Energy transition progress in 2019
A package of measures to mitigate climate change, a greater share of renewables and fresh momentum for grid expanision – Let's look back at the past twelve months.
Climate, climate, climate! Hardly any other topic has preoccupied the German public in 2019 as much as the future of our climate and ensuring that our energy supply is environmentally compatible on a permanent basis. Germany has done a great deal towards making this a reality. Today, almost forty per cent of our electricity comes from wind, solar, hydropower and biomass. The Bundestag adopted key parts of the 2030 Climate Action Programme and the Climate Action Act in 2019. These include a comprehensive package of measures aimed at enhancing climate protection and ensuring a secure supply of energy in Germany.
The aim is to continue to reduce the level of harmful greenhouse gas emissions being released into the atmosphere. An important element in this will be the introduction of carbon pricing in the heat and transport sectors. From 2021 onwards, the price of releasing greenhouse gases is to become a little bit more expensive from year to year. This system will work in a way that is 'socially acceptable' and 'will not overburden anyone', Minister Altmaier promises. In addition, citizens are to be given relief on their electricity prices and to receive assistance and subsidies, for example for the replacement of their heating systems with climate-friendly models. This might take the form of an exchange premium for an old oil heater for instance. Direct subsidies are still available for energy-efficiency retrofits in houses and buildings and the application process is being made simpler. As an alternative, those living in Germany will in the future also to be able to save on tax if they decide to undertake such measures. The Federal Government will spend around 50 billion euros over the next three to four years to implement all of the measures.
Good for the climate: the complete phase-out of coal by 2038
At the start of 2019, the Commission on Growth, Structural Change and Employment tabled its proposals for the phase-out of coal-fired power plants in Germany. According to these proposals, all coal-fired power plants are to be taken offline by 2038. Ending the use of coal will be no easy task. The gradual phase-out of coal-fired power generation and the changeover towards renewables must be well planned so that Germany can attain its 2030 climate targets while also ensuring security of supply and affordable electricity prices.
As the phase-out of coal takes place, it will be important to create new and secure jobs in the regions affected by this change. To make sure this happens, the Federal Cabinet adopted the Act on structural change in coal mining areas in August 2019. It will work on the act on the phase-out of coal-fired power in December 2019. This act is to stipulate the parameters for the phase-out of coal-fired power generation. In addition, intensive negotiations are taking place with power plant operators on the phase-out of lignite.
The Federal Republic of Germany is placing a priority on relations with its neighbours and is closely coordinating the decision to phase out coal with its neighbouring countries. It discussed the recommendations made by the Coal Commission with them in detail in April 2019. The cross-border exchange of electricity helps all neighbours, because it makes the electricity supply secure and affordable.
More renewables: expansion of photovoltaics, plans to increase offshore wind up to 2030, action plan for onshore wind
As part of the 2030 Climate Action Programme, it was decided this year that the share of renewable energy in electricity consumption is to be raised to 65 per cent by 2030. To do this, wind and solar energy are to be expanded further. The 2030 expansion target for offshore wind power will be raised from 15 to 20 gigawatts (GW).
There were sunny prospects for solar power again in 2019. At the end of November 2019, Germany's Federal Network Agency (Bundesnetzagentur) reported that the share of photovoltaics in the electricity mix is growing strongly and bids for solar systems are still exceeding the amount of capacity up for auction by more than 50 per cent.
In contrast, the expansion of onshore wind energy fell sharply. This was in part due to that fact that not many approvals were granted and there are many pending lawsuits. Following the meeting on wind energy at the beginning of September 2019, Federal Minister for Economic Affairs and Energy Mr Peter Altmaier therefore announced a programme of measures designed to give wind energy a new shot of air. At the beginning of October 2019, the Federal Ministry for Economic Affairs and Energy presented its work plan for strengthening onshore wind energy. According to the plan, more land will have to be made available for wind power plants, approval procedures are to be accelerated and the acceptance of wind farms raised among the general public.
Fresh impetus for grid expansion
At the end of January 2019, the Federal Sectoral Planning for the first section of the 'Ultranet' electricity highway in Hesse and Baden-Württemberg was completed. This marked an important step in the process of expanding the grid. The Planning sets out the exact corridor in which the power line will run. 'Ultranet' is one of the five main German power highways and is designed to transport the wind power produced in northern Germany to the south. The project is the first in Germany to put a DC line and an AC line on the same pylons.
These large power highways carry the lifeblood of the energy transition. They need the support of the Federal Government, the Länder and municipal authorities, and especially of all of the local communities. In February 2019, Minister Altmaier therefore packed his suitcases for the third time and went on a grid expansion trip, this time to 'Ultranet' in Hesse. 'These trips enable me to see things for myself and to try and find solutions. It's important to me to know what residents think. I want to listen and to promote the expansion of the network as well,' Minister Altmaier said.
At the beginning of April 2019, the Bundestag finally gave the go-ahead for the revised Grid Expansion Acceleration Act (NABEG). This act is to make approval procedures for the construction of new power lines in Germany faster and simpler. The local communities affected by this work will continue to be closely involved throughout the process.
The energy ministers of the Länder and the Federal Government are also working together to speed up the expansion of the grid. At end of May 2019, they met with the Federal Network Agency and the German transmission grid operators in Hanover, where they agreed clear schedules and milestones for all of the grid expansion projects. The six milestones mark the beginning and end of the Federal Sectoral Planning, the commencement of construction and the commissioning of the grid.
