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Some remarks on the energy policy in the Federal Republic of Germany

: Fraunhofer-Institut für Systemtechnik und Innovationsforschung -ISI-, Karlsruhe

ENER bulletin (1988), Nr.5, S.23-32
Fraunhofer ISI ()
energy demand; energy policy; energy pricing; energy supply; Länder government; rational energy use; subsidies; West Germany

The author comments the energy policy of the Federal government and some Länder governments of the 1980's. The decline of primary energy intensity does not prove long-term trend of improved energy efficiency. Structural changes to less energy intensive production in industry and the economy cause a substantial reduction of energy intensity. Energy supply gained a high level of flexibility in West Germany since 1973 (oil reduced its share in primary energy from 55% to 41,7% in 1987, natural gas grew from 10% to 16,7% in 1987 and nuclear energy from 1% to 11%). Lignite took over the role as sunig producer of base load electricity. The author questions the free market approach of the Federal energy policy: the natural monopol of grid based energies on the distribution level creates speatic market imperfections: The relatively low prices for fossil fuels since 1986 will discourage the continuation of rational energy use, particulary in the road and airtransportation. The free market approa ch neglects substantial social costs of energy consumption. The subsidies of the Federal government are eight times higher than support for national energy use. The unbalanced situation is likely too worsen in the future. As the Federal government withdraws from energy effieciency policy, some of the Länder governments try to compensate for this leck of wise activity.