That same year, a handful of solar entrepreneurs set up shop in a local industrial park. Today their little start-up is Q-Cells, the world’s largest manufacturer of photovoltaic cells. It presides over a burgeoning industrial hub christened Solar Valley by its ecstatic boosters. Unemployment here has plummeted from its 25 percent–plus peak in the 1990s down into the mid-teens. The economic development director of the regional municipality of Bitterfeld-Wolfen (which includes a number of other blue-collar burgs), a shy young gent named Christian Puschmann, told me he’s constantly updating the employment figures on his agency’s website to keep up with the delirious pace of expansion.
Puschmann was keen to show me the exuberant reality of Solar Valley, so we met one typically grey Saxon afternoon at Q-Cells’ headquarters and set off on a tour of booming Bitterfeld-Wolfen. He trolled slowly down winding industrial park avenues and rail yard access roads, pointing out the sights from behind the wheel of his modest, aging subcompact with palpable pride. Here were the vast warehouses containing Q-Cells’ production lines, its next-generation spinoffs, and its competitors’ goods. Around the bend were a Swiss supplier of PV components and a maker of solar panel glass. We skirted Thalheim, the once-sleepy town closest to the Q-Cells complex. “This small village had so much money they didn’t know what to do with it,” said Puschmann in his gentle, halting English. “They built a new stadium; they made streets and lamps and whatever.”
Finally, he dropped me at the Bitterfeld train station with a reluctant auf Wiedersehen. He’d wanted to squeeze in a visit to the new lake they’d made by pumping water into an old open-pit brown-coal mine near the market square. Stylish homes were going up around it, in hopes that high-tech workers would forsake their commutes from Leipzig and Berlin. Things were happening in Bitterfeld. In Bitterfeld! This was what he wanted me to know.
Curiously, not once did Puschmann mention climate change. The defining issue of our time may have provided the impetus for Bitterfeld’s renaissance, but it was by now an incidental detail. There was too much else happening here — and up and down the length of Solar Valley, and all over Germany — to dwell on such gloomy topics. This is one of the upsides of acting boldly: you wind up too busy to wring your hands.
In much of the world, the official response to climate change from government and business leaders has been decidedly underwhelming. Few seriously dispute the assessment of Scientific American that stopping climate change represents “the most imposing scientific and technical challenge that humanity has ever faced,” but the reaction, particularly in Canada, has been a series of half shuffles, tentative and provisional and multiply compromised. We throw a little R&D; money around and implement voluntary efficiency programs and pilot projects, but we are deathly afraid of big steps. Germany, meanwhile, has taken one giant step, skipping past the frustration and acrimony of a hundred incidental ones. To the surprise of a great many North American skeptics, the country has given birth to one of the world’s most verdant green industrial heartlands.
The engine of this radical transformation is the single most effective climate policy measure yet devised: a straightforward law called a feed-in tariff that obliges power distributors to purchase electricity from renewable sources for a fixed time, at fixed rates above market prices. The German fit (the Renewable Energy Sources Act, by name) sets the price for green power far higher than market rates — as much as seven times higher in the case of solar energy.
Although Germany is not particularly windy and is kissed each year by about the same amount of sunlight as southern Alaska, it is now a global leader in the generation of energy from sun and wind, and in the production of solar panels and wind turbines. Its renewable energy industry employs about a quarter of a million people, and brought in almost $40 billion in revenue in 2007, up 10 percent from 2006 and nearly four times the figure for 2000. Seemingly every green power company on the planet has set up at least part of its shop there in recent years, including Arise Technologies, a solar company headquartered in southwestern Ontario, which announced in September 2007 that it would establish its first industrial-scale production facility in eastern Germany.
To most North American economists and policy wonks, the German fit reeks of any number of heresies, whether price fixing or central planning or some other acridly socialistic term deemed synonymous with eco-nomic suicide. But the frenetic activity at eastern German economic development offices is a direct result of the fit’s unorthodox pricing scheme, and one European nation after another has chosen to follow the German lead. The fit — an easily copied piece of legislation, unencumbered by the elaborate rules and fine calibrations of cap-and-trade regimes — has now spread to France, Greece, Ireland, Italy, and Spain.
