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Germany’s renewable energy use outstrips EU targets, says new OECD report

According to a report on Germany’s progress in achieving domestic and international environment commitments, published by the Organisation for Economic Cooperation and Development (OECD) at the end of May, the share of renewables in electricity generation in Germany has nearly tripled since 1995, when it stood at 5.9%, to 16.8% in 2010.

Most of this growth has been since 2000, when the share was 7.2%. The Federal government has made it a priority to increase the share of renewables in the energy mix. Its 2010 Energy Concept envisages that renewable energy will account for at least 35% of gross electricity consumption in 2020, 50% in 2030, 65% in 2040 and 80% in 2050. These targets are more ambitious than the EU targets as a whole.

As well as introducing feed-in tariffs (FITs) for renewable energies, Germany has introduced a number of other incentives, including capital grants and low-interest loans, reduced tax rates for renewable-generated energy and heat, tax exemptions and quotas for biofuels and financial incentives for the use of renewables in buildings.

However, unlike FITs in other EU countries with similar schemes, the additional cost is passed onto end-use consumers as a surcharge on the electricity price. And these costs have increased sevenfold, from EUR 1.4 billion in 2000 to EUR 9.8 billion in 2010. This represents about 10% of the electricity price per kWh paid by the residential customer. According to the OECD report, an inherent risk in this policy is that, while the high prices can encourage energy savings, they could also push consumers to look to less expensive, carbon-intensive fuels. “Since renewables remain the core of German energy policy,” concludes the report, “controlling the cost of renewables support will remain a key challenge.”

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