The German ‘Energiewende’ under pressure
Dr. Sylvia Borbonus
Wuppertal Institute
Presentation at Clean Energy Workshop:
How the EU’s clean energy revolution fell victim to ‘blind austerity’?
of the European Trade Union Institute, November 25th, Brussels
The Wuppertal Institute
A think tank on transition research
 President: Prof. Dr. Uwe Schneidewind
 Vice President: Prof. Dr. Manfred Fischedick
 Foundation of the institute: 1991 under
Prof. Dr. Ernst Ulrich von Weizsäcker (-2000)
and Prof. Dr. Peter Hennicke (-2008)
 Legal form: Non-Profit-Organisation
 Owner: North Rhine-Westphalia
 Approx. 200 employees
 Approx. 150 -170 projects per year
 Budget 2010:
2.8 Mio. Euro by North Rhine-Westphalia
 9 Mio. Euro by external funding sources
(UN, EU, ministries, industry, NGOs)
 A joint subsidiary by UNEP and WI
UNEP/WI Collaborating Centre on
Sustainable Consumption and
Production (CSCP)
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The organisational structure
Research groups
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Content
•
Introduction
 The German Energiewende: What exactly are we talking
about?
 What are the conflicts?
•
The cost debate
 Costs or investments?
 The benefits of the German Energiewende
•
The power price debate

Why are power prices on the rise?

Do power prices affect poor households?
•
Diverging interests
 Decentralized and democratic transformation
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German energy transition:
What exactly are we talking about?
Hennicke/Johnson/
Kohler/Seifried
(1985)
The
“Energiewende” is
possible
1985 - 2010:
A long way to
make the
“Energiewende”
happen!
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However: We refer to
the time after the
Fukushima catastrophe
Energy concept of the
German Federal
Government (2010):
ambitious targets for
energy and climate
policy
Energy package (2011):
a comprehensive
legislative package
including nuclear
phaseout
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Goals of the Federal Government‘s Energy Concept
(2010) as cornerstones of the Energiewende
”
The German energy transition after Fukushima represents a policy-driven,
sustainability-oriented restructuring of both the supply and demand-side
components of the entire energy system by 2050.
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Controversial topics of the “Energiewende”
 Costs: How much, how long, who pays?
 Security of power supply vs. system integration of intermittent
power?
 Focus on power: system transformation of heat and transport
sector?
 Supply side biased; how to foster energy (resource) efficiency?
 Decentralized („smart grids“) vs. centralized power („Desertec“)?
 Citizens participation and democratisation?
 Lifestyle changes to sustainable consumption and production?
Costs and power prices are at the heart of the debate: in media
and politics social concerns and ecological needs are played off
against each other in order to thwart the German „Energiewende“.
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How much does the energy
transition cost?
Difficulties in determining the costs and
current assessment
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Is the energy transition affordable?
There is no easy answer to this question, requires first of all to clarify
what exactly we are talking about:
• What is the „Energiewende“?
Only nuclear phaseout?
Only expanding renewables or renewables plus energy
efficiency?
Only power system or also heating and transport?
• Do we consider absolute costs or additional costs (compared to
business as usual)?
• Do we consider costs for single groups in society or for the whole
economy?
• Which time frame do we consider (short-term vs. long-term)?
• Do we concentrate on market costs or do we integrate external
costs?
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Typical differential costs of the „Energiewende“
All sectors; according to German Federal Ministry of the Environment „Lead
Scenario 2012“
Source: BMU 2012
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How much does the Energiewende cost? Assessment by
Federal Ministry of the Environment ‚Leitstudie‘ (2012)
 Transitional additional costs of a comprehensive energy transition
are estimated to be approximately at most 20 billion € per year;
without potential savings by additional energy efficiency measures
 The German gross domestic product (GDP) in 2012 amounted to
approximately 2.650 billion €
 The costs of the Energiewende add up to at most 0,8 % of the
German GDP or 1,3 % of private consumption (~1.500 billion €)
 Can Germany temporarily afford to do without (transitional)
consumption in the amout of 1,3 %?
 Is this really a significant welfare loss? Is it really a cost explosion
that might even initiate the deindustrialization in Germany?
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Germany on the edge of deindustrialization?
Export balance and trade surplus as measured by gross domestic
product (GDP) [Mrd. €]
6 % are
considered
‚healthy‘
Germany has been realizing the largest trade surpluses within the
European Union and faces growing criticism by other euro area
member states
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Source: DUH 2013
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The costs of the energy
transition cannot be seen in
isolation:
The economic benefits of the
“Energiewende”
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Feed-in law accelerates the market of green electricity
Steep learning curves and cost degression for wind and PV power in Germany
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Learning effects and cost degression
8 cts/kWh: price of PV-power in 2015 (without storage); HH pay 27cts/kWh (2013)
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Reducing external damage costs of fossil electricity:
260 bn € external costs can be avoided by green power up to 2030
Source: BMU 2012
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Germany on the way to sustainable energy?
Decoupling and reducing energy import dependency (2012: import costs 105 bn€)
Primary energy in Germany in 2010 and in 2050 according to typical energy scenarios
Share of imported energy
BMWi - Scenario II B
ca.50%
2050
EnBW et al - Scenario 3
BMU - Base Scenario 2010 A
47%
Greenpeace - Plan B
11%
WWF - Innovation w. CCS
energy efficiency
WWF - Innovation w/o CCS
31%
27%
2010
renewable energy
Actual
ca. 70%
0
2000
4000
6000
8000
10000
12000
14000
16000
PJ
Nuclear energy
Hard coal
Lignite
Oil
Natural gas
Renewables
Others
Source: Samadi 2011, based on data from AG Energiebilanzen 2011 and scenario studies cited
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Fostering „green growth“ and „ecological modernisation“
Additional investments for the Energiewende according to BMU-Lead Study (2011)
Quelle: Nitsch et al 2011
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Revenues from power market equipment (German industry)
60 bn € (2020); Federation of German Industry (BDI): „The Energiewende is
feasible – with reasonable costs“
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Employment in Germany´s renewable energies sector
More than 380,000 Germans work in the renewables sector
Source: BMU 2012
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The power price debate:
Does the Energiewende
unproportionately charge
enterprises or low-income
households?
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Comparison of electricity prices in the EU
German households: high; industry: comparable
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Power prices for industry and households [ct/kWh]
In the last ten years, energy intensive industry paid 10 cent and less per
kilowatt hour – households have to afford two and a half times higher prices
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Source: DUH (2013)
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Power price development for households (annual
consumption 3.500 kWh) [ct/kWh]
Power price including renewable energy surcharge
Renewable energy surcharge
Power
prices have
been rising
continually
since the
turn of the
millenium
The renewables expansion began to influence the power price noticeably only
in 2011; before it, other influencing factors were dominating such as lacking
competition between the four big utilities and rising fossil fuel prices
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Source: DUH (2013)
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Cost components of electric power for German households
Many drivers – Renewable Resources Act only one factor

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Source: BMU 2012
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Development of the surcharge and other factors
influencing the power price increase
Taking a closer look at the EEG surcharge predicted for 2014: The mere
costs of fostering renewable energies amount to only 2,54 cent per
kilowatt hour
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Development of energy costs for an average three
persons household
The costs of
mobility
(gasoline) and
heating
(heating oil)
represent
larger items
in absolute
numbers
Household-level energy costs have been rising in the last
years even if the renewable energy surcharge is excluded.
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Source: DUH)
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Development of energy prices at household level
(base year 2010)
Heating oil
Central + district
heating
Natural gas
Power
Gasoline +
diesel
All trends go in the same direction: all energy costs have been rising
since the turn of the millenium, not only power
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Source: DUH (2013)
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Share of power costs as measured by gross domestic
product [%]
„From an aggregated perspective, the increase in power prices is not
as dramatic as often asserted in public debates“ (Expert Commission
for the Assessment of the first monitoring report on the Energiewende,
December 2012)
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Source: DUH (2013)
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Germany‘s subsidies for renewables
Reasonable range compared to other countries

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Total financial exemptions with regard to the power
price of the industry [Mrd. €]
Unter the last government coalition of christdemocrats and liberals the
total power price exemptions of the industrie reached with 16,8 Mrd. €
their highest level so far
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Source: DUH (2013)
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Decentralized power options and new actors
e.g. regional utilities, citizens cooperatives
drive the “Energiewende”
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Decentralized options support large scale implementation
100%-Renewable-Energy-Regions in Germany
Area
12
%
88
%
Popul.
8%
92%
• Political decision towards 100% renewable
energy in more than 100 cities or regions
• Aim: Complete change towards renewable
energy as well as reducing energy use
• Using regional sustainable energy sources
to create regional welfare (income effects)
• Main barriers: co-ordination, local
acceptance, lack of funds
• Innovative financing (citizen companies,
cooperatives, local funds)
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Financing the „Energiewende“ in the power sector
The important role of „citizens capital“ ( > 50%)
Private households
The ‚big four‘(Eon,
RWE, Vattenfall,
EnBW) only
contribute 7 % of
the power sector
investments of the
Energiewende
Farmers
Four big power
companies
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Conclusions
• The German energy transition is broader than often
discussed. It also includes transportation and housing
sector.
• The Energiewende is an ambitious, but feasible and
affordable undertaking. It strengthens Germany‘s
industrial base and creates new jobs.
• A number of steps have to be taken to ensure that the cost
of renewable electricity is equally spread across power
consumers.
• German industry needs to pay its fair share in the switch
to renewables.
• The German energy transition is driven by citizens and
communities.
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Thank you for your attention!
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