Germany has committed to perhaps the boldest
energy transformation in the world. With
near unanimous political support, they adopted legislation in 2010 that sets
ambitious targets for carbon reductions, renewable energy and energy efficiency,
and commits to a phase-out of nuclear power.
According to Peter Altmaier, minister of environment, “this is
unprecedented and brings to an end decades of public debate in Germany.”
While much international attention is paid to
the rapid growth of solar energy and the phaseout of nuclear power, the
legislation is a comprehensive energy policy, covering transportation, heat,
and electricity use across the whole economy.
German energy policy goals
Source: Dr. Martin
Schöpe, Federal Ministry for the Environment
Now that the political debate is over, they
have moved on to implementation. “The
bulk of our energy is to come from renewable sources by the middle of the
century,” writes economics minister Peter Rosler. “At the same time, Germany is to remain a
competitive business location. This
requires a complete restructuring of our energy system.” With typical German practicality, member of
parliament Hans-Josef Fell has said, “This is not a problem, it is a task.”
But why?
While many countries have clean energy goals,
what motivated Germany to move so aggressively?
Altmaier and Rosler’s ministries (the federal
Ministry for Environment, Nature Conservation and Nuclear Safety (BMU) and the
Ministry of Economics and Technology (BMWi)) share responsibility for energy
policy. They have laid out “five good
reasons for transforming our energy system.”
1. Responsibility for the
future
“A policy of responsibility for the future,
policy that also takes account of the interest of our children and
grandchildren, means that wherever technologically and economically feasible it
is our duty to choose an alternative form of energy supply.” The multiple meltdown at Fukushima, only six
months after the adoption of the German energy policy, compelled the parliament
to close seven nuclear plants right away and phase out the nine remaining
plants by 2022. The anti-nuclear
movement in Germany is strong, motivated by the Chernobyl disaster of 1986 –
less than 800 miles from Berlin – and perhaps by a lingering distrust of
authority from the days of the Nazi regime.
2. Protecting the climate
Germany has committed to reducing carbon
emissions 40 percent by 2020 and up to 95 percent by 2050, economy wide. Transforming the energy system enables
Germany to capture the “positive dynamics of renewables and a modern energy
infrastructure.” In other words, getting
ahead of the challenge allows for an orderly transition.
3. Supply security,
competitiveness and cost stability
Germany imports 97 percent of its oil, 90
percent of its natural gas, and two-thirds of its hard coal. Europe is expected
to increase total energy imports from 53 percent in 2010 to 70 percent in 2030. Increasing competition for energy from
emerging economies like China and India, coupled with limited supplies, “are good
reasons to develop new energy sources.” With
increasing global demand for energy, German industry will face greater
competition, higher prices, and less stability.
By setting long term energy policy, the government can create “planning
certainty for industry.”
At the same time, “in a highly industrialized
country energy not only has to satisfy the high demands of industry and be
available in sufficient amounts at all times, it also has to remain
affordable.”
The main policy tool for renewable power, the
feed-in tariff (FIT), pays renewable producers a fixed amount for 20
years. This predictability results in
low financing costs, which lowers the cost of capital-intensive
renewables. The tariff prices are
adjusted according to market conditions to reduce total costs. As renewables scale up and mature, there is an
ongoing debate about the evolution of feed-in tariffs. Already, solar tariffs are less than the
retail price of electricity, making it more attractive to self-generate than
sell into the grid. It is possible that some
technologies may “graduate” from the FIT market to the competitive wholesale
market.
4. Growth and new jobs
Like many countries, German energy policy is
an arm of their industrial and competitiveness policy. Major corporations like Siemens and BASF,
along with many smaller companies, are selling clean energy technology around
the world. A strong domestic policy is a
good way to give these companies a domestic market to incubate new technologies
and experience. Jobs in renewable energy
have grown 129 percent since 2004, employing over 370,000 people.
5. Greater public
participation
In addition to the broad public support for
clean energy, German energy policy is explicitly encouraging citizen investment
in renewables. Over half of renewable
energy projects are owned by individuals and farmers, amounting to over $100
billion of investment. The share of
generation owned by utilities has fallen by 20 percent, creating a major form
of competition. (German power markets have been deregulated since 1998.) Citizen ownership has the benefits of greater
competition, economic development (especially in rural areas), and greater
consensus over renewable energy development, leading to less controversy over
siting new projects.
And considering that Germany was reunited
less than 25 years ago, the energy transition can mend the fabric of the nation.
“It is a chance for our society to come together in a unique joint action," writes Altmaier. "It
is a major joint national project.”
Learn more
Transforming our Energy System,
Federal Ministry for Environment, Nature Conservation and Nuclear Safety, May
2012, www.bmu.de.
Clean Break: The story ofGermany’s Energy Transition and What We Can Learn From It, Osha Gray Davidson, 2012.
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