German Renewable Energy Sources Act of 2000

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Encounters newsletter:

"Germany is in the process of rapidly transforming its energy system after passing a landmark law, the Renewable Energy Sources Act, in 2000 that “guaranteed renewables a fixed, higher-than-market price for 20 years, and created an emphatic incentive to invest in renewables.” It also signaled the end of reliance on nuclear power, a decision reinforced by President Angela Merkel in 2011 after the Fukishima nuclear plant explosion in Japan.

The city of Schwabisch Hall in southwest Germany has radically transformed its energy profile with its complex mix of renewable energy sources. Its municipal utility company manages nearly 3,000 regional energy suppliers from “several thousand solar photovoltaic (PV) installations, two wind parks, one gas-and-steam power station, six small hydro-electric works, three biomass (wood pellet), six biogas plants, and 48 combined heat and power plants, as well as other conventional and renewable energy suppliers outside the municipality. ...

“In just a dozen years, industrial-powerhouse Germany has replaced around 31 percent of its nuclear and fossil fuel generated electricity with green power, produced overwhelmingly… by a dynamic, decentralized patchwork that includes more than two million small and medium-scale renewables producers -- businesses, villages and towns, co-ops, individuals, green investment funds, and farmers -- whose numbers grow by the month."

These changes represent a profound challenge to traditional energy companies as they face what some have called a “utility death spiral,” in which utilities begin to lose customers, forcing them to jack up rates to cover lost revenue, which in turn pushes more people away. The “Big Four” energy utility companies that have dominated Germany’s energy production and distribution have been caught largely flat-footed during these changes experiencing record losses that will likely never be recovered. Germany’s two biggest utilities, E.On and RWE, have both seen their net income drop by one-third since 2010. “At best,” says Berlin-based Paul Hockenos, “the big utilities can postpone the day of their inevitable redundancy unless they move into renewables fast.” (http://www.maryknollogc.org/encounters/encounters-4-creative-hopeful-strategies-build-energy-resiliency#energygrids)