Energy transition shapes foreign policy in Germany and beyond
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Germany’s transition to a low-carbon and nuclear-free economy has largely been a domestic environmental project, whose impact on international relations was only peripherally on the public agenda. But this has begun to change, as issues like the Ukraine crisis or integrating the EU power market have highlighted the links between the Energiewende and foreign policy. According to Wolfgang Ischinger, chairman of the Munich Security Conference, the world's largest gathering of its kind, energy and diplomacy have always been closely connected: "Energy policy is European security policy".
When tensions between Ukraine and Russia – and subsequently with Russia’s European partners – erupted in 2014, there was much talk about Germany’s reliance on energy imports. Russia is the country’s largest supplier of oil, gas and coal. Government officials have highlighted that the Energiewende can play a significant role in mitigating such risks. The German Minister for Economic Affairs and Energy (BMWi), Sigmar Gabriel, told representatives from 60 countries at an event showcasing the energy transition as a global project in March that the Energiewende “will enable us to reduce our dependence on oil and gas imports while reaching our climate protection targets and, not least of all, advancing the development and use of new and promising technologies in global markets.” Germany’s exit from nuclear power, and the depletion of already limited domestic resources, will maintain its reliance on fossil fuels from abroad for some time to come, according to experts. But in the longer term, the expansion of renewables and rising efficiency to meet climate targets can reduce the need for imports.
At the same time, the impact of the Energiewende on international relations reaches far beyond energy supply security. While more renewable power may help defuse global conflicts over fossil fuels like oil, it could also weaken longstanding trading partnerships that have been a bulwark against conflict, some security analysts argue. Russia needs buyers as much as its trading partners need gas. Such mutual dependencies have provided an incentive for maintaining diplomatic stability, they say. If Germany shifts successfully towards a low-carbon future, many countries may well follow suit. Foreign policy experts say this would profoundly alter global power relations, currently heavily influenced by fossil fuel dependency. Security experts also warn that climate change starts to have grave implications for international security - for example, by destabilising fragile nation states - which adds to the importance of cutting carbon emissions through projects like the Energiewende. Lastly, the Energiewende’s success has become important to Germany's credibility on the global stage, analysts say.
Germany is powered by vast amounts of fossil fuels from abroad
Despite the rapid rise of renewables, Germany remains dependent on fossil fuel imports. The share of renewables in gross power consumption rose to 27.8 percent in 2014, with first estimates showing a rise to nearly one third in the first half of 2015. But because the Energiewende has focused on electricity, mostly bypassing other energy-hungry sectors such as heating and transport, green energy’s share in primary energy consumption was only 11.1 percent.
As one of the world's largest energy consumers, Germany has to import most of its energy fuel. “Although energy demand in Germany has been falling for years, the country's dependency on imported energy sources will increase with the continuing decline in domestic production,“ predicts the Federal Institute for Geosciences and Natural Resources (BGR). According to this institute, Germany imports about 98 percent of its crude oil, 88 percent of natural gas, about 87 percent of (hard) coal, and 100 percent of uranium.
Tensions in Ukraine have highlighted that Russia supplies 35 percent of the oil Germany needs, 39 percent of the gas, and 29 percent of hard coal. [For more details on Germany’s dependence on fossil fuel imports, see the factsheet.]
Medium- and long-term effects of the Energiewende
Until recently, there was little discussion of how the Energiewende could affect supply security in terms of foreign policy. “Up until 2014, there was no such debate in Germany,” says Christian Hübner from the Konrad Adenauer Stiftung, where he has built up the renewable energy department. The Ukraine crisis has catapulted the topic into the mainstream. “The Ukraine/Russia crisis suddenly put the import dependency on fossil energies in the limelight of the political discussion,” writes Matthias Ruchser from the German Development Institute (DIE).
This trend was reflected at this year’s high-level Energy Security Summit. The implications of the Energiewende for supply security took centre stage on the agenda of the meeting of researchers, international policy makers and industry representatives hosted by Munich Security Conference in Berlin. Among others, state secretary Stephan Steinlein from the foreign ministry argued that renewables and efficiency should provide a springboard for thinking about future supply security.
Energy experts Hanns Günther Hilpert and Kirsten Westphal from the German Institute for International and Security Affairs (SWP), concluded a recent analysis, saying that “Given volatile price developments and growing geopolitical risks, the Energiewende is the most important pillar for Germany’s supply security, because it is the most reliable part of energy policy.” Westphal has said expanding renewables is a “strategic imperative” for Germany that can increase policy leeway and negotiating clout.
