Germany’s economy minister and environment minister Tuesday rejected demands for more state subsidies for the construction of new power plants and grid expansion in Germany.
“The market alone is best suited to handle a task of that size,” Energy Minister Philipp Roesler said during an energy conference in Berlin.
The ministers are developing a framework to promote alternative energy without relying on government subsidies.
“We have to combine both, an understanding for markets and political responsibility,” said Environment Minister Peter Altmaier, a senior ally of Chancellor Angela Merkel, who took over at the ministry last week.
Almost a year after Germany decided to shift away from nuclear power and sharply raise production from renewable sources, critics doubt that the move will go ahead as scheduled. The government has so far failed to present a plan for filling the gap in its future energy capacity, as the switch has proven more difficult than initially thought. Massive investment is needed to build new power plants and to strengthen and expand the power grid to be able to transfer electricity from wind turbines in the North Sea to industrial plants in southern Germany.
The alternative energy industry says the only way to ensure that companies invest in new technologies is to provide an incentive through subsidies. But traditional energy companies say such subsidies distort competition and make it expensive to invest in the best technology.
OMG! is that sanity I hear knocking at the door?
Too bad the rent seekers here in the US have such great influence in Congress. I think ALL federal subsidies need to go. Without exception. Let the individual states experiment with wasting money if they like.