The German ‘Energiewende’ under pressure
Dr. Sylvia Borbonus Wuppertal Institute
Presentation at Clean Energy Workshop: How the EU’s clean energy revolution fell victim to ‘blind austerity’?
of the European Trade Union Institute, November 25th, Brussels
Wuppertal Institute
The Wuppertal Institute A think tank on transition research
President: Prof. Dr. Uwe Schneidewind Vice President: Prof. Dr. Manfred Fischedick Foundation of the institute: 1991 under
Prof. Dr. Ernst Ulrich von Weizsäcker (-2000) and Prof. Dr. Peter Hennicke (-2008) Legal form: Non-Profit-Organisation Owner: North Rhine-Westphalia Approx. 200 employees Approx. 150 -170 projects per year Budget 2010:
2.8 Mio. Euro by North Rhine-Westphalia 9 Mio. Euro by external funding sources
(UN, EU, ministries, industry, NGOs)A joint subsidiary by UNEP and WI
UNEP/WI Collaborating Centre on Sustainable Consumption and Production (CSCP)
22.04.23
Wuppertal Institute
The organisational structure Research groups
22.04.23
Wuppertal Institute22.04.23
Content
• Introduction The German Energiewende: What exactly are we talking
about?
What are the conflicts?
• The cost debate Costs or investments?
The benefits of the German Energiewende
• The power price debate Why are power prices on the rise? Do power prices affect poor households?
• Diverging interests Decentralized and democratic transformation
1
Wuppertal Institute22.04.23
German energy transition: What exactly are we talking about?
Hennicke/Johnson/Kohler/Seifried (1985)
The “Energiewende” is
possible
1985 - 2010:
A long way to make the
“Energiewende” happen!
However: We refer to the time after the Fukushima catastrophe
Energy concept of the German Federal Government (2010): ambitious targets for energy and climate policy
Energy package (2011): a comprehensive legislative package including nuclear phaseout
Wuppertal Institute
Goals of the Federal Government‘s Energy Concept (2010) as cornerstones of the Energiewende
The German energy transition after Fukushima represents a policy-driven, sustainability-oriented restructuring of both the supply and demand-side components of the entire energy system by 2050.
”
Wuppertal Institute
Controversial topics of the “Energiewende”
Costs: How much, how long, who pays?
Security of power supply vs. system integration of intermittent power?
Focus on power: system transformation of heat and transport sector?
Supply side biased; how to foster energy (resource) efficiency?
Decentralized („smart grids“) vs. centralized power („Desertec“)?
Citizens participation and democratisation?
Lifestyle changes to sustainable consumption and production?Costs and power prices are at the heart of the debate: in media and politics social concerns and ecological needs are played off against each other in order to thwart the German „Energiewende“.
Wuppertal Institute22.04.23
How much does the energy transition cost?
Difficulties in determining the costs and current assessment
8
Wuppertal Institute22.04.23
There is no easy answer to this question, requires first of all to clarify what exactly we are talking about:• What is the „Energiewende“?
Only nuclear phaseout?Only expanding renewables or renewables plus energy
efficiency?Only power system or also heating and transport?
• Do we consider absolute costs or additional costs (compared to business as usual)?
• Do we consider costs for single groups in society or for the whole economy?
• Which time frame do we consider (short-term vs. long-term)?• Do we concentrate on market costs or do we integrate external
costs?
Is the energy transition affordable?
9
Wuppertal Institute 22.04.23
Typical differential costs of the „Energiewende“ All sectors; according to German Federal Ministry of the Environment „Lead Scenario 2012“
Source: BMU 2012
Wuppertal Institute22.04.23
Transitional additional costs of a comprehensive energy transition are estimated to be approximately at most 20 billion € per year; without potential savings by additional energy efficiency measures
The German gross domestic product (GDP) in 2012 amounted to approximately 2.650 billion €
The costs of the Energiewende add up to at most 0,8 % of the German GDP or 1,3 % of private consumption (~1.500 billion €)
Can Germany temporarily afford to do without (transitional) consumption in the amout of 1,3 %?
Is this really a significant welfare loss? Is it really a cost explosion that might even initiate the deindustrialization in Germany?
11
How much does the Energiewende cost? Assessment by Federal Ministry of the Environment ‚Leitstudie‘ (2012)
Wuppertal Institute 22.04.23
Germany on the edge of deindustrialization? Export balance and trade surplus as measured by gross domestic product (GDP) [Mrd. €]
Source: DUH 2013
Germany has been realizing the largest trade surpluses within the European Union and faces growing criticism by other euro area member states
6 % are considered ‚healthy‘
Wuppertal Institute 22.04.23
The costs of the energy transition cannot be seen in
isolation: The economic benefits of the
“Energiewende”
Wuppertal Institute 22.04.23
Feed-in law accelerates the market of green electricitySteep learning curves and cost degression for wind and PV power in Germany
Wuppertal Institute 22.04.23
Learning effects and cost degression8 cts/kWh: price of PV-power in 2015 (without storage); HH pay 27cts/kWh (2013)
Wuppertal Institute 22.04.23
Reducing external damage costs of fossil electricity:260 bn € external costs can be avoided by green power up to 2030
Source: BMU 2012
Wuppertal Institute 22.04.23
Source: Samadi 2011, based on data from AG Energiebilanzen 2011 and scenario studies cited
Primary energy in Germany in 2010 and in 2050 according to typical energy scenarios
energy efficiency
renewable energy
Germany on the way to sustainable energy?Decoupling and reducing energy import dependency (2012: import costs 105 bn€)
Share of imported energy
Wuppertal Institute 22.04.23
Fostering „green growth“ and „ecological modernisation“Additional investments for the Energiewende according to BMU-Lead Study (2011)
Quelle: Nitsch et al 2011
Wuppertal Institute
Revenues from power market equipment (German industry) 60 bn € (2020); Federation of German Industry (BDI): „The Energiewende is feasible – with reasonable costs“
22.04.23
Wuppertal Institute 22.04.23
Employment in Germany´s renewable energies sectorMore than 380,000 Germans work in the renewables sector
Source: BMU 2012
Wuppertal Institute 22.04.23
The power price debate:Does the Energiewende unproportionately charge enterprises or low-income
households?
Wuppertal Institute 22.04.23
Comparison of electricity prices in the EUGerman households: high; industry: comparable
Wuppertal Institute 22.04.23
Power prices for industry and households [ct/kWh]
In the last ten years, energy intensive industry paid 10 cent and less per kilowatt hour – households have to afford two and a half times higher prices
Source: DUH (2013)
Wuppertal Institute 22.04.23
Power price development for households (annual consumption 3.500 kWh) [ct/kWh]
The renewables expansion began to influence the power price noticeably only in 2011; before it, other influencing factors were dominating such as lacking competition between the four big utilities and rising fossil fuel prices
Source: DUH (2013)
Power price including renewable energy surcharge
Renewable energy surcharge
Power prices have been rising continually since the turn of the millenium
Wuppertal Institute 22.04.23
Cost components of electric power for German householdsMany drivers – Renewable Resources Act only one factor
Source: BMU 2012
Wuppertal Institute 22.04.23
Development of the surcharge and other factors influencing the power price increase
Taking a closer look at the EEG surcharge predicted for 2014: The mere costs of fostering renewable energies amount to only 2,54 cent per kilowatt hour
Wuppertal Institute 22.04.23
Development of energy costs for an average three persons household
The costs of mobility (gasoline) and heating (heating oil) represent larger items in absolute numbers
Household-level energy costs have been rising in the last years even if the renewable energy surcharge is excluded.
Source: DUH)
Wuppertal Institute 22.04.23
Development of energy prices at household level (base year 2010)
All trends go in the same direction: all energy costs have been rising since the turn of the millenium, not only power
Source: DUH (2013)
Heating oil
Central + district heating
Natural gas
Power
Gasoline + diesel
Wuppertal Institute 22.04.23
Share of power costs as measured by gross domestic product [%]
„From an aggregated perspective, the increase in power prices is not as dramatic as often asserted in public debates“ (Expert Commission for the Assessment of the first monitoring report on the Energiewende, December 2012)
Source: DUH (2013)
Wuppertal Institute 22.04.23
Germany‘s subsidies for renewables Reasonable range compared to other countries
Wuppertal Institute 22.04.23
Total financial exemptions with regard to the power price of the industry [Mrd. €]
Source: DUH (2013)
Unter the last government coalition of christdemocrats and liberals the total power price exemptions of the industrie reached with 16,8 Mrd. € their highest level so far
Wuppertal Institute 22.04.23
Decentralized power options and new actors e.g. regional utilities, citizens cooperatives
drive the “Energiewende”
Wuppertal Institute
Decentralized options support large scale implementation100%-Renewable-Energy-Regions in Germany
• Political decision towards 100% renewable energy in more than 100 cities or regions
• Aim: Complete change towards renewable energy as well as reducing energy use
• Using regional sustainable energy sources to create regional welfare (income effects)
• Main barriers: co-ordination, local acceptance, lack of funds
• Innovative financing (citizen companies, cooperatives, local funds)
22.04.23
Wuppertal Institute22.04.23
Financing the „Energiewende“ in the power sector The important role of „citizens capital“ ( > 50%)
22.04.23
Private households
Four big power companies
Farmers
The ‚big four‘(Eon, RWE, Vattenfall, EnBW) only contribute 7 % of the power sector investments of the Energiewende
Wuppertal Institute
Conclusions
22.04.23
• The German energy transition is broader than often discussed. It also includes transportation and housing sector.
• The Energiewende is an ambitious, but feasible and affordable undertaking. It strengthens Germany‘s industrial base and creates new jobs.
• A number of steps have to be taken to ensure that the cost of renewable electricity is equally spread across power consumers.
• German industry needs to pay its fair share in the switch to renewables.
• The German energy transition is driven by citizens and communities.
Thank you for your attention!
Have you visited our website? http://www.wupperinst.org
