Energy transition progress in 2018
Fresh momentum for grid expansion, a greater share of renewables and more funding for research – Let’s look back at the past twelve months.
With houses and streets full of lights and fairy lights and our homes warm and snug, the weeks before Christmas are a time when we are more than usually aware of how important it is for us to be able to rely on a secure supply of affordable energy. The energy transition is all about guaranteeing Germany’s energy supply for the long term, whilst taking incremental steps towards a more climate-friendly energy solution.
Renewables are an important part of building this future. This is why we are increasing their share in our energy system. But if we are to be able to bring the electricity generated from wind and solar power to the places where it is needed, say from Germany’s offshore wind farms in the North Sea to the industrial centres in the south and west of the country, we also need to expand our electricity grids. We have taken up this challenge and are planning to build several electricity highways and optimise existing power lines.
Minister Altmaier takes grid-expansion tour
The crucial grid-expansion project has met with some scepticism among the general public. Minister Altmaier took another grid-expansion tour in the autumn to talk to the people affected by the projects and see where the problems are. "It is important to me to find out what our citizens think about this and where exactly the problems are. We need people to embrace the energy transition – not just as a theoretical concept, but also where it is really happening." The first leg of his tour took Mr Altmaier to North Rhine-Westphalia and Lower Saxony last summer, the second to Thuringia and Bavaria in November. The Minister also actively engaged in discussions with citizens’ initiatives and is planning to travel to Hesse next year.
In summer, Minister Altmaier launched the Electricity Grid Action Plan, which is to accelerate the expansion process by streamlining planning procedures and improving the way projects are overseen. Existing grids are to be optimised using new technologies and operating strategies.
Federation and Länder agree on legislative package for faster grid expansion
Most decisions relating to the expansion of grid – including planning permission – are taken at Länder level. At a grid summit in September, Federal Minister Altmaier and the energy ministers of the Länder agreed on a legislative package to speed up the process of grid expansion. Said Minister Altmaier: "This marks a major step forward taken jointly by the federation and the Länder, a step towards ensuring that Germany as an industrial centre will continue to have a powerful electricity grid and quickly expand the use of renewables." The action is to address the obstacles and delays hitherto experienced and thus reduce costs for consumers.
New auctioning schemes for renewables
Another key project for 2018 was to further optimise the market-based auctions for renewables projects. All operators of solar, wind and biomass installations that became operational in 2017 or later have to participate in a competitive procedure if they want to receive government funding. This funding scheme has replaced the former system of fixed feed-in tariffs and ensures that funding is channelled towards those operators requiring the least amount of public-sector funding. This has helped considerably lower the cost of the expansion. "The reforms of the last few years are having an effect," said Minister Altmaier. "Newly installed renewable energy needs less and less funding."
The draft for the so-called Energy Omnibus Act that entered the legislative process in November also envisages 'special auctions' to be held. These are designed to speed up the process of expanding the use of renewables and support the attainment of the climate targets. Over the next three years, an additional four gigawatts of capacity both for on-shore wind-powered installations and for solar installations will be auctioned. Under the new legislation, there will also be auctions for innovation. These are designed to test new pricing mechanisms or any other measures making the system more competitive. The exact details will be drawn up over the coming months.
Good news for consumers: the renewable energy surcharge will remain stable
The share of renewables in our electricity supply has risen, but consumers are not having to pay more because of that. Germany’s renewable energy surcharge which every consumer has to pay has remained stable in 2018, at 6.792 cents per kilowatt hours (ct/kWh) Next year, it will drop to 6.405 cent/kWh, as announced by the network operators in October.
Companies making greater use of waste heat
The energy transition is not only about climate-friendly electricity, for instance for powering the fairy lights on your Christmas tree. It is also about using heat efficiently. This is why the Federal Ministry for Economic Affairs and Energy has launched a number of programmes designed to encourage private households, companies and municipalities to invest in efficient boilers and other heating systems. Industrial companies generating waste heat in their production processes can put this heat to good use, for instance to heat their office space. The programme providing funding for this met with a particularly positive response in 2018, with more than 400 new projects approved this year alone.
As of next year, the waste heat programme and other programmes targeted at commercial companies will be subsumed into an even more attractive overall programme providing encouragement for firms to invest more in energy conservation.
The one thing that is even better than using green energy is to reduce your energy consumption. This is why the federation is providing some €3.4 billion of funding for investments in efficient buildings, energy efficiency in the industrial and commercial sectors, and expert energy advice.
Bringing research findings to market more quickly
No technological process without energy research – this is true of solar PV for your own home, climate-friendly vehicles and highly-efficient manufacturing facilities. This is why the Federal Government is providing some €6.4 billion in funding for energy research up to 2022. representing an increase of approx. 45% over the period from 2013-2017.
The 7th Energy Research Programme adopted by the Federal Government in September wants to help speed up the process of turning research findings into marketable products, procedures and services. The living labs established as part of the energy transition will be made an essential pillar of our energy research (click here to read more about living labs and how they work). Furthermore, startups are to be given better access to research funding.
In contrast to the former editions of the Energy Research Programme, which only provided funding for individual technologies, the focus in the coming years will also be on horizontal issues such as digitisation and sector coupling.
Germany is working together with almost 20 countries
Like Germany, many countries across the globe are seeking to fundamentally overhaul their energy systems, improving their energy performance and moving away from fossil fuels such as coal and gas to renewable energies that are compatible with the environment and our climate. Germany is working with nearly 20 countries to give a boost to the global energy transition and ensure that best practices are shared across the world. Among the countries Germany is working with are Brazil, China, India and Mexico, which which it has formed energy partnerships on an official footing. Beyond these, Germany is also engaged in informal energy dialogues with Japan, Russia, the USA and others.
EU creates new milestone for the European energy transition
This summer, the European Union set the course for the next 10 years of the European energy transition. In their Clean energy for all Europeans package, the Member States have defined new ambitious, but attainable EU-2030 targets for the expansion of renewables and the increase in energy efficiency. The share of renewable energy in final energy consumption within the EU is to increase to at least 32% by 2030. Within the same period, the EU’s primary energy consumption is to be reduced by 32.5% compared to baseline scenario. Furthermore, the Member States have agreed on specific action and correction measures to be taken in pursuit of the joint targets.
Under a system modelled upon the German Energy Concept, Member States are to draw up national energy and climate plans for the period from 2021-2030 – an exercise that will help compare energy policies within the EU and better coordinate action. Most importantly, the plans will state each country’s national contribution to the EU-2030 targets and be debated not only at national level, but also with neighbouring states.
The objected shared by all Member States in this is to deliver clean energy for all Europeans – today and for the generations to come.