, look embarrassed. But the minister has some good advice for them. Wrapping a little foam insulation around the pipe would help save a lot of energy, he says, adding: "I have the same kind of pipe in my house."
In fact, says Rösler, he has a good mind to drive to the local hardware store and take care of the matter himself, along with replacing the old, inefficient light bulbs he saw while touring the house. He also didn't fail to notice the antiquated tube television set in the living room. "A lot can be done here," says the minister, giving the couple his final verdict.
The price hike is the result of an assessment under the Renewable Energy Act (EEG), a sort of green-energy solidarity surcharge that is automatically added to every consumer's electricity bill. Under the agreement reached in the last round of negotiations, the assessment will increase from 3.6 cents to 5.4 cents per kilowatt hour.
With the new rates, German citizens will be paying a total of more than 20 billion ($25.7 billion) next year to promote renewable energy. This is more than 175 for an average three-person household, a 50 percent increase over current figures. And then there are the additional charges a consumer pays for the electricity tax, the cogeneration assessment, the concession fee and value-added tax.
The development is an embarrassment to Germany's coalition government, made up of Chancellor Angela Merkel's center-right Christian Democratic Union (CDU), its Bavarian sister party, the Christian Social Union (CSU), and the pro-business Free Democratic Party (FDP). In recent months, the government has denied claims that the gradual transition to green energy could cost German citizens a load of money.
In a government statement issued in June 2011, Chancellor Angela Merkel promised that prices would remain stable. "The EEG assessment should not increase above its current level," she told the German parliament, the Bundestag. Economics Minister Rösler said that there could even be "room for decreases." The environment ministers, first Norbert Röttgen and then Peter Altmaier, behaved as if Germany's phase-out of nuclear energy was not going to cost anything, even as they handed out billions in subsidies to owners of homes with solar panels and wind-farm operators.
Merkel must now deal with the consequences of her statement that the energy turnaround was to be the most important domestic project in the legislative period. Within a few hours after the nuclear reactor disaster in Fukushima in March 2011, she had transformed herself from a proponent into an opponent of nuclear energy. At the time, most Germans supported the chancellor. But now, more than a year later, they are losing confidence in her ability to get it right. German politician and EU Energy Commissioner Günther Oettinger says that he doubts "whether German consumers will accept rising electricity prices resulting from the energy turnaround in the long term."
The rising cost of electricity is also a burden on businesses. According to Oettinger, energy costs now represent the biggest liability for Germany as a place to do business, especially in light of the marked increase in the number of blackouts and voltage fluctuations in the grid.
Consumer advocates view the electricity price as a social issue, not unlike the price of bread in ancient Rome. The Paritätischer Gesamtverband, an umbrella association for social-welfare groups, estimates that about 200,000 recipients of benefits under the Hartz IV welfare reform program for the long-term unemployed saw their power shut off last year because of unpaid bills. The VdK, Germany's largest welfare organization, uses the term "electricity poverty" and is sharply critical of what it sees as a "glaring violation of basic social rights." According to the VdK, it is unfair that citizens are being asked to bear much of the burden of costs and risks associated with the energy turnaround.
Wasted Time and Money
This Wednesday, Environment Minister Altmaier plans to unveil a proposal on how to move forward with legislation designed to promote green energy. Members of the Bundestag from the ruling coalition want to exempt a growing number of companies from the green energy assessment. FDP parliamentary floor leader Rainer Brüderle is calling for a moratorium on new roof-based solar modules and wind turbines. Meanwhile, the center-left Social Democratic Party (SPD) and the Green Party are discussing whether energy providers should be compelled to offer special rates for low-income customers. Economics Minister Rösler, whose visit to a boiler room in Hönow marked the beginning of a new promotional campaign, wants to encourage citizens to conserve energy.
The central question in all of this is whether the money coming from electricity consumers is being spent wisely. If the federal government wants to have all of Germany's nuclear power plants phased out by 2022, why is it doing so little to ensure that the project will succeed?
Billions are currently being spent on the unchecked expansion of solar energy -- a technology that contributes the least to a reliable power supply in Germany, which isn't exactly famous for abundant sunshine. The comparatively efficient building renovation programs, on the other, have come to a standstill because the federal and state governments have been quarreling over funding for more than a year now. There is far too little storage capacity to serve as a buffer against the fluctuating supply of wind and solar energy. In addition, there are no conventional replacement power plants in the works. In fact, energy utilities are thinking about shutting down existing plants.
A Massive Mess
Instead of agreeing on a concept for the energy turnaround, the parties in the ruling coalition are arguing over who is responsible for the program. Economics Minister Rösler, of the FDP, is laying claim to the expansion of the grid. Environment Minister Altmaier, of the CDU, sees himself as being in charge of renewable energy projects -- as if the two things could function without each other. And then there are Transportation Minister Peter Ramsauer (CSU) in charge of site planning, Research Minister Annette Schavan (CDU) heading up storage-technology efforts, and Agriculture Minister Ilse Aigner (CSU) looking after biofuel issues. Vanity and proportional representation are also factors in the mix.
Meanwhile, Germany's 16 federal states are developing their own concepts, some of which are at odds with each other. Bavarian Governor Horst Seehofer says that his state plans to develop a self-sufficient energy supply. But David McAllister, the governor of the northern state of Lower Saxony, has a plan based on supplying Bavaria with large amounts of electricity from wind farms off the North Sea coast.
What some grid operators, power plant owners and scientists are doing today is nothing short of flabbergasting. There are power plants that are not connected to the grid, power masts without lines, and power lines leading to nowhere.
"There is still quite a lot to do here," Rösler said when he emerged from the boiler room in Hönow. Petra Röfke, the owner, nodded. Rösler added that he couldn't have imagined so much waste. "It's crazy, isn't it?"