Energiewende in Germany

The term Energiewende

The term Energiewende was first contained in the title of a 1980 publication by the German Öko-Institut, calling for the complete abandonment of nuclear and petroleum energy. The most groundbreaking claim was that economic growth was possible without increased energy consumption. On 16 February 1980, the German Federal Ministry of the Environment also hosted a symposium in Berlin, called Energiewende – Atomausstieg und Klimaschutz (Energy Transition: Nuclear Phase-Out and Climate Protection). The Institute for Applied Ecology was funded by both environmental and religious organizations, and the importance of religious and conservative figures like Wolf von Fabeck and Peter Ahmels was crucial. In the following decades, the term Energiewende expanded in scope – in its present form it dates back to at least 2002.

Energiewende designates a significant change in energy policy. The term encompasses a reorientation of policy from demand to supply and a shift from centralized to distributed generation (for example, producing heat and power in small cogeneration units), which should replace overproduction and avoidable energy consumption with energy-saving measures and increased efficiency.

In a broader sense, this transition also entails a democratization of energy. In the traditional energy industry, a few large companies with large centralized power stations dominate the market as an oligopoly and consequently amass a worrisome level of both economic and political power. Renewable energies, in contrast, can, as a rule, be established in a decentralized manner. Public wind farms and solar parks can involve many citizens directly in energy production. Photovoltaic systems can even be set up by individuals. Municipal utilities can also benefit citizens financially, while the conventional energy industry profits a relatively small number of shareholders. Also significant, the decentralized structure of renewable energies enables creation of value locally and minimizes capital outflows from a region. Renewable energy sources therefore play an increasingly important role in municipal energy policy, and local governments often promote them.

Status

The key policy document outlining the Energiewende was published by the German government in September 2010, some six months before the Fukushima nuclear accident. Legislative support was passed in September 2010. On 6 June 2011, following Fukushima, the government removed the use of nuclear power as a bridging technology as part of their policy. After the 2013 federal elections, the new CDU/CSU and SPD coalition government continued the Energiewende, with only minor modification of its goals in the coalition agreement. An intermediate target was introduced of a 55–60% share of renewable energy in gross electricity consumption in 2035. Germany imports more than half of its energy. Important aspects include (as of November 2016):

In addition, there will be an associated research and development drive. A chart showing German energy legislation in 2016 is available.

These targets go well beyond European Union legislation and the national policies of other European states. The policy objectives have been embraced by the German federal government and has resulted in a huge expansion of renewables, particularly wind power. Germany's share of renewables has increased from around 5% in 1999 to 22.9% in 2012, surpassing the OECD average of 18% usage of renewables. Producers have been guaranteed a fixed feed-in tariff for 20 years, guaranteeing a fixed income. Energy co-operatives have been created, and efforts were made to decentralize control and profits. The large energy companies have a disproportionately small share of the renewables market. However, in some cases poor investment designs have caused bankruptcies and low returns, and unrealistic promises have been shown to be far from reality. Nuclear power plants were closed, and the existing nine plants will close earlier than planned, in 2022.

One factor that has inhibited efficient employment of new renewable energy has been the lack of an accompanying investment in power infrastructure to bring the power to market. It is believed 8,300 km of power lines must be built or upgraded. The different German States have varying attitudes to the construction of new power lines. Industry has had their rates frozen and so the increased costs of the Energiewende have been passed on to consumers, who have had rising electricity bills. Germans in 2013 had some of the highest electricity prices (including taxes) in Europe. In comparison, its neighbors (Poland, Sweden, Denmark and nuclear-reliant France) has some of the lowest costs (excluding taxes) in the EU.

According to a 2014 survey conducted by TNS Emnid for the German Renewable Energies Agency among 1015 respondents, 94 per cent of the Germans support the enforced expansion of Renewable Energies. More than two-thirds of the interviewees agree to renewable power plants close to their homes. The share of total final energy from renewables was 11% in 2014.

On 1 August 2014, a revised Renewable Energy Sources Act entered into force. Specific deployment corridors now stipulate the extent to which renewable energy is to be expanded in the future and the funding rates (feed-in tariffs) will no longer be fixed by the government, but will be determined by auction.