Supply security still high
In order to ensure that the power supply remains stable as the energy transition progresses, the Federal Ministry for Economic Affairs and Energy constantly monitors the security of the power supply. The results are summarised in the monitoring report on the security of the electricity supply. The Ministry examines in detail how the electricity market and the available power plants will develop in the coming years until 2030. The report published in July 2019 shows that the electricity supply to consumers in Germany will continue to be secure as the transformation of our energy system continues. Security of supply in Germany also remains very high compared with other countries.
Many innovations designed to raise energy efficiency
In 2019, much work has also been done in the field of energy efficiency. This is needed in order to achieve the target of reducing primary energy consumption (the most important indicator in this field) by 50 per cent by 2050 compared with 2008. This is why the Federal Ministry for Economic Affairs and Energy realigned its support programmes for companies at the start of 2019 to better promote investment in the use of industrial waste heat and to improve energy efficiency in production processes.
Another means of saving energy is to undertake climate-friendly renovations on houses. In the future, those living in Germany will also to be able to save on tax by if they decide to go down this route. In October 2019, the Federal Cabinet decided to grant tax incentives for energy-efficiency retrofits on buildings. These plans now need to pass through the Bundesrat and Bundestag. Tax incentives are an important part of the 2030 Climate Action Programme in the building sector. In the future, those willing to have energy-efficiency retrofits will be able to decide whether they want to depreciate the project for tax purposes or whether they would prefer to receive support from the Federal Ministry for Economic Affairs and Energy's established 'investment-based' building programmes. For background information, please click here.
In July 2019, the Bundestag decided to simplify and overhaul energy audits for companies. Energy audits are used to determine how much energy a company consumes and in which areas, and where energy can be saved. This enables them to improve their energy efficiency and to save on energy costs.
At the end of the year, the Federal Government also adopted a 2050 Energy Efficiency Strategy. The Strategy sets an energy efficiency target for 2030. This is to be met through by bundling many of the energy efficiency measures operated by the different federal ministries as set out in the new edition of the National Energy Efficiency Action Plan (NAPE 2.0).
Award-winning research and energy showcases
In February 2019, the Federal Ministry for Economic Affairs and Energy launched a competition for ideas entitled Reallabore der Energiewende or Regulatory Sandboxes for the Energy Transition. The competition attracted a great deal of interest as one of the areas of focus was on promoting new hydrogen technologies. There is a great deal of hope pinned on these technologies for the future of the energy transition. Since August 2019, the 20 winners of the competition have been able to test out in practice innovations that have already been tested in the research laboratory. This work means that new energy technologies will reach the market more quickly – bringing decisive progress in the energy transition. For further information on the competition, please click here.
The funding programme 'Smart Energy Showcases – Digital Agenda for the Energy Transition' (SINTEG) is making it possible to travel through time to see the future of energy. As part of this most successful project, five large-scale model regions have been set up to test innovation solutions for the energy transition. The programme was launched in 2017 and entered the second half of its run-time at the start of 2019. In the meantime, the types of innovations being tested have expanded. The first half of the project involved the development of solutions which are now being tried out in practice as part of specific practical tests. To read the mid-term review, please click here.
Raw materials of the future and smart electricity meters
Natural gas will remain an important component of our energy supply system for many years to come – a fact that has consistently been shown by the 'Gas 2030' dialogue process to date. In order to achieve our climate targets, however, the remaining gas demand is to be gradually covered by carbon-free or carbon-neutral energy sources. Hydrogen could provide a host of climate-friendly solutions for the energy transition of the future. In the coming weeks, the Federal Government plans to develop a National Hydrogen Strategy and a related action plan. Minister Altmaier said that the aim was to create an environment 'that would enable the economy to further develop its industrial potential'.
A key technology for the energy transition is smart meters. Smart metering systems consist of a digital meter and a communications unit, the smart meter gateway. They comply with the high security standards set by the German Federal Office for Information Security (BSI). In the coming years, analogue electricity meters, some of which are decades old, will be replaced by these modern, digital measuring devices nationwide. Smart meters provide a more accurate picture of energy consumption and energy generation at each of the connections where they are directly located and integrate electricity meters into the smart power grid. Once three such devices from mutually independent manufacturers have been certified by the German Federal Office for Information Security (BSI) and the Office has also issued its declaration of market-readiness, there is a legal obligation to install them. By the end of September 2019, two devices had already received this certification and, according to the BSI, a third could follow by the end of the year.
The European electricity market is becoming greener
In 2019, the European electricity market was given a new foundation. Part two of the legislative package 'Clean Energy for all Europeans' is preparing the internal market in electricity for a growing share of renewables. This means more competition and flexible electricity rates for consumers. The most important points can be summarised as follows: electricity suppliers have to offer flexible tariffs, electricity from renewables can be traded everywhere in 15-minute units, released capacities can be marketed more easily, security of supply is increasingly becoming a joint project for the whole of Europe, the cross-border exchange of electricity is being massively promoted, larger renewable energy plants have to market electricity themselves, the feed-in priority for renewables is being bolstered throughout Europe and subsidies for carbon-intensive power plants will be coming to an end.
EU: Germany is sat up front
In July 2020, Germany will take on the Presidency of the Council of the European Union. The Federal Ministry will then also be responsible for the 'Council for Energy'. From January 2020, Germany will additionally assume the presidency of the North Seas Energy Cooperation, which consists of ten European countries and the European Commission. They are all working together to develop offshore wind energy and the grid infrastructure at sea.
The new European Commission started work at the beginning of December 2019. The area of energy is to play a key role in the success of the European Green Deal announced by the Commission. An important task will be to evaluate the National Energy and Climate Plans (NECP) of all EU member states. The NECPs contain the countries' national energy and climate policies for a period of ten years. The goal is to raise the share of renewables in final energy consumption to at least 32 per cent and improve energy efficiency. In addition, primary energy consumption is to be cut by at least 32.5 per cent.