The Energiewende: Transforming Germany’s energy sector
- 25 Jul 2013, 14:05
- Mat Hope
Credit: Joachim Köhler
Germany's energy transformation, or Energiewende, has
become a national
obsession. If it succeeds, Germany's model could become a
blueprint for other industrialised nations seeking to decarbonise
In 2010, the German government set ambitious targets as part of its
Energiewende programme: to reduce emissions by 80 per cent and
provide for 80 per cent of the country's electricity consumption
from renewable sources by 2050. The government's decision to
phase out nuclear generation by 2022 has complicated matters,
putting renewables at the centre of the energy revolution.
Germany has long supported renewable generation and the energy
sector is starting to see the effects - and challenges - such
commitments bring. Booming solar, curtailing coal, and upgrading
the country's transmission grid are all part of the Energiewende
More of the same: Germany ramps up
targets mean Germany must significantly ramp up the the amount
of renewable power connected to the grid. But this isn't a
completely new ambition.
The German government invested heavily in renewables research
and development in the
1980s, and the Electricity Feed-in Act (Stromeinspeise-Gesetz)
established a support mechanism known as feed-in tariffs for
renewable energy in 1991. The 2000 Renewable Energy Act (EEG)
reformed the subsidies, and a 2004 amendment to the EEG set a
target for renewables to provide at least 20 per cent of
electricity production by 2020.
The measures mean Germany's renewable energy industry has been
growing since the late 1980s, as the graph below shows. The support
was largely responsible for
more than tripling Germany's renewable power generation between
1999 and 2012.
Source: German Environment Ministry (BMU)
Development of renewable energy sources in Germany
Solar power in particular has boomed, with Germany regularly
Technological advances mean the
cost of solar installations has reduced by over 50 per cent in
the last five years. The cheapness of solar technology and the
feed-in tariff payments make it an attractive option for households
and private investors. The rapid increase in solar installations
meant solar power produced 27.6 terawatt hours of electricity in
2012, a 47 per cent rise on 2011. But that's still only about
5 per cent of Germany's total electricity generation.
And solar's popularity isn't all good news for Germany. Many of
the installations use cheap, panels imported from China - leading
job cuts at German solar panel manufacturers. In May, the
European Commission proposed a
tax on Chinese solar panel imports to revive the European market.
But the German government
opposed the tax out of fear the Chinese would block German
solar goods in retaliation.
Wind power has also grown significantly, with an additional
6,000 megawatts of new capacity installed since 2010, according European Wind
Energy Association data. It shows Germany has the most
installed wind capacity of any country in Europe, with over
31,308 megawatts installed - almost 10,000 megawatts more than
Energy Agency (IEA) expects renewable energy to be the main
source of electricity generation in Germany by 2030, with wind
providing around 30 per cent, solar around eight per cent and hydro
about five per cent.
There are concerns that fossil fuels would predominantly
fill the gap left by the nuclear power phase out. In 2011,
nuclear provided about
18 per cent of Germany's electricity generation, with that
proportion declining as more generators are decommissioned.
But extra renewable generation has so far gone some way to fill
the gap left by nuclear. In 2012,
almost a quarter of Germany's electricity was generated from
renewable sources - up from about
20 per cent in 2011 - and this is expected to rise as the
Energiewende's policies encourage the industry to develop.
So Germany's commitment to a non-nuclear, low carbon energy
sector - refreshed by the Energiewende targets - is delivering
increasing amounts of renewable generation.
Increased coal generation
criticism of Germany's decision to phase out nuclear power is
that it has led to
burning more coal. And there has indeed been a small
jump in coal power generation since the nuclear phase out was
announced in 2011, causing emissions to rise.
Coal plants - burning both hard coal and less-polluting lignite
- were responsible for about
45 per cent of Germany's electricity generation in 2012, about
same as 2011 and a few per cent more than 2010.
Nonetheless, coal generation is expected to decline in the long
run: the IEA expects coal to provide about a fifth of electricity
But phasing out nuclear is only part of the coal revival the
story, the economic competitiveness of gas is plays a large
One reason coal is currently such a significant part of
Germany's energy system is that
gas remains relatively expensive on the international market,
partially due to an increased amount of cheap US coal
exports. The collapse in the
EU's carbon price also means there is little incentive to move
away from high-emitting coal. This effect isn't restricted to
Germany - the UK has also seen
coal generation increase recently.
Germany also makes money from exporting coal. The country
doubled its power exports from coal plants in the second
quarter of 2012. There is a strong market for exporting the power
to neighbouring countries such as the
Netherlands, where it provides a cheaper alternative to
And Germany is building more coal plants, though probably not as
many as some suggest.
Bloomberg reported in February that about 5,300 megawatts of
new coal plant capacity would start generating in 2013, and German
news agency DW reports that as many as
23 new coal plants could eventually be built.
It's unclear how many of the plants will actually
end up being constructed due to regulatory and policy
obstacles, however. A new
report by energy consultancy Poyry suggests short-term economic
opportunism drove Germany's recent coal developments, with a
bleaker long term outlook.
Poyry doesn't expect more than the eight gigawatts of coal
plants currently under construction to be completed.
The shift to coal has affected Germany's emissions. According to
Bloomberg, the increase in coal generation was largely
responsible for a 1.6 per cent rise in greenhouse gas emissions in
2012, bucking a long-term decline. But the president of the
Germany's environment agency said further expansion of renewable
checked the rise.
The government expects this to be increasingly the case in the
future, with renewables squeezing out fossil fuel generation, and
gas once again becoming competitive with coal.
Creating a balanced, low carbon energy mix is only part of the
Energiewende challenge. Bringing more renewables online creates
significant power distribution problems which urgently need
Germany's glut of renewable electricity generation leads to what
The Economist describes as
"a web of grotesque distortions" in demand and supply, which
leaves the existing grid infrastructure struggling with the
fluctuations it creates.
The country also needs to connect the new northern windfarms to
demand in the south. At the moment, Germany has to route power
bordering countries' grids when supply is high - taking wind
power from the North Sea and Baltic regions to Germany's south. But
Germany's neighbours don't see this as
a sustainable solution. The Czech Republic has threatened to
block Germany's electricity overflow - so Germany will need to
upgrade its own grid infrastructure.
The German energy agency estimates an additional 36,000
kilometers of high voltage lines are needed by 2020. That's about
20 per cent of the length of the existing transmission grid,
according to the
Oxford Energy Institute. The grid's technology also has to be
upgraded to deal with households both consuming electricity and
generating it through solar panels on their roofs.
But the public aren't so keen on having more
pylons dotting the landscape. There is a vocal
not-in-my-backyard lobby against grid expansion, with an
environment agency poll showing only
42 per cent of Germans would accept a new power line running
through their community.
So the Energiewende is as much about getting the public to
accept the need for grid upgrades as incentivising renewable
The Energiewende's policies aim to incentivise renewable energy
development, continuing a policy tradition that goes back over
twenty years. But the government will also have to ensure the
energy infrastructure can cope with increased renewable
And cracks are forming: Germany's first anti-wind energy group
has been established to combat plans to site windfarms in its fairytale
forests, and the economics minister is fighting against cabinet
colleagues over suggestions the transmission grid should be
nationalised. With elections due in September, the
Energiewende's supporters hope those cracks don't prove
Want to know more about the Energiewende? Read our
Keep an eye out tomorrow for the final part of our
Energiewende trilogy, on how it affects energy prices.