ABC: Germany has the wind at its back

Matthew Wright

THE recent clinching of a $1.9 billion Australian defence contract by the Germans illustrates to carbon price knockers that they need look no further for proof that an economy which relies on renewable energy can outsmart one dependent on fossil fuels.

Germany's electricity sector delivers 21 per cent of its power from renewable sources, such as the wind and the sun. Just 8.5 per cent of Australian power is provided by these sources, despite the fact that our continent has them in spades compared to the Germans.

This month it was reported that a Bendigo workshop planned to lay off 50 staff because it had missed out on a government contract to supply vehicles for the Australian Army.

The tender for Land 121 Phase 3 military vehicles was won late last year by German consortium Rheinmetall MAN which will export about 2,700 fully assembled vehicles to Australia.

The Bendigo manufacturer, operated by French engineering giant Thales, had been building the required military vehicles under a previous contract.

But now, the Thales retrenchments will add to a growing list of Australian based employers who are cutting jobs and threatening to push our unemployment rate close to six per cent in 2012, according to CommSec economists.

Anxiety over the potential of the Eurozone crisis to wreak havoc around the globe is undoubtedly driving the softness in the Australian economy.

But what of Germany, which finds itself at the epicenter of the EU debt maelstrom?

How is it possible that a nation shouldering the lion's share of bailing out Europe's basket-case economies has its finances in the best shape ever in two decades?

The yearly German unemployment rate keeps falling and at 6.7 per cent in January was the lowest since reunification. The Berlin based BGA Exporters and Wholesalers group estimated total German exports hit a record $US1.3 trillion last year.

This is hardly a picture of an economy that has been struggling under the impost of a carbon cost and renewable energy subsidies.

Energy production using fossil and nuclear fuels is penalised in Germany by virtue of the Renewable Energy Act, which guarantees higher prices for generators of electricity sourced from wind and solar through feed-in-tariffs.

The legislation has encouraged a phenomenal uptake of solar roof panels for a nation that hardly boasts sunny weather. Today Germany has over 150 million solar panels installed or 25,000MW, more than Australia's entire baseload capacity.

Compare that with a mere 1,250MW of photovoltaic panels in the sunburnt country and the irony is scorching.

Critics who claim that pricing carbon using feed-in-tariffs, taxes or emissions trading is somehow linked to an underperforming economy and high jobless rates ought to be silenced by Germany's success in bursting that myth.

And if the proof in the pudding is not enough for the naysayers, they could look to volumes of published material demonstrating that the early costs of encouraging renewable energy benefit an economy in a matter of years.
Respected energy experts Dr Wolfram Krewitt and Dr Joachim Nitsch's published research while at the German Aerospace Centre that is regularly cited to drive home this point.

In a peer reviewed paper they wrote: "While the success of the German Renewable Energy Sources Act in supporting the use of renewable energy sources for electricity generation is widely acknowledged, it is partly criticised for imposing unjustified extra costs on society.

"[This] paper makes an attempt to estimate the external costs avoided in the German energy system due to the use of renewable energies for electricity generation, and to compare them against the compensation to be paid by grid operators for electricity from renewable energies according to the Renewable Energy Sources Act.

"… [R]esults clearly indicate that the reduced environmental impacts and related economic benefits do outweigh the additional costs for the compensation of electricity from renewable energies,'' Krewitt and Nitsch concluded.

Another misleading argument renewable energy doubters like to peddle is that the rise in renewable energy use and the reduction in coal use is only possible in economies that also have a nuclear sector, to supply supposedly 'reliable' electricity when 'the sun don't shine and the wind don't blow'.

Germany also recently burst this myth.

After the Fukushima nuclear disaster last year, the German government ordered the shut down of eight reactors, prompting warnings that when winter came around, a surge in energy use would cause black outs.

But not only has the electricity supply remained reliable in the coldest months, the unusually icy weather of late has seen the German energy sector prove very resilient in the absence of 9,000MW of nuclear back up. In fact during a cold snap last week, the country with the fastest growing renewable sector was propping up nuclear powered France which was importing over 6,500MW to support its fleet of old outdated nuclear plants.

With a 100 per cent target, renewable energy is a fact of life in Germany, tried and proven.

The vocal and incessant deniers of this evidence have only ideologies, opinions and a gaping lack of comprehension.

Matthew Wright is executive director of Beyond Zero Emissions.