Opinion: Germany's Energy Policy Gets a Second Wind
April 4, 2006
Energy is clearly a priority issue right now -- especially in a country as reliant on imports as Germany is. Against this backdrop, Monday saw Angela Merkel meet with industry leaders for talks on how to reshape Germany's floundering energy policy.
A wake-up call
In fact, the initial impetus for the energy summit came from Moscow. When President Vladimir Putin turned off gas supplies to Ukraine earlier this year in an energy price dispute, the move also hit Russian exports to Western Europe, as most of its gas arrives channeled through Ukrainian pipelines.
The incident was something of a wake-up call to Germany, prompting many to wonder -- often for the first time -- where the country's energy actually comes from. The answer was basically bad news. Apart from coal, Germany has little going for it on the energy front. And Germany's coal mines are supported with billions worth of subsidies, making the industry almost unsustainably expensive. Gas and oil, meanwhile, are bought from abroad, as is the uranium for the nation's nuclear power plants.
Insatiable global demand
But the reasons for the hikes in energy prices do not lie in Germany. Unlike in other countries, energy consumption in this country has been steadily sinking in recent years, even though worldwide consumption has doubled since the early 1970s.
The insatiable international demand for resources in fast-developing nations such as China and India is one factor boosting prices, while another is globalization. The bottom line is that energy is a product subject to market forces. And it's also a determining factor when it comes to the distribution of wealth.
But German consumers are increasingly fed up with the skyrocketing prices for electricity, natural gas and gasoline. Largely to blame is the monopoly of the major energy suppliers, who want to be able to plan ahead for the next few decades. Meanwhile, environmentalists are pushing for more climate-friendly energy policies.
A workable policy
The summit on Monday night was faced with the challenge of juggling these conflicting interests and jumpstarting a dialogue designed to lead to a workable energy policy for all.
Observers had warned that the summit was unlikely to yield spectacular results, which was a fair-enough point -- after all, a problem of this complexity will never be solved in just three hours.
The key issue here is to ensure that the dialogue remains ideology-free. It needs to be embedded in a pan-European strategy, and that rules out any stubborn refusal of nuclear energy. And even though Germany might be sticking to its guns in its phase-out of nuclear energy, it's actually undergoing a worldwide renaissance.
Striking the balance
But Berlin has identified a way out of its import dependency in the form of renewable resources such as sun, wind and biomass energy. As world leaders in technology with export figures to be proud of, representatives from these areas were active participants in Monday's talks. So Germany does apparently have more to offer than coal -- and that something also reduces the country's reliance on imports, creates jobs, and saves the planet in the process.
But before anyone starts building windmills and sun collectors across the country, the coal mines should be given a second chance, while Germany's nuclear powers stations should run for as long as they're still safe. It's all a question of getting the balance right. In 60 years time, there will be no crude oil left, and another option better have been found by then. And given that the multinationals who earn their money with oil also need to survive, it seems reasonable enough to assume that the market will also do its bit in sorting out the problem.