Germany racked up one economic success after another for most of this century. But the loss of Russian natural gas due to the war in Ukraine has dealt a severe blow to its industry through higher energy costs.
This is such an egregious misrepresentation. These industries were subsidised like crazy, brought cheap products to the market with a head start, and when subsidies ran out they couldn’t compete with the Chinese.
2022 Chinese renewable energy subsidies totalled 600 million USD. That’s peanuts.
2020 Chinese renewable energy subsidies totalled 807 million USD.
I was talking about 2010…2015 but you cited very recent numbers. I was talking about producers of polysilicon and panels, your numbers are for solar farms/wind farms/biomass generators. And they don’t seem to be complete, either.
Germany, meanwhile, allocated 4 billion euros annually to subsidize electricity prices for industry.
This plan is opposed by the chancelor and the minister of finance. Safe to say it won’t happen this year.
The link you sent refers to subsidies from previous years that haven’t actually been paid out yet. The Chinese government did the classic play of “here’s some subsidies jokes haha we’ll totally pay you ten years later if you’re not bankrupt by then haha.”
So… Thanks for helping my point, I guess? For a historical perspective, China’s solar PV subsidies have been almost entirely demand-side with the exception of academic research grants, national labs, and poverty-alleviating policies.
It’s not like subsidizing an emerging industry is that unusual: the problem is usually when people keep subsidizing output from that industry after it’s a mature competitor. German subsidies were at, what, 37c/kWh with 8877MW (8760 hours per year, 25% typical daily efficiency) installed in 2010? Those subsidies are massive, so either Germany is incompetent at solar PV development or neoliberal policies don’t work and the government should have been more active in managing the nascent industry.
But you do realize that you quoted numbers for the wrong part of the economy in the wrong timeframe!?
For a historical perspective, China’s solar PV subsidies have been almost entirely demand-side with the exception of academic research grants, national labs, and poverty-alleviating policies.
Please let me know when you find any proof of that. There’s a reason why there is an entire solar supply chain concentrated in Xinjiang, rather than some more developed coastal region. (It’s subsidies.)
The subsidies did not run out. They were cut overnight, without much warning, so the industry could not adapt. Even worse they cut legally guranteed subsidies of already finished projects, meaning nobody in the industry trusted the government anymore, as subsidies cut be cut at any point without warning.
Industry needs a stable planning enviroment. If you cut heavy subsidies do it over time in clearly communicated steps, not overnight and breaking previous gurantees.
While yes, the feed-in tariffs dropped in price and capped eligible additions once 52GW of capacity was installed, this only shook the heavily propped-up domestic market. Had the German manufacturers produced anything better than the rest of the world they could have exported their stuff as German engineering did since forever. However, what they produced was nothing special, solar panels are pretty low-tech that can be produced in China for a fraction of the cost in the same quality so naturally they win out. All the money should have went to the development of high-end solutions that demand engineering and manufacturing prowess and cannot easily be copied, not focus and subsequently rely on shipping lots and lots of units. This is a game high-income countries will always lose in today’s globalized economy.
Two things. First of all when you just decide to shut down all your nuclear power plants, you need to come up with a plan to replace the low carbon electricity in the grid. Solar installations in Germany dropping by 2/3 is really not a good strategy in that case.
Then it was not just solar panel manufacturers, but also tooling manufacturers, who often were bought out by Chinese companies, with Chinese government money. That is the actually intressting part of the manufacturing chain.
Subsidizing them to kickstart them was absolutely right, both from a national and international perspective.
To not reap the reward but let it crumble was patently stupid.
The subsidies worked. Now we have matured, (somewhere else) mass produced technology on scale. It worked so well that now it’s viable without subsidies.
No way! An industrializing nation with the largest (or second largest) population in the world and without access to cheap natural gas has high emissions? Next you’ll tell me that water is wet and Russia is invading Ukraine.
A core issue that’s dominated Chinese policy is robust access to oil. Meanwhile, the core driver of decreasing emissions in most of the West has been the shift from coal to natural gas.
Nowadays, academics are mixed on the true impact of natural gas because of methane leakage (~3%, but methane being something like a 25x more potent GHG than CO2).
