The goal of the federal government‘s energy policy is to make Germany one of the most energy efficient and environmentally compatible economies in the world while keeping energy prices competitive and ensuring a high level of prosperity. The expansion of renewable energies will make a substantial contribution to achieving this goal.
Source: iStockphoto/iconeer
Energy debate in the Chancellor’s Office (1 April 2014).
Photo: Bundesregierung / Steffen Kugler

Nationwide expansion of renewable energies: How is Germany dealing with the challenges?

When it comes to the topic of “transitioning from nuclear and fossil fuels to sustainable sources of energy” – especially the region-wide development of renewable energies and their integration into the energy system – business, politics and consumers all over the world are looking to Germany. The intention of the German government’s energy policy is to make the country one of the world’s most energy efficient and environmentally sound economies. At the same time, energy prices must be kept competitive, the level of prosperity high and the supply of energy secure. This poses immense challenges for the world’s fifth-largest industrial nation. Countries around the world can profit from Germany’s experience.

Expansion according to plan: the growth trajectory of renewable energies

Owing to political encouragement early on, renewable energies are now a mainstay of the total commercial energy system in Germany, accounting for 12.3 percent of final energy consumption and 23.4 percent of gross ­electricity production. And the German federal government is continuing to pursue a path of further expansion. In the electricity sector alone, the share of renewable ­energies is intended to be expanded to 40 – 45 percent by 2025 and 55 – 60 percent by 2035.

The increase in the utilisation of renewable energies in Germany is chiefly a result of the Renewable Energy Sources Act (EEG), which has been in place for the electricity sector since 1 April 2000. The goal of the EEG is to facilitate the market entry of renewable energies through fixed compensation as well as through guaranteed purchase and prioritising the feed-in of electricity from renewable sources to the grid. By the end of 2012, more than 1.3 million EEG-subsidised installations throughout Germany were feeding in more than 118,000 GWh to the German electricity grid.

In the heating sector, as well, the German Renewable Energies Heat Act (EEWärmeG) and the amplified market incentive programme (MAP) are the main starting points for doubling the amount of heat produced from renewable sources of energy to fourteen percent in 2020. The EEWärmeG stipulates that new buildings use renewable energy to provide a certain portion of the buildings’ heat, implement certain substitute measures such as additional insulation, or make use of combined heat and power or district heating facilities. The MAP promotes technologies in the heating market primarily for existing buildings – such as solar thermal systems, wood pellet heating systems and efficient heat pumps. The support at the federal level is supplemented by a large number of measures in various federal states and municipalities.

Biofuels are promoted in Germany within the scope of the Biofuel Quota Act (BiokraftQuG). Based on the Biofuel Quota Act, admixtures to fossil fuels have been supported by way of the biofuel quota since 2007.

Today’s challenges to energy policy

The enormous expansion of renewable energies, especially photovoltaics and wind power, is today confronting politicians with the challenge of coming up with intelligent solutions to integrate renewable energies – whose production is often dependent on the season or weather conditions – into the energy system, to expand infrastructure by upgrading transmission networks and distribution grids, to improve coordination with neighbouring European countries and to equably distribute the costs of transitioning to renewable sources of energy.

The Energy Line Extension Act 2009 (EnLAG) is intended to accelerate the further expansion of the German transmission network in order to ensure that even those ­renewable energies that are subject to large fluctuations can be transmitted in the grid from the often decentralised production locations to the centres of high demand for electric power.

The EEG reform of 2014 is intended to control more specifically the demanding goals, while reducing and better distributing the costs, of this further expansion. A direct marketing obligation is intended to facilitate the introduction of renewable energies to the market. The federal government’s objective is to ensure that Germany, the fifth-largest industrial nation in the world, remains competitive even for energy-intensive industries. Value added and jobs are to be secured – a challenge which the federal government is attempting to master by intensively engaging with industry. When the costs of the transition to renewable sources of energy are apportioned, the concerns of a large number of stakeholders must be taken into consideration, such as power supply companies, grid operators, the energy supply industry and investors, as well as a large number of energy consumers, including private consumers. For example, the energy-intensive industries with their roughly 830,000 employees are the basis for the success or failure of a large number of other industries. And the renewable energy industry itself, which now has around 378,000 employees, is also a major economic factor. The so-called Special Equalisation Scheme in the Renewable Energy Sources Act was thus instrumental in creating the policy which enables power-intensive manufacturing companies, as well as operators of railways, to apply for an exemption from the so-called EEG levy.

Long-term perspectives

By transitioning increasingly to renewable energy sources, Germany has struck out upon a path which has gained it international attention. By 2050, Germany intends to have an energy system that is climate friendly, secure and economically efficient. This fundamentally new, sustainable energy system, marked by far lower emissions of CO2, will make a significant contribution to international climate protection – and do so without incurring any of the risks to humans and the environment posed by nuclear power.

In addition, the federal government is planning to use the new sources of energy to strengthen the German economy for the long term. Thanks to Germany’s time-tested use of innovative, efficient technologies, machines and products “Made in Germany”, the domestic industry already has a strong competitive position. Successfully transitioning to renewable sources of energy will further strengthen this base.