Stable Policies – Turbulent Markets. Germany's Green Industrial Policy: The Costs and Benefits of Promoting Solar PV and Wind Energy
Lütkenhorst, Wilfried and Pegels, Anna (2014): Stable Policies – Turbulent Markets. Germany's Green Industrial Policy: The Costs and Benefits of Promoting Solar PV and Wind Energy (January 2014). International Institute for Sustainable Development Research Report. Winnipeg: IISD
89 Pages Posted: 8 Jul 2014
Date Written: January 1, 2014
In this report, we address the fiercely debated challenge of Germany’s energy transition (Energiewende) and review the policy measures taken in support of increasing the share of renewables in the country’s energy mix. We place special emphasis on solar photovoltaic (PV) and wind energy, analyze the evolution of both sectors in Germany, assess the costs and benefits associated with support policies and draw some conclusions and lessons concerning the need to reform the feed-in tariff approach and to consider the broader issues of green industrial policy. We find mixed evidence that Germany reaches its green industrial policy aims at reasonable costs.
Wind energy seems to perform better against all policy objectives, while the solar PV sector has come under intense pressure from international competition. However, this is only a snapshot of current performance, and a dynamic and systemic perspective may nonetheless make the support of various renewable energy sources advisable.
Keywords: Renewable energies, green industrial policy, Germany, Energiewende, energy transition
JEL Classification: L52, Q42, Q48
Suggested Citation: Suggested Citation