Energy and Climate: The Energiewende


Energy and Climate: The Energiewende

The Energiewende moves forward: the German Government sets out the parameters for energy and climate policy over the next few years

In summer 2015 the Grafenrheinfeld nuclear power plant has been decommissioned. With this, Germany is taking another big step along the path towards a safe and sustainable energy supply. A quarter of our electricity now comes from wind, the sun or biomass. By 2012, environmentally-damaging greenhouse gas emissions were successfully reduced by nearly 25 percent compared to 1990 levels. This means the German Government has moved forward with its road map for the Energiewende, the plan to transform Germany’s energy system to make it safe, environmentally responsible and economically successful in the future.

Germany wants to increase the percentage of its electricity supply that comes from solar, wind and other renewable energy sources to between 40 and 45 percent by 2025 and then to between 55 and 60 percent by 2035. By the same token, this should enable CO2 emissions to be reduced by 40 percent by 2020.

The chairs of the ruling parties met on 1 July 2015 in order to set out new parameters for a successful Energiewende.

Electricity market 2.0

A robust 'electricity market 2.0' constitutes an important step towards a safe and economically efficient electricity supply in a European market increasingly shaped by renewable energy. It ensures that the capacity required can be refinanced through market mechanisms and according to expert reports, in practice, proves more cost-effective than a capacity market.
The electricity market is backed up by a capacity reserve of four gigawatts. The power plants which provide this are only to be activated if, contrary to expectations, market supply and demand cannot reach an equilibrium. This capacity reserve only encompasses power plants not on the electricity market, thus market price formation remains unaffected.

In the future, security of the energy supply will be viewed from an increasingly European perspective, as Germany stated together with its “electric neighbours”. Because supply and demand can be balanced on the single European energy market, individual countries do not need to have as much capacity available.

Phasing out nuclear energy safely

The financial responsibility for the safety of nuclear power plants during the remainder of their operating life lies with energy companies. They are responsible for decommissioning and dismantling the plants as well as the interim storage and final disposal of nuclear material.
The German Government wants to guarantee that this remains the case in the future. Thus first of all a stress test evaluates the companies’ finances. A new legal framework is to counter the possible reduction in energy suppliers’ volume of liability, which could occur if the company is restructured, for example. Moreover, by the end of November 2015, a commission will draft proposals on how to guarantee companies’ long-term funding for dismantling plants and disposing of radioactive material.

Grid expansion

The grid needs to be expanded in order to guarantee that affordable electricity from renewable sources in the North reaches consumers in the South. Citizens’ concerns about overhead cables are being taken very seriously here and thus for direct current lines underground cables are set to take precedence over overhead cables.

Climate protection

Germany will achieve its climate protection goals. For it to do so, CO2 emissions must be reduced by 22 million tonnes by 2020.
This is to be accomplished by gradually transforming lignite-burning power station units with a capacity of 2.7 gigawatts (i.e. 13 percent of installed lignite capacity) into a capacity reserve, at which point they are no longer active on the electricity market. After respective periods of four years the lignite-burning power stations will then be decommissioned.
Heat-power cogeneration will help reduce CO2 emissions by four million tonnes by replacing coal CHP-plants with gas CHP-plants whilst the development of a moderate number of new plants is funded.
From 2016, energy efficiency measures will reduce CO2 emissions by a further 5.5 million tonnes. These measures in the construction sector, municipalities, industry and rail transport will, up to 2020, receive public funding totalling 1.16 billion euros annually via the Special Energy and Climate Fund (EKF).

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