Germany cautioned against cutting renewable energy subsidiesSeptember 2, 2013
Germany considers reducing subsidies supporting renewable energy
Germany is widely considered to be a major leader in the realm of renewable energy. The country has established this lead through various financial incentives that have made it attractive to companies specializing in clean power. Domestic countries have benefitted from these incentives as well and have helped the country establish itself as an influential force in the field of solar energy and other forms of clean power. Now, however, the German government is seriously considering cutting the subsidies it provides to the renewable energy sector, a move that has aroused the concern of the European Commission.
EU warns Germany to avoid cutting subsidies
EU Energy Commissioner Gunther Oettinger has issued a warning to Germany concerning the country’s interest in cutting renewable energy subsidies. The Commissioner suggests that such actions could cause significant damage to investor confidence, which would lead to a major drop-off in renewable energy development in Germany. This is not a solitary warning from the European Commission as it is joined by similar warnings coming from investors.
Investors show concern over German initiatives
Many investors are showing concern that Germany may cut subsidies for renewable energy that are meant to be in place for the next 20 years. These investors have already built a reliance on these subsidies due to the fact that they would be in place for such a long period of time. Cutting the subsidies could cause investors to take their money out of the German energy sector, which could be problematic for the country’s shift toward clean power.
Energy shift may falter without investor backing
Germany has been working to embrace renewable energy more aggressively in recent years. The country is working to reduce its consumption of fossil-fuels and nuclear energy, replacing these forms of power with solar and wind energy as well as hydrogen fuel. This energy shift is a costly endeavor, and without the support of wealthy investors, Germany is likely to see the momentum it has generated dissipate rather quickly.