The politics and economics of constructing, contesting and restricting socio-political space for renewables - The German Renewable Energy Act

This paper addresses the politics and economics of constructing, contesting and reducing the “socio-political space” for renewables connected to the German Renewable Energy Act (EEG). The political discourse is traced, revealing a gulf between “fit and conform” versus “stretch and transform” narratives. The former focus on short-term consumer costs, short learning periods and cost reductions from R&D rather than from market formation. The latter focus on total costs and acknowledge the need for lengthy learning periods and market formation to reduce costs. The version of the “fit and conform” narrative which recently became dominant, misrepresents the EEG surcharge, exaggerates the “burden” by ignoring external costs of fossil generation and doesn't consider inter-generational equity issues. This reflects the defensive reactions of a politically entrenched industry caught in a process of creative destruction, appealing to political actors such as the European Commission by invoking Europe's industrial competitiveness and (ideologically shared) technology-neutral policies.