All things environmental

Musings about the environment and all it touches, from education to city planning

How Germany gets it done (it’s about climate)

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The market for solar power didn't happen by itself; incentives created it.

The market for solar power didn’t happen by itself; incentives created it.

I’m making my way through the German Government’s Climate Action Programme 2020.

Yawn. Thank God it’s in English. But despite the impression conveyed by the ponderous title, it’s actually not bad reading at all, because – contrary to what I have come to expect from my governments, being Canadian – this document has actual substance and specifics.

Here’s an example: “In view of the growing heat efficiency of the buildings, the use of fuel cells with a high electricity to heat ratio is becoming an increasingly attractive option.

Whoa, what was that? Fuel cells? The high tech thingies that were developed in Vancouver by Ballard ages ago? The Germans plan to introduce “a funding criterion for particularly electricity-efficient systems (fuel cells)”.

Let’s back up a bit. What does that mean?

The German government created a whole program for combined heat and power systems (CHP), including micro CHP that can be used in the residential sector. The logic goes as follows: if you’re are going to burn natural gas (or some other fuel) to heat up your building, why not also produce electricity? Instead of using a furnace, use an engine; most of the energy of the fuel turns into heat, anyways. So instead of using a radiator to get rid of the heat, as in a car, connect the hot pipes to the heating system, et voila: same heat as with a furnace, but electricity that is sold to the grid.

These systems have become fairly popular (an example of such a system for a small home can be seen here), since the government provides incentives for them while discouraging the installation of inefficient heating systems. But there is a problem: most of the energy is still dissipated as heat, and a well insulated house or apartment building doesn’t need much heat. So installing a CHP may be costly if you don’t need much heat.

As a result, the government is now considering the next logical step: creating incentives for fuel cells, because of their increased efficiency.

How a fuel cell works (and Ballard's works fine!)

How a fuel cell works (and Ballard’s works fine!)

Maybe it’s foolish: fuel cells are expensive, complex, and not quite ready for the domestic market. But the very same thing was said about photovoltaic solar panels twenty years ago. The government of the time created incentives in the form of guaranteed feed-in tariffs, and the market took off, with the result that solar cells are much cheaper now, and their price continues to drop. If the government is serious about creating a demand for solar cells, watch out.

Meanwhile, in Canada, we’re a long way away from having these problems. We don’t have domestic CHP; nobody would buy it. Not only are there no incentives, but getting the grid to purchase the power is difficult.

The same thing can be said about fuel cells. Despite a promising start in Vancouver (there was a time when stock brokers were all pushing Ballard Power) the innovation has be let to wither on the vine. Oh, it’s not dead altogether; there have been some contracts for stationary sites, and demonstration projects like the hydrogen fuel cell buses that ran between Vancouver and Whistler, a project since cancelled.

This is the essential difference between the R&D strategy between the two countries. Both believe in the efficiency of the market. But in Canada, once a new technology has been developed, it is left to fend for itself and often dies; we say, well, that’s the market’s decision, it must be right. Fuels cells have been invented here; the technology for PassivHaus was invented here. But it never took off.

In Germany, by contrast, the Government has a clear vision of what it wants (to combat climate change, to create employment, whatever) but accomplishes it by creating a need: a market. It felt confident that through a feed-in tariff, it would create a market for solar panels. It knew that by enacting energy efficiency requirements, it would create a market for homes built on the PassivHaus standard. The same may well apply to fuel cells, and once again we may see a Canadian-born technology flourish in Germany.

It’s not rocket science. Governments create incentives. Incentives create markets. Markets foster innovation, efficiency – and jobs.

In this country we don’t do that, out of a misplaced belief that markets should never be messed with. But markets need a first kick to get going; once there, sure, don’t mess. But get them started, for crying out loud! There’s no hope of tackling climate change otherwise; but also, there no hope of creating jobs – it’s that simple.

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Written by enviropaul

October 14, 2015 at 8:57 am

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