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IEA Commends Germany's Energiewende, Recommends Further Actions
Green Technology Featured Articles
May 28, 2013

IEA Commends Germany's Energiewende, Recommends Further Actions

By Cheryl Kaften
TMCnet Contributor

In a report released on May 24, the Paris-based International Energy Agency (IEA) recognized Germany’s role as a leader in the worldwide renewable energy revolution—and challenged the nation to do even more to “maintain a balance between sustainability, affordability and competitiveness.”


Through its Energiewende —a transitional national plan to abandon nuclear and petroleum energy—Germany has developed and documented a comprehensive energy strategy, ambitious renewable energy targets and plans to reduce energy consumption, the IEA said.

Nonetheless, according to the new policy research and policy document, “Energy Policies of IEA Countries – Germany 2013 Review,” the scale of Germany’s energy policy ambitions, coupled with the size and energy intensity of its economy, and its location at the heart of Europe’s energy system, mean that further policy measures are necessary.

IEA Executive Director Maria van der Hoeven commented, “Electricity flows where resistance is least—in Germany’s case, often to your neighbors. Understandably, cooperation was limited when this process started. This is no longer the case; Germany is now more aware that domestic policy decisions have an impact far beyond your borders and policies must be implemented within the context of a broader European policy framework.”

Prices and Power Choices

To date, German consumers have absorbed the costs of the Energiewende, but the debate over the social and economic impacts has become more vociferous as the share of renewable energy has continued to grow alongside rising electricity prices. The report notes that the transition to a low-carbon energy sector requires public acceptance, and, therefore, retail electricity prices must remain at an affordable level.

“The fact that German electricity prices are among the highest in Europe, despite relatively low wholesale prices, must serve as a warning signal,” said van der Hoeven.

She also pointed out the growing, strategic role of natural gas, stating, “Further … thought needs to be given to [the use of natural gas] and [its] place in the energy supply mix of the future. Furthermore, if Germany is to meet its 2020 greenhouse gas (GHG) emissions reduction target of 40 percent in the absence of much of its nuclear fleet, a cleaner alternative to coal use needs to be found. Natural gas use can support the transformation of the electricity sector to a low-carbon future and [can be used] as a tool to manage the system risks related to the integration of large amounts of wind power and solar PV.”

The ‘To-Do’ List

Specifically, the report recommends that Germany should:

  • Manage the cost of extra renewable energy capacity via cost-effective, market-based approaches—which will bring new renewable capacity closer to market needs, support investments in appropriate locations and complement planned network expansion;
  • Ensure that the costs of the Energiewende are allocated fairly across customer groups, including households and small businesses, producers of renewable energy and energy-intensive industry—and limit the growth of the Renewable Energy Sources Act surcharge attributable to the deployment of additional renewable energy capacities, while drawing all benefits from the rapid decrease in technology costs that has occurred;
  • Make timely and cost-efficient investments in transmission and distribution networks, as well as a regulatory system that provides sufficient financial incentives and investment security for mobilizing the necessary investments in distribution;
  • Complete an assessment, in coordination with stakeholders, of the extent to which the present electricity market facilitates the financing of new, flexible gas-fired generation and cost-effective electricity storage.

At the same time, the IEA said that energy policy is based on long-term investment decisions, and that the framework conditions in Germany for a policy consensus in favor of large-scale deployment of renewables have never been better.




Edited by Alisen Downey


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