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Renewables Made in Germany

Kristine ZiwicaOctober 11, 2004

At a time when oil prices are at a record high, Germany is one of the world's leaders in developing renewable energy. After progress in wind and solar power, Germans are looking to find a replacement for gasoline.

Exporting renewable energy could become a profitable businessImage: AP

Last week, oil prices reached an all time high, breaking the $50 per barrel mark. Fuelled by political instability in the Middle East and Africa and a series of hurricanes in the United States, the per barrel price peaked at $50.47 (€40.65). The situation highlighted, once again, how precarious the world's oil supply is and the cost of relying too heavily on traditional fossil fuels.

Germans have long sensed the looming crisis and invested millions in the development of renewable energy. The 2000 Renewable Energy Law paved the way for serious progress in the fields of solar and wind energy, and Germany is now well on its way to meeting the goal of having 12 percent of all electricity come from renewable energy by 2010.

The effort has proven so effective that the Worldwatch Institute, one of the world's leading environmental organizations, has singled out Germany for special praise in its annual "State of the World" report.

A lucrative new field?

Windkraft in Kron-Prinzen-Koog
Windmills in northern GermanyImage: AP

Encouraged by that success, the German government and researchers are looking to replace good old-fashioned gasoline. A new law making so-called "biofuels" tax exempt and technologies in development at a few start-up German firms are making a good start. But the nagging question remains: Is renewable energy profitable? The answer is yes, say exporters, if producers look beyond Germany's borders for markets.

At a symposium in Chicago on Monday entitled "Renewable Energy, Made In Germany" sponsored by the German Energy Agency (DENA) and its renewable energy export initiative companies researching biofuels and their collegues in other renewable sectors will showcase their latest products to the rest of the world -- all in the hopes of drumming-up a little business abroad.

Germany, long a leading exporter of many products, may find that its investment in renewable energy technologies, will not only be good for the earth, but good for business, Daniel Becker the project leader of DENA's export initiative, told DW-WORLD. "It's important to develop the technology, but also to market it well," he said. "To make renewable energies profitable -- and thus lucrative to produce -- we need to seek out new markets." That goes for the solar and wind technologies German firms are already widely respected for, and the newer biofuels still in development.

Law fosters progress in wind and solar energy

In 2000, German Chancellor Gerhard Schröder's incoming government and his coalition partner, the Green party, made a huge commitment to the environment and passed the Renewable Energy Law.

Biodiesel Schwarzheide GmbH
Rapeseed oil is transformed into biodiesel in Schwarzheide in the German state of Brandenburg.Image: AP

It required electricity utilities to purchase a certain amount of power from renewable sources at a premium rate each year -- basically, price-fixing. And the plan -- now widely considered an excellent example of how legislation can spur the development of new technology -- worked. The percentage of electricity from renewables has jumped from 4.7 percent in 1998 to 10 percent.

"Germany chose a price-fixing scheme, as have other countries such as Spain and France, and in every case, the approach has contributed to the development of a stable market for renewable energies, particularly solar and wind power," Johannes Lackmann, president of the German Renewable Energy Association (BEE), told DW-WORLD.

Biofuel, the next big thing?

Beta-Anlage von Choren
Saxony-based Choren specializes in producing biofuels.Image: Choren

It's precisely that kind of success that the German government is now hoping to replicate in the development of alternatives to gasoline, Hans-Joseph Fell, a spokesman for the Green party's research and technology division, told DW-WORLD. And he reckons there's a pretty good chance that up to 10 to 20 percent of traditional gasoline usage could be replaced by biofuels in five years time. To help make those fuels more attractive and affordable, the German government passed a new law this year exempting biofuels from taxes.

Lackman of the BEE also thinks the usage of biofuels will grow, though his estimates are conservative. He reckons the current 1 percent market share will grow to 6 percent by 2010. "With this new tax exemption, we are going to see lots of growth in the biofuel sector," he said.

Sundiesel, biodiesel and more

Chroen's "Sundiesel Beetle" runs on biodiesel.Image: Choren

Numerous German companies are hoping to profit, including Choren Industries from the state of Saxony, developers of "Sun Diesel," and Hamburg's ADM-Oelmühle, developers of a biodiesel product. Both fuels fall under the umbrella of biomass energy, a vary large and diverse category. They are environmentally friendlier fuels made out of vegetable oil, sugars, wood -- almost anything that grows in the Earth, as Fell of the Green party likes to put it.

By developing such technologies, Germany is chasing the coattails of Brazil, where biofuels already have a 30 percent market share. If it works more so-called "flex-fuel" cars, already popular in Brazil, could soon be cruising the streets of Germany.