Comments (10 comments)
John: Great article. Ontario could be 100% powered by renewable energy in five years. Listen to Dr. Hermann Scheer, architect of the German Renewable Energy Act, describe exactly how in our video interview at www.thesolarvillage.com . December 05, 2008 07:47 EST
Kristopher Stevens: Join the campaign for a Green Energy Act in Ontario at www.greenenergyact.ca! December 05, 2008 15:20 EST
matt malone: perhaps if we compared the structure of their respective governments, and not just the effect of their policies, we might come closer to the original question: why such a massive difference? much of the progress achieved in the german example is credited to the strength of the green party in germany, and specifically their participation in a coalition federal government (1998-2005) and the pressure they were able to exert on the mainstream parties. it is since then that the issue has taken its urgency. even the more conservative parties, like the CDU/CSU headed by angela merkel, now address climate change as the most important crisis of our time.
what is astounding is that the popularity of the greens in germany is not totally different from that of those in canada. both parties have roughly the same level of popularity (10%). but whereas in canada, the first past the post system of representation converts this level of support into 0% of seats in the house of commons, germany's mixed member proportional system means that 10% of support roughly attains 10% of representation in their federal parliament.
Mixed Member Proportional (MMP). sounds familiar. December 11, 2008 04:56 EST
matt malone: an addendum: analysis of proportional representation by andrew coyne on its prospects concerning the recent coalition news. such prospects would have certainly altered the focus on climate change.
http://blog.macleans.ca/2008/12/10/different-electoral-system-different-coalition/ December 11, 2008 08:03 EST
Richard Glanville-Brown: This is the sort of article that makes one wonder what is wrong with our politicians. All new homes and businesses should be required by law to include solar and geothermal heating, plus wind turbines for all new rural ones. Put government money into doing this and the retrofitting of older homes and businesses, and the requirement for new power stations would be reduced by 80% or more. Now is the time to really push for this, what with the political and economic uncertainty abroad in the land, so strike while the iron is hot. December 17, 2008 14:56 EST
Chris Holt: Things have changed since you visited Windsor, Chris, but not for the better. More and more people are out of work as the governments are tripping over themselves to bail out a failed social mobility experiment. How much of this money and effort could have been redirected to establishing fertile ground for green developments such as those you experienced in Germany, we will never know because, as you stated, we are still at the lip-service stage. Even our ground-level municipal leaders are clinging to the status-quo mirage of auto-jobs instead of looking for real, sustainable solutions. We have yet to take our future into our own hands in this city.
It is through articles such as this one that we will begin to change the electoral mindset, however. With more and more fingers pointing to what works instead of what failed, maybe some of the voters who have the ability to enact real change will throw their power behind developing Windsor's local economy instead of subsidizing it. Because as we all know, reactive politicians will only respond when their irrate, engaged constituents start demanding this kind of change. Until that happens, we will continue to "spin our wheels".
Cross your fingers. December 19, 2008 10:17 EST
Ross Jarvis: Canada is still stuck in the early 20th century. Oil and automobiles are still considered the most important ingredients to a healthy economy. Even in this age of the internet, we continue to drive to and from the city to work,instead of having work come to us which would rid our world of so many problems.
If we would empty our tall buildings and have them converted into Verticle Farms, we would be on our way to the earth's salvation. Stop havesting every creature in the sea, and eat organically-grown food from verticle farms everywhere in the world. No more starvation because of lack of land. No more wars to increase land. Why doesn't our government spend our money on something that we need, instead of throwing good money after bad in support of the archaic automobile.
December 21, 2008 11:06 EST
Dale: Canada has so many opportunities and the vast land mass to make renewable, clean energy a reality, do they have a government that can actually do something?
Well at least some in the Con party have good intentioned ideas, don't know if the rest might be able to see the possibilities.
Try this read...
http://www.freewebs.com/elmwood_transcona/beyondkyoto.htm December 27, 2008 10:52 EST
Cornelius Suchy: The article could have illustrated the difference to another cross-subsidy mechanism, the Renewable Portfolio Standard (RPS). RPS require power producers to have a minimum of x% of their electricity produced by renewables. There are fierce discussions over this. Consumer advocates claim that RPS are lower cost to the consumer as the technologies with the lowest generation costs (rather than a mix of renewables) are chosen by the utility. Denmark apparently moved away from a FIT, as they passed the 15% mark covered by wind. However, a comparison between countries with a FIT to that with a RPS show that FIT-countries have a much higher growth rate – and promote a more decentralized, diversified portfolio of renewables.
In any event, our love affair with renewables – in Canada it has really only been a flirt, as the article points out – is partly due to the idea that we could keep living the live style we do, if only we replace brown power by green power. Energy efficiency, on the contrary is associated with having to do with less.
Compact fluorescent lamps simply don’t have the same appeal and visibility as a solar panel on your roof. A CFL is inside your house and often hidden behind a lamp shade.
The question is what do we want to achieve. If it is promoting our renewable energy industry and manufacturers a FIT is certainly the best solution. If we want to reduce GHG emissions, we should have another sober look at FITs: generation costs for most renewable energy technologies are above that of conventional fuels, even if you add some of the external costs. Most energy efficiency technologies, in contrast, have negative avoided costs, i.e. you make money with it, even without a cross-subsidy or a carbon tax.
So why don’t we replace these old freezers with new ones, if we can save more money than the new freezer costs? There are number of reasons, the most evident being that the markets don’t work. The idea of a homo oeconomicus is far fetched, few of us do a comparative cash-flow analysis when we stand in front of the shelf with incandescent and CFL light bulbs.
The Walrus should be following up with another three-letter acronym: LCP. Sounds like a mind-altering drug, but really is just comparing the costs of generating power with that of saving power (Least-Cost Planning). Several US states require utilities to proof that saving energy is less cost effective than generating new power, before they get the go-ahead for a new plant.
What it would take is a utility to change from an energy delivery company to a service provider. Internet providers do it – they go past the modem right into your computer and install anti-virus and all kinds of other software for you. So far most energy utilities stop at the meter. But they need to go beyond that, into the houses, and replace these old fridges free of charge. Sounds like freakonomics, but they could actually make money with this, lots of money, especially with an export driven utility like BC Hydro. Negawatts instead of Megawatts.
January 05, 2009 22:11 EST
Cornelius Suchy: The article could have illustrated the difference to another cross-subsidy mechanism, the Renewable Portfolio Standard (RPS). RPS require power producers to have a minimum of x% of their electricity produced by renewables. There are fierce discussions over this. Consumer advocates claim that RPS are lower cost to the consumer as the technologies with the lowest generation costs (rather than a mix of renewables) are chosen by the utility. Denmark apparently moved away from a FIT, as they passed the 15% mark covered by wind. However, a comparison between countries with a FIT to that with a RPS show that FIT-countries have a much higher growth rate – and promote a more decentralized, diversified portfolio of renewables.
In any event, our love affair with renewables – in Canada it has really only been a flirt, as the article points out – is partly due to the idea that we could keep living the live style we do, if only we replace brown power by green power. Energy efficiency, on the contrary is associated with having to do with less.
Compact fluorescent lamps simply don’t have the same appeal and visibility as a solar panel on your roof. A CFL is inside your house and often hidden behind a lamp shade.
The question is what do we want to achieve. If it is promoting our renewable energy industry and manufacturers a FIT is certainly the best solution. If we want to reduce GHG emissions, we should have another sober look at FITs: generation costs for most renewable energy technologies are above that of conventional fuels, even if you add some of the external costs. Most energy efficiency technologies, in contrast, have negative avoided costs, i.e. you make money with it, even without a cross-subsidy or a carbon tax.
So why don’t we replace these old freezers with new ones, if we can save more money than the new freezer costs? There are number of reasons, the most evident being that the markets don’t work. The idea of a homo oeconomicus is far fetched, few of us do a comparative cash-flow analysis when we stand in front of the shelf with incandescent and CFL light bulbs.
The Walrus should be following up with another three-letter acronym: LCP. Sounds like a mind-altering drug, but really is just comparing the costs of generating power with that of saving power (Least-Cost Planning). Several US states require utilities to proof that saving energy is less cost effective than generating new power, before they get the go-ahead for a new plant.
What it would take is a utility to change from an energy delivery company to a service provider. Internet providers do it – they go past the modem right into your computer and install anti-virus and all kinds of other software for you. So far most energy utilities stop at the meter. But they need to go beyond that, into the houses, and replace these old fridges free of charge. Sounds like freakonomics, but they could actually make money with this, lots of money, especially with an export driven utility like BC Hydro. Negawatts instead of Megawatts.
January 06, 2009 09:34 EST