All Renewable Energy Is Domestic Energy

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Originally published on the Lenz Blog
by Karl-Friedrich Lenz

Article 1 of the German Law on Priority for Renewable Energy spells out four goals. One of them is

die volkswirtschaftlichen Kosten der Energieversorgung auch durch die Einbeziehung langfristiger externer Effekte zu verringern (reduce the national economic cost of energy, also by including long-term external impacts, my translation).

So investing in renewable energy is supposed to reduce cost. There are several ways that is actually happening.

One way (and the most important impact) is that Germany’s feed-in tariff has helped bringing costs down, especially with solar. That of course means that every kW of new capacity installed anywhere on the planet will be much cheaper than ten years ago.

If Germany did not have the alternative to fossil fuel of renewable energy, it would be stuck permanently with ever rising costs of fossil fuel. A new report commissioned by the German Greens and authored by Steffen Bukold gives some numbers for that.

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Last year, Germany paid EUR 93.5 billion for fossil fuels, or EUR 1165 per capita, or 3.5% of GDP. That is up from EUR 404 per capita in 2002, which means costs have risen by close to a factor of three in only ten years.

Bukold expects costs to rise further, with a cumulative bill of EUR 2.3 trillion until 2030 and 4.45 trillion until 2040.

Every kWh generated from a solar panel in Germany reduces that import bill. Every kW added capacity helps reducing that import bill for decades and centuries to come.

There is a lot of money to be saved in the long run by speeding up the transition to renewable energy. That’s because all renewable energy is domestic energy.

At least that’s true for all solar panels and wind capacity falling under the German feed-in tariff. It applies only to capacity installed in Germany.

I recall that Minister of Environment Altmaier asserted costs of EUR 1 trillion for the feed-in tariff in Germany up to 2040 earlier this year.

I think he was right. Germany should spend at least that until 2040. That would leave the country ahead by at least EUR 3 trillion for the next 28 years until 2068, if that is enough to get to 100% renewable.

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