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Alarms Ringing for Green Energy

Wind turbines at sea
Wind works but watch out! Dark clouds are forming on the horizon. Source: Getty Images[M]

For Brigitte Zypries the energy transition is a “model for the future with global implications.” At the start of the year, the economics minister distributed a 20-page brochure documenting this “success story.” Ms. Zypries praised the fact that a third of domestic electricity is supplied by renewable sources and waxed lyrical about “sustainable jobs” generated by the energy transition.

But with the insolvency of Solarworld, Germany’s last big maker of solar panels, Ms. Zypries should concede that her analysis is not based on reality. The miracle of green jobs is an illusion. In the domestic solar industry, nearly 100,000 jobs have been lost in recent years. More than €100 billion ($110 billion) of subsidies poured into the solar sector over the years may have put the energy transition in motion, but did not translate into a sustainable labor market. Politics are partly to blame.

The Renewable Energy Law (EEG), which guarantees operators of green plants payment per kilowatt hour of electricity produced for a period of 20 years, created a “handout industry” that cannot survive without subsidies. To make matters worse, the steady stream of money made one-time pioneers like Solarworld too comfortable. There was no pressure to reduce costs and develop innovative products, ending in its demise. What’s more, Germany lost its status as the world’s leading solar nation to China. We should be under no illusions: German leadership of the wind energy industry is also on shaky foundations.

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