Transcript: Germany's Transformation into a World Leader for Renewable Energy

 
THE CNA CORPORATION
 
GERMANY’S TRANSFORMATION INTO A WORLD LEADER
FOR RENEWABLE ENERGY
 
WELCOME:
MITZI WERTHEIM,
FOUNDER AND DIRECTOR,
THE ENERGY CONVERSATION
 
MODERATOR:
KEVIN BILLINGS,
ACTING ASSISTANT SECRETARY FOR INSTALLATIONS,
ENVIRONMENT AND LOGISTICS, U.S. AIR FORCE
 
SPEAKER:
MARIO-INGO SOOS,
COUNSELOR ON ENVIRONMENT AND ENERGY,
EMBASSY OF GERMANY
 
JEFFREY MICHEL,
ELECTRICAL ENGINEER
 
 
MONDAY, OCTOBER 20, 2008
 
Transcript by
Federal News Service
Washington, D.C.
 
 
MITZI WERTHEIM:  Good evening.  We’re going to try to get started now if you can –
you know, there is a really good Girl Scouts system where everybody puts up their hand, and
they know they’re supposed to stop talking.
 
I want to welcome you all here this evening.  I think we have a very interesting program
ahead of us.  For those of you who don’t know me, I’m Mitzi Wertheim.  I’m one of the founders
of this effort and we get a terrific amount of support from both CNA and Mazenti and Company. 
We couldn’t run it without them.  
 
I have a few brief announcements before we get into the program.  First of all, for those
of you who don’t know, there’s going to be a program tomorrow night on PBS called “Heat,”
which has been 18 months in the making and it’s really about energy and climate change.  It’s a
two-hour program and you might want to watch it.  
 
The second thing is our next meeting will be on November 8th – I think that’s right – and
we’re going to have Mike Granoff coming from A Better Place, and he’s going to talk about a
conceptual system of running cars with batteries that also have, I guess, stations where you can
go and change your battery.  And you just change it in and out, and you can run it for 100 miles
and then you just go in and you change your batteries.  And it’s a program – I think they are
going to start doing a pilot in Israel.  But anyway – 
 
MR. :  November 10th –
 
MS. WERTHEIM:  November 10th, thank you.  Scott’s going to be the introducer.  Thank
you – (laughs) – thank you very much – November 10th.  
 
And finally, tonight we have Kevin Billings, who is the acting assistant secretary of the
Air Force for installations, environment, and logistics, who is going to be our real introducer and
moderator.  He really impresses me because he’s had such a multi-dimensional career and
executive positions, both in the public and private industry, in strategic management,
international and domestic business development, transformation and change management,
corporate relations and legislative policy development.  
 
His experience includes work on Capitol Hill, executive positions in Westinghouse
Electric Corporation and other areas of federal facilities, and had an advisory role for the
secretary of the Army for matters relating to business process transformation and industrial
safety.  
 
He has an open mind.  He’s always interested in learning and looking for new and better
ways to make things happen.  So Kevin, we’re delighted to have you here this evening.  Thank
you.  
 
(Applause.)  
 
KEVIN BILLINGS:  Thank you, Mitzi.  I appreciate that.  That was quite kind.  It’s
really terrific to be here today because one of the questions I seem to get a lot, since I’ve taken
over this role in the last couple of months, is how has energy changed in the Air Force?  And as I
thought about this and I’ve worked with Secretary Donley and General Schwartz, things really
haven’t – things have changed tremendously and they haven’t changed at all.  
 
As everybody knows here, the world energy situation continues to look very similar to
what it did four months ago.  The price of oil has gone down, but we still import 60 percent of
our petroleum products from places outside the United States.  They still go through a lot of
dangerous places.  Regimes are using energy as – trying to use it as leverage and the Air Force
continues to use more energy than anybody else in the government.  
 
But what has changed and what is very timely about this meeting tonight is the attitude
the Air Force has taken towards how do we address energy?  We’re going to continue to be very
aggressive, but we’ve – we’re going to look to spend much more time on receive than on
transmit, and we’re going to figure out ways that we can learn from others and collaborate and
work with folks.  
 
Paul Bollinger’s doing great things in the Army.  The Navy’s doing terrific stuff in terms
– and we’re looking to figure out not only how we can collaborate, but how we can bring the
things that we do well to them, but how we can listen, learn, and figure out how to make the
processes work across the services – not only that, we’re spending a lot of time continuing to
figure out how we’re doing work internationally.  
 
One of the things General Schwartz asked me to do a couple of weeks ago was address
the NATO Air Chiefs Conference and talk about energy.  And we talked about energy in the
context of NATO and in terms of the alliance, and not necessarily as issues with Article Five in
terms of how do we protect infrastructure as militaries, but how do – as large consumers as air
forces within the alliance, how do we look at NATO in terms of, say, of Article Two and use our
free institutions to create the conditions inside markets, so that we can move forward and make
the conditions available so that renewables, energy efficiency, domestic production within the
alliance, within our countries, can provide that leverage against suppliers, so that we’re actually
in control of what we’re doing.  
 
So our guests tonight are a big piece of that in terms of learning what we can learn from
our allies and our friends.  So in the theme of being on – getting off of transmit and being on
receive, let me introduce them really quickly.  
 
Mario-Ingo Soos is the counselor for environmental and energy policy at the German
Embassy here in Washington.  In that role, he spends most of his time looking at and analyzing
U.S. activities and evaluating climate and energy policy, and communicating that back to the
German government.  He’s also spent time in the embassies in Cyprus, in Croatia, and Colombia
as well, and has worked in the Economic Affairs Division of the German Foreign Office
throughout his career.  
 
Also Dr. Jeffrey Michel is here with us.  He is an MIT-trained engineer, who spent most
of his early career with the Boeing Space Division in Germany, in Czechoslovakia, and in the
’80s looked at figuring out – began to look at how we can use international affairs and look at
multinational cooperation for dealing with upcoming environmental issues that we’re going to be
facing.  
 
And finally, today, Dr. Michel is one of the foremost experts in terms of advanced
metering and how we pull all that together, and is having these folks who’ve worked very closely
both with the German Embassy and in Germany.  It reminds me a couple of weeks ago, I had the
lord mayor of Kaiserslautern came in, and the city and the Air Force in the city – the Air Force
Base at Ramstein are working very closely together to look at how can we use the – leverage the
things that are going on with the utilities in Kaiserslautern to drive advanced power at the base,
as well as using the market presence of the base and the rest of the community to leverage and
drive down the costs – again, one of these things where we can learn a lot from our neighbors
and our bases both here and around the world.  
 
And with that, I want to turn it over to Mr. Soos.  (Applause.)    
 
MARIO-INGO SOOS:  Well, thank you very much for this introduction.  I am very
pleased and honored to be here, to be able to speak with you about an issue that, in Germany, are
really proud of – our climate and energy policy.  I have just mentioned in our discussions here
before that this is one of the questions we are being asked most frequently in past time about how
did we do that because apparently, the successes that we have are quite known in many places
now.  
 
And so I’m delighted to be here and to try to explain what we did in Germany and where
we stand and where we would like to go from here.  
 
Right from the outset, let me tell you that we are in the phase of really fundamentally
changing the way how we produce and consume energy in Germany and this, of course has to do
with three major challenges that we have.  One is that of climate change; the other is energy
security; and the other one is to make sure that we have the necessary economic growth to pay
for all this.  
 
The climate and energy policy that we have is a quite progressive one, as I just
mentioned, and we do believe that it is healthy for our economy.  So to the contrary of what I
hear here very often, that it is kind of a poison if you introduce regulatory mechanisms.  If it is
done in a modest way, it can be very healthy and have very positive effects.  So it leads to an
economic growth, employment, and industrial innovation.  I will show you later in my
presentation what happened in Germany.  And again, it did work in Germany only on the
precondition that we had a legal framework and some regulatory policy.  You can’t leave it all to
the markets.  
 
So now, why do we need an integrated climate and energy policy, not just one on climate
and maybe one on energy?  And there – we have to move to the next slide.  I hope that this will
work.  There it is.  
 
Energy and climate are intertwined.  I think I don’t tell you something new here, but it’s
good to know that 65 percent of the global greenhouse gas emissions are produced from energy
consumption.  
 
Oh, sorry, yes, I didn’t notice that.  Just a second.  All right.  They can’t read them, okay. 
We’ll try to do that.  How about this?  Is it better?  Is it – can you read from – yes, okay, good.  
 
So this is a graph that shows as a pizza, I would like to say, the distribution of the
different sources of greenhouse gases and as I said, energy consumption production is
responsible for 65 percent of the global greenhouse gas emissions.  So this energy consumption
would only grow.  We know that.  We have now 60 billion people living on this planet and by
2050, there will be probably nine billion people, so energy consumption will grow and will
increase the future environmental and economic problems.  
 
And without a coordinated action – it is a global problem.  That is why we need a
coordinated action.  Without that, the world’s primary energy consumption will increase 55
percent by 2030.  That will lead to scarcity and to an increase of the cost of fossil fuels that has
just been mentioned here before; that even if prices go down now, for the time being – which has
probably to do with the economic development – they’re bound to stay high.  
 
Greenhouse gas emissions, in the same time, will increase by 58 percent and now the
problem there is that this will most likely raise the global temperature significantly above the 2
degrees centigrade or 3.6 degrees Fahrenheit that are deemed by the scientists as tolerable. 
Above this, if we have more than that, we enter uncharted territory with a dangerous climate that
has not existed on the earth for hundred thousands of years.  
 
What can be the causes of such a climate change?  I just wanted to show you this slide,
and with the enumeration of the many environmental effects that are problematic: more extreme
weather, biodiversity loss, famines, drought, economic and political instability, et cetera – I don’t
want to read them all out to you.  You’ve probably all heard of them.  
 
Well, this does not have to happen.  It is still possible to change and to avoid this
dangerous path.  Two years ago, the former chief economist of the World Bank, Sir Nicholas
Stern, produced his study, the Stern Report, and the result of this study simply was that action is
affordable; inaction is not.  So what he said basically is that the investment that takes place in the
next 10 to 20 years will have a profound effect on the climate in the second half of this century
and the next.  So decisions that we take now will deeply impact on what is going to happen with
the climate in the years after.  
 
