Huersdorf, Germany – It’s a pretty little village – heritage buildings, a 13th century church..oh yes, and a death sentence. For this is a community living on borrowed time.

MAYOR HORST BRUCHMANN: No, there’s no hope left. We launched two lawsuits in the Constitutional Court of Saxony. We won the first case. Then the State of Saxony passed a new law and this new law was approved in the second case. So there’s no hope that the town can be saved.

Already some homes here have been demolished. And here’s the reason why – the neighbouring lignite mine. It may be inefficient, subsidised and produce highly polluting brown coal, but the state government has decided the American multinational that owns it can bulldoze Huersdorf to expand the mine’s operation. Over the decades, dozens of other villages have met the same fate.

The fact that this mine continues to operate and devour entire villages is a pretty graphic illustration of how desperately Germany needs new sources of energy. On one hand this has led to a new push to reinvigorate the country’s nuclear program, on the other side there are those that say the future lies with renewable energy – an area where Germany already leads the world.

Another town – Swabisch Hall – post-card perfect and in no danger whatsoever of being bulldozed. Tourism is the big money spinner here – now it’s been joined by renewable energy. The visitors strolling across its covered bridges may not realise it, but they’re also traversing one of the Swabisch Hall’s renewable power sources. For tucked away discreetly along the river are a number of small-scale hydro-electricity turnines. This one generates about a million kilowatt hours a year – enough for about 60 houses. And here I find Hermann Scheer, the father of Germany’s renewable energy revolution.

HERMANN SCHEER, RENEWABLE ENERGY ADVOCATE: It’s a very old city, but a city with the most modern application of energy technologies. It is again an example how many devices, many small powr stations can substitute some large power stations.

Hermann Scheer has come to Swabisch Hall to address a solar power conference. He’s revered here as the author of Germany’s landmark EEG law. This law compels power companies to buy electricity at above market prices, from anyone using renewable technology to generate it. The result – thousands upon thousands of German companies, communities and individuals now sell power into the national grid.

HERMANN SCHEER: It’s the first step, yes. It’s a beginning. It’s the beginning of an energy revolution. The time of phasing out nuclear and fossil will come.

The renewable revolution has already come to the village of Juhnde. The dairy cows here are now producing more than milk. Their manure helps power the town’s new bio-gas plant – although the main raw material is a purpose-grown cereal crop produced by local farmers grateful for a new market. The mixture is fermented in large vats producing methane – the smell is yeasty – a little like a brewery. The methane powers generators – the electricity is sold into the national grid. And there’s a more direct benefit – excess heat warms water that’s then reticulated throughout the village.

ECKHARD FANGMEIR, LOCAL RESIDENT: Here’s the hot water grid, which is coming from the energy plant. The hot water is forwarded here by 80 degrees Celsius.

Local resident Eckhard Fangmeir proudly shows me his cellar – where his oil furnace once stood. He tells me he’s already saving A$1200 a year in heating costs.

ECKHARD FANGMEIR: I’m personally very, very happy because now I am independent. Independent of the international oil prices because we are producing our own energy here in our village – electricity and heat will be produced by our own energy plant and we are now independent.

Upstairs over coffee Eckhard and his wife Sabine explain their investment. 140 local residents own the bio-gas plant, borrowing most of the money from banks. With the plant producing twice as much electricity as Juhnde requires, in 20 years time the banks will be paid off and the residents will be fully-paid-up energy barons.

SABINE FANGMEIR: I think it’s a good idea because it is very environment friendly. There is no danger. No danger for us, no danger for our children, and the children of our children. And it’s all our own. Not one owner, not an oil company. It’s ours. And we all together are responsible for this plant.

The bio-mass plant at Juhnde has only been running for around six months, but already some 30 neighbouring villages are so impressed they’re planning to invest in their own plants.

