Dr. Christine Wörlen July 2010 Renewable Energy Policy in Germany: A Green Jobs Success Story

Overview German industrial transformation The renewables law: energy generation made easy Benefits: CO2 emission reduction, income, jobs

Industrial transformation in Germany

Unemployment in Germany since Source: BA 2010

Growth trends for renewable energy jobs compared to other industries. Source: AEE 2010 Indexed to 100 in 1998 Automotive: ; +5% Food: ; +1% Agriculture and Forestry: ; -11% Nuclear Energy: ; -21% Construction: ; -2% Lignite mining: ;-35% Hard coal mining: ; -58%

Renewable Energies in Germany

Renewables as share of total final energy consumption in Germany in Source: BMU 2010

Renewable heat in Germany, Source: BMU 2010

Renewable electricity in Germany, Source: BMU 2010

The Renewable Electricity Law (FIT) in Germany and its effect

Source: BMU 2010

German Renewable Energy Sources Act (Feed-in- Tariff) …guarantees that the grid connection is established, …guarantees that the power is purchased, …guarantees that this happens at a cost-recovering price …and over a sufficiently long time frame. …incentivizes early action, …is open for everybody, and facilitates the development of new business models.

Renewable energy purchase prices …are fixed through the law …are granted for 20 years …vary by technology …vary by plant (resource quality, plant size, feedstock) …get lower over the years (degression) …negotiated such that at current investment prices some (marginal) profit is attained.

Advantages of Feed-in Tariffs: Simple, stable, fair, effective. All of these factors reduce the total cost of deploying renewables – through lower risk and – lower transaction costs, and maximize deployment activity Industry has a long-term perspective for large investment and capacity decisions. System is open for everybody. Extremely low barriers for becoming energy systems owner.

Advantages of Feed-in Tariffs: Simple, stable, fair, effective (II). Germany has overachieved her renewable energy targets. – In 2000, the target for 2010 was 12.5%. – This target was actually reached in 2007 with 14.7%. Costs for systems in Germany are lower than in other jurisdictions.

Costs and Benefits

FIT costs in relation to power price. Source: BMU 2010, eigene Darstellung

CO 2 avoidance through renewable energy, Source: BMU 2010

Turnover from renewable energy installations in Germany, Source: BMU 2010

Income from operating renewable energy installations in Germany, Source: BMU 2010, eigene Darstellung

Total income from renewable energy in Germany, Source: BMU 2008

Source: BMU 2010

The solar industry in Germany. BSW Präsentation Marktentwicklung

26 Own translated diagram based on: Wissenschaftsladen Bonn et al. 2009, p.4

….solar PV….

Who is building this? Your local handiman According to a recent survey among electrical contractors in Germany, 30% of all electricians do solar work.

Source: BMU 2010

Renewable energy jobs require more labor than other industries. Source: Wei, Patadia and Kammen 2010

Sweetwater, TX Nolan County, Texas had 20% of the population living in poverty in Now 1,100 of the 15,000 residents have jobs directly related to wind energy. Sweetwater area is steadily growing again for the first time in decades. Nolan Countys property tax base has expanded from $500 m in 1999 to $2.4 bn in Source: windpowerworks.org 2009

Conclusion Energy efficiency and renewable energies will be among the main vehicles to achieve Germanys climate protection objectives. But that brings along new opportunities for growth. The policies implemented are having multiple benefits: – increased energy security – decreased GHG emissions, – Creation of an industry of global significance, – Jobs and national income. Among the social and economic benefits of these policies is increased resilience against the current global downturn.

Thank you for your attention. Christine Wörlen, Ph.D. Münzstrasse 19 | Berlin | Germany mail