And then, as far as the costs are concerned, and that is the due notion that Stern
introduced.  He calculated the costs of action and inaction and compared them and he said that
inaction would lead at least to a 5 percent GDP loss, but possibly as much as 20 percent of the
global GDP.  And in comparison, to deploy efforts now would only cost about 1 percent of the
worldwide GDP until 2020, 2050.  
 
What he also said is that damages – the economic damages to be expected would amount
to the economic losses of the two world wars of the past century.  So that’s the magnitude of the
economic losses if nothing is going to be done.  
 
Just to give you a few examples – I hope that you can read them from behind – of the
costs of extreme weather events, in 2002, we had floods in Europe that produced a damage of
approximately $13 billion.  In 2003, we had a heat wave with approximately $14 to $24 billion
of damages and ten thousands of deaths.  Estimates go up to 70,000.  That was the most dramatic
heat wave we ever had.  Now, no one is saying that it is directly connected to climate change, but
that kind of weather events are to be expected if climate change takes place as predicted by the
scientists.  
 
And the hurricane seasons, 2005 and 2008 in North America, you can see there Katrina,
$81 billion, Wilma, $20 billion, Rita, $11 – many nice names, but a lot of very – (unintelligible)
– and serious costs.   
 
So Germany has – before this background of climate change, energy challenge, and
economic growth needs, Germany has set an ambitious climate protection target calendar, which
is in tune with that of the European Union.  Very quickly – the European Union has said it will –
unilaterally has said it will reduce greenhouse gas emissions 20 percent by the year 2020 in
relation to 1990 levels and there is a conditional target.  If other industrialized countries
undertake the same effort, the European Union has declared it will reduce its emissions by 30
percent.  
 
Other targets are a 20 percent increase of renewable energy and a 20 percent energy
efficiency gain.  That means for Germany, which is one of the most important economic powers
in the European Union, that we would have to reduce our greenhouse gas emissions by almost 40
percent by 2020, and to achieve this, the German government has decided on an integrated
climate and energy package.  
 
It consists of 28 different programs and legislations.  And I have to tell you that most of
this has become already legislation, so it’s law; it’s not only targets.  These are laws that I’m
going to speak about after this.  And the goal of this integrated climate and energy package is to
reduce the greenhouse gas emissions by 270 million metric tons by the year of 2020, which is
huge.  At the moment, we have 1 billion metric tons of greenhouse gas emissions roughly.  So
this is a very ambitious goal.  
 
Why do we think that it’s possible?  Why do we think that this is feasible?  I don’t know
if the lines are visible very well.  The yellow line shows you the development of the gross
domestic product, of the GDP, beginning with 1990, when this policy started at the modest pace
at that time, but increasingly, with regulations and more laws.  
 
The middle line, which is – I would like to call it the green line there – is the
development of the energy supply.  You can see it’s – well, it decreased by 5 percent.  And the
bottom line, the red line, are the greenhouse gas emissions, which decrease by almost 20 percent,
and that’s where we are now.  Compared to 1990 levels, the greenhouse gas emissions have been
reduced by 20 percent.  
 
Now, much of this has to do with the modernization of Eastern Germany.  Eastern
Germany had an industry that was very energy intensive and after unification, this was one of the
first things to happen to modernize this industry.  But this is what I always say because I hear
that very often.  Well, it was easy for you because you just simply got rid of that industry.  Well,
it’s not that.  We invested.  The investment in East Germany cost about 5 percent of the annual
GDP.  So it didn’t come without any cost, what happened there.  
 
And now there is – Jeffrey Michel will tell you about the development in East Germany
in the energy sector more in detail.  
 
So that again came with a cost and what I want to give you the message is this kind of
investment doesn’t kill an economy.  The economy’s still going on.  Germany has a strong
economy still and we have a strong manufacturing sector, and although 5 percent of the GDP
annually was invested in the building up, modernization of an old industry infrastructure.  
 
Where are we going to get these 270 million of reductions – 270 million metric tons
reduction?  There are eight areas.  First of all, power plant efficiency with 30 million; then co-
generation; electricity and heat; renewable energy for electricity production, efficiency, heating,
renewable energy for heating, in the transport sector and from non- CO2.  
 
Well, this is a slide that shows you the – what we call the German climate toolbox.  It
consists basically of four elements.  One is you need to have these legally binding standards –
legally binding standards – not voluntary standards, legally binding standards, concerning
efficiency for buildings, efficiency labeling, appliances, and others; second, the feed-in tariff
system that helps bring electricity and – from renewable energies to the grid to the consumers.  
 
Then the financial and other support programs, which are, if you so like, the voluntary,
the positive incentives because there is always the necessity to have carrots and sticks.  The
binding standards are the sticks, but there are also carrots connected to this.  So credits, tax
rebates, et cetera, in quite a substantial amount.  
 
And finally, the emissions trading – I would have to say emissions cap and trading.  That
means that the production of energy and energy-intensive industry has to reduce its emissions.  If
it cannot, then it has to buy emission certificate somewhere else and that is also a mandatory part
of this whole system.  
 
So standards, feed-in tariffs, financial support programs, emissions trading.  
 
This shows you – this graph shows you how the renewable energy developed in the past
years.  Let me point out at the pre-last line there, the black line – it is where the year 2000 is, and
it shows that from then to now the renewable electricity – let me put it that way – has at least
quadrupled because of the feed-in tariff.  
 
The yellow space there is hydropower.  That is as it is.  You cannot really increase it, but
the others – wind energy has had the most – the largest increase.  Biomass is very important and
photovoltaic is tiny, as you can see.  You can hardly see it.  It’s the top line and it is really
minuscule, but nevertheless, Germany is world record holder in installed photovoltaics still.  I
hope that the United States will surpass us very soon.  And they will – I’m sure about that.  
 
What was the key to this success?  The Renewable Energy Sources Act – it’s a law.  And
its main components are it guarantees the feed-in of electricity from renewable energy at a fair
and fixed fee.  It gives priority to renewable energy.  The fees are established for each kilowatt-
hour of electricity and the additional costs that are necessary to pay for this electricity are
apportioned to all consumers.  So it’s not a tax.  Every consumer pays a tiny portion in his bill to
cover these additional costs for the feed-in tariffs and by now, it says here, the act has served as a
model for more than 30 countries.  I think we are at about 50 countries, if I’m not mistaken, and I
know that here in the United States, a few states have also great interest in doing something
similar.  
 
What has been achieved by this in terms of climate protection?  Here you can see a graph
on the greenhouse gas emissions.  In total, approximately 150 million tons have been avoided
through renewable energies and more than – or almost half of this are apportioned to the
Renewable Energy Act through this electricity and heat and fuel.  
 
Jobs created – 249,000 – 250,000 roughly by now clearly only in the sector of renewable
energies.  These are new jobs, not converted – new jobs, and the turnover in the renewable
energy sector now stands at about €25 billion, which is $35 billion per year of which €11 billion
are investments and the rest is consumption.  That’s the turnover.  So it’s a huge economic
sector.  
 
This slide I find especially impressive.  It compares the solar potential of the United
States and Germany.  (Laughter.)  South of Texas, you will find Alaska on this.  (Laughter.) 
And Alaska has the potential of Germany in solar.  This is why earlier, I said I’m sure that we
will be overtaken by the United States very soon on solar and photovoltaic.  
 
I don’t want to bore you with this.  Lots of economic benefits to be expected from the
climate and energy program, this integrated program.
 
Most important, I think I would like to highlight the savings from energy imports of
about €20 billion per year in 2020.  Already now, the renewable energies help us to save, I think,
about €7 billion per year in avoided import costs.  And then the jobs – the number of jobs are
estimated to increase to a number of 500,000 by 2020 and 800,000 by 2030.  Investment increase
– this is all domestic investment, so this money will not flow to other countries to buy energy. 
We will have it in our country to produce energy in our country.  
 
The demand for a specialized workforce will increase because we have seen it.  We know
that it happens and new jobs come to the market.  And for the industry that engages in this, they
have a first mover advantage and that is good for a country like Germany.  We are an exporting
country and that again, creates additional jobs and investments.  
 
Very quickly, transportation is another area.  So it’s renewables; it’s efficiency.  Here is –
we talk about the transportation sector.  Steps will be, and are being, undertaken to reduce
emissions from automobiles.  This is an interesting number here.  We look at the grams of CO2
per kilometer and the goal is that cars will have to fulfill a standard of 120 grams per kilometer
in the year 2012.  And the average now, I think, is 160 or something like that.  So there is a long
way to go.  
 
Then there is fuel consumption labeling and vehicle tax based on CO2 emissions.  We are
planning to introduce a vehicle tax based on the CO2 emissions.  So the more CO2 emissions a
car has, the higher the tax will be; tolls on the roads also based on the CO2 emission and the
expansion of the biofuels.  
 
Emissions trading, I don’t want to go into details here – just to let you know that, as you
may know, we had this first phase, which was an experimental learning phase of cap and trade
that ended in 2007.  Many things went wrong in this first phase.  There was an over-allocation of
emissions that led to a fall in CO2 prices as low as, I think, €0.20 per certificate, which was
ridiculous.  
 
And utilities received emissions for free, but they factored – they made it into their bills
to the consumers, so they had huge windfall profits.  This will be avoided in the future.  The cap
is more stringent already for this second phase from 2008 to 2012.  Ten percent of the emissions
will be auctioned and the next phase, beginning with 2013, will have a full auctioning of
emissions from utilities and step-by-step increase of auctioning of certificates for the energy-
intensive industry.  
 
I would like to turn to some aspects of international, at least here.  We do believe that
such a cap and trade system is only – its most and greatest benefit if it’s joined by others, and
therefore, we have initiated the establishment of an International Carbon Action Partnership. 
And the goal of this ICAP is to create an international forum of governments and public
authorities committed to designing and implementing effective carbon markets.  The reasoning
behind this is the bigger the market, the more transparent it is, and the more benefits for those
acting in this market are.  
 
So we have a secretariat – there is a secretariat now and there is a forum of experts that
meets and discusses issues.  And as you could see in the last bullet, there are – Germany is a
member, Germany; British Columbia is a member; Massachusetts, California, New Jersey, U.K.,
Portugal, Australia and New Zealand.  Japan is an observer and others are interested in joining
this.  
 
