Spotlight Activity: Policy on Renewable Energy (EEG)
The overall awareness about the already-existing German ‘Energiewende’ (Energy transition) increased by the end of 2011 as a reaction to the nuclear reactor collapse in Fukushima, Japan. The target was to shut down all nuclear reactors currently still operating in Germany by 2022 and expanding the renewable energy sector, particularly solar and wind.
When the policy on renewable energies (EEG) passed in 2000, the government set the target to gain at least 60 % of all energy from renewables by 2030. At first, all renewable facilities were given compensation for every kWh they produced and had the right to sell their generated electricity to the national grid. For 20 years, a fixed price was agreed on for electricity generated, which was paid by the grid operation facilities. These facilities correspond to the companies, selling electricity to households in their relevant surroundings.
In 2017, the existing compensation scheme was modified with the justification of renewables being resilient enough to compete on the European market. From the 1st of January 2017, all facilities had to compete to receive subsidies. Dependent on the size, the location and the type of renewable source subsidies over a 10-year period are granted at certain rates to the most competitive bidders. These are usually large-scale facilities that can afford to bid at lower prices.
The changes made in 2017 to the paragraph ‘Mieterstrom’ (tenant generated electricity) also has made it more attractive for the single household to invest in installing its own solar panels or PVs. With every generated kWh, the owner will be compensated with 2.2 or 3.8 cents, respectively.
The most recent review published by ‘Agora – Energiewende’ states that an extraordinary growth in the energy market was observed in 2018, where 38.2 % of all electricity consumption was based on renewable sources. For example, solar experienced an immense increase compared to 2017, which leads back to the high amount of sun hours in the summer of 2018. On the other hand, wind energy experienced a much smaller growth rate, which likewise is due to the hot summer with calm conditions. It is believed, however, that throughout the winter wind energy will partially be compensated due to predicted warm and windy weather conditions.
There still are prominent questions related to the changes made to the EEG. Despite the growth of the renewable energy sector, the cheapest source of energy still originates from brown coal. Until there is a reduction in coal production, the private owners of renewable energy sources will struggle to sell their electricity and energy to the grid, particularly in the future when the subsidy period comes to an end. Currently, most owners of the old wind parks still benefit from allocated subsidies, which by law will continue to be paid for 20 years after the date that they started according to the EEG. But concerns were raised about the continuation of their wind parks after 2020. If no further subsidies are given or the price for coal is not increased, the shutdown of multiple wind turbines will be the outcome, which will lead to new problems also for the national grid. The transition of energy states that by 2030, 65 % of all electricity in Germany should be obtained from renewables seems like an illusion.
If the sustainable development goals (SDGs) and the Paris Agreement 2015 are to be reached, and Germany is to fulfil its commitments under the defined EU’S NDC’s, the country has to wake up and act very quickly to reach the defined renewable energy targets. For instance, to successfully close down the brown coal sector, new job opportunities need to be given to the relevant staff. Schooling and free education should be provided in addition to the creation of facilities for work opportunities in the renewable energy sector or similar. It is also crucial the carbon price is further increased as it has shown to dramatically reduce the use of coal and the other fossil fuels. Finally, it is essential that the realisation of the extension of Germany’s electricity grid happens at a faster rate to be able to carry the access electricity that is obtained from renewable energy sources. If all these measures are taken, Germany would finally be globally recognised as a leader in the area of sustainability and renewable energy.
Status: Standing Still
The EEG was endorsed in 2000, and since then multiple changes have been made to the policy. It is too early to determine their impact. However, reducing the length of the given subsidies for renewable energy produced electricity and basing the electricity price on a market analysis is too early to enable renewable energy sources to compete with coal. The extension of the electricity grid has not happened fast enough and still does not reach all areas with renewable energy due to the limited directorate from Mr. Altmaier (Minister of the Ministry for Economy and Energy). The above mentioned Mieterstrom compensation is, on the other hand, a positive change and should be further encouraged.
Please send the following message to the policymaker(s) below.
You are encouraged to make some adjustments in the EEG if this important policy is to achieve its goals. You are encouraged to allocate a specific team for the Energiewende that focuses alone on the extension of the national grid’s ability to access and provide renewable energy and offer fair subsidies to renewable facility owners, which should include small as well as big businesses. Particularly, single households should be encouraged to become self-sustainable and subsidised for it. The promotion of such a initiative would automatically reduce Germany’s dependency on international imports of fossil fuels. To speed up the transition to renewable energy, financing for renewable energy needs to be made available, which could potentially be achieved by setting a higher carbon price in the next years.
Peter Altmaier – Federal Minister for Economic Affairs and Energy
Scharnhorststraße 34-37, 10115 Berlin
Phone: +49 (0) 3018 615-0
Fax: +49 (0) 3018 615-7010
Dr. Patrick Graichen
Phone: +49 30 7001435100
Agora Energiewende, Anna-Louisa-Karsch-Str. 2, 10178 Berlin
For More Information:
PDF on EEG 2017 changes: https://www.erneuerbare-energien.de/EE/Redaktion/DE/Downloads/eeg-novelle-2017-eckpunkte-praesentation.html
Youtube Link by Agora Energiewende: https://www.youtube.com/watch?v=O23A0SvOe-A
Article on situation for wind parks facing the final period of subsidies:
The policy on renewable energies:
Article on national grid situation in Germany: https://www.dw.com/de/vernichtende-kritik-an-deutscher-energiewende/a-45669225