More than half of the EU’s energy needs were met by net imports (55.1 percent) in 2017. Germany’s energy import dependency was still higher at 63.9 percent – a slight rise compared to the previous year’s 63.7 percent.
With an increasingly integrated European energy market, the significance of a country-focussed analysis of import dependence will decline, and an EU-wide view become more important.
As fossil oil and gas are being phased out, many see the need to partly replace them with synthetic fuels. Renewable electricity is converted into hydrogen, methane or synthetic petrol (power-to-x) to serve as energy sources, for example in road freight transport, shipping or seasonal energy storage. According to several studies, Germany will have to import significant amounts of these green fuels, because space for generating electricity from renewables is limited in the country and power-to-x fuels could be produced significantly cheaper in other regions of the world.
Oil reached peak consumption at the end of 1970s, but it is still Germany’s most important primary energy source. Mineral oil covered 34.3 percent of Germany’s primary energy use in 2018. Most oil was used for transport fuels. Only a small fraction is used for power production.
According to the Federal Institute for Geosciences and Natural Resources (BGR), about 98 percent of Germany’s primary energy consumption of mineral oil depended on imports in 2017. The country’s domestic crude oil output from 50 oilfields amounted to 2.22 million tonnes in 2017. Germany imported 90.7 million tonnes crude oil (Germany also imports additional mineral oil products). Russia was by far the largest supplier in 2017, delivering 33.5 million tonnes, or about 37 percent of oil imports. Norway provided 10.3 million tonnes and the UK 8.5 million tonnes. In total, more than 30 countries supplied oil to Germany.
What impact will the Energiewende have on oil imports?
Transport accounts for most of Germany’s oil consumption, so the transition to renewables, which has largely been focused on electricity, has had little impact. Still, the energy transition has reduced the already minor role of oil in power generation (0.8 percent share in 2018 gross power production), because cheap, renewable energy has crowded out oil-based generation.
The planned decarbonisation of all sectors by 2050 should all but eliminate fossil oil from German energy consumption. In November 2016, the German government agreed on its Climate Action Plan 2050, a basic framework for largely decarbonising the country’s economy to reach its 2050 climate goals. As interim steps, the plan introduced target corridors for reducing greenhouse gas emissions from individual economic sectors until the year 2030.
Oil use in transport, for example, should decrease significantly, as the sector must reduce its emissions by about 40 percent by 2030, compared to today’s levels. However, greenhouse gas emissions in transport in 2018 were still at 1990 levels. In a 2016 study, researchers from the Institute for Applied Ecology (Öko-Institut) forecast a reduction of total fossil fuel use in domestic transport of between 9 and 35 percent by 2030, depending on the scenario.
Compared to the base year 2005, energy consumption has actually increased in the transport sector. The government aims to reduce consumption to 90 percent of 2005 levels by 2020 and to 60 percent by 2050, with the help of more efficient engines. If electric cars catch on as the government hopes, renewables will be able to supply more of the energy required for transport, reducing Germany’s dependence on oil imports.
Gas accounted for around 23.7 percent of Germany’s primary energy use in 2018, making it the country’s second most important energy source. Germany is the world’s biggest natural gas importer and needs to import around 95 percent of the gas it consumes, according to the BGR. In 2017, the country produced 7.9 billion cubic metres (bcm) of natural gas, but according to geologists, the fields are nearing depletion. Domestic natural gas production has been falling since 2004 and will likely cease altogether in the next decade. Strict regulations make substantial use of fracking highly unlikely at the moment.
Germany imported 4,446 petajoules (PJ) of natural gas in 2018, according to the Federal Office for Economic Affairs and Export Control (BAFA). Due to data privacy regulations, BAFA stopped publishing import volumes by country in 2016. However, it can be assumed that Russia, Norway and the Netherlands continue to be the main suppliers. In 2015, 35 percent of gas imports came from Russia, 34 percent from Norway and 29 percent from the Netherlands. In July 2018, an economy ministry spokesperson put Russia’s share in German natural gas imports at “about 40 percent”.
Gas is imported to Germany exclusively by pipeline, and the country currently has no infrastructure for the direct import of liquefied natural gas (LNG). Germany can, however, be supplied via LNG terminals in neighbouring countries, where the liquid is regassified and pushed into the natural gas pipeline infrastructure. In 2016 the European Commission proposed a liquefied natural gas (LNG) and gas storage strategy aimed at overcoming regional LNG access disparities and boosting the internal energy market.
Following harsh criticism by US President Donald Trump over the contentious Russian-German natural gas pipeline Nord Stream 2, the German government has promised financial backing for one or more new import terminals, which could receive LNG from the US, among other exporters.
Most gas is used in the industrial sector (e.g. for chemical processes, but also for power supply), followed by private households, small businesses and public power and heating supply. Natural gas consumption in transport is marginal. The lion's share of gas is burned to produce heat, and only a fraction to produce electric power.
What impact will the Energiewende have on gas imports?