Market redesign is a key part of the Energiewende. The German electricity market needs to be reworked to suit. Among other things, wind and PV cannot be principally refinanced under the current marginal cost based market. Carbon pricing is also central to the Energiewende and the European Union Emissions Trading Scheme (EU ETS) needs to be reformed to create a genuine scarcity of certificates. The German federal government is calling for such reform. Most of the computer scenarios used to analyse the Energiewende rely on a substantial carbon price to drive the transition to low-carbon technologies.

Coal-fired generation needs to be retired as part of the Energiewende. Some argue for an explicit negotiated phase-out of coal plants, along the lines of the well-publicized nuclear phase-out. Coal comprised 42% of electricity generation in 2015. If Germany is to limit its contribution to a global temperature increase to 1.5 °C above pre-industrial levels, as declared in the 2015 Paris Agreement, a complete phase-out of fossil fuels together with a shift to 100% renewable energy is required by about 2040.

The Energiewende is made up of various technical building blocks. Electricity storage, while too expensive at present, may become a useful technology in the future. Energy efficiency has a key but currently under-recognised role to play. Improved energy efficiency is one of Germany's official targets. Greater integration with adjoining national electricity networks can offer mutual benefits — indeed, systems with high shares of renewables can utilize geographical diversity to offset intermittency.

Germany invested €1.5 billion in energy research in 2013. Of that the German federal government spent €820 million supporting projects ranging from basic research to applications. The federal government also foresees an export role for German expertise in the area.

The social and political dimensions of the Energiewende have been subject to study. Strunz argues that the underlying technological, political and economic structures will need to change radically — a process he calls regime shift. Schmid, Knopf, and Pechan analyse the actors and institutions that will be decisive in the Energiewende and how latency in the national electricity infrastructure may restrict progress.

On 3 December 2014, the German federal government released its National Action Plan on Energy Efficiency (NAPE) in order to improve the uptake of energy efficiency. The areas covered are the energy efficiency of buildings, energy conservation for companies, consumer energy efficiency, and transport energy efficiency. German industry is expected to make a sizeable contribution.

An official federal government report on progress under the Energiewende, updated for 2014, notes that:

A commentary on the progress report expands on many of the issues raised.

Slow progress on transmission network reinforcement has led to a deferment of new windfarms in northern Germany. The German cabinet earlier approved costly underground cabling in October 2015 in a bid to dispel local resistance against above-ground pylons and to speed up the expansion process.

Analysis by Agora Energiewende in late-2016 suggests that Germany will probably miss several of its key Energiewende targets, despite recent reforms to the Renewable Energy Sources Act and the wholesale electricity market. The goal to cut emissions by 40% by 2020 "will most likely be missed ... if no further measures are taken" and the 55–60% share of renewable energy in gross electricity consumption by 2035 is "unachievable" with the current plans for renewables expansion. In November 2016, Agora Energiewende reported on the impact of the new EEG (2017) and several other related new laws. It concludes that this new legislation will will bring "fundamental changes" for large sections of the energy industry, but have limited effect on the economy and on consumers.

The 2016 Climate Action Plan for Germany, adopted on 14 November 2016, introduced sector targets for GHG emissions. The goal for the energy sector is shown in the table. The plan states that the energy supply must be "almost completely decarbonised" by 2050, with renewables as its main source. For the electricity sector, "in the long-term, electricity generation must be based almost entirely on renewable energies" and "the share of wind and solar power in total electricity production will rise significantly". Notwithstanding, during the transition, "less carbon-intensive natural gas power plants and the existing most modern coal power plants play an important role as interim technologies".

The fifth monitoring report on the Energiewende for 2015 was published in December 2016. The expert commission which wrote the report warns that Germany will probably miss its 2020 climate targets and believes that this could threaten the credibility of the entire endeavor. The commission puts forward a number of measures to address the slowdown, including a flat national CO₂ price imposed across all sectors, a greater focus on transport, and full market exposure for renewable generation. Regarding the carbon price, the commission thinks that a reformed EU ETS would be better, but that achieving agreement across Europe is unlikely.

