Germany’s challenges to keep on its energy transition pathway

Trevelyan Wing, Centre Researcher and PhD Candidate, Cambridge Centre for Environment, Energy and Natural Resource Governance (CEENRG at the, University of Cambridge writes on The Conversation website about how the energy supply crisis and the war in Ukraine are causing difficulties for the German federal government to keep to its ambitious policy agenda. What are your views?

 

Why Russian gas could disrupt Germany’s plan for a bolder climate agenda

After 16 years under conservative Angela Merkel, Germany gained new leadership late last year. Following a “climate election” that saw the issue surpass COVID-19 as voters’ top concern, Europe’s largest economy is now ruled by a progressive three-party “Alliance for Freedom, Justice and Sustainability” comprising Social Democrats, Greens and Liberals.

This is the first time the Greens have shared power since 1998-2005, years that saw the acceleration of the “Energiewende” (energy transition), a trailblazing project that has stalled over the past decade. With the party’s co-leaders heading both the foreign ministry and a new economy and climate “super ministry”, many expect Germany to step up efforts to once again lead on climate change and turbocharge the national Energiewende.

Likewise, there are high hopes for Germany’s new chancellor, Social Democrat Olaf Scholz. As Hamburg mayor, he brought that city’s energy grids back under municipal control to promote renewables following a popular referendum – despite initially opposing the idea – displaying a pragmatic approach to green policymaking. With such figures now at the levers of power, a bolder climate plan appears possible.

Toward that end, the new government approved an ambitious agenda, including objectives by 2030 to phase out coal (eight years earlier than envisioned under Merkel), achieve 80% renewable electricity (up from the prior 65% goal), earmark 2% of land for onshore wind, and achieve 50% climate-neutral heating. It has also set big targets on electric vehicles, train electrification, green hydrogen and rooftop solar, with the overall aim of reaching climate neutrality by 2045.

“The bridge has collapsed”

Russia’s invasion of Ukraine has made all of this significantly harder to achieve. Germany’s energy transition has for years been predicated on the notion of Russian gas as a “bridge fuel” between a coal-powered past and renewable future, yet supply and sanctions-related concerns linked to the conflict are challenging this strategy. According to climate state secretary Patrick Graichen, “the bridge has collapsed” as a result of the war in Eastern Europe, which “has broken the narrative of natural gas as a bridging technology”.

The Greens’ participation in government has further undermined the prospect of natural gas as a bridge fuel. The natural gas-sceptic party has long opposed the Nord Stream 2 pipeline between Russia and Germany, with foreign minister Annalena Baerbock lambasting the project as contrary to EU rules even before it was put on ice following events in Ukraine.

A slow decade

Trouble was already brewing well before this, however. Despite impressive achievements into the early 2010s, the intervening period saw missed targets and a slower rate of renewable energy deployment. In a landmark case last year, Germany’s highest court even ruled the country’s 2019 Climate Change Act to be partially unconstitutional for failing to safeguard the rights of future generations.

Now, just as Germany attempts to simultaneously close all its coal-fired (by 2030) and nuclear (by the end of 2022) power plants, rapidly rising energy prices mean lower- and middle-income households are footing an excess proportion of the Energiewende’s hefty bill. This seriously threatens the project’s popular support.

Calls to boycott Russian oil and gas over Ukraine present another headache for the government. Indeed, economy and climate minister Robert Habeck recently claimed that an overnight embargo on Russian fossil fuels, as part of wider sanctions, would lead to petrol shortages, poverty and mass unemployment.

Bring back energy democracy?

One solution to Germany’s energy transition woes would draw on the country’s federal system to kick-start progress. German municipalities and states have historically played a pioneering role environmentally, with the Energiewende launched largely thanks to grassroots efforts.

From clean energy cooperatives to citizens’ initiatives pushing for greener municipal- and state-level policies, these experiments in “energy democracy” stemming from the 1970s were buoyed by complementary laws passed at the federal level, particularly in the 1990s and early 2000s. This meeting of bottom-up and top-down approaches provided the foundation for the Energiewende’s initial successes.