Many experts see natural gas as a bridge to a low-carbon economy because it produces much less CO2 emissions when combusted than either coal or oil. However, fugitive emissions, like the leakage of methane during drilling and transportation, need to be taken into account to evaluate total lifecycle greenhouse gas emissions. Gas complements fluctuating power supply from renewables rather well, because modern gas-fired power stations (unlike coal) can switch from idle to full output within minutes if necessary – for example when solar and wind power are in short supply.
The German government has said that the planned exit from nuclear and coal-fired power generation means that gas demand will increase. However, many analysts doubt that natural gas demand in total will rise during the energy transition as renewables, storage facilities and ultimately renewable forms of gas will cover most of the energy needs in Europe. Projections for future EU and German gas demand vary widely, many foreseeing a decrease.
Alexey Miller, CEO of Russian energy giant Gazprom, said in 2015 that natural gas from Western Siberia will remain indispensable for Europe, particularly because of Germany’s exit from nuclear, a comment delivered with apparent "schadenfreude", according to a report in die Welt. Germany is the biggest buyer of Russian gas, with a record 58.5 billion cubic metres (bcm) in 2018, says the company which posted record exports of about 200 bcm to Europe that same year.
The construction of Gazprom’s contentious Russian-German Baltic Sea pipeline project Nord Stream 2 is underway, providing additional direct export capacity when finished. [Also read the factsheet Gas pipeline Nord Stream 2 links Germany to Russia, but splits Europe]
The key to reducing gas imports lies less in power production than in heating. According to a study from research institute Fraunhofer IWES, Germany could significantly lower its dependence on foreign gas by improving building insulation and the roll-out of renewable electricity in the heating sector, where most gas is used. This includes energy-efficient modernisation of buildings, and exchanging gas heating units for electric-powered heat pumps. The EU also included increased energy efficiency in buildings and industry as a measure to reduce import dependency in its energy security strategy in 2014.
Power-to-gas as a way of converting electrical energy into methane or hydrogen for direct use or the long-term storage of renewable power has only been tested in pilot projects and has yet to be used on a larger scale. It is likely to become more important in the future. In a 2018 analysis, think tanks Agora Energiewende and Agora Verkehrswende said Germany would need the well-directed use of power-based synthetic fuels, including gas, in connection with a phase-out of conventional oil and natural gas to reach its long-term climate targets. Producing these synthetic fuels in Germany is comparatively expensive, so Germany will likely import large quantities from other countries in decades to come.
Germany’s largest source of domestic fossil fuel is coal. Germany still extracts lignite (or brown coal) from opencast mines for power production on a large scale – 171.3 million tonnes in 2017 - and imports very little (31,700 tonnes in 2017). Germany is the world’s biggest producer of lignite – which emits particularly high levels of CO2 – and still has extensive deposits. Lignite amounted to about 11.3 percent of Germany’s primary energy use in 2018. Most is burned for power generation – producing 22.5 percent of Germany’s gross electricity – or district heating.
Due to unfavourable geological conditions, German hard coal is not competitive on the international market, and subsidised hard-coal mining ended in 2018. While still mining in two – now closed – mines 3.7 million tonnes in 2017, Germany now has to import all the hard coal it uses. It’s mainly consumed by the energy sector (61 percent in 2017) and for steel production (36 percent). (See the CLEW factsheet on coal for more details).
In 2017, Germany already imported 51.2 million tonnes, or 93 percent of the hard coal consumed. Its leading coal suppliers are Russia (38.5 percent), the United States (17.8 percent) and Colombia (12.7 percent). Hard coal amounted to 10 percent of Germany’s primary energy use in 2018. Most is burned for power generation and produced 12.9 percent of Germany’s gross electricity that year.
What impact will the Energiewende have on coal imports?
Long-term climate targets clearly imply that Germany will have to abandon coal entirely by 2050 unless an affordable technology can be found to capture its emissions. A government-appointed commission bringing together policymakers, industry representatives, environmental organisations, labour unions and federal states and regions dependent on the coal sector (“special commission on growth, structural economic change and employment”) in January 2019 recommended an end date for coal-fired power generation in Germany by 2038 at the latest. Chancellor Angela Merkel's government coalition has to decide how to implement the non-binding proposal and draft necessary legislation. Many details have yet to be worked out and ultimately decided by parliamentarians in a process that could last well into 2020. The end of coal-fired electricity generation will eventually remove the need for hard coal imports.
But exiting coal alone will not necessarily help reduce the country’s dependence on fossil fuels, as Germany may initially have to import more gas to compensate – if it does not manage to roll out renewables fast enough.
In the past, critics of Germany’s current push to reduce the use of CO2-intensive lignite have said Germany should not abandon its only sizeable domestic energy source. Mining union IG BCE, for example, warned in 2015 that the Energiewende can only succeed if Germany doesn’t play “Russian roulette” with its supply security. The union argues that “domestic energy sources ensure German companies don’t become even more dependent on price and supply fluctuations on world markets. Our lignite can guarantee this in a balanced energy mix.”