Energiewende: Germany’s Renewable Energy Transformation

July 15, 2014

OffshoreWindSmallGermany is a world leader in sustainable development. This is largely due to the mentality of ‘Energiewende’ or energy transformation. The cornerstone of this concept is decreasing energy consumption and increasing renewable sources in the energy mix. There has been rapid growth in the Germany’s wind, solar and biomass industries, but the process is not without its share of costs and controversies.

According to the German Association of Energy and Water Industries, 23.4 percent of German electricity was generated by renewable energy sources in 2013. This was primarily wind and biomass sources, but photovoltaic and hydropower energy were also significant contributors. In 2013 the United States generated a considerable 13 percent of electricity from renewable sources.

Much of the credit for the success of Energiewende is attributed to the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz), implemented in 2000. In addition to the government’s prior calls for grid efficiency improvements and consumption reductions, the Act calls for Feed-In Tariffs. These tariffs get most of the credit for the rapid development of renewables. The tariff is a 20-year subsidy guarantee of a fixed rate price per unit energy, independent of market prices and usually decreasing over time.

Before legislation came into play, the renewable energy transition built steam gradually. The founding of the Federal Environment Agency in 1974, the rise of the Green party and progressive planning by the European Union have all greatly benefited the movement.

German Chancellor Angela Merkel has also played an important role in the progress of renewables, despite not being a member of Germany’s Green Party. Since her election in 2005, Merkel’s agenda to reduce CO2 emissions has received mixed reactions, but was strongly supported in polls of the German public.

In the wake of the Fukishima disaster in Japan in 2011, Merkel changed the direction of the renewables program with a plan to close all nuclear plants in Germany by 2022. This met with support from some environmental groups and opposition from others.

MerkelSmallThough there was the clear benefit to decreasing risk of nuclear disaster, the unreliable nature of wind and solar energy means there must be sources to offset energy demand when the sun isn’t shining and the wind isn’t blowing. If not nuclear, this source would be fossil fuels, as other reliable non-emitting sources do not yet have large enough market shares.

The Feed-In Tariff subsidies, which are funded through cost-sharing, have also placed a financial burden on energy consumers. Recently, revisions were made to Feed-In Tariff legislation to decrease subsidies, prevent prices from rising further and ideally motivate innovation to lower costs in the renewable energy industry.

Germany hopes to be generating 40 percent of all energy with renewables by 2025 and 80 percent by 2050, according to the German Federal Ministry of Economic Affairs and Energy. With the support of the German people and continued policy improvements, Germany will likely achieve a fully sustainable energy economy far ahead of any other industrialized nation.

As of 2013, Germany had a budget surplus of 7 percent of its GDP, and an unemployment rate of about 5 percent this June. I guess we need to step it up America.

-Aidan Kelly
Photo Credit-Flickr/Phault, Christliches Medienmagazin pro

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