Citizen support and participation

As of 2016, citizen support for the Energiewende remains high, with recent surveys indicating that about 80–90% of the public are in favor. One reason for the high acceptance is the substantial participation of German citizens in the Energiewende, as private households, land owners, or members of energy cooperatives (Genossenschaft). A 2016 survey showed that roughly one in two Germans would consider investing in community renewable energy projects. Manfred Fischedick, Director of the Wuppertal Institute for Climate, Environment and Energy has commented that "if people participate with their own money, for example in a wind or solar power plant in their area, they will also support [the Energiewende]." A 2010 study shows the benefits to municipalities of community ownership of renewable generation in their locality.

Estimates for 2012 suggest that almost half the renewable energy capacity in Germany is owned by citizens through energy cooperatives and private initiatives. More specifically, citizens account for nearly half of all installed biogas and solar capacity and half of the installed onshore wind capacity.

Changes in energy policy, starting with the Renewable Energy Sources Act in 2014, may jeopardize the efforts of citizens to participate in the future.

Computer studies

Much of the policy development for the Energiewende is underpinned by computer models, run mostly by universities and research institutes. The models are usually based on scenario analysis and are used to investigate different assumptions regarding the stability, sustainability, cost, efficiency, and public acceptability of various sets of technologies. Some models cover the entire energy sector, while others are confined to electricity generation and consumption. A 2016 book investigates the usefulness and limitations of energy scenarios and energy models within the context of the Energiewende.

A number of computer studies confirm the feasibility of the German electricity system being 100% renewable in 2050. Some investigate the prospect of the entire energy system (all energy carriers) being fully renewable too.

2009 WWF study

In 2009 WWF Germany published a quantitative study prepared by the Öko-Institut, Prognos, and Hans-Joachim Ziesing. The study presumes a 95% reduction in greenhouse gases by the year 2050 and covers all sectors. The study shows that the transformation from a high-carbon to a low-carbon economy is possible and affordable. It notes that by committing to this transformation path, Germany could become a model for other countries.

2011 German Advisory Council on the Environment study

A 2011 report from the German Advisory Council on the Environment (SRU) concludes that Germany can attain 100% renewable electricity generation by 2050. The German Aerospace Center (DLR) REMix high-resolution energy model was used for the analysis. A range of scenarios were investigated and a cost-competitive transition with good security of supply is possible.

The authors presume that the transmission network will continue to be reinforced and that cooperation with Norway and Sweden would allow their hydro generation to be utilized for storage. The transition does not require Germany's nuclear phase-out (Atomausstieg) to be extended nor the construction of coal-fired plants with carbon capture and storage (CCS). Conventional generation assets need not be stranded and an orderly transition should prevail. Stringent energy efficiency and energy saving programs can bring down the future costs of electricity.

2015 Deep Decarbonization Pathways Project study

The Deep Decarbonization Pathways Project (DDPP) aims to demonstrate how countries can transform their energy systems by 2050 in order to achieve a low-carbon economy. The 2015 German country report, produced in association with the Wuppertal Institute, examines the official target of reducing domestic GHG emissions by 80% to 95% by 2050 (compared with 1990). Decarbonization pathways for Germany are illustrated by means of three ambitious scenarios with energy-related emission reductions between 1990 and 2050 varying between 80% and more than 90%. Three strategies strongly contribute to GHG emission reduction:

In addition, some scenarios use controversially:

Potential co-benefits for Germany include increased energy security, higher competitiveness of and global business opportunities for companies, job creation, stronger GDP growth, smaller energy bills for households, and less air pollution.

2015 Fraunhofer ISE study

Using the model REMod-D (Renewable Energy Model – Germany), this 2015 Fraunhofer ISE study investigates several system transformation scenarios and their related costs. The guiding question of the study is: how can a cost-optimised transformation of the German energy system — with consideration of all energy carriers and consumer sectors — be achieved while meeting the declared climate protection targets and ensuring a secure energy supply at all times. Carbon capture and storage (CCS) is explicitly excluded from the scenarios. A future energy scenario emitting 85% less CO₂ emissions than 1990 levels is compared with a reference scenario, which assumes that the German energy system operates in 2050 the same way as it does today. Under this comparison, primary energy supply drops 42%. The total cumulative costs depend on the future prices for carbon and oil. If the penalty for CO₂ emissions increases to €100/tonne by 2030 and thereafter remains constant and fossil fuel prices increase annually by 2%, then the total cumulative costs of today's energy system are 8% higher than the costs required for the minus 85% scenario up to 2050. The report also notes:

