Drawing on Germany’s experience, this section shows how renewable energy policies drive up electricity prices and disproportionately burden low-income households, questioning their viability as a core national energy strategy.

2016-03-16

In Germany, there are coal-fired power plants that use inexpensive domestic coal, but Japan has no such domestic resources.
The double investment required for solar power and thermal power plants raises costs, and because adjustment thermal plants operate at lower capacity factors, overall economic efficiency is extremely poor.
Germany, which introduced a feed-in tariff system for renewable energy ahead of other advanced nations in 1992, has actively promoted renewable energy for over twenty years, yet its share of total power generation remains at only about twenty percent.
Looking at Germany’s feed-in tariff surcharge, which adds the cost difference to electricity bills, it is clear that it increased at an accelerating pace through 2014.
Germany’s electricity prices have doubled over the past ten years due to policies such as the renewable energy purchase scheme.
Although this is rarely reported by Japanese media, during Germany’s general election in September 2013, Chancellor Merkel faced strong criticism from opposition parties using the term “renewable energy poverty.”
Who suffers most from rising electricity prices is the economically vulnerable.
In fact, such phenomena are occurring in Germany.
Renewable energy is regarded as imposing the greatest sacrifices on low-income households.
What Germany’s experience makes clear is that, at the present stage, placing renewable energy at the core of energy policy imposes too heavy an economic burden on citizens.
In Germany, industrial electricity prices are set lower than household rates, but they are still high compared to other countries, leading many German companies to relocate factories to border areas near the Czech Republic, where electricity is cheaper, in order to maintain international competitiveness.
What exactly did Mr. Koizumi go to Germany to see?
To be continued.