This is such an egregious misrepresentation. These industries were subsidised like crazy, brought cheap products to the market with a head start, and when subsidies ran out they couldn’t compete with the Chinese.
Not saying that the German solar industry was in great shape but …
2022 Chinese renewable energy subsidies totalled 600 million USD. That’s peanuts.
2020 Chinese renewable energy subsidies totalled 807 million USD.
Germany, meanwhile, allocated 4 billion euros annually to subsidize electricity prices for industry.
I was talking about 2010…2015 but you cited very recent numbers. I was talking about producers of polysilicon and panels, your numbers are for solar farms/wind farms/biomass generators. And they don’t seem to be complete, either.
This plan is opposed by the chancelor and the minister of finance. Safe to say it won’t happen this year.
The link you sent refers to subsidies from previous years that haven’t actually been paid out yet. The Chinese government did the classic play of “here’s some subsidies jokes haha we’ll totally pay you ten years later if you’re not bankrupt by then haha.”
So… Thanks for helping my point, I guess? For a historical perspective, China’s solar PV subsidies have been almost entirely demand-side with the exception of academic research grants, national labs, and poverty-alleviating policies.
It’s not like subsidizing an emerging industry is that unusual: the problem is usually when people keep subsidizing output from that industry after it’s a mature competitor. German subsidies were at, what, 37c/kWh with 8877MW (8760 hours per year, 25% typical daily efficiency) installed in 2010? Those subsidies are massive, so either Germany is incompetent at solar PV development or neoliberal policies don’t work and the government should have been more active in managing the nascent industry.
But you do realize that you quoted numbers for the wrong part of the economy in the wrong timeframe!?
Please let me know when you find any proof of that. There’s a reason why there is an entire solar supply chain concentrated in Xinjiang, rather than some more developed coastal region. (It’s subsidies.)
(it’s cheaper labour and the fact that Xinjiang is literally the perfect place to deploy solar)
The subsidies did not run out. They were cut overnight, without much warning, so the industry could not adapt. Even worse they cut legally guranteed subsidies of already finished projects, meaning nobody in the industry trusted the government anymore, as subsidies cut be cut at any point without warning.
Industry needs a stable planning enviroment. If you cut heavy subsidies do it over time in clearly communicated steps, not overnight and breaking previous gurantees.
While yes, the feed-in tariffs dropped in price and capped eligible additions once 52GW of capacity was installed, this only shook the heavily propped-up domestic market. Had the German manufacturers produced anything better than the rest of the world they could have exported their stuff as German engineering did since forever. However, what they produced was nothing special, solar panels are pretty low-tech that can be produced in China for a fraction of the cost in the same quality so naturally they win out. All the money should have went to the development of high-end solutions that demand engineering and manufacturing prowess and cannot easily be copied, not focus and subsequently rely on shipping lots and lots of units. This is a game high-income countries will always lose in today’s globalized economy.
Two things. First of all when you just decide to shut down all your nuclear power plants, you need to come up with a plan to replace the low carbon electricity in the grid. Solar installations in Germany dropping by 2/3 is really not a good strategy in that case.
Then it was not just solar panel manufacturers, but also tooling manufacturers, who often were bought out by Chinese companies, with Chinese government money. That is the actually intressting part of the manufacturing chain.
Subsidizing them to kickstart them was absolutely right, both from a national and international perspective.
To not reap the reward but let it crumble was patently stupid.
The subsidies worked. Now we have matured, (somewhere else) mass produced technology on scale. It worked so well that now it’s viable without subsidies.
2022 Chinese renewable energy subsidies totalled 600 million USD.
2020 Chinese renewable energy subsidies totalled 807 million USD.
Germany, meanwhile, allocated 4 billion euros annually to subsidize electricity prices for industry.
Okay, let’s do it like China.
No way! An industrializing nation with the largest (or second largest) population in the world and without access to cheap natural gas has high emissions? Next you’ll tell me that water is wet and Russia is invading Ukraine.
A core issue that’s dominated Chinese policy is robust access to oil. Meanwhile, the core driver of decreasing emissions in most of the West has been the shift from coal to natural gas.
Nowadays, academics are mixed on the true impact of natural gas because of methane leakage (~3%, but methane being something like a 25x more potent GHG than CO2).