Business think tank warns renewables levy could rise sharply by 2025
Cologne Institute for Economic Research
Electricity consumers will likely see rising costs for the support of renewable energies with a possible increase of the renewables surcharge to 7.5 to 10 cents per kilowatt hour (KWh) by 2025, compared to the current 6.35 cents/KWh, according to a new study by Cologne Institute for Economic Research (IW Köln) commissioned by trade associations and the energy intensive industries. “In total, the costs for the support [of renewables] may likely rise to 24.8-32.9 billion euros per year until 2025,” write the authors. The study examines different scenarios of how changing power prices and other circumstances influence the amount of renewables support needed over the coming years. IW Köln – which is the think tank of Germany’s large business associations – makes clear that a reliable prediction is hardly possible because of the myriad of parameters, not least wholesale power prices.
Without the industry exemptions, “the affected companies in Germany would have long since stopped being competitive. The IW study shows that we will need the exemptions in the future more than ever,” said Michael Basten, spokesperson of the platform of energy intensive industries in Germany in separate press release.
Find the press release by the energy intensive industries in German here.
For background, read the CLEW article Renewable energy levy set to rise in 2017 – think tank and the factsheet Industrial power prices and the Energiewende.
Federal Ministry of Education and Research
33 research projects presented their findings and proposals on how to transform the energy system in Germany in an environmentally friendly and socially acceptable way in Berlin yesterday. The projects, funded by the education and research ministry, focus mainly on the acceptance and participation of citizens as well as on governance of transformational processes. Support for the country’s energy transition (Energiewende) by the population was especially important, as “substantial additional financial burdens for citizens” continued to arise and “no end was in sight”, Wilfried Kraus, deputy director general at the education and research ministry, said at the presentation.
Find out more about the individual funded projects in German here.
Innogy, the green subsidiary of German energy provider RWE, could be the biggest stock market launch of any German company since the year 2000 – but renewable energy likely only plays a minor role for its expected success, write Varinia Bernau and Angelika Slavik in the Süddeutsche Zeitung. Innogy’s cooperation with a number of innovative green energy start-ups has won it the plaudits of critics such as Greenpeace. Yet, only about 15 percent of its profits are generated with renewables. The bulk of its market value stems from the grids that Innogy operates, Bernau and Slavik argue. While profits in this sector are capped by the Federal Network Agency, they are also secure for years to come.
See the article in German here.
Heinrich Böll Foundation
In order to push the energy transition in heating, the Green Party’s think tank, the Heinrich Böll Foundation, proposes a tax reform that takes into account emissions caused in the sector. “Germany ranks at the bottom in Europe in terms of taxation” of fossil fuels for heating, according to the authors. They argue low taxation is one reason why Germany will likely miss its goal to reduce the heat requirement in buildings by 20 percent by 2020.
See the policy briefing in German here.
Helmholtz Centre for Environmental Research (UFZ)
The progress of Germany’s energy transition varies immensely throughout the country, a study published by the Helmholtz Centre for Environmental Research (UFZ) suggests. In rural areas and particularly on the coasts, the transition to a clean and decentralised power supply is “way ahead” of more densely populated parts of Germany, UFZ researchers found. By analysing data on energy production and consumption, the scientists compiled a map that illustrates the individual score for all of Germany’s more than 12,000 municipalities. Taking these spatial differences into account could be key for ensuring the country as a whole masters the transition as projected, according to the UFZ.
To read the UFZ’s press release in English, please click here.
A determined transition to carbon-free energy production in Germany is crucial for the Paris Agreement to become a success, according to the environmental NGO Germanwatch. Signatories would have to make sure that the agreement is swiftly implemented - with Germany taking a lead role in negotiations, Christoph Bals of Germanwatch said in a press release. However, Chancellor Angela Merkel will only be able to convince fellow G20 leaders to decarbonise their economies if Germany “credibly” sets its own ambitious goals for individual sectors, Bals argues.
Find the press release in German here.
For background on Germany’s climate action plan, read the CLEW article Ministry avoids concrete targets in weakened Climate Action Plan.
Carmakers’ hesitation to push electric mobility is simply an act of self-preservation, writes Grischa Brower-Rabinowitsch in Handelsblatt. “That’s because the e-car is the first step into a new mobility world, where the automobile will reach a new technical dimension, but lose its significance at the same time […] with the e-car and the next phase, the self-driving vehicle, the demand for cars will decrease significantly.” To sell conventional cars, carmakers appeal to emotions and driving experience, and present the car as a status symbol, but all these factors might become irrelevant in the future, writes Brower-Rabinowitsch. “Even within the industry, there are many managers who expect we will need fewer carmakers in the longer term than we have today.” To secure their own survival, carmakers will have to become mobility service providers, and be ready to make their conventional business models superfluous, writes Brower-Rabinowitsch.
Read the article in German (behind paywall) here.
For background, read the CLEW article VW, Daimler take key step for e-mobility at Paris Car Show, as well as the factsheets Dieselgate forces VW to embrace green mobility and Reluctant Daimler plans “radical” push