In Hamburg, Germany: Municipal Buy-Back of the Power Grid

Excerpted from Giles Parkinson:

“One intriguing result of the election included a referendum in the state of Hamburg to buy back the lower power grid from Vattenfall, and turn it into a local municipal-based public utility.

The proposal gained a majority, despite active campaigning and a lavish budget against it by most major parties, including the centre left SDP, which rules in the state, Merkel’s centre right CDU and the FDP.

As one observer noted: “Regardless of whether this will mean much in terms of promoting renewables (almost everyone agrees it doesn’t), it is a clear signal that citizens are favouring a publicly owned, decentralised energy system with a leading role of renewables.”

That could be critical because one of the biggest issues confronting a “grand alliance” between Merkel’s CDU and the SPD is reform of the Erneuerbare-Energien-Gesetz (EEG), the renewable energy act which for the past 13 years has underpinned the transition, which has so far reached a level of 23 per cent renewables.

The EEG surcharge in 2013 rose 47 per cent to 0.528c/kWh, about one fifth of electricity costs. That burden currently falls mostly on households, and Bloomberg New Energy Finance says a new Coalition would likely seek to remove some exemptions from businesses.

HSBC says that on energy, both parties essentially aim to increase the share of renewables in the electricity mix. However the conservatives want to keep exemptions (on taxation and grid fees) for energy-intensive manufacturing industries, while the SPD is aiming for lower electricity costs for private households and also wants to completely rework the renewables law (EEG).

Other analysts say that while both the CDU and SPF have strong ties to industrial lobbies, the local support for the Energiewende – as evidenced through the Hamburg vote – could be a powerful counterweight to big business lobby.

Hamburg is not the only city in Germany to want to buy back its grid. Berlin holds a similar vote next month, and nearly a dozen other municipalities have either voted for or are in the process of doing the same.

The states will be increasingly important in energy policy as many of the progressive states with a strong interest in local energy transition have greater power in second chamber of parliament, which is decisive for energy legislation.

Some analysts expect a new ministry of energy/energiewende to be created. This may help address some of the current tensions between the environment and economy ministries, but its direction will depend on who will lead it.

The Greens also polled poorly. Some are suggesting it was due to a poor strategic decision to downplay their core themes such as environment, energy, climate, and focus on tax hikes which they want to introduce to pay for better education.

Analysts at HSBC last week suggested that the election in Germany would be critical in unblocking domestic and European policies on renewables, carbon and efficiency.”

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