Consensus on Germany’s energy transition

In Germany everyone is expressing their support for Energiewende – from industry to the green movement. That was the overall impression gained after a delegation trip in connection with the Electricity Crossroads project.

The first document about Energiewende was published in September 2010, six months before the Fukushima nuclear power plant accident. The accident helped bring strong consensus on Energiewende and a number of nuclear power plants were closed immediately. The other nine still in operation will be closed ahead of schedule – no later than 2022.

Energiewende has numerous long-term goals, including:

* Reducing greenhouse gases by 80–95 percent by 2050

* 60 percent renewable energy by 2050 (solar, wind and hydro)

* Increase energy efficiency by 50 percent by 2050.

And there is strong consensus:

“All political parties are supporting the goals, including the one on closing nuclear power plants,” says Dr Thies F Clausen from the think tank Agora. A full 85 percent of members of the German parliament voted for Energiewende in 2011 and 90 percent of all Germans agree with its goals.

The result is a big increase in renewable energy in Germany, now at around 30 percent of total electricity production. To speed up the development of solar and wind power, substantial subsidies were introduced with a 20-year price guarantee, so-called “feed-in

tariffs.” Today renewables constitute the second largest source in the electricity system, after brown coal and coal (24 and 18 percent respectively). Source: Agora.

“The main problem with Energiewende is that coal use is not being reduced,” says Dr Julia Hertin, Secretary General of SRU, a council on environmental issues appointed by the government. “The price of coal is simply too low. And reaching the milestone of 40 percent lower greenhouse gas emissions by 2020 seems impossible.”

Dr Thies F Clausen does not believe that solving the emissions issue through carbon capture storage (CCS) is a viable way forward:

“CCS is far too expensive today and there’s a low acceptance level among local communities for this method of storage.”

Germany today has no shortage of electricity – on the contrary, it is exporting electricity to its neighbours. But southern Germany uses the most energy, while renewable wind power is located in the north. This requires enormous investments in transmission cables, which in many cases has led to protests among local residents. The so-called distribution grid will also need to be reinforced when electricity production becomes more decentralised.

Dr Thies F Clausen adds that Energiewende today is only about wind and solar. 

“Biofuels are far too expensive.”

In order to deliver electricity when the sun is not shining and the wind is not blowing, some form of plannable electricity production is needed. Nuclear power could, for example, be replaced by gas. But one problem is that the price of coal has dropped sharply so that investing in gas is not profitable in comparison.

“Today there would be no investments at all without subsidies,” says Dr Thies F Clausen. “The reason is that the prices have fallen by 50 percent since 2011. Electricity usage has also fallen.”

Germany has invested EUR 22 billion in subsidies for renewable electricity, according to Dr Clausen.

“The problem today is that Germany has a patchwork quilt of taxes and fees. Each time they introduce new prices or taxes, it disrupts the system and as a result the resources are not being used efficiently.”

According to Dr Julia Hertin, managing the German electricity market is complex. It is impacted both by the EU’s 2020 goal and the EU Emissions Trading System (ETS). And the EU, the German government and Germany’s 16 relatively independent federal states are all involved.

“Energiewende is a big experiment!

According to Dr Julia Hertin there are three possible scenarios today: some form of capacity market; a capacity market that is not based on coal; or no capacity market but possibly with some form of power reserves.

Dr Clausen thinks that a capacity market would destroy the EU ETS. 

“A European solution is needed.”

The need for change in Germany’s market structure is taken into account in Energiewende. In November 2016 the Germany ministry for the economy and energy released a white paper: An electricity market for Germany’s energy transition.

Pictured: Delegation trip to Germany organised by Electricity Crossroads.