GERMANS JUMP OUT IN THE NEW ENERGY RACE

U-turn puts Germany ahead of race
Anatole Kaletsky, June 2, 2011 (The Australian)

"Germany's decision to close permanently all its nuclear power plants… will [over the next 10-to-20 years] make the German economy stronger…[and] the global environment safer…[though it was] quickly condemned around the world…[and many believe it had [less] to do with economic efficiency, responsible environmental stewardship or serious science..[than with] political expediency…

"…Eliminating Germany's most efficient power stations, which at present produce 23 per cent of its electricity, will increase the bills paid by business and household consumers…[and] exacerbate global warming because the share of electricity generated from fossil fuels will rise [in the short term]…Yet Germany's nuclear U-turn will probably strengthen its economy in the long term and help to wean the world off fossil fuels…[because] Germany also committed itself…to an enormous program of subsidies and investment in wind, solar and other renewable energy sources…"

Germany has a serious and substantial plan that includes a LOT of New Energy. (click to enlarge)

"…[T]hey are likely to strengthen the renewable energy sector in Germany at the expense of countries where government interference with market forces remains taboo…Energy supply is an industry where investment returns take decades to materialise, so private companies and investment institutions, responding purely to the financial markets, are unlikely to make decisions consistent with long-term needs. Nor will governments necessarily do any better…

"But [Germany’s investments] will create businesses and technologies unlikely to be developed in the US and Britain, where governments feel they have to mimic private sector decisions based purely on financial returns…[and] the German government [spending] will accelerate the reduction of costs through mass production, allowing renewables to displace fossil fuels more quickly around the world…It would have been better for the world if Germany had directed its subsidies at replacing the 47 per cent of electricity it produces from coal…But in energy economics, the best is the enemy of the good…"

Germany's plan has multiple options for a not entirely predictable future. (click to enlarge)

"…France, China, South Korea, the US, Britain and Russia will continue to develop nuclear technology…China, India and the US are investing large sums in new technologies based on thorium, a safer material than uranium or plutonium, which one day could revolutionise global energy…[but] Germany's push into renewables will open a new front in the war against fossil fuels…[It] will impose extra costs on electricity consumers…But, by the end of the decade, German industry will almost certainly lead the world in renewable energy equipment…[with competition] from China, where enormous investment programs…are already in full swing, and from [post-Fukushima] Japan…

"…British and US manufacturers will hardly figure in this global competition if market signals, rather than government targets, determine their investment and research…[M]arket forces encourage [the U.S. and] Britain to develop new techniques to burn coal while Germany helps to wean the world off fossil fuels altogether. In terms of long-term potential…[the smart bet is] the German approach."