So this is an initiative to prepare the ground for the creation of bigger global – or global,
at the end of the day, carbon markets among those who are already engaging in that direction
because in the international negotiations, UN negotiations, there is negotiation about such a
system, but who knows how long that will take?  So those who are already on this path are doing
good to get together and discuss among themselves how to align their systems and offer their
businesses this market.  
 
We are very optimistic about the cooperation with the United States.  Both candidates for
the presidency have expressed their political will to promote a more ambitious climate policy. 
And we do believe that– of course, I have to speak as diplomat here and the representative of the
Foreign Office – that the Transatlantic Corporation can be a catalyst for positive change and we
do believe that these three areas could be essential for our transatlantic agenda toward a climate
and energy security, sustainable and stable energy supply, and to achieve this global carbon
market.  
 
Also in this area of international cooperation, let me only mention that the German
government has initiated the establishment of an international agency for renewable energy,
IRENA.  As you know, there is the IAEA.  There is the IAEAO, but the renewables energy don’t
have an international agency of their own.  And there is a good reason to establish such an
agency because it would include developing countries and emerging countries, which are not part
of the aforementioned agencies.  And when we say that, we want to have – to see technology
diffusion, renewable energy technology diffusion.  This would be facilitated by such an agency.  
 
So the role of IRENA would be to provide relevant policy advice and assistance to its
members, to improve technology and knowledge transfer, to provide for capacity building, again,
with a view to engage the developing countries and emerging countries.  And this again is
important for the international negotiations that we are going to – that we’re having on climate
regime.  Stimulate research, and last not least, enhance public information and communication,
which is not equally strong in all countries.  
 
And a couple of days from now, to be precise, on October 23 and 24th, there will be a
conference in Madrid, the third conference – the first one was in Germany – to prepare the
founding of this IRENA and the agency will be founded in January or February next year.  We
would hope that the United States will join it.  Until now, we did not have the support.  
 
Here, an example of what can be achieved by innovative partnerships – I think you will
like this.  It’s about Nellis Air Force Base, where there is North America’s largest solar
photovoltaic system and it is a joint project of the U.S. Air Force and U.S. and German
companies.  And below that, there is another nice project, the Stillwell Avenue Terminal Train
Shed in Brooklyn.  It’s covered with solar panels.  The solar system was supplied by a German
photovoltaic company and it is among the largest in the country and it’s rated at almost a quarter
of a megawatt.  
 
And maybe finally, here a view to what is possible through international – positive
international competition, namely innovation.  As some of you may remember, last year, there
was, I think, called Decathlon, Solar Decathlon, that took place here on the mall and, yes, a
German university won the first place.  It’s the Technical University of Darmstadt.  They set up a
house – a home for living that was not only capable of being energy independent.  It produced
energy.  It produced energy to supply plug-in car, plug-in laptop, whatever.  
 
Thank you for your attention.  (Applause.)  
 
JEFFREY MICHEL:  Mind if I sit down or should I – mind if I sit over there?  Okay. 
I’m less of a target if I sit down.  Can you hear me now?  Yes, okay.  
 
I’ve been living in Germany for almost 40 years, but I’m still an American citizen.  This
is, as a matter of fact, a picture I took outside from a train.  You see wind turbines everywhere. 
We have 18,000, 20,000 wind turbines in Germany already.  
 
First of all, I want to point out – I want to look at the United States and Germany in my
presentation.  In the United States, there’s this Ernst & Young Global Limited list.  United States
and Germany are always among the top contenders for the most attractive places in the world for
renewable energies and as you see, others are, but those two are the top.  
 
For solar power generation, as Mr. Soos pointed out, Germany is in top position.  This
was still when they were half.  Otherwise, now we’re around 40 percent, you said, so that
apparently other countries are starting to catch up, which is just great.  The United States has a
number of solar states that are doing very well, starting with California and if you look here, you
see that a lot of states are doing a lot of things.  The problem is that they’re doing different
things.  I thought of a comparison today.  Suppose your USB stick that you got.  Suppose every
time you went to a different state, you had to reformat it for a different standard or something. 
That’s sort of the way it is in the United States with solar energies or with renewable energies.  
 
There’s just too little cohesion.  There’s a lot of work going on.  This I found fascinating. 
Chicago has greenhouse gas mitigation strategies.  The most powerful component of that is,
again, renewable energies.  So they recognize the potential of it, but it’s just not getting together
the way Germany has accomplished it.  
 
Here’s a comparison between California and Germany.  California has set the goal for
3,000 megawatts of new solar produced energy by 2017.  Germany will have exceeded 5,000
megawatts by the end of the year.  Of course, we have twice as much many people in Germany,
but have as much sun.  And we don’t have the possibility of using concentrated solar power
because the light is too diffused in the upper latitudes of the earth, so we can only use
photovoltaics.  And so it’s much more expensive too in Germany than in the United States.  
 
What are some of the impediments in the United States?  There’s no enduring national
renewables policy.  Senator – excuse me – Congressman Inslee, Jay Inslee, is pushing for such a
law, and I believe you should have one, a national law.  We have 16 states in Germany.  If we
had 16 different laws, we wouldn’t be as far as we are today.  
 
There is dependence on public-funded incentives, so it’s sort of stop and go.  When they
have money, they promote it.  If they don’t have money, it gets – there’s a budget cut.  And then
you have what they call net metering, which means that your one single power meter spins
forwards and backwards.  Well, you never can really tell how much solar energy you produced in
the roof of your house because the meter is trying to count two things at once – how much you
consume and how much you feed into the grid.  So you never can really tell – well, you can’t
even really tell if your solar panels are working properly, can you, if you only have one meter
and it just – maybe it doesn’t ever spin backwards.  
 
And then you have high population mobility.  This is a fact that is often overlooked. 
Over 40 million people a year change their address in the United States each year.  That means if
you move to another state, or if you know you are going to move, you’re never going to put up
solar panels because if you move to a different state, well, maybe the law there doesn’t permit
you to reconnect them.  In Germany, you can disconnect them from one place.  If you move to a
new house in another part of Germany, you reconnect them and the contract is either continued
or you start a new contract under the same terms.  
 
And everybody’s anticipating future price reductions, so they’re holding back now and
then there’s no national CO2 reductions binding targets as we have in most parts of Europe –
actually in all of Europe – and Germany has overcome every one of these impediments.  We
have a uniform law.  We have – there’s no public – the government is not even involved. 
Because of these feed-in tariffs, the costs are redistributed to every subscriber, every user of grid
power, and the government is out of the way.  
 
It’s really plug and play.  You call up your electrician and you say, I want a solar panel or
a solar installation on my roof, and within a week or 10 days, it’s up and running and there are no
forms to fill out, anything.  You just have to report it starting in 2009 because it’s been done so
quickly that they’ve even forgot to count how many they have.  They have approximately half a
million solar installations in Germany now.  
 
Population mobility – irrelevant because the same terms apply everywhere and the future
technology price reductions are faceted into the feed-in tariffs.  I’ll show you that a little bit later. 
And we have the CO2 emissions reduction targets, so we have to do things.  And not only that,
this is a very – these are two very interesting curves – first of all, the costs are always at the
beginning, but afterwards, you have only benefits.  And you never get this green sector up in
fossil fuels because you’re always paying for fuel, no matter how long you generate.  
 
At the same time, a photovoltaic installation will give you the maximum power when
power trading prices – this is from our power trading organization in Leipzig, which controls
most of the power trading in Germany – and the prices there peak just about the same time that
the sun is shining most intensively.  So it obviously makes sense to cap some of those costs.  
 
And then also – I’m an MIT engineer, as you were told – there are lots of really
engineering reasons for using renewable energies – solar power the most obvious.  When you
need the most energy in your home in the southwest of the United States, your air conditioning is
running the hardest, well, also solar energy delivers you the most power.  Wind and wave power,
when the wind’s blowing, buildings cool out faster, so they need more electricity.  And
hydropower, the same way – during stormy weather and so forth, buildings are cooling out and
also if it’s raining, well, then the municipal pumping systems have to get started and so forth.  So
wave power comes into play.  
 
Biogas generation might be a little bit abstruse to look at it this way, but the more cows
you have, the more methane you have to get rid of and the more biomass you can use to generate
electricity from.  
 
By the way, I understand that Americans consume on the average of three cheeseburgers
a day – oh, no, a week – and the number of – somebody calculated the greenhouse gas emissions
from all the cheeseburgers in the United States is equivalent to one-quarter of electricity
generation in Germany.  And these are some of the reasons that we are really using – well, this is
the one-quarter – right down at the bottom here – the things – now, I’m an undiplomatic person
and I – (laughs) – I’ve experienced really – I’ve been on the front.  It’s sort of like having a
soldier who’s been in Stalingrad.  I sort of compare myself with somebody – one of these poor
schmucks there because I live at one of these mines.  
 
Germany excavates the Suez Canal every 25 days to generate electricity from domestic
lignite and that produces a quarter of its electricity; 180 million tons of lignite are used every
year.  That’s one of the reasons they want to start slowing down this landscape devastation. 
Another reason is that they are highly dependent on foreign countries; 75 percent of their energy
is imported.  And also the Chernobyl accident, 21 years ago, 22 years ago, it got people so
shaken up that they just wanted an alternative to nuclear power.  And so Germany has a phase-
out law.  Within another 15 years, there will be no nuclear power plants left running in Germany.  
 
At the same time, the European Union is really in a fix now because they can’t meet their
Kyoto goals, at least not in Western Europe.  This is the last graph.  It’s available from 2005 and
you see they’ve only gotten 2 percent of the 8 percent they’re supposed to be getting.  And what
are they going to do?  
 
And there are countries like Spain.  Spain is like – something like 46 percent, 41 or 46
percent – I’ve forgotten the figure exactly – over its Kyoto targets.  And even if it does emissions
trading and does joint – (unintelligible) – they’re still 30 percent over it.  Also Austria and
Denmark – surprisingly enough, Denmark, which has always been the country that people have
been looking at as the most progressive in renewable energies, they can’t meet their targets too. 
It’s the most recent data I have.  
 
How did countries start getting started cooperating in Europe.  That’s an interesting fact. 
It actually was in 1972 that the first UN conference on the environment was held in Stockholm,
and the reason was that we had this acid rain.  We had sulfur dioxide emissions coming over
from Great Britain and acidifying 5,000 lakes in Sweden.  And people said, we’ve got a problem. 
We have to go at this in a trans-boundary way.  We have to get nations to cooperate with one
another.  
 
