2022 is the year of energy reform in Germany, the federal coalition government of Social Democrats (SPD), Green Party and Liberal Democrats (FDP) pledged when it took over in late 2021. Its declared aim was to accelerate renewables growth, the hydrogen ramp-up, the decarbonisation of the heating and transport systems and the power grid expansion. By the end of 2022, most of the necessary legal changes that are part of this “climate emergency programme” are to be enacted so that the following three years would start to show how these make a “physical” difference that the government’s performance can be measured against, the climate and economy minister said in early June 2022.
This factsheet gives an overview of the many legal projects and changes the government is undertaking, what shape they are likely to take and at what stage they are in their implementation.
The economy and climate ministry (BMWK), which is in charge of most of the new legislation, announced in January 2022 in an initial stock take of the energy transition that Germany was faced with a drastic backlog in emission reduction efforts and was headed for a climate target miss of 15 percent in 2030 if no new measures were deployed. A month later, the ministry presented a first plan for its legislative schedule, saying that it would tackle the various areas needed to accelerate renewables growth etc. in two large packages – one before Easter (Easter Package) and one in the summer (Summer Package), both also sometimes called the “planning acceleration packages” or “emergency programme.”
At the end of May 2022, the BMWK published its work plan for reforms of the buildings sector and other efficiency measures, e.g. in industrial processes. Many of these proposals are changing the existing funding schemes, which means that the government can change the funding criteria without involving parliament – although some of the newly proposed funding programmes need EU approval. The efficiency legislation amendments are generally scheduled for the second half of the year.
Among the first measures, the federal parliament has already changed the Renewable Energy Act (EEG) and abolished the renewables surcharge that consumers pay on the power price. Planned for 2023, the government moved the end of the surcharge forward to 1 July 2022. While it was originally meant to lower electricity prices to incentivise consumers to switch to electric driving and heating systems, it is now mainly going to work as a relief measure for consumers suffering under high energy prices.
Info-Box: Germany’s climate targets and emissions
Compared to 1990, emissions in Germany have fallen by 38.7 percent in 2021. In 2020, the drop was just under 41 percent. Germany’s greenhouse gas emissions increased by 4.5 percent between 2020 and 2021 in an expected rebound during the economic revival after the pandemic.
Apart from the energy sector, where emissions have fallen considerably since 2010 thanks to renewables deployment, the other sectors are more or less stagnating. According to the national Climate Action Law, every sector has decreasing emission reduction targets that it has to meet every year. In 2021, the transport and buildings sectors did not achieve their annual reduction target.
The following are the major elements of the legislative packages proposed by the ministry:
Accelerate renewables buildout
Renewable Energy Act: higher buildout targets and tenders (parliament has made changes; vote planned for 7 July)
- The government aims to roughly double the country’s onshore wind capacity to 115 gigawatts (GW) by 2030, meaning annual capacity additions will have to reach 10 GW as of 2025
- Solar PV installations will total 22 GW per year as of 2026 to achieve a total capacity of 215 GW by 2030, up from about 60 GW in 2021.
- Offshore wind additions are increased to reach a minimum of 30 GW per 2030, 40 GW by 2035 and 70 GW by 2045
- An amendment to the Renewable Energy Act (EEG) establishes the principle that the use of renewable energies is of overriding public interest and will be given priority over other concerns (e.g. species protection) until greenhouse gas neutrality is achieved
- To increase public acceptance, citizen-led energy initiatives will be exempt from participating in the tender scheme. It will be made easier for local communities to benefit financially from wind parks and ground-mounted solar PV nearby
- A controversial provision that automatically reduced solar subsidies with the increase in capacity additions will be abolished
Onshore Wind Power Act: 2 percent target & distance rules (parliament has made changes; vote planned for 7 July)
- Govt introduces changes to law on spatial planning and construction to reserve 2 percent of the country’s surface area for onshore wind power (more than twice the area currently designated)
- Germany's 13 larger states have to designate 1.4 percent of their surface area to onshore wind power by 2027. By 2032, they must reach their respective targets of 1.8-2.2 percent
- The country's three city states (Berlin, Hamburg and Bremen) must use 0.5 percent of their area for wind power by 2032 (0.25% by 2026)
- Depending on their wind conditions and the size of their nature protection areas, certain states will only have to reach slightly less than the 2 percent share, while others must achieve slightly more. States can make deals (amounting to 50% of the designated areas) among each other to fulfil their obligations
- Minimum distance rules between wind turbines and residential buildings that currently impede designating more wind power areas in several German states will be allowed to remain in force only if the state fulfils its contribution to national wind power buildout targets
- The states must do their own planning guided by a set of uniform rules and modelling issued by the federal government but can stick to individual distance rules if these do not prevent them from reaching the percentage target. If, however, they do not manage to assign enough space to wind turbines, wind power investors would be automatically allowed to build new turbines in areas previously unavailable due to the distance rules
- Repowering old wind turbines, i.e. replacing them with more powerful new models, will be made easier by changes to the Buildings Act
- If the 2 percent target is achieved, Germany could potentially construct onshore turbines with a total capacity of 165 GW, the draft law said. Less than 1 percent of Germany’s land area is currently designated for potential wind turbine construction and about 0.5 percent is actually being used
Change to species protection rules to allow for more wind energy utilisation (parliament has made changes; vote planned for 7 July)
- One of the major obstacles to wind power deployment in recent years has been the drawn-out planning procedure (up to 5-8 years) that delayed new capacity addition and deterred investors. The reasons for this included the wide range of rules on species protection around new constructions (i.e. wind turbines). The government wants to reduce the permit procedure to 2 to 3 years during the current legislative period
