Economics Expert Slams German Feed-In Act, Calling It “An Abuse Of State Power”…”Belongs In The Dustbin”

Dr. Klaus Peter KrauseLast week I wrote how an expert government committee recommended scrapping Germany’s once widely ballyhooed EEG renewable energy feed-in act.

Photo: Dr. Klaus-Peter Krause. Source:

Today at the Freie Presse here economics expert and veteran journalist Dr. Klaus-Peter Krause slams the EEG act, saying “it belongs in the dustbin”: “Too expensive, and too unstable.”

Increasingly as energy poverty in Germany mounts, companies close their factories due to soaring electricity prices, power supply becomes too unstable, and one renewable energy company after another bite the dust, the pressure for the government to scrap renewable energies is growing. Yet the German government obstinately refuses to admit it the act is mortally flawed.

Krause writes that although the share of renewable energy in Germany’s energy-mix has increased, “it has done so at an enormous cost.” According to Krause the costs of the feed-in subsidies have risen form €883 million per year in 2000 to a whopping €23 billion in 2013. Meanwhile over the same period the share of renewable energy rose from 7% to 23%.

Worse, Krause writes that the EEG law has done nothing to reduce CO2 emissions across Europe. Germany’s coal consumption has actually risen over the last few years. “The EEG has not delivered more climate protection, rather only higher electricity costs.” Krause cites Prof. Helmut Alt of the University of Aachen, who calls the EEG act “the most gigantic subsidy law of the postwar period.”

Krause also believes that the EEG act is dividing the country:

The EEG act has created a two-class society of those exploiting the act, and the losers. Those exploiting it are going all out in securing their financial advantage.“

Krause ends by quoting a government official who wishes not to be named:

 The EEG must be regarded as an instrument of abuse by state power and especially contradicts the social-civic responsibility of the legislators.”


Dr. Klaus-Peter Krause studied economics in Kiel und Marburg and was an editor for the Frankfurter Allgemeine Zeitung from 1966 to 2001. He has been an independent journalist, publicist and author since 2004.


6 responses to “Economics Expert Slams German Feed-In Act, Calling It “An Abuse Of State Power”…”Belongs In The Dustbin””

  1. John F. Hultquist

    I think most of us reading this will agree and have understood this was happening. Even more, it was very predictable. So now we have Krause, Alt, and an un-named official saying the same things. Were some of them aware years ago? Did they say so then? If not, when?

    Above the title of the post are 2 lines that begin with Browse –
    The “Our Climate in Pictures” link gives a 404 Not Found error

  2. DirkH

    “The EEG must be regarded as an instrument of abuse by state power and especially contradicts the social-civic responsibility of the legislators.”

    And, it was created by two leftist parties, the social democrats and the Greens, in 1999, after they formed a coalition government… leftists who regularly maintain they fight for the interests of the little guy… And they still claim that their monstrous price rigging law gives control to the little guy because now everyone can produce his own power, not have to buy it from huge companies… Well, that’s not much of a help if the self produced power is intermittent and 5 times as expensive. Stupid or evil? you decide…

  3. Kevin Marshall

    There was a time, at least in Britain, when large scale projects, like building a new road, underwent a cost-benefit analysis. That is to demonstrate that the project would create a better state of affairs than do nothing. When the decision was made to go ahead with the project, it would be awarded to a contractor who had the capability to bring the project in on-time and within budget. It did not often work well, but it did confront some of the issues, and draw upon a diverse range of specialist skills.
    With catastrophic global warming, the identification of a potential problem by a small number of applied scientists in a new discipline, seemed to point to an obvious solution. There was no proper measurement of the size of that potential problem, nor rigorous examination of the expected policy costs, nor the ability of those implementing the policy to deliver. Yet an engineering project, like a road, is far simpler to deliver than mitigation of global greenhouse gas emissions. Policy will always fail if people do not first grapple with the issues, just like a road builder will fail if they do not understand geology, road engineering, and project management.

    1. DirkH

      Let’s just rebuild the entire country. Hail Sustainable Development!

  4. Weekly Climate and Energy News Roundup | Watts Up With That?
  5. Brian H

    When the Germans are being stupid and suicidal, they’re very systematic and thorough about it, and hard to deflect.

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