Metropolitan News-Enterprise


Friday, September 19, 2008


Page 7



Germany Setting an Example With Economics of Energy




The world is taking notice. While most nations are trying to cope with high-priced oil, Germany is getting around this problem with a green revolution. Germany is pioneering solar and wind-power energy production and has solved the technical problem of rooftop solar generation.

Following the German example, some three dozen countries are now adopting some variation of the green revolution. What these countries have noted is the willingness of Germany to explore producing energy through the use of just about anything - from ultra-thin photo voltaic roofing material to cow manure.

By going green, Germany is not only meeting its energy needs, but it’s also responding to an employment challenge. A report in the Christian Science Monitor claims that “since 2004 [German] employment in the green-energy sector has climbed from 160,000 to nearly 300,000.”

Green technology in Germany is expected to pass the level of employment in the automotive and electrical engineering industries and become the nation’s top employers by 2010.

Germany is thus liberating itself from rising high oil prices, especially from Russia, in which oil mixes itself in such a volatile way with politics. By its success, Germany won’t have to worry too much about the high cost of Russian oil or the potential pressure from Russia in German affairs.

A few politicians in the U.S. are noticing German successes and hope to emulate them. A bill was introduced in the House of Representatives on June 26 of this year which would fund alternative energy exploration. Entitled the Renewable Energy Jobs and Security Act, the bill “would guarantee renewable producers long-term contracts at above market rates” by creating a feed-in tariff system of payments for small to mid-sized renewable energy suppliers (sites up to 20MW in size) similar to the system which has had such success in Germany.

Under a feed-in tariff system, renewable electricity producers are paid a fixed, above market-rate tariff for electricity that is fed into the grid. The cost is then spread across all consumers of electricity. This bill, if adopted, could dramatically change the way in which renewable energy is promoted in the United States.

California, with its California Solar Initiative passed last year, currently offers the most progressive incentive programs in the U.S. to encourage adoption of solar photovoltaics. The financial burden for the incentive program falls upon taxpayers.

With feed-in tariffs such as those in Germany, the extra cost is distributed across utilities’ customer bases. Payments reward overproduction of power and reward the number of kilowatt hours produced over long periods of time.

It is up to the federal government to step in. The federal investment tax credit, which provides incentives to businesses and individuals to invest in renewable energy, is set to expire at the end of the year. Renewable energy groups have lobbied for passage of Senate measures that will extend the credit for eight years, but that legislation has been blocked eight times by Republicans who object to tax increases that would cover the cost of the credits.

Presidential candidate McCain should look into the matter and expedite passing this legislation. He hints that some tax credits might be provided or extended. In the past, McCain has not supported subsidies for renewable energy or much else.

In May, according to the Wall Street Journal, McCain said he was “wary” of government subsidies but that he supported federal help for nuclear power. His voting record doesn’t show support for credits, either. The League of Conservation Voters gave McCain a 0 percent rating on its environmental scorecard for 2007 - he missed all the votes - and a 24 percent lifetime rating.

Obama offers much more specific language and goals regarding renewable energy in his plan. His proposal rests on spending $150 billion over 10 years for alternative and renewable energy efforts, including promoting the “development of commercial scale renewable energy.”

Obama also says he’ll require that 25 percent of electricity used in the U.S. comes from sustainable sources such as solar, wind and geothermal by 2025.

At the end of July, Exxon-Mobil reported the largest quarterly profit of any business in U.S. history, posting a net income of $11.68 billion on revenue of $138 billion in the second quarter. That profit works out to $1,485.55 a second. Even so, the company has slammed proposals to increase windfall profit taxes on the oil industry, saying they would “discourage the sustained investments needed to safeguard U.S. energy security and not be in the interests of American consumers.”

Senator Obama has taken aim at oil company profits as he has laid out his economic platform. “I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills,” he said recently. The U.S. Senate has failed to take up the issue of windfall profits for the oil companies.

Now is the time for the middle class to assert itself and become engaged in all aspects of the energy discussion. It is in their economic self-interest to do so.

— Capitol News Service

Copyright 2008, Metropolitan News Company