Grid Expansion: Opportunities and Challenges of a Modern Energy Policy
Prof. Michael Eilfort, Dr. Peter Ahmels, Martin Fuchs, Dr. Martina Krogmann, David McAllister, Hans-Heinrich Sander, Jochen Homann, Prof. Justus Haucap and Michael Bauchmüller (left to right)
Dr. Martina Krogmann, Lower Saxon representative to the federal government, welcomes the more than 200 guests in the Lower Saxon state house.
Chairman of the Monopoly Commission, Prof. Justus Haucap, advocates for a greater role of Ordnungspolitik in energy planning: "Why not a somewhat greater role for the market in the EEG?"
Jochen Homann, undersecretary of the Federal Ministry for Economics and Technology declares that grid expansion policy in the future involves citizens.
Martin Fuchs, head of the grid operator TenneT, begrudges the slow licensing and authorization procedures of the states and declares his desire to invest more onshore.
Hans-Heinrich Sander, the Lower Saxon minister for environment and climate protection, finds state regulations to be appropriate and opines that the federal agency for this task lacks sufficient expertise.
Dr. Peter Ahmels, head of the renewable energy department of Deutsche Umwelthilfe, experts that more transparency will at least better public sentiment regarding the issue.
A Conference by the Market Economy Foundation and the Government of Lower Saxony
The rapid phasing-out of nuclear energy and the even more rapid introduction of renewable energy appear to enjoy broad consensus today. But have the goals of economic viability, supply security, and climate protection been taken into account during the evolution of this consensus?
These are certainly not achieved by simply expanding renewable energy production. Improved cables and better ways of storing energy are necessary. Electricity produced from wind turbines in the North and Baltic Seas, for example, must be transported efficiently to the areas where it will be used using methods that incorporate such improvements. The required investment necessary for an electricity grid that can accommodate growth in renewable energy, however, is tremendous. According to studies by the German Energy Agency (Deutsche Energie-Agentur), Germany must construct 850km of new electricity transmission lines by 2015, and another 3600km must be in place by 2020. Additionally, energy production that is more decentralized requires intelligent transmission networks (Smart Grids) and, above all, any such program requires the approval of the citizens.
How can this reconstruction of the grid proceed in an way that allows for the implementation of market incentives? What can and what may the state do? Smarter regulation of the grid, which sets into place incentives for network operators to invest without unnecessarily raising electricity costs, is necessary. But how would such regulation look? Instruments like the Federal Grid Plan (Bundesnetzplan) and the Federal Grid Expansion Acceleration Act (Bundesnetzausbaubeschleunigungsgesetz) are supposed to expedite the regulatory approval process. But is the shift in responsibility and action to the federal level an appropriate step? And how can acceptance of the plan among citizens affected by it be strengthened? Is cost-intensive underground cabling an effective solution? What role could an expansion of cross-border transfer points and the strengthening of European energy trade play in the transformation of the German energy market? We were able to discuss these issues at our energy conference held in conjunction with the Lower Saxon government. A conference report will be available here shortly.
Here you can find
Municipal Finance Reform: Latest Assessment
The Tax Code Commission’s (Kommission Steuergesetzbuch) four column reform model, developed under the roof of the Market Economy Foundation (Stiftung Marktwirtschaft), enabled the formation of a highly acclaimed policy proposal that has found considerable support in the political arena.
The original four column model for municipal finance reform was recently enhanced and introduced into the political process. During the process, the proposal was slimmed down to three columns due to the exclusion of the section pertaining to the property tax, which remains unchanged. Nevertheless, municipal financing no longer depends on volatile local business taxes, and now derives support from more sources, including the payroll tax, the local business tax, the property tax, and the municipal portion of the income tax. The Market Economy Foundation supported this proposal scientifically and helped to guide it through the political process.
With the approval of the Foundation, the state of Lower Saxony allowed the Federal Statistical Authority (Statistiches Bundesamt) to conduct a thorough analysis of the proposal’s effects in all Lower Saxon municipalities. The statistics can be accessed through the following links:
Remarks on the Lower Saxon Model of Municipal Financing (German)
Citizen's Dividend (Bürgergeld) – A Deadly Antidepressant
What do we think about the Citizen's Dividend? Irrespective of whether you like to call it a solidarity-inspired basic income guarantee or a transfer payment with no strings attached, the Citizen's Dividend is a deadly antidepressant. Read more on the subject in our:
You can find more background information on the subject by reading our report from our conference "Citizen's Dividend and Basic Income: Stroke of Genius or Madness?"