From the macroeconomic perspective, the transformation of Germany's energy system demands a significant shift in cash flow, moving the cash spent on energy imports today to spend it instead on new investments in systems, their operation and maintenance. In this respect a transformed energy system requires a large expenditure for local added value, a factor which also does not appear in the shown cost analysis.

2015 DIW study

A 2015 study uses DIETER or Dispatch and Investment Evaluation Tool with Endogenous Renewables, developed by the German Institute for Economic Research (DIW), Berlin, Germany. The study examines the power storage requirements for renewables uptake ranging from 60% to 100%. Under the baseline scenario of 80% (the German government target for 2050), grid storage requirements remain moderate and other options on both the supply side and demand side offer flexibility at low cost. Nonetheless storage plays an important role in the provision of reserves. Storage becomes more pronounced under higher shares of renewables, but strongly depends on the costs and availability of other flexibility options, particularly on biomass availability. The model is fully described in the study report.

2016 acatech study

A 2016 acatech-lead study focused on so-called flexibility technologies used to balance the fluctuations inherent in power generation from wind and photovoltaics. Set in 2050, several scenarios use gas power plants to stabilise the backbone of energy system, ensuring supply security during several weeks of low wind and solar radiation. Other scenarios investigate a 100% renewable system and show these to be possible but more costly. Flexible consumption and storage control (demand-side management) in households and the industrial sector is the most cost-efficient means of balancing short-term power fluctuations. Long-term storage systems, based on power-to-X, are only viable if carbon emissions are to be reduced by more than 80%. On the question of costs, the study notes:

Assuming that the price of emissions allowances in 2050 will significantly surpass its current level, a power generation system boasting a high percentage of wind and photovoltaics will, as a rule, come cheaper than a system dominated by fossil fuel power plants.

2016 Stanford University study

The Atmosphere/Energy Program at Stanford University has developed roadmaps for 139 countries to achieve energy systems powered only by wind, water, and sunlight (WWS) by 2050. In the case of Germany, total end-use energy drops from 375.8 GW for business-as-usual to 260.9 GW under a fully renewable transition. Load shares in 2050 would be: on-shore wind 35%, off-shore wind 17%, wave 0.08%, geothermal 0.01%, hydro-electric 0.87%, tidal 0%, residential PV 6.75%, commercial PV 6.48%, utility PV 33.8%, and concentrating solar power 0%. The study also assess avoided air pollution, eliminated global climate change costs, and net job creation. These co-benefits are substantial.

Criticisms

The Energiewende has not been without its critics. After introduction of the original Renewable Energy Sources Act in 2000 there was a focus on long term costs, while in later years this has shifted to a focus on short term costs and the "financial burden" of the Energiewende while ignoring environmental externalities of fossil fuels. Nonetheless, for the first time in more than ten years, electricity prices for household customers fell at the beginning of 2015.

The renewable energy levy to finance green power investment is added to Germans' electricity unit price. The surcharge (22.1% in 2016 ) pays the state-guaranteed price for renewable energy to producers and is 6.35 cents per kWh in 2016.

German Economy and Energy Minister Sigmar Gabriel admitted "For a country like Germany with a strong industrial base, exiting nuclear and coal-fired power generation at the same time would not be possible." Germany's CO₂ emissions were escalating in 2012 and 2013 and it is planned to reopen some of the dirtiest brown coal mines that had previously been closed. Coal generated electricity increased to 45% in 2013, the highest level since 2007. Nonetheless, in 2014 carbon emissions had declined again. More renewable energy had been generated and a greater energy efficiency had been achieved. From 1999 to 2014 renewable energy production rose from 29 TWh to 161 TWh, while nuclear power fell from 180 to 97 TWh and coal power production fell from 291 to 265 TWh.

United States

Robert Fares states two lessons to be learned from the German example: