German Engineering Federation (VDMA) - Engineering Energiewende-Barometer
Most German engineering firms believe the Energiewende is good for their own business, and good for Germany as a business location more broadly, according to a poll by the German Engineering Federation (VDMA).
Approval rates rose significantly in 2016 compared to 2015, with 63 percent of companies saying the energy transition already had a positive impact on their business, and 73 percent expecting it to have a positive impact in the future. This year, a majority of 61 percent of respondents said the Energiewende would benefit industrial Germany as a whole, compared to just 45 percent in 2014.
333 companies responded to the VDMA’s fifth survey since 2011 - around 12 percent of all companies contacted - including manufacturers of components for renewable facilities, fossil power plants, and grid components, and suppliers of IT infrastructure for energy providers and power storage facilities, among others.
Around 40 percent said the energy transition would boost their sales volume. 60 percent expected their sales volumes to rise in the future both domestically and abroad. 44 percent were confident of unlocking new business segments in the future, thanks to the Energiewende. The segments they were most confident of tapping into were energy efficiency, renewables, energy storage, digitalisation, and also conventional power generation. 70 percent believed their customers would invest more in efficient technologies in the future.
Still, companies remained critical of the government. 80 percent said they were dissatisfied with the energy transition's current political implementation - although compared to 2014, this represents a rise of 9 percentage points in approval of government’s management of the Energiewende.
Approval rates were lowest for the government’s record on transmission grid expansion (9 percent), cooperation between Germany’s states and the federal government (11 percent), and measures to increase energy efficiency (18 percent). The shift to an auction system for further renewable expansion under the reformed Renewable Energy Act (EEG) had the highest approval rate at 32 percent, although 57 percent of companies still were not satisfied with it.
While most companies said their power bill had increased over the course of the Energiewende, a clear majority said it did so only moderately and would not affect their competitiveness (73 percent). 84 percent of the companies surveyed said the distribution of Energiewende costs was opaque, and 82 percent regarded their distribution as unfair.
German Chambers of Commerce and Industry (DIHK) - Energy Transition Barometer
For the first time in at least five years, German companies evaluated the influence of the energy transition on their competitiveness as marginally positive in 2016, according to an online survey of businesses conducted by the Association of German Chambers of Commerce and Industry (DIHK).
The association asked 2,171 companies (43 percent from industry, 4 percent from construction, 15 percent from trade and retail, and 38 percent from the service sector) the following question: "How do you evaluate the overall effects of the Energiewende on the competitiveness of your company?"
Positive attitudes towards the energy transition have generally increased, with 20.6 percent of respondents saying it has a positive effect on their competitiveness - compared to 17.3 percent in 2015. The share of companies saying the Energiewende affects their competitiveness negatively fell to 21.5 percent from 24.1 percent. The majority of companies still say the energy transition does not have a sizeable impact on their business at all.
“The assessment of the energy transition on the whole is less critical than a year ago. However, many possibilities for Energiewende investments lie fallow due to regulatory and market conditions,” says the survey report, “IHK-Energiewende-Barometer 2016”, published in October 2016.
Relatively low energy prices were the main reason for the more favourable perception of the Energiewende, according to the DIHK. Almost half the companies said costs for oil, gas and district heating had fallen. But results varied considerably across industry sectors, as the following graph demonstrates.
The manufacturing sector remains the most critical, with 36.8 percent of companies viewing the energy transition as detrimental to their competitiveness. The share of negative responses had, however, dropped by almost eight percentage points in 2016 from 2015. In manufacturing, 16.2 percent of companies saw positive effects on their competitiveness.
Companies with less than 20 employees on average viewed the Energiewende as positive for their business, while larger companies reported mainly negative effects. In the following graph, a rating above 0 indicates that positive views prevailed, while a rating below 0 shows that assessments were predominantly negative.
The overall perception of the Energiewende may have turned positive for the first time in the survey’s history, but respondents voiced concerns over a number of aspects. Reliable electricity supply continued to be the most pressing issue, even though Germany’s power supply is one of the most stable in the world. Seventy-eight percent of the companies surveyed called for further grid expansion, 60 percent said better coordination of political measures was necessary, and 58 percent said planning and permission procedures needed to be shortened.
Differences in regional perceptions of the Energiewende also remain. Companies from Northern and Southern Germany said they generally benefitted from the transition, while businesses from the West and East generally saw it as damaging to their competitiveness.
McKinsey - Energiewende Index
Consultancy McKinsey’s bi-annual Energiewende Index assesses the current status of the energy transition based on three main categories: climate and environmental protection, security of energy supply, and economic feasibility. For each category, McKinsey has developed five indicators that allow progress towards a 2020 goal to be measured, mainly focusing on the power sector.
McKinsey found that there is a widening gap between “unrealistic” targets that are unlikely to be met, and others that are going to be even exceeded among the 15 areas covered by the indicators.
Seven targets to thought to be “realistic”: PV expansion, reliability of power supply, secure capacity reserve, renewable energy jobs, employment in energy intensive industries, expansion of offshore wind farms, as well as their grid connection. According to the analysis, it seems likely that offshore wind expansion and the secure capacity reserve will significantly exceed targets, with wind power capacities already reaching 170 percent and reserves 292 percent of the current target value.
Targets deemed to be out of reach in seven other areas covered by the indicators are: household power prices, industry power prices, the size of the renewable surcharge, CO2 emissions, primary energy consumption, as well as power consumption. McKinsey laments in particular the strong rise in grid intervention costs caused by fluctuating supply from renewable sources.
The rising number of re-dispatch measures can mainly be attributed to bottlenecks in the North-South-corridor of German network operators, McKinsey found. The indicator grid expansion is therefore judged to need “adjustment” in order to meet its target. About 615 kilometres of power lines have been added - but reaching the goal of 1,887 kilometres by 2020 is thought to be “more than unlikely given the present status of political debate”.
“Only if the energy transition, including grid expansion, is being planned and implemented in an integrated and purposeful manner can Germany achieve its goals regarding the expansion of renewables and CO2-reduction”, the analysis concludes. While the country had been a role model for expanding renewable energy production, it now needed to become a trailblazer for systems integration by establishing a larger and more flexible grid.
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