How exactly will the Energiewende impact Germany’s energy supply dependencies? The long-term goals are spelled out in the country’s long-term climate targets. By 2050, Germany aims to cut CO2 emissions by 80 to 95 percent. This is to be achieved by halving gross energy consumption over 2008 levels, while increasing the share of renewable energies to 60 percent. These targets imply that by 2050, Germany will make great strides towards energy independence.
But in the short and medium term, the effects of the Energiewende on supply security are much less clear-cut. The limited domestic production of oil and gas will decrease even further in coming years because of depleting resources, rising the share of imports even further. Mining of hard coal within Germany will be phased out in a few years' time because it is too expensive. And the government plans to reign in production of brown coal to keep emission targets within reach. But experts agree that weaning Germany off imported energy will be a long and arduous process [see factsheet for details]. Germany's phase-out of nuclear energy by 2022 adds to this challenge, because fossil-generated power will remain part of the energy mix for quite a while. Additionally, the Energiewende has so far been focused mainly on the power sector. If Germany wants to reduce oil imports, it has to cut consumption in the transport sector, for example with e-cars. Because gas is mainly burned in homes to produce heat, the insulation of buildings is key to reducing imports.
The case of Russia: Who is dependent on whom?
Foreign policy experts stress that simply loosening Germany's particular dependence on Russia is not without risks from a security policy point of view and might even backfire. Friedbert Pflüger, former state secretary in the Ministry of Defence and now Director of the European Centre for Energy and Resource Security at London’s Kings College, laments that Europeans only think in terms of supply security. He stresses that security is also vital to producers, because those must shoulder massive investments to extract and transport fossil fuels. The Economist also argues that greater efficiency and the roll-out of renewables “will shift the balance of power, because it will signal a fundamental truth: in the end, the Kremlin needs its European customers at least as much as they need Russian imports.”
This mutual dependence is underscored by Russia’s perception of the Energiewende. “Experts from Russia clearly see the changeover to renewable energy as a threat. A threat to their economy,” says the Konrad Adenauer Stiftung’s Hübner. In 2014,the conservative think tank asked companies, NGOs, government officials and science experts from the BRICS countries – Brazil, Russia, India, China and South Africa - about their perceptions of the Energiewende. In contrast to experts from other countries, the Russians interpreted the Energiewende foremost as Germany’s effort to become more independent of Russia. According to Hübner, the Russians believed "that a successful Energiewende in Germany poses a threat to Russia: namely, that it would lose an export market in the long term."
Many foreign policy experts also argue that breaking down this interdependence might not make the world a safer place - and could even do harm. Ever since a ground-breaking deal in the 1970s, enabling German companies to provide pipelines for transporting Russian gas to Germany, the commodity has been a cornerstone of the diplomatic relationship between Germany and Russia. Russia and West Germany "managed to establish a reliable energy partnership,” explains Pflüger. “It worked because it was not a one-sided dependence. Just as Germany needed an affordable and stable flow of gas, Russia needed stable demand. Over decades, this interdependence has proved to be a stabilising factor in foreign policy.”
Speeding up the Energiewende
Reducing Germany’s dependence on Russia may also merely shift its reliance to other sources. “The lesson we should learn from the Russian dependency is not to diversify the origins of fossil energy forms by entering into new dependencies with other autocratic states,” argues Ruchser from the German Development Institute. Instead, he wants to speed up the implementation of the Energiewende and to focus more on the heat and transport sector. A study for Germany’s Armed Forces (the Bundeswehr) from 2011 reaches a similar conclusion: The authors recommend a quick rollout of renewable energy for more leeway in foreign policy. But Russia’s role as an energy supplier might still increase, they say, and Germany should continue to deepen its interdependence with Russia.
The German government is also working to portray the Energiewende as a role model for other countries. Because its greenhouse gas emissions only amount to ittle more than two percent of global output, Germany’s energy transition can only help mitigate climate change if other countries join in. This also explains why the government made energy supply a central theme of its G7 presidency, hoping to pave the way to a successful climate summit in Paris at the end of the year. At the June G7 summit in Elmau in the South of Germany, chancellor Angela Merkel successfully pushed the other industrialised countries to a committment to decarbonise their economies this century - in effect subscribing to a G7 energy transition.
State secretary Steinlein insists the Energiewende must become a global project in order to have an impact on climate change. “We are the world’s laboratory,” he says. “Whatever succeeds here will inspire hope and courage; whatever fails might not even be attempted elsewhere. We are the pioneers and the world is watching us.”
Many experts agree. “With its energy transition Germany plays a global pioneering role, both for the shape of the transformation and for the terms of the transitional period,” says foreign policy expert Westphal. According to her, this makes the energy transition one of Germany’s most important political projects. If it fails, Westphal argues, “there would be good reason to doubt that any other country would be able to assemble the arguments and resources for a complete conversion of its energy system.”
Matthias Ruchser from the German Development Institute notes that this is particularly important for the developing world. “If Germany successfully achieves the energy transition and shows that competitiveness, employment and climate protection can all be achieved at the same time, then this model will be copied, including in many developing and emerging countries,” he argues, noting that many developing countries are also dependent on fossil fuel imports.
Making solar competitive
According to Felix Matthes from the Institute for Applied Ecology, the Energiewende has already fostered this global transformation by making solar power competitive. Matthes argues the German system of financial support for renewable energy through feed-in tariffs put solar technology on track to become the world’s most important energy source, according to IEA forecasts. The International Renewable Energy Agency (IRENA) reached the same conclusion in a report on global renewable energy targets: “If all countries had adopted a technology-neutral approach, it is unlikely that the dramatic cost declines in solar PV would have occurred when they did, as these were supported by the presence of large markets (most notably, Germany) that drove competition, cost reduction (in both hard and soft costs) and private-sector led investments in R&D.”
So it’s at least partly due to the Energiewende that financial markets expect a spectacular global rise in solar power. Deutsche Bank, for example, predicted a “second gold rush” thanks to rapidly declining costs, which are set to fall further, according to a study by Fraunhofer ISE for think tank Agora Energiewende.
New York Times columnist Thomas Friedman went as far as suggesting the Energiewende should earn Germany a Nobel Peace Prize. Making renewables competitive “is a world-saving achievement,” writes Friedman. “What the Germans have done in converting almost 30 percent of their electric grid to solar and wind energy from near zero in about 15 years has been a great contribution to the stability of our planet and its climate.“
A policy for peace?
If solar energy is truly about to take off on a global scale, many of the world’s current energy interdependencies, and thus the global political landscape will be altered. Policy advisor Westphal writes the Energiewende’s contribution to international security and conflict prevention should not be underestimated: “In the medium term, cheaper and more efficient renewables could help to reduce energy poverty and defuse national and international access and distribution conflicts over expensive fossil fuels.”
The Nobel Peace Prize recipient, International Physicians for the Prevention of Nuclear War, in 2013 started the campaign “Local Power for Peace”. Pointing out that most military conflicts were partly about access to oil and other energy resources, the group said, “the local production of renewable energies is the central key to a more peaceful world.”
Some experts also argue the Energiewende could become essential to avoiding conflicts related to climate change. State secretary Steinlein said climate change already had “dramatic implications for international security policy,” naming refugees and tensions due to degrading environments as examples. “Climate change transforms conflicts and crises on a global scale”, he said. A recent G7 study also concluded that "climate change is a global threat to security in the 21st century".
Nevertheless, the project is not without conflict. Some of Germany’s neighbours have criticised the Energiewende’s damaging effects on their power grids, calling the project a unilateral initiative in an integrated European market. The rapid expansion of renewables and the malfunctioning EU emissions trading scheme have meant cheap German electricity from coal and renewables regularly floods neighbouring countries like Poland and the Czech Republic.
Germany bets its future on Energiewende’s success
Frequently defining the Energiewende as Germany’s “Man to the Moon” project, the government has staked the country's international reputation on the success of the energy transition. It is actively marketing the Energiewende abroad in order to “pave the way, through a process of dialogue with its international partners, towards a global energy transition”.
The government also hopes a global Energiewende will increase demand for technology "made in Germany" and cement the country's export prowess in years to come. Chancellor Angela Merkel said at this year’s industry trade show Hannover Messe that Germany needed to defend its world leadership in renewable energies. “There are 130, 140 countries that support their production of renewable energies, that make the transition step by step. Here also, Germany should extend its leading position,” Merkel said according to a Reuters report.
According to Westphal, Germany is betting part of its economic success, and also its future international standing, on the Energiewende. "The energy transition is one of Germany's most important political projects, and both resource and challenge for German foreign and trade policy...If the energy transition is successful, it will raise Germany's international profile, while failure would have significant international repercussions."
Material from freelance contributor Sönke Gäthke has been used for this story.