German Energy Giant Warns Against Wind and Solar Subsidies

The chief executive of German power utility major E.ON has called on the government to prioritize businesses over wind and solar capacity additions, saying job creation was more important than more turbines.

“First priority for grid connection should go to whoever creates jobs,” Leonhard Birnbaum told Sueddeutsche Zeitung in an interview, as cited by Reuters. “The costs for the fixed feed-in tariff for new solar power may look harmless per year,” the executive added. “But the subsidy often runs for 20 years, and that adds up to billions.”

Birnbaum did not stop there, however, also telling the daily that “The renewables have won — they already deliver more than 60% of our electricity. At this stage, it no longer makes sense to massively subsidize new capacity, especially when another wind turbine adds costs but hardly any benefit.”

Germany has been among the most aggressive wind and solar developers in Europe, in line with the Energiewende, or energy transition, plan devised during the Angela Merkel era. Also, as part of that plan, Germany shut down its last nuclear power plants last year, even though this meant it had to fire up a coal power plant to ensure a reliable electricity supply during periods of no sun and no wind, commonly referred to as Dunkelflaute.

Despite its massive wind and solar power capacity, at 73 GW for wind and 112 GW for solar, Germany has also substantially increased its natural gas imports, mostly from the United States, to replace Russian pipeline flows and secure sufficient power for electricity and heating. Anticipating continued strong imports of LNG in the future, Germany is currently building more import terminals, with hypothetical plans to convert these to green hydrogen at some distant point in the future, when, also hypothetically, it would no longer need natural gas.

By Irina Slav for Oilprice.com

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