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German Commitment Contrasts Mild U.S. Efforts

German Chancellor Gerhard Schroder declared energy efficiency and renewables the "best response we can give to rising energy prices -- rational not just populist," bringing cheers from participants at the Renewables 2004 conference on the third day.

With that he announced a new EURO 500 million (US612 million) five-year low interest loan program for developing countries to invest in such projects. The chancellor said the United Nations has not played the global "catalyzing" role which is needed. But he and other spokesmen for his government have made it clear that Germany had itself in mind for that role. It is now the world leader in wind energy.

In contrast to Schroder's call for a dramatic overhaul of the global energy economy to avoid the "horror scenario" of climate change, the U.S. Government's response was mild.

David K. Garman, acting under secretary of energy, said the U.S. was committing itself to an expansion and extension of the lapsed renewable energy production tax credit.

In addition, Garman said the U.S. would commit its research and development programs to achieving specific cost-reduction goals for various renewable technologies. He mentioned 3 cents/kWh for on-shore wind and 5 cents for offshore wind by 2012; 6 cents for photovoltaic by 2020; and 3 to 5 cents for geothermal by 2010.

For biomass, he outlined a different approach: an integrated biorefinery, producing a variety of fuels as well as feedstocks for products, using biomass as the primary fuel.

No additional funding will be forthcoming, he said in an interview, but the goals will be achieved by a realignment of R&D priorities and planning.

Garman said the U.S. government believes "lowering the cost of renewable energy is the real key to our success" and the U.S. is publicly committing itself to "transparent" goals against which its progress can be measured.

He said in an interview that subsidies are too expensive for their energy yield when they are applied to technologies not yet competitive in the marketplace. Some producers are asking for subsidies so they can deploy now, before their products are cost-competitive, he added.

Asked about fossil fuel subsidies, he said their impact on the cost of conventional energy is over stated. President Bush, he pointed out, had proposed to Congress $5.2 billion for support of renewable energy and efficiency, and zero for oil and gas, although Bush did ask for a clean coal initiative.

"We live in a world with finite fossil fuel resources and a finite capacity to contend with emissions resulting from their use," Garman aid, "therefore, we look to emission-free primary energy sources, including renewable energy."

Meanwhile, Peter Woicke, managing director of the World Bank Group and executive vice president of the International Finance Corp., announced an aggressive program to expand Bank investments in renewable technologies.

In the face of growing support for a proposal that the bank phase out its fossil fuel investment within five years, Woicke said the bank would increase its renewables portfolio by 20% a year, rising from the current $200 million annually to $400 to $500 million a year.

A press release from environmental groups, including Friends of the Earth and Greenpeace, dismissed the proposal as "spin," since the 20 percent increase was only about 1 percent of the Bank' energy investments

Mark Braly is attending the four-day conference in Bonn, Germany as a correspondent for SolarAccess.com News

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