Having FiTs in Nova Scotia

Last week, it was reported that Dr. Christine Woerlen, former head of Germany’s Renewable Energy Agency, spoke about Nova Scotia’s efforts to foster a wind energy industry (German Wind Consultant Says NS Getting it Wrong, 22 May). Amongst other things, Dr. Woerlen described Germany’s feed-in tariffs (FiTs) and employment in its renewable energy sector.

Proponents of FiTs invariably point to Germany’s renewable-energy employment miracle as a reason for introducing FiTs to Nova Scotia—the implication being that something similar could happen here.

However, before embracing FiTs, it is worth looking at why they were introduced in Germany.

In the early 1990s, Germany, already a world leader in conventional electrical generation technology, was looking for a way to expand its presence in the field of renewable energy, notably wind and solar photovoltaic. However, Germany was years behind other countries in the development of renewable technology, many which had established domestic and international markets. The German government, realizing that to stimulate industry a domestic market would first need to be created, decided to turn Germany into what was essentially a renewable energy laboratory. The problem confronting the Germans was how to encourage the uptake of their renewables technology—the difficulty was compounded by the fact that much of Germany is not conducive to wind or solar electrical production.

The answer was to subsidize both the purchase of the equipment and the equipment’s production of electricity. The production subsidies, known as feed-in tariffs, resulted in a huge uptake in renewables. Since some of the FiTs were so lucrative, equipment was often installed in locations with poor wind (or solar) resources, while in other cases, the density of installation caused ill-feelings amongst those living near the facilities.

Equipment subsidies and FiTs saw Germany leapfrog over the established leaders in the wind and solar fields, becoming the world’s leading exporter of renewable technologies. Thousands of highly-paid jobs were created in research, design, and manufacturing wind turbines and solar panels.

All was going well in the German renewable energy export industries until last year’s worldwide economic downturn caused renewable energy budgets to be slashed around the world. As a result, Germany’s renewable exports are being hurt badly and thousands of workers are under the threat of being or have already been laid-off.

So why is Germany promoting FiTs in Nova Scotia and other jurisdictions? Quite simply, for the same reason FiTs were originally promoted in Germany—to stimulate Germany’s renewable energy export industries. By subsidizing renewables in Nova Scotia with FiTs, the chances are some of that money will return to Germany.

If the next provincial government adopts FiTs, there may well be an increase in the number of wind turbines in the province—just don’t expect to have a German employment miracle.

Larry Hughes
Submitted to AllNovaScotia.com 28 May 2009