Germany is now the world leader in renewable energy. 10% of its electricity requirements are now supplied by wind, solar, bio-mass and small hydro. That will grow to 20-25% within 15 years, when nuclear is scheduled to be phased out. This energy revolution can, in large part, be attributed to Hermann Scheer. As a young politician in the 1980s, his opposition to nuclear power led him to explore the possibilities of renewables.

HERMANN SCHEER: It was a surprise to me, that there was no politician, not in my country, and not in other countries who was really committed with sufficient knowledge on renewable energies. And then I concluded for me, in my mind, if that issue is so important then I should do that. It was a question of personal responsibility.

DAVID HOGG, CSG SOLAR: We’re using very thin silicon. We want the light to stay in the silicon. So we do that here.

The EEG law has also led to a boom in solar power. Near Leipzig I find a brand-spanking-new solar panel factory run by Australians, using groundbreaking technology developed over 20 years in Sydney, but now majority-owned by Germans.

DAVID HOGG: It uses crystalline silicon, which is what is being used predominantly in the industry for a very long time, but we’ve found a way of using a much, much thinner layer of the same material. So we get all the benefits without all the costs.

Germany’s support for renewable energy is sucking in technology from around the world.

DAVID HOGG: When we were looking at promoting exactly this business in Australia, one of the key risks that made it difficult was the marketing risk. And people in Australia largely don’t have any idea of big the market is for renewable energy. To put that into context, as we are ramping up this business in early 2006, we have already sold the entire output through the end of 2010. Nobody in Australia would believe that.

It’s a market that’s set to grow, as Italy and Spain move to introduce laws similar to Germany’s. That man s Germany is not just developing a new source of power, it’s building an export industry.

DAVID HOGG: Oh, look, inevitably everywhere in the world will need to embrace these sorts of technologies. The options are not that great.

HERMANN SCHEER: We got with the help of this law, a renewable energy industry that has now 170,000 people employed – a new industry. That means if you compare this with the money that makes that possible, it became the most cheap public industrial and job promotion program ever happened - ever happened.

Hermann Scheer’s EEG law, together with the decision to phase out nuclear, is radically changing the way Germany powers itself, but not everyone is a fan. Power companies, forced to buy renewable energy at an elevated price, pass the cost onto consumers and business. This means electricity for domestic use is the most expensive in Europe – for business it’s the second most expensive. The critics say that makes some German industry uncompetitive.

Joachim Pfiefer is the energy spokesman for the Christian Democrats – winners of the recent federal election, and now the senior partner in government with Hermann Scheer’s Social Democrats.

JOACHIM PFIEFER, CDU-CSU ENERGY SPOKESMAN: The overall effects have to be positive, that is our aim. And at the moment it is so that the jobs that we gain on the renewable side we lose even more jobs on the traditional side.

REPORTER: So hang on, you’re saying then that overall Germany’s investment in renewable energy is actually costing jobs?

JOACHIM PFIEFER: The overall effect is at the moment still negative.

I come to this energy expo in Berlin in order to find out who’s right – Hermann Scheer or Joachim Pfiefer – whether renewables are a boost or a drag on the German economy. I track down independent energy analyst Professor Claudia Kemfert as she participates in a seminar on energy. She says renewables add an extra 5% to German electricity bills, although they’re already cheaper than German coal. She says the net economic impact is positive.

PROFESSOR CLAUDIA KEMFERT, ENERGY ANALYST: We have a booming renewable energy branch in Germany which has already in 2005 157,000 people starting from 30,000 in 1998. So we have a strong increase in employment in this sector, but it’s also the case that we are exporting a lot to other countries. For example, wind energy is going to California, to all over the world. So it’s also an export increase of 5% in the last year alone.

For Germany’s big four energy companies, renewables represent a threat to their income streams. With conventional power stations, they make money from power generation and from distribution – with renewables they are largely restricted to distribution alone.

HERMANN SCHEER: It creates another ownership because more possible investors will come on the table. Many small investors. We have to think what happens, shy it is an energy revolution when we shift from nuclear and fossil to renewables. Why? A lot of economic structures will change automatically.

And a lot of vested interests will lose money.

HERMANN SCHEER: Yeah. It is away from commercial primary energies to non-commercial primary energies.

Dieter Schaarshmidt is a renewable energy pioneer. He subscribes to Hermann Scheer’s vision of decentralised, locally owned power utilities.

DIETER SCHAARSHMIDT, WINDMILL COOPERATIVE MANAGER: We are still aiming towards 100% renewable energy in the region. And we think that renewable energy should be owned by the people in the region. We think they should be responsible for their energy supply, and that’s a big difference to the centralised system.

But it’s a vision that’s unlikely to be fulfilled.

DIETER SCHAARSHMIDT: It will be the last windmill from our company. There will be more windmills from bigger companies because they have taken all the places we could have taken.

REPORTER: Oh, I see, so the big companies are starting to take over?

DIETER SCHAARSHMIDT: Yeah, they are taking over. The big business from the small people.

Despite several weeks of requests, none of Germany’s big four power companies would agree to an interview, but at the energy expo in Berlin, I come across this stand run by one of them – Swedish multinational Vattenfall. Here I meet engineer Daniel Kosel.

DANIEL KOSEL, VATTENFALL: So here you see the model of the first power plant in the world which will use the oxy-flu process and so will be free of an emission of carbon dioxide.

Vattenfall is pinning its hopes on new “clean coal” technology.

DANIEL KOSEL: We think that for base-load energy production, coal is necessary. Either coal or nuclear. And we want coal, but in a clean way.

This is the core argument used by the big power companies. They say when the wind doesn’t blow and the sun doesn’t shine, renewables can’t guarantee supply. And because electricity itself cannot be stored on a large scale, they say for the foreseeable future, renewables can only fill a minor, top-up role.

DANIEL KOSEL: It is absolutely necessary that you have base-load plant for safe energy production and you can’t have base-load plants at this time with renewable energy. And therefore you need big plants, big conventional power plants.

The Christian Democrats, now back in power, are sympathetic to such arguments, and have flagged their intention to extend the life of Germany’s nuclear program past 2020.

JOACHIM PFIEFER: On the supply side we shoukd keep open all technologies. We want to strengthen the renewables, we want to make the fossils more efficient, for example the CO2-free power plant is on our schedules to 2015, 2020 and we also want to keep the nuclear option.

HERMANN SCHEER: The whole debate on so-called new nuclear or the comeback of nuclear is based on the big energy lie, the big energy lie that renewables would not be enough.

It’s a radical view, but Hermann Scheer is prepared to challenge conventional wisdom. He says renewables alone can meet Germany’s entire energy needs, because hydro and bio-mass can guarantee supply when wind or solar are not available. He says the power companies oppose renewables for financial, not technical reasons.

HERMANN SCHEER: The primary energy business will disappear, will disappear. That is one of the big problems the energy system of the day has with renewables. But they don’t confirm it. They try to denounce the technological availability, and they never confirm their real concern, based on their own interest.

Independent analyst Claudia Kemfert says renewables can supply half the country’s energy requirements within the foreseeable future.

CLAUDIA KEMFERT: No, it could go higher. We also estimate that there is an efficiency increase and the electricity demand will decrease over time. So that 50% of the total production can come from renewable energy in Germany in 2050 already.

But such a target could only be reached with the continuation of Hermann Scheer’s EEG law – compelling power companies to buy renewable energy at a set price. But with the change of government, that law is under threat of modification.

JOACHIM PFIEFER: We have to make the renewables efficient and we have to make them competitive. We don’t want to subsidise the renewables forever. And so we have in our coalition treaty that in the year 2007 we are going to revise this law and look if it is still efficient.

HERMANN SCHEER: The most important question is “How long do we need?” Because if this development is postponed and postponed again and again, and hindered by – intentionally – by barriers, then we will lose the race against time. The decisive question is to introduce it in the short run, because we don’t have so much time any more for avoiding a global disaster created by the present energy system.