Friday 4th April 2014


April 4, 2014

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Wind Watch

The German wind sector is claiming a couple of victories against Angela Merkel.

This week, the German government revealed a plan to cut its 2020 target for total capacity in its waters by 20% to 8GW. This would not normally be cause for celebration, but the industry has welcomed it because a cut by 35% to 6.5GW had been mooted.

The cap will still stifle the country’s offshore wind sector, but it could have been worse.

The onshore sector has been celebrating too. The government is still committing to a 2.5GW annual cap for expansion of German onshore wind, but it has revealed this week that it does not plan to include repowering schemes in this cap, as previously expected.

Both policies are parts of a controversial overhaul of the Renewable Energy Sources Act, where reform plans are due to be finalised on Tuesday and come into force in August. The government wants to reduce the amount that consumers pay in subsidies to renewable energy producers; and it also wants to increase support for traditional power producers.

So why has the government had a change of heart on some of its tougher policies?

Well, it partly reflects the growing political clout of the wind sector.

The proposed reforms have provoked anger among developers and manufacturers, particularly those in north Germany, who claim that swingeing government reforms would harm the nation’s move towards clean energy and put thousands of jobs at risk.

The government has had to listen to the wind sector because of those thousands of jobs. Severe cuts to renewable subsidies in Germany would put many people out of work and stifle the development of technological innovations it can sell elsewhere.

It is also politically difficult for the government to turn its back on green energy as evidence for man-made climate change gets stronger. The Intergovernmental Panel on Climate Change has this week reiterated dire warnings about the state of the planet.

And herein lies an interesting paradox for political leaders.

They may, like Germany, want to cut renewable energy subsidies when the renewables sector gets too big. But, when the sector gets to that size, it also becomes more difficult to make those cuts because of the number of livelihoods that rely on the sector.

We can look at the UK’s Conservative Party as another example. The Conservatives’ Liberal Democrat coalition partners have said that prime minister David Cameron is planning a moratorium on all new onshore wind farms. This is a big cause for concern.

But such a moratorium would also be politically tricky given that the UK’s onshore wind sector now supports thousands of jobs. The Siemens deal in Hull last week may have been focused on offshore, but it still shows how the sector can help job creation.

Governments cannot rein in a fast-growth sector like wind without also putting jobs at risk. Will the Tories have the guts for a moratorium when they how see many jobs it puts at risk?

It is a dilemma that Merkel has been dealing with – and that Cameron has yet to tackle.

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