These pictures were taken in Eastern Germany.  I took them.  I took two of them,
anyway.  The third one is from another source.  And they were taken in the ’80s, and that’s what
really got me started in being interested in the environment.  I lived in the Black Forest, which is
in West Germany.  We had forest damage, forests dying there, and they had it in Eastern
Germany too.  And I had started to go over to Eastern Germany in 1975, the communist part of
Germany.  Simply, I met some people and interested me, well, how does the second country
work?  How does communism work and so forth?  And you could get it.  I was there 100 times
between ’75 and ’89 and took a lot of pictures, talked to a lot of people, and became part of the
environmental movement.  
 
I live in East – this is one of the lignite power plants they have there.  There was one that
was slightly larger.  Just one plant had the same SO2, sulfur dioxide emissions as all of Sweden
and that’s lignite in the background there.  Down at the lower left-hand corner is a picture that I
took.  It was the entrance to a hotel.  I didn’t check in that place.  There was a pile of lignite in
front of practically every big building because that’s what they heated with, but there was also, if
you look at the very, very left-hand corner, there was also a crate of glass bottles and so forth.  
 
The East Germans recycled everything.  They had the highest recycling quota in the
world.  As I say, I went over there to see what – if there are any positive sides of communism,
and there were a few.  They recycled everything and the middle picture down at the bottom was
actually taken in Wittenberg.  It’s actually about a half – about 500 yards away from where
Martin Luther posted the 95 theses on the church door, in the same street.  And here you see
these old people who came in and actually improved their pension payments a little bit by
bringing glass bottles and everything.  You got 15 cents for every glass bottle you brought back
and so forth.  
 
Every marmalade jar was a deposit jar.  They didn’t throw anything away.  It was great. 
At the same time, they said, we have to do all this and we have to use lignite without pollution
controls simply because we have to spend so much money for armaments to ward off
imperialistic aggression, and you know who is meant there.  And that was one of the pictures that
demonstrated that fact.  
 
What happened in 1990?  Well, they threw out all of the pictures of the former
communist leaders on the trash dump, and they put up solar energies and this is a great place. 
Now, that top picture that is actually the schoolhouse in which – in the village in which I now
live, and this schoolhouse – this is the third highest indebted community in Germany.  After
Berlin, Bremen, we’re in third place.  Nevertheless, they had the money to put up a solar panel
like this or a solar installation.  How they do it was because of this feed-in law.  Not only did it
pay for the installation, it paid for fixing the roof, and they still make a profit.  That’s how
lucrative this is.  
 
The second one is in a community where I, in 1993, started the CO2 Model Community
Project that was the first project in Eastern Germany, and that was thermal solar collectors.  The
third picture on the right is right around the corner from where I live.  This guy has photovoltaics
and hot water.  As a matter of fact, the photovoltaics probably pay for the hot water, solar hot
water collectors, and so he gets hot water for free because the feed-in tariffs are paying for
everything, and that’s a combination of wind power and photovoltaics.  And that’s my personal
photovoltaic operation in another village.  You see a very, very old building, but nevertheless,
making money there too.  
 
And where is this village?  This is the village in which I’ve been living for the last 10 or
12 years and it’s now being half destroyed by an American company.  The American company
owns this coal mine and they told us in order to make sure that this company survives, we have
to destroy the village and dig up the lignite there and make big money.  So that’s the year 2005
up there, and that church has been – maybe you even saw it in the news here.  It was on a couple
of news channels, a church being moved in Germany from one little village to another.  That was
our church.  And the village is half destroyed now.  
 
However, the mining company is now going bankrupt because of – all the CO2 emissions
from lignite, so they’re up for sale.  The problem is that now the parent company, which just
came on the news today, NRG Energy – that was one of the two companies that owns this
mining company – they’re being taken over because they’re apparently bankrupt too.  
 
So our village is being destroyed and there’s a domino effect.  However, the company’s
just banked on lignite and because of the climate protection mandates – and I told you about
Spain before – they don’t know how to reduce CO2, so they have to make the price of CO2
emission certificates very, very high, and that’s causing all the lignite companies to start
perspiring.  
 
This is – however, what they did, in the early ‘90s, they put up these very modern lignite
plants.  Remember the picture I showed you of the East German lignite plant a few slides ago? 
This is a very, very modern facility.  It produces 2 percent of Germany’s electricity.  It’s the
power plant that – for which the lignite is being produced.  It’s destroying our village and it’s
about, I think, two or three times the Hoover Dam.  That’s how you can put it into a sense of
proportion.  So the very – that’s the most modern lignite power plant in the world.  At least it
was up to very, very recently.  
 
The very fact that Eastern Germany had produced so much lignite before and about-three
quarters of it was eliminated after German reunification has meant that all of – almost all of
Germany’s CO2 reductions had actually taken place in Eastern Germany.  You see how
emissions were in 1990 per inhabitant and how they declined.  
 
In West Germany very, very little happened and actually, in those three states, three
German states – I live in Saxony – 38 percent of CO2 reductions – simply because they closed
down all of these inefficient communist power plants – have been eliminated there – 19 percent,
15 percent.  What does it mean?  It means that 72 percent were done in these three states and the
13 other states have done the remainder, which is not really too much.  There are places in the
United States that are better than some places in Germany.  
 
So look at the climate change initiatives in the United States, like for example, in
Cambridge, where I went to college, or the Northeast in general, California, and so forth.  There
are lots of packets where – New Jersey.  New Jersey is the first state to declare CO2 a pollutant. 
So this is something that we could adopt in Europe as well.  It would ease a lot of legislation
there, I think, just to say, okay, it pollutes the Earth.  
 
You see how close Germany has gotten not to meeting its Kyoto targets and as soon as
those power plants – you see, it was doing quite well until the new power plants in the Eastern
Germany came in and the lines sort of flattened off.  Now, some of the older power plants have
been finally retired.  They might meet their Kyoto target, they might not, but Europe as a whole
will probably not.  And the reason is – that Germany is sort of on thin ice too is the fact that they
are phasing out nuclear power at the same time.  Now, nuclear power produces over a quarter of
their electricity.  So if they’re going to do it, they’ve got to build new – more coal power plants
because they don’t know – renewables are coming – we’ll look at it later – but not fast enough.  
 
Germany is the biggest producer of lignite.  Lignite, by the way, is what they call brown
coal.  It’s sort of a halfway point between peat and soft bituminous coal.  You have it in the
United States in North Dakota, Wyoming, and Montana, and also in Texas.  And when you burn
one ton of lignite, you get one ton of CO2 because, as you see there, the relationship, it’s about
one-third carbon and over half of it is just water.  And then the carbon combines with oxygen
and gives you a molecular weight to 44, brings you back up to the same weight as the lignite,
including the water, that you would burn to begin with, okay?  And then what happens if you
have emissions trading?  
 
Well, lignite is very cheap.  That’s why they’re using it because it’s surface mining. 
Surface mining is the cheapest way to get something out of the earth.  So it costs €15 a ton. 
However, the emissions trading price is €30 a ton now and maybe even going up more.  If they
can’t meet the Kyoto targets, well then, it’ll go up.  So that means it effectively triples the cost of
lignite, and that’s why the mining company in our area is going bankrupt.  And that’s one of the
reasons – one of the many reasons that NRG Energy has lost some book value because the banks
just won’t give them any more credit to set up new power plants.  
 
Okay, now here’s the problem in Germany.  In the year 2010, we’re going to have 23
percent  nuclear power CO2 free, 17 percent renewable energies, and coal, lignite, and gas
generates the rest.  Okay, 2020 will have almost no nuclear power.  Renewables will go up to 30
percent, according to the government, so that’s means that the rest, 67 percent, will have to be
taken over by fossil fuels.  That means that CO2 emissions are going to go up.  
 
And then 2030, we’re going to be better off with renewables, but coal, lignite, and gas are
not going to be down as far as they should be to meet the CO2 reduction targets they have hoped
for at that time, unless we get energy efficiency going.  And that’s one of the ways where the
United States and Germany can cooperate.  I’ll show you that later.  
 
Okay.  A lot of people talking about carbon capture and storage – the problem with that is
you need more energy to capture the CO2 and to compress it and to send it through a pipeline and
pump it underground somewhere.  And all of the – and because you’re using more energy, it
means you need more cooling water.  So if you have a CCS power plant, it means that double the
water is needed in some designs, and that makes it prohibitive, let’s say, for the western part of
the United States.  There are lots of power plants now that can’t be commissioned because they
don’t have enough cooling water.  And if you add this process to it – well, then you just can’t do
it in that place any longer.  
 
And even in Germany, in Eastern Germany, we have lots of places where the water table
is declining so fast – as a matter of fact the Spree River – Spree as they call it German – runs
through Berlin.  At one time the water table declined so much, it started flowing backwards,
outside of – back to where it came from.  Germany – it’s really not known, but Germany is going
to have a water problem in 20 or 30 years too, along with Poland and Hungary, places like that. 
Anytime you talk about a power plant, always look at the water reserves there.  
 
Oops – what have I done now?  Oh, well.  Maybe I’ll have to go back up.  I don’t know
how you get rid of that thing.  All right, let me see if I can do it up here.  Okay.  I just wanted to
go back one because I skipped a slide.  Did it again.  Oh, yes – previous, okay, good.  
 
Okay, this is – Mr. Soos has already told you about this.  This is the renewable energy
law, what it’s brought us on CO2 emissions reductions already.  And that’s the German
Erneuerbare Energien Gesetz.  In the English it’s the Renewable Energy Act.  So that’s you’re
German lesson for this evening.  And Mr. Soos has told you all about this already, so I’ll just
breeze past it.  
 
And they’re not subsidies.  That’s very important.  Every time people write about
government support has made this possible in Germany.  No, the government is circumvented. 
There’s no government funding involved and we just simply have fixed prices.  Now, everybody
says, oh, fixed prices, that must be communist or something like that.  We have that – if you buy
a newspaper in the United States, you also have a fixed price, don’t you?  It costs the same
everywhere, no matter where you buy it.  You could be right next to the printing house or you
could be 1,000 miles away or in Alaska.  It’s the same price everywhere.  And so you have lots
of fixed prices already for things and they provide enduring economic and social benefits
regardless of how the market performs.  
 
These are the old tariffs and the new tariffs.  I won’t go into those in detail.  I just want to
point out the very last thing, down at the bottom.  This is a new feature starting in 2009, that if
you have onsite PV usage – just like this house from Darmstadt that won the competition here
last year – they generate their own electricity and that in the future is also going to be honored
with a special rate.  So this is really, really progressive.  
 
And the digression rate means that German manufacturers are forced every year to make
their prices less expensive because the feed-in tariff is going down and if they want to stay in the
market, they have to cut their prices.  
 
There are alternative ways of doing it.  There are so-called renewable power certificates,
like for example, in Great Britain or in Italy, but they make renewable energy more expensive
than countries that use feed-in tariffs.  So don’t do it that way.  Do it our way.  (Laughter.) 
Okay.  Here’s – you’ve seen these graphs too, except they’re being outdated from day to day,
even as we speak, because this law is just so progressive and so effective.  
 
And here’s German wind power statistics.  I believe you’ll all be able to download my
presentation from the website afterwards, so I won’t go into this in detail, but just success stories.  
 
Here’s – over there at the right-hand side is the way the feed-in tariffs work.  You have
two power meters.  The green one is measuring your consumption and the yellow one is
measuring what comes out of the solar equipment.  One has nothing to do with the other – none,
nothing whatsoever.  As a matter of fact, you could be a different person.  Let’s say, if you don’t
want to put it up, you can rent your roof to somebody else, and he can do it with a second meter. 
And that’s the way – it makes every operator a – his own power plant operator and half a million
of them in Germany already.  
 
Here are the photovoltaic operations, the factories in Germany and you see a good deal of
them are in Eastern Germany.  For the first time, young people are coming to Eastern Germany. 
Otherwise, people are leaving because there’s no work, because communist industry was so
ineffective that they closed most of the factories and young people had nothing to do but to leave
and go to other parts of Europe.  However, they’re returning now to work in these solar factories. 
So anytime you have an economically depressed area in the United States, put up a solar factory
and you’ll have people employed.
 
And manufacturing statistics – this is interesting too.  Everybody thinks that large-scale
photovoltaics is very, very important.  It is in Germany too and especially in Eastern Germany
because we have a lot of contaminated areas that were formerly military bases of the Soviet army
for example, or they’re airports, things like that – a lot of area where they let all sorts of oil into
the ground or there might be munitions residues, whatever.  There’s nothing else you can do, but
put up a solar farm there.  Now, nobody’s ever going to build a house there.  
 
And so that’s why from year to year, the large-scale photovoltaics systems up – is up into
40 megawatts or even 50 megawatts – I think they’re building one now.  Nevertheless, as big and
as impressive as these things are, they’re less than 10 percent of total capacity in Germany.  Over
90 percent is people’s roofs.  
 
And there’s a big conversation, a big discussion in California now about whether they
want to put power lines from these big solar farms out in the middle of the desert and lots of
people resisting up at things in the desert, but the power lines, and they’re doing too little on
rooftops in California.  Again, if you had a feed-in law modeled after Germany, you’d start the
other way around.  
 
And then also biogas, as very few people know about that – Germany’s the leader in
biogas.  One company called Schmack – S-C-H-M-A-C-K and they’ve done 3,500 of these
things at least, maybe even more and they have a representative here in the State of Ohio.  And
any time you have livestock under one roof, you can take their manure and put in this thing and
generate electricity and you see how effective it is.  Next to wind power, it’s the second most
effective thing that’s being done in Germany with renewables.  
 
And redistributing these payments to everybody gives you only about 3 percent total
power expenses.  However, this is really minuscule, small – I don’t know to pronounce that word
anyway – because CO2 emissions trading is going to make fossil fuel generation so expensive
that photovoltaics are just going to be cheap, cheap, cheap and you’ll see that coming.  
 
Renewable energies on the electrical power grid, 37 percent increase in only two years
and also – Mr. Soos talked about this too – we’ve avoided so many fuel imports.  The benefits of
climate and air pollution have gone – added extra benefits.  Power purchases have been
eliminated.  So you really come up more or less on top – of course, according to whom is doing
the calculation because the fossil fuel industry has its own calculations that prove that this is
worthless.  So I don’t know.  Take the middle ground and draw your own conclusions.  
 
I drew up these graphs just to show you how effectively this digression rate lowers costs. 
In other words, the quicker you are, the more money you’re going to make unless the
manufacturer lowers his prices accordingly because the digression really lowers the amount per
kilowatt hour, unless the investment down per kilowatt peak has become less expensive too. 
That’s where – these are for roof arrays and so forth.  Good.
 
And here’s what you really have to see.  This is – the digression rate is pushing down the
prices of the feed-in tariffs, and we already pay €0.20, which about $0.30 per kilowatt hour now
in Germany for power and it’s keeping – and continuing to go up – much more expensive than
the United States.  But we’re going to reach what they call grid parity within five to 10 years. 
That means that the photovoltaics, when the sun is shining, are going to be producing electricity
at the wall socket, not at the power plant, because they don’t exist there.  They exist at the
person’s home, where either he buys in electricity from the power company, or he generates his
own and it’s going to be about the same price during the daytime in about five to 10 years.  
 
Now, of course, you can say, well, in the United States the curve is much lower.  Yes, but
in the Southwest you have twice as much sun, right?  So you get twice as many kilowatt-hours. 
So it sort of equalizes that out, plus the fact you have air conditioning in the United States that
we don’t have in Germany, so you need the power at the middle of the day.  And the DOE in the
United States predicts that grid parity is going to be reached in 2015 with solar if prices are
reduced by 50 percent.  
 
Well, the 50 percent price reduction is being accomplished by Germany with the
digression of the feed-in tariffs.  So we’re sort – Germans to the front; this is the way it goes. 
Germany gets the prices down and America comes in at the second wave.  And I did work for an
American company once; I was a representative.  We were making – remember what a pickup
cartridge was?  Remember what a phonograph record was back in the old days?  Okay.  And so
we manufactured those things here in Connecticut and I was the German representative.  I
discovered, however, all of a sudden an order didn’t come into Germany because they’d send an
order to Chicago.  I found out as a rule of life that the market in Chicago is more important than
market in Germany.  
 
You have such tremendous quantities here of things that are sold if you get the market
aligned.  And obviously, in the American Southwest, you’re going to be able to sell
photovoltaics to practically every community, dozens and dozens and dozens of them, if you get
the right legislation in place and people sort of realize that this is the coming thing and it
becomes so attractive because it comes cheaper and cheaper.  
 
In Germany, we also now have 1/10,000th of our electricity supply being produced
completely with renewable energies and on a dispatchable basis.  It’s just an experiment really,
but showing that actually you could do it.  You could probably get several percent where you
could say, no matter what time of day or night, something is going to be running, up and running,
so I’ll be able to use that electricity.  It’s just really – and more an experiment than anything else,
but it shows you that’s theoretically possible in certain situations.  
 
Now, here’s where it starts getting a little bit thorny though.  What do you have to do to
replace everything with renewable energies, all this nuclear power and so forth?  Well, we have
about something more than 600-terawatt hours, in other words, billion kilowatt-hours in
Germany.  You don’t have to replace all of it because some of it, you want to have with, let’s
say, natural gas, generating – natural gas is being used to heat homes everywhere.  So why not
use it at the same time to generate electricity, on a decentralized basis using coal generation,
okay?  
 
So you can eliminate coal generation from the calculation and just say, okay, whatever is
left, whatever we need to do on a large scale, what’s it going to be?  Well, offshore wind energy
is going to be a big chunk of that.  How are they going to get it to work?  They’re not so sure, not
as many as they need.  And if they are going to do it with the onshore part, is fine, if you put
them all near the seacoast, but I don’t know if the people are going to be all ready for that.  So
you have to distribute them throughout Germany, and there’s not as much wind as there is on the
seacoast and so forth.  So you really probably need more than what this calculation has told you,
you would need, and solar, however, is going to be a small, but more significant, part than it is
today, and biogas also.  
 
Here are some of the conflicts now.  First of all, electrical power usage, in the timeframe
1990 to 2020 in Germany, is going to increase by 23 percent.  Now, remember, we have
basically – I didn’t tell you that.  We have basically no population growth in Germany and
actually, in all of Europe.  In California between 1990 and 2020, it’s 47 percent more population. 
So anything you look at in Europe, you’re going to have to add this factor of population growth
in the United States because of the increasing number of people you have here from year to year. 
So it’s even more difficult in the United States.  
 
And so what’s going to happen?  Twenty-three percent more electricity and what they’re
doing in Germany is keeping the old power plants running for a longer period than they should
be because they’re also phasing out nuclear.  So coal power plants are running for a longer time
than they thought they would be, so more CO2 – nuclear power reduced only to 3 percent. 
Renewable energy generation, seven-fold.  You’ve got to increase it seven-fold, from 4 percent
to 30 percent in this 30 years, and twice as much as we have today, we have to have in another
12 years.  
 
It’s going to be tough, but we can do it, I think, in Germany.  And then overall CO2
reductions by 40 percent between 1990 and 2020 if the expectations – and the problem is that
half of it’s been accomplished in Eastern Germany up until now, but we don’t have another part
of Germany we can reunite with, so we’ve got to do it ourselves now, guys.  (Laughter.)  That’s
going to be tough too and only in 12 years.  We’ve had 18 years to do 17 percent and now the
next 12 years, the German government wants to get 23 percent more, difficult.  
 
Okay.  And they do have – in Europe, it’s called the 20-20 by 2020, reduction of at least
20 percent in greenhouse gases and 20 percent share of renewable energies.  The current level is
8.5 percent.  This is not only renewable energy power, but everything renewable, 20 percent, but
a stable population.  The United States – population increasing.  Reducing greenhouse gas
emissions by 30 percent is contingent on comparable resolve by the United States.  In other
words, if the United States gets onboard, Europe will also do more.  And then they add that 20-
20-20 target.  They want to also increase energy efficiency by 20 percent.  
 
However, they’re also talking about carbon capture and storage.  The target of having the
1990 emissions by 2050, which is what they’re talking about Europe-wide, is only if they use
carbon capture and storage.  However, if they use carbon capture and storage, then they’re going
to need 30 to 40 percent more coal because of the energy efficiency of these processes.  I don’t
think all this is going to happen, at least not the way they’re talking about it today.  
 
And then, here’s a comparison now between Germany and the United States.  The green
line down at the bottom is Germany.  You can see no population growth, 23 percent more
electricity in 30 years.  Yes, okay, you can sort of see it happening, but look at the United States. 
The capacity additions in the United States are far more than what we’ve got in Germany in total. 
And it’s just mind-boggling to see – and then I hear that Al Gore comes in and he gets a million
people to sign up on the internet that they want all of that done within 10 years with renewables. 
That’s what he says.  I don’t think – these guys are not even budgeting yet and he wants to have
it all done in 10 years.  It’s not going to happen because there are so many impediments.  The
other side always fights back, but we’ve got to do something.  
 
What we have to do is reduce entropy and I think you know what the definition of
entropy is.  It’s a randomness, or disorganization.  It means that anytime you use energy, you
generate heat, and you can’t use the heat for anything else, at least not for the original thing you
were doing.  
 
And then Norbert Wiener from MIT – he’s the guy who invented cybernetics and he
points out – this is the most important sentence I think that he wrote in this context – that
processes that would lose information are the same as – closely analogous to processes which
gain entropy.  In other words, the more energy you dissipate means that the less information you
had ahead of time about what you should be doing to begin with.  The more information you
give a decision-maker – put it at the disposal of a decision-maker, the more intelligent decisions
he will make and the lower the energy consumption will be.  
 
It means in a practical context – well, the second thing is the sampling theory.  It means
that you have to control – if you’re controlling any process – let’s say you’re heating and you
want to keep your fish aquarium at a constant temperature, okay?  So it goes up to a maximum. 
Oh, it’s getting too hot.  So you have to turn off the heater, and then it starts cooling down and it
gets too cold.  Then you have to turn it back on, the heater that you have for your aquarium for
your tropical fish.  That means that you were actuating the switch there twice as often as the
process that you’re trying to control, of keeping it constant.  And that means that no matter what
process you want to control, you have to give a decision-maker information at twice the rate of
the rate at which he’s supposed to react.  
 
And Germany, it’s the most backward system.  I used to say – I used to think that it was
so antiquated that – as old as the German Kaiser himself, but in the German Kaisers’ time, they
did it more intelligently than they did about 50 or 60 years ago.  It was the same period where, in
the United States, you say, energy, too cheap to meter.  And that’s what they thought in Germany
too.  And in Germany today – you won’t believe it – they have Porsches.  They have
photovoltaics.  They have this and that, but we only get a power bill once a year.  
 
And so you can’t even tell what your seasonal variations are in using power, and nobody
knows anything in Germany about what power you use is, except, yes, this is a little bit more
than last year, a little bit less.  But at least in the United States, you get a monthly power bill and
you have Energy Star billing, which means that it shows you the last few months what you
consumed ever month, and you can sort of figure, am I using more this month or less?  And the
power consumption goes up when you get a plasma television set or something like that.  
 
Germans don’t really know any of that information.  So that’s where the United States,
the information, and also the technologies developed in the United States, could be a big help to
Germany.  And electronic power metering is capable of reporting changes as they occur, in other
words, on a real- time basis.  If you have a little display panel in your house, you always are
aware of what the power is being consumed in your house and ultimately, how it’s related to the
environment as a whole because you can connect all of these things.  What’s happening at the
power plant?  What’s happening with the environment and what is going on with your
consumption?  And those are all filtered into your usage decisions and you change your
consumption accordingly.  
 
There are EU directives on metering transparency.  They’re starting to enact that in the
European Union and they do say, you have to give billing information frequently enough to
enable customers to regulate energy consumption.  And that’s very, very important.  That’s a
major change.  The problem is it’s still very, very chaotic in Europe and so there are only modest
prospects in Germany that they’re really get a leg up on this.  Starting in 2010, all new and fully
renovated homes in Germany have to be equipped with an intelligent power meter.  It’s a good
thing.  
 
However, the organizations say that even by 2015, only 25 percent of all households will
be equipped in Germany.  In the United States, you’ll probably have 80-90 percent, something
like that, by the time, if not 100 percent, because basically every power meter here that now gets
installed in the next couple of years, it’s going to be an electronic one.  In Germany in 2015,
we’ll only have maybe only 25 percent.  So obviously, there’s a market opportunity for
companies here.  
 
And actually, Germany might be the last country with manual meters in the EU by 2020. 
And so therefore, it doesn’t help Germany at all in reducing CO2 emissions because it’s just so
incoherent and German politicians apparently have not realized what the United States could
offer them in furthering this possibility, except for a few people in some of the ministries who
are starting to get projects going.  And there’s a so-called ICT, Information Community
Technology, and E energy program that is being implemented.  
 
What are you going to do?  One of the arguments against it in Germany is that the
Germans use so little power.  We don’t have air conditioning; we don’t have big houses.  We
have – or not as many people have big houses like they have in the United States and so forth. 
How much can you save?  
 
What you can do with these electronic power meters is you can use them for
environmental monitoring, measuring electricity, heat, and water, and home surveillance.  In
other words, it’s a computer that’s running 24/7, so you can use it for other applications and
defray costs that way.  And we’re getting into that slowly but surely, at least very, very advanced
projects are.  
 
And there are the names of a few of them in Germany in Aachen, the city of Aachen, –
(unintelligible) – Mannheim, Rhein-Ruhr, and also in – (unintelligible) – which is in Stuttgart
and Karlsruhe.  And of course, we’ve heard Kaiserslautern there at the air force base.  
 
And ultimately, utilities are going to be operated in virtual space and this works very well
in Germany.  We have a liberalized energy market.  You can get hundreds and hundreds of
different companies to give you a price on the electricity to use in your house and you can
change power suppliers every month if you want to, to get the lowest price and lots of people use
that service.  There are just millions and millions of Germans who no longer use their own utility
– their own utility is still obligated to give them electricity all times.  Even if the company that’s
supplying electricity goes bankrupt, well, they have to revert to their old system then
automatically, but you can save 20 percent on power bills that way.  So that works very well.  
 
Here now are some proposals on what we could do together.  Let’s get these virtual
utilities going.  Let’s get German-American cooperation in developing the software, so that on
these in-home panels people can say, hey, what am I using for electricity?  How can I simulate
the addition of a solar panel?  What’s the lowest price can I get?  How much CO2 is being saved,
and so forth.  I think this is a very, very fruitful area for both sides to work together.  
 
And we talked about this just before.  We want to try to set up a bilingual cost benefit
energy website between Germany and the United States, so that people also with a little bit of a
knowledge of German or of English can work on the site together and exchange views and
viewpoints.  There are lots of websites or blogs, where people actually can get it.  The Internet
Movie Database, look at the German movies there.  You’ll see lots of people trying out their
German there and vice versa and so forth.  And so you can get something like that going here on
this website with energy usage and CO2 reduction and renewables.  
 
Joint investment strategies – why not buy components together for things that you need? 
If there’s a project in Germany and a project in the United States, we’ll get some solar
manufacturer to offer you a bulk rate for installations in both communities, one side and the
other side of the Atlantic.  
 
And then energy security trade regulations, how about import-export controls on CO2
intensive capital goods and motor vehicles?  And why do I mention that?  It’s because – oops –
here’s my last slide.  Thank you for staying awake.  But this is the thing I – okay, all right.  
 
I told you about the CO2 Model Community, the one I was – I was so proud of these
people.  This was 1993 to ‘94.  It’s a little suburb outside of Leipzig and these people – they’d
just come out of communism.  In this little village, they put up 15 solar collectors.  This was
1993.  It was a long time ago.  They’re very, very happy that they have them today because
they’ve got very, very inexpensive hot water.  And so we saved a lot of CO2 from – with these 15
solar installations.  
 
And then in the same village – in the same village – Porsche put up its factory in 2002 for
the Porsche Cayenne.  And not only that, Mr. Soos told you before about the flooding of the Elbe
River – 13 or 15, I don’t know how much it was and it was a lot of money that it cost Germany. 
Chancellor Schroeder went to the Elbe River.  It was flooding and he said, we’ve got to do
something about climate protection.  And then he came to Leipzig and he dedicated this factory
for the Porsche Cayenne on the same day.  And just one of these cars, the Porsche Cayenne, the
top model, generates so much CO2 going 20,000 miles a year, it negates the CO2 aborted by 85
square meters of solar collectors which is about 25 installations – just one car.  
 
And this car has 38 percent more horsepower than a World War II Sherman Tank.  It
weighs 2.4 tons and the Sherman tank weighed 30 tons and these things are driving around in
Germany, and they’re exporting them to the United States, and now the gasoline is falling in
price so much, I believe a lot of people are going to be buying them again.  
 
So it’s rather frustrating to think that you want to do so much for renewables, but that’s
another thing for our in-home displays just to say what kind of house do I have?  What kind of
car do I have, and what do I want to give to my children?  And I think the children would like to
say, yes, I’d like to have a house that generates its own electricity, but ultimately, you’re going to
have to confront yourself with what kind of car are we driving and can we integrate that into the
concept?  That’s something for everybody to think about.  
 
Thank you very much for being so attentive for so long.  (Applause.)  
 
MR. BILLINGS:  Thank you.  What I’d like to do real quickly is just open it up to
questions, but to begin with, and this is – I’ll start with one question.  In terms of – for both of
you, and especially Mr. Soos – you look at the energy requirements in terms of renewables and
replacing coal-fired plants, and you look at the carbon emission issues.  And Germany’s made
great strides and is continually advancing in its thinking about energy technologies and things,
but it seems to be stuck in the 1980s with regard with nuclear power.  Is there discussion about
perhaps the ban being lifted?  What is going on in terms of discussion about nuclear power,
revival of nuclear power in Germany that would perhaps match the rest of the world?
 
MR. SOOS:  Yes.  Well, I don’t know if I would like to thank you for this question.  I
was afraid that you were going to ask for it.  (Laughter.)  Well, representing the embassy, the
government, I have to tell you what the government line on this is.  We have a grand coalition, as
you know forming the present government, and there is an underlying treaty between the two
parties forming this government to phase out the nuclear power plants by the year, more or less,
2022, 2025.  It’s not the year that counts.  The amount of energy these power plants will produce
has been limited.  Once they reach this limit, they will be phased out starting with the older
power plants.  So from the existing park, I think, seven have been phased out or four.  I’m not
sure about the number.
 
MR. MICHEL:  I think we still have 13.
 
MR. SOOS:  Something like that.  And this is an ongoing process.  Now, if we have a
new government constellation next year – we have elections in Germany next year – this might
change.  There are very important voices that say that this decision to phase out should be
reconsidered, but for the time being, this is the government policy and there is no way that it’s
going to be changed until the next government.  
 
MR. MICHEL:  I just want to mention one thing.  I did bring along a copy of a study that
I did on the German lignite industry which will give you a lot of statistics in general.  I’ve got a
full stack of them here in the back.  Feel free to take one home, if it interests you at all.  Thank
you.  Excuse me for interrupting.
 
Q:  Thanks very much.  You both alluded to energy efficiency at different points in your
talk.  And I’m curious about something you didn’t talk about that much which is energy use in
buildings.  And I used to live in Northeast, and I lived in a drafty old house in the Northeast and I
always was very conscious in the winter of how much heat was going out through the cracks, and
I’m thinking it was probably a lot like Germany.  I think of Germany as kind of a cloudy, cold
place.  
 
So I’m wondering, given the kinds of progressive institutions and progress that you
describe in Germany, what kinds of information does the government have or do the industries
have, and what kinds of institutions could you imagine in Germany, or do exist now in Germany,
that are designed to increase the efficiency of existing buildings throughout the country?  So can
you imagine, or is there already a nationwide program in Germany to reduce CO2 emissions, to
increase energy efficiency by changing the built infrastructure, and could that kind of a model
help us here?
 
MR. MICHEL:  East Germany is really the model for the world – East Germany, 15
years ago, when everything was so – the reason being, in communism – if you know anything
about the system, the communists put in a rental structure where you paid the same rent in 1985
as you paid in 1920 because they said prices will not increase since communism came into being
in the Soviet Union. That meant that you paid $30 a month rent.  That meant there was no money
for renovations of the house because it was so cheap.  
 
So after German reunification, they really replaced the heating, the windows, the
insulation of practically every building where people are living in East Germany.  So it was a
strategic effort and it got done within three or four years.  
 
How did the German government do that?  They classified the different types of houses
and they brought out a whole series of brochures saying, okay, if you’ve got this type of house,
this is what you do.  And you could just leaf through the pages and the companies, the
contractors, that were doing this were also well informed about this is the type of house where
we follow this procedure, we get this energy efficiency.  It worked very, very well.  
 
And now, Mr. Soos can probably give you more details on this.  They have increasingly
stringent regulations for all of Germany about new homes and renovations.  They can’t do
anything about existing infrastructure if people don’t want to do it, but anytime you renovate in
Germany, you have to follow these regulations and they’re very strict.  Isn’t that correct?
 
MR. SOOS:  Yes, that’s absolutely correct.  And I would like to add that there are a
couple of new legislations and programs being prepared, or have just recently been adopted by
the government – for example, that houses, new homes that are going to be built as from 2010, I
think, will have to fulfill a mandate of 10 percent of renewable energy utilization.  So you have a
new home and 10 percent of the energy the home uses must come from a renewable energy
source.  That’s not only electricity; that can be heating as well or cooling, depending. 
Altogether, it is a set amount, a mandate.  
 
What does it mean?  That people will have to invest to make their houses do this, to
consume energy from renewable sources and again, for that, there are a couple of – again, there
are subsidies, there are programs, there are incentives, positive incentives, for those who take
these measures up.  
 
One other thing I would like to mention is that heating is a very important issue.  We are
planning to have the same kind of feed-in legislation for heating as there is for electricity, so that
it works on the basis of heating grids, urban heating grids.  You need to have the combined heat
and power production, but it leads to the necessity of the grid owners to provide a certain amount
of heat from renewables, from renewable energy sources, be it biogas, be it wind or whatever.  
 
So I can’t give you all the details.  I can give you the information where you can find
these.  There is information in the internet about all the details.  They’re abundant and they’re
very complicated, but, yes, the answer is on buildings and energy for buildings, electricity,
heating, cooling, a lot of things will happen and are happening already.
 
Q:  Mr. Soos, I’m interested in your numbers on job creation as a part of these renewable
energies.  What sort of job skills and did the government help in mandating any training or have
job training as a part of that?
 
MR. SOOS:  Yes, well, as far as I know, there has not been a specialized program,
training program or professionalization program, to accompany this law, this legislation.  The
market created the demand for these jobs and the market also created the demand for the training
of such professionals.  Now, the overall educational system in Germany puts a very strong
emphasis on vocational training, which is maybe a little bit different from here in the United
States, if I understand it well.  Vocational training takes part from a very early age.  In school,
there are –
 
Q:  You actually train your people to be workers?
 
MR. SOOS:  Well, high-qualified workers.
 
Q:  I understand that – more than McDonald’s.
 
MR. SOOS:  Let me give you the picture.  The workers we would like to see are those
that can handle a screwdriver and a laptop equally well and that’s what these schools are doing. 
Thank you.
 
Q:  Thank you.
 
Q:  Yes.  Mr. Soos, I found these presentations very interesting, and I sympathize with
Germany in trying to meet the Kyoto accords.  It seems to me that you’ve accomplished a great
deal in East Germany, but particularly with the phase-out of nuclear power, it is going to be a
challenge.  It’s also going to be a challenge in the United States and in many other countries.  
 
And given that situation, I’m wondering what the position of Germany is likely to be
going into Copenhagen.  Are you thinking that we should try to keep the Kyoto process going, or
should that be scrapped and something new developed that includes countries like China and
India?  What’s your thoughts about where you’ll be coming in to Kyoto?
 
MR. SOOS:  Let me give you two answers because you had two questions there.  First
one, concerning the challenge of reducing the carbon emissions by almost 40 percent by 2020,
that is going to be, indeed, very difficult and I underlined that we know that it’s a very ambitious
target, but we still think that it is possible because all the calculations have been done.  We look
back at some experience, and if you remember the slide where I showed the 270 metric tons of
CO2 that have to be reduced, the next slide was one of the eight sectors where that – so it has all
been calculated and not only by the government.  
 
McKinsey has been asked to produce a report if that is feasible, not by the minister of
environment, by the way, but the minister of economics was very skeptical that is feasible.  And
the surprise of this report by McKinsey was, yes, it is possible.  You can reduce 35 percent of
emissions without major economic costs for the economy.  Now, from there on to the 40 percent,
the costs will increase exponentially, meaning that it’s going to be harder and harder.  The
economists among us they know that these are the marginal costs and they grow at very high
rates.  
 
Now, having said that, we are confident that we can achieve this goal.  And Germany is a
pioneer in climate policy and in this modern energy policy, and therefore, we definitely believe
that we should continue this effort towards Copenhagen, and that in Copenhagen, as planned, we
need to have an agreement on a global arrangement to reduce greenhouse gas emissions after
2012.  That is absolutely necessary.  
 
Now, the big question is how do we get there, since so many countries are on a different
level of capability also to contribute to this reduction?  And there, as you know, our approach is
to say that the industrialized countries have to be the first movers, industrialized countries,
because of the historic responsibility, but also because of their capabilities.  So we have to do the
first step, but then, emerging countries and developing countries have to join in shortly after.  So
that would be more or less the sequence.  
 
I’m not in a position here to detail how the negotiation position is going to develop.  This
is an international negotiation, of course, but maybe very shortly to your answer, yes,
Copenhagen and the UN process is important and we would like to stick to that; and secondly,
we would expect all industrialized countries to undertake the same level of effort as the
European Union does and Germany does.  The details can be negotiated, but that’s the starting
point.  And then, the developing countries and especially the emerging countries also have to
take up own commitments to combat climate change in this global agreement.  
 
Q:  Sam Usak (ph) from George Mason University.  As you know, the fossil fuel burning
is one of the leading causes of producing CO2.  In fact, over 50 percent of CO2 emission is
produced by fossil burning.  Your government seems to be taking its time when it gets to
reducing the coal-based factories.  When you compare that to the nuclear power plant, it seems
like you’re in a hurry of shutting down your nuclear-based plants versus your coal-based plants. 
So I’m just asking why not reduce them both at the same time and increase your renewable
energy sources?  Why is that?  
 
MR. MICHEL:  It has a lot to do with the history of the last 25 years.  I mentioned the
Chernobyl accident that really put the fear of God into Germans.  There are still places –
Germans loved to go out to pick mushrooms in the woods and they’re still radioactive in some
places.  There’s a second factor too that anytime nuclear waste is transported through Germany,
they have to mobilize the entire country’s police force because so many people protest against. 
It cost something – one time, it cost €400 million to get all the police out.  The transport
continued on through France and they had two policemen on motor scooters accompanying it. 
Nobody protested in France, but Germany mobilizes against these things.  So politically, it’s
almost suicide to pose the possibility of reintroducing it.  It’s just too expensive to do it at the
present time.  
 
So then why don’t they do coal power plants at the same time?  Because renewables, as
attractive as they are, are also difficult to implement in many areas.  As I mentioned before,
offshore wind power is going to be the answer when it finally gets developed, but it’s very, very
expensive.  Onshore, we’re running out of places to put it up unless communal and regional
regulations are changed about where you can put up wind turbines.  There’s just so much
livestock in Germany, and there’s so much woods, and so forth, after a while, they’re starting to
run out of sources for renewable energy.  
 
So what Mr. Soos has pointed out now is that we’re looking much more closely at
buildings saying, wait a minute.  As much as industry is doing, buildings are even probably –
basically, you have three sectors: industry, motor vehicles – we talked about that – and then
buildings, and buildings have been neglected and so now they’re concentrating on buildings to
reduce CO2 that way.  
 
And how we’re going to get around the nuclear issue is the following, that they say that
in Germany – first of all, 70 percent of the people in Germany live as tenants – in others words,
they’ve living in apartment houses, so you’ve got a lot of people closer together.  And you have
– most of the apartment houses are being heated by gas, and so they say why build a nuclear
power plant, rather than use this gas to generate electricity first as it’s generating the heat.  So
they want to increase co-generation as much as possible in this area and at the same time,
insulate the houses so well that they need less energy to being with, and use that as a model for
the rest of the world because you have the same problem everywhere.  
 
Not every country has nuclear and not every countries – most countries don’t have coal. 
So you have to develop a model that is applicable, and immediately applicable, to any other
industrial or even emerging nation.  And this is the formula, I think, that’s going to work.  It
might not work as well as the Germans hope, but it’s working a lot better than any other
strategies we know about anyplace else in the world.  So that’s the way we’ve got to go.  
 
And that’s what you really have to discuss, I think, in Copenhagen, in what they call the
Kyoto aftermath process is if we put buildings first, how much can we accomplish that way? 
And how – can that also be the way to achieve our goals that we think are necessary or how
much do you have to add in each traditional country to make a international consensus possible?  
 
One thing – when I talk about power meters, one thing is that these power meters are
going to be incapable of registering heat at the same time, and we discovered in Eastern
Germany – you probably know in Eastern Europe, they have these communist apartment
companies.  Every apartment looks exactly the same as the next one.  There’s sometimes heating
usage between one apartment and the next is two to one or three to one.  People just don’t know
that the guy next door is using only a third of energy that he’s using.  
 
So you have to do a lot by cross-communication between similar usage situations that’s
going to reduce the entropy as Norbert Wiener said it would.  So information technologies and
concentrating on buildings would probably be the most important single steps that you can apply
everywhere, no matter if these people have a lot of cars or few, they’ve got coal or not, and so
forth.  That’s one thing – everybody lives in a house somewhere.  
 
MR. BILLINGS:  The last three questions here.
 
Q:  Yes, my name is Bahri Aliriza.  I’m with Polytrade International Corp., and my
question is for the speaker that was talking with regards to the lignite – for the coal.  Here in the
United States, we have very limited money for research and development for new technologies
for environment and energy, and I think we’re lagging well behind Europe as well as Japan.  
 
I was wondering if you could tell us with regards to Germany, specifically, how they are
doing with the research money that may be available?  And also for a small company that may
have a technology that can increase fuel efficiency by about 300 percent – and I’m talking about
going from like 30 megawatts to like 90 megawatts and also reduce emissions at the same time at
78 percent – how easy or hard would it be for a company like that to get money or research done
in Germany?  
 
And I’m saying that specifically because you mentioned that coal is going to be the
biggest energy source in the future for Germany and that definitely is what’s happening here
because we have a lot of coal and we are running out everything else and everything else is very
limited in the availability.  Thank you.  
 
MR. MICHEL:  I could give you a lengthy answer, but I’ll give you a simple one. 
There’s a marvelous institution called Invest in Germany.  Just look it up on the website, Invest
in Germany, and they have offices throughout the United States.  They have some in Germany
too, but they’re centered in Berlin.  It’s their purpose to find American companies that want to
invest, if they have the money, but otherwise, at least catalyze investments in Germany,
especially in eastern Germany.  
 
If you do anything – if your process does anything to create job perspectives in Eastern
Germany, they’ll roll out the red carpet for you and they’ll find out every possible way to fund
and you can fund at the local level, but also the European Union.  Eastern Germany is still
economically so depressed, even after 18 years, that they are still what they call the target one
area in Europe.  They get preferential treatment for European funding.  You won’t find any better
funding opportunity anywhere in the world as far as I know.  And all you have to do is contact
these people because they are equipped with all of the answers on questions like that, and they’ll
also be able to direct you to connect you up with German companies that are working in
technologies in that same area.  
 
And at the same time, don’t forget – these German companies are interested in
developing their American markets, so you could perhaps work out a deal where they’ll be able
to cooperate with you in a way that you can represent their interests here or find somebody who
does here because they can’t cover the whole of the United States.  It’s just too big for them. 
They’re small companies too.  They’ll need somebody on this side of the Atlantic to do the job
here.  So I think that’s an excellent possibility and most people just don’t know about this
organization.  They’re professionals and they’re doing a better job than you can imagine.  
 
MR. SOOS:  Just a quick comment on this.  I have brochures with me of Invest in
Germany concerning the photovoltaic sector in general, so I’d be happy to distribute those after
the meeting.  
 
And one more thing, to mention one U.S. company you may have heard of, First Solar is
one of the few American companies, a couple of American companies, that went to Germany to
invest in the renewable energy sector.  They have a factory close to – in East Germany in
Brandenburg with 700 employees, and now they’re one of the big players in photovoltaic films
manufacturing.  They have a manufacturing site in Ohio.  They’re expanding to India and all this
was started up in Germany because of the feed-in tariff.  So it’s an interesting success story of an
American company using Germany as a springboard for a global and also U.S. presence.  
 
Q:  Thank you for all the numbers tonight.  I didn’t absorb all of them, but I’ll look at
your website, but one of the sets of numbers that I did not quite capture deals with the other
reason that this group comes together to talk about energy.  It’s not just emissions, as important
as petroleum emissions are.  As you know, listening to the American political scene, people are
also worried about having to import energy, and I didn’t understand from the discussion tonight
if Germany is on a down slope or an upslope on total energy imports.  I think I heard that you’re
not importing electricity from Poland or France or Austria or somebody, but I didn’t hear if
you’re declining in your importing of natural gas, or oil, or coal, or any other energy source that
doesn’t come to mind.  Could you talk about – are you reducing energy imports?
 
MR. SOOS:  I’ll try to give a quick answer to this.  We are equally dependent on natural
gas as the United States probably is on oil.  What oil is for the United States, it’s gas for us.  It
comes from our neighbors.  That is one thing.  Natural gas is growing as a resource.  Why? 
Because it replaces coal.  It’s much – with the aim to reduce the greenhouse gas emissions, it’s
much more favorable to build natural gas power plants, and to build one takes only one, two
years, and the coal-fired power plants will take 15 years and is also combined with this high risk
of an increased cost through the emissions cap and trading.  
 
So what we foresee is that in the future, you will see coal-fired power plants, new ones,
coming to the grid only if they are already – they have to be already CCS-ready and they will be
combined heat and power plants.  So those are the coal plants that have a future.  All in all, the
energy consumption in Germany is growing, but at the very low pace and it depends, in our case,
not on demographic development, but on the economic development.  When we have economic
development, of course, it goes up.
 
Q:  I think I’m hearing you saying that your imports of natural gas will continue to go up.  
 
MR. SOOS:  Will go up.
 
Q:  And you’ll therefore be sending money to the sources of natural gas.
 
MR. MICHEL:  Yes.  There’s a – you have to look at this at the European level really. 
There’s an EU white paper called “Towards Enhanced Energy Security,” but if you look at the
curves, you would think you were looking at the curves of the United States.  Europe is in the
same situation the United States is.  Europe, except for Germany, Europe in another few years
will have no more coal, so they’ll have to import all their coal.  And Russia just announced that
they are increasing their gas exports to Western Europe by 40 percent, so, yes, Western Europe is
becoming more dependent on imported energy as well.  
 
MR. SOOS:  And that is also the reason why we’re doing all this.
 
MR. MICHEL:  It would be even worse if we were not doing this.  
 
MR. BILLINGS:  The last question.
 
Q:  I actually want to trace two small – we’ll do it different ways.  On feedback systems
on meters to raise that and get the minutia for a moment, let’s not exaggerate the status of the
United States.  It counts as a smart meter if you can drive by and, by radio, pick up the meter
information and so we’ll have 85 percent.  Most of those will not be very smart meters.  
 
But it’s very surprising to me with the emphasis being placed on buildings, and it’s a
question of how much analysis has paid attention to.  The analysis basically shows that about –
putting in a smart meter drives people to about 7 to 9 percent reduction in their power use.  It’s
maybe a 20 percent in the first months and then it averages out to about 7 to 9 percent after a
year and that’s from the Italian studies, U.S. studies, Canada, and otherwise.  It’s a very quick,
very strong payback.  I’m surprised it’s not being driven with what is being stated as the
emphasis in Germany.  
 
A different question – when we think about Germany and the photovoltaics, comparing
let us say, North Africa versus in Germany, and what the power would be and per euro payback
in terms of reduced emissions if we were just to take coal in its global warming, where is
German foreign aid, foreign engagement via the World Bank or directly on energy?  We just had
meetings where there were very contentious issues about how the World Bank is supporting coal
and very fossil fuel-heavy development.  Where is Germany in its foreign aid against energy and
climate issues?
 
MR. SOOS:  That, I think, is very consistent with the domestic policy, what we have. 
Foreign aid is the portion that is devoted to projects and programs that promote renewable
energy – energy efficiency but especially renewable energy in developing countries is growing.  
 
Just to give you an example how it grows, we have started to auction the emissions from
the cap and trade system, from the national cap and trade system this year, and the government
has calculated that it will have some 400 million.  I’m getting confused because we use another
word in German for billion, so million – €400 million, which is about $550 million U.S. dollars. 
That would be the gains of the government from the sale of the emission certificates; 120 million
of those have been apportioned already, set aside, earmarked, however you like it, for projects in
the developing world, developing countries, for climate protection programs and renewable
energy programs, energy efficiency programs, and that is the way – how it’s going to continue. 
So a big chunk of the income from the certificates, emission certificates, will be dedicated for
programs in developing countries.
 
MR. MICHEL:  Okay.  The less diplomatic answer – all that is true and it’s a model way
of going about it.  However, I showed you my village that’s being dug up, being destroyed. 
There are 50 more villages in Germany that they’re planning to do the same thing with in the
next 50 years, including the village in which Friedrich Nietzsche was born and is buried. 
 
 Where there’s coal they can dig up, they can destroy a village and move the people.  And
they reason they say they have to do it is because they’re developing modern coal power plants
which are going to export to the rest of the world.  And there’s a certain argument – rationale in
that too because if they didn’t use highly efficient German coal-powered plants, they would
probably use less efficient coal power plants.  
 
But in other words, it’s not just white gloves; it’s also coal.  It has still something to do
with it, but gee wiz, on the other hand, as he mentioned right at the beginning of his presentation,
the world population is increasing to nine billion and we don’t have the answer for that order of
magnitude yet.  But obviously, we have a better chance of solving the problems that are inherent
to that if the United States and Germany work together.  As I showed at the beginning of my
presentation, we’re number one and number two on the list for doing so.
 
MR. BILLINGS:  Mr. Soos, Dr. Michel, thank you very much.  Thank you all for coming
tonight.  See you in November.  
 
(Applause.)
 
(END)

File Attachment: 

102008 Transcript.pdf