Over the past ten years, the energy transition has shifted agency and power from enterprising citizens and communities to large corporations, under the federal government’s aegis. As the scope for citizen-driven contributions was curtailed, so too was the pace of the Energiewende. Targets once exceeded now regularly go unmet. To reverse this trend, a national reappraisal seems in order.

From Energiewende to “Zeitenwende”

The war in Ukraine has put a spoke in the wheel here, but it may yet serve to fast-track the Energiewende. A proportionate and graduated Russian energy embargo, intelligently conceived, could present a unique opportunity for Germany to pursue alternative means of powering its energy transition far into the future.

The costs might not be as high as predicted either, with some experts suggesting an embargo could impact the country’s economy less than COVID-19, in the short term leading to a fall in GDP of between 0.5% and 3%, compared with a 4.5% decline during the 2020 pandemic. Meanwhile, renewables could be massively expanded to help make up the shortfall, with coal, for example, providing a temporary backup solution (nuclear remains a domestic bugbear).

Ultimately, whether the government’s promises are kept and the Energiewende’s potential is fulfilled remains to be seen. What is clear is that, beyond the immediate risks, this is also a moment pregnant with possibility – a potential “Zeitenwende” (historical turning point) for Germany, Europe, and the wider world.

Posterity will not look kindly if the new government fails to seize this generational opportunity to restore Germany’s climate – and moral – leadership.

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4 thoughts on “Germany’s challenges to keep on its energy transition pathway

  1. A good article raising some valid points. When one looks at German history 2000 – 2020, there are some very very odd developments.
    There was the cuddle up to Gazprom by Schroder once he left office (politico on the make?).
    Following Angie getting the top job (2005) there were in 2010/2011
    a) stop the nukes (ostensibly Fukushima),
    b)Nord Stream (which kept rolling even post 2014).
    c) RES reform 2015/2016 which as the article noted booted out the small people (which dominated German RES up to that point) and pulled in the big guys. This action on its own did two things:
    1) stalled/slowed on-shore RES build out (just as Nord Stream was getting completed & made the case stronger for gas
    2) introduced what amounted to asymmetric Contracts for Difference (CfDs) so wholesale goes low – German serfs pay the difference between auction/strike price & wholesale, wholesale price goes high – kerching! Big companies trouser loads-a-money (as is the case now).
    d) off-shore build out stalls – for years.
    e) energy efficiency … lots of talk, renno rates slow to 1% on Angies watch – which means – more gas (is that Vlad smiling?).
    A cursory glance at the evolution of stock market prices for companies dependent on the German market for WTs (or indeed Knauf & Rockwool) is instructive & tracks quite well German failures.
    It is almost as if the whole sorry tale was planned. Of course it could equally be cock-up. But the question to be asked & answered is if RES/EE fails (or is slowed) who gains?

    A couple of add-ons – the German PV production industry was destroyed by, Germany PV equipment manufacturers who sold loads of kit to China (& then lobbied via the DE gov to slow down any anti-dumping action) – that is why Europe is now dependent on Chinese PV panels – remind me who China is best friends with?
    Pathetic, money grubbing, mercantilist are some of the words one could use to describe some elements in the German body polit-sick.

    Of course it they turbo-charged community energy & energy efficiency actions this would help the German economy – with economic multipliers of anything between 3 and 5 (1euro spent results in 3 or 5 more being spent). Instead it looks like the dolts will spend money on weapons. Know what the economic multiplier on weapons spending is? minus 9 , yes minus 9 …spending on weapons kills an economy. Rant ends.

  2. A good article but here’s the catch that could de-rail the Zeitenwende: “Meanwhile, renewables could be massively expanded to help make up the shortfall”.
    Could be, should be, would be…I’m not sure this is happening. Regulations can change, but as you probably know as far as 2026 the permits to install utility-scale wind/solar projects have all been auctioned off, final investment decisions taken etc. This was already problematic when the German coalition agreement was signed with its massively ambitions targets.
    Now, new attempts to speed up deployment, including shortcuts in the permitting process (circumventing environmental impact studies or local opinion) will likely lead to backlash and/or even less popular support.

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