- The BMWK together with the environment ministry has presented a compromise that aims to reconcile bird protection and wind energy expansion by making changes to the Federal Nature Conservation Act (BundesnaturschutzGesetz) and other legislation
- Change in the Renewable Energy Act (EEG) prescribes that the expansion of renewable energies is to be classified as "overriding public interest" – giving renewable energy installation in general priority over other concerns, until the power sector in Germany is nearly greenhouse gas neutral
- Uniform legal standards for the assessment of risks of bird collision with wind turbines as well as a nationwide list of birds threatened by wind energy development. Specific wind turbine “close range areas” at precisely defined distances from breeding sites are to make it easier to identify suitable wind power sites
- Instead of focusing on the protection of individual animals, the new rules are to put the emphasis on the wellbeing of animal species. If an animal population is not endangered, the threat to an individual cannot prevent the construction of a wind turbine
- The law specifies thresholds for mandatory shutdowns of wind turbines according to the behaviour of endangered species living in the affected area
- The repowering of existing wind park sites will be made easier by acknowledging that these areas are not ideal breeding grounds
- Until the target of using 2 percent of Germany’s surface area for onshore wind power production is reached, wind turbines are also permitted in landscape protection areas (Landschaftsschutzgebiete)
- Species assistance programmes, into which the operators of wind turbines pay, are to compensate for the increased risk to endangered bird and bat species by setting up protective measures elsewhere
Beacon lights & military areas – freeing up space for wind power (parliament has made changes; vote planned for 7 July)
- With new distance rules between wind turbines, weather radar installations and rotating radio beacons, which have so far prevented the building of new wind parks in their vicinity, some 5 GW of onshore wind capacity can be freed up, allowing for around 1,200 new wind turbines to be built within a short time, economy and climate minister Robert Habeck said in early 2022
- Military areas - In the short term, a change in distance rules from military areas could free up land where another 4 GW of wind turbines have otherwise been approved
Acceleration of offshore wind planning
- Environmental assessments and rights of participation are more strongly bundled and repeated surveys of previously examined aspects are no longer required
- More rapid clearance of offshore grid connections following the inclusion of an area in the spatial development plan
Acceleration of grid expansion
- The “Easter Package” also includes changes to grid planning at the federal level. In general, all future power network planning is to be undertaken to achieve a climate-neutral grid in the most efficient way and to ensure that the grid will serve the needs of renewables expansion
- Initially, 19 new grid expansion projects will become part of the federal grid requirement plan, and another 17 will be amended to best serve the energy industry
- To make grid planning and building faster – Germany lags behind its grid expansion plans by several years – permit procedures are to be simplified and hurdles are to be lowered, e.g. by streamlining the spatial planning and approval procedures by partially dispensing with federal sectoral planning and by publishing planning documents only electronically (for stakeholder processes)
Reform of the federal funding for efficient buildings (BEG) (this summer)
- As a first step, the government has aligned the BEG with clear climate protection criteria, e.g. by only funding the higher EH-40 efficiency standard in new buildings
- From January 2023, a new programme for new buildings will follow
- This summer’s reform is to introduce greater incentives for switching from fossil fuels to renewables, e.g. from gas heating to heat pumps in existing buildings. Buildings with the worst energy performance should be addressed first as they have the largest potential to save energy and reduce greenhouse gas emissions
Building Energy Act: Reform of the efficiency rules for new homes (in parliament/draft bill in 2nd half of 2022)
- From next year, the statutory minimum efficiency standard for new buildings will be raised to efficiency class EH 55. From 1 January 2025, the standard will be raised to EH 40 (according to an amendment proposed by the cabinet in May 2022)
- In the second half of 2022, the BMWK will propose changes to the requirements for heating in newly constructed houses. As of 2024, they will have to use 65 percent renewable energy
- Solar panels will be mandatory on all new buildings
Reform of the CO2 price on heating fuels – split between landlords and tenants
- Tenants living in well-insulated homes in Germany will have to shoulder the lion’s share of their CO2 costs for heating, while landlords must cover most of the bill in inefficient buildings. For now, landlords can pass on the carbon price on heating fuels fully to their tenants
Federal funding for efficient heating systems (BEW)(EU approval pending)
- Funding for municipalities that want to decarbonise their district heating networks (as of this year)
Carbon contracts for difference (in preparation)
- By summer, the BMWK is preparing a funding guideline (EU approval needed) that starts a programme for carbon contracts for difference for industry. This is to facilitate the introduction of climate-friendly processes in the primary industries, reduce their risks and operating costs, and improve efficiency
2022 legislative timeline
Once the Easter and Summer Packages have passed through parliament – where they are usually worked on and changed – the government is planning the following legal changes for the second half of the year:
On 13 July, the cabinet plans to present another set of rules, such as the elimination of duplicate checks and the digitalisation of planning. The overall aim is to accelerate planning procedures in Germany. The government also wants to ensure the „adequate supply of qualified specialists for efficient and speedy planning and approval procedures” and will give additional judges to the Federal Administrative Court for an additional chamber for planning matters.
In autumn, the government plans to publish another acceleration package, this time looking at administrative procedures, digitalisation and staffing with the focus on important infrastructure projects that serve the goals of climate neutrality, as well as investments in the maintenance or replacement of railways, bridges and roads, and the construction of new railways.
In the second half of the year, the BMWK also plans to reform the buildings energy act. This will likely include making solar roof panels mandatory on newly constructed houses and stricter measures for changing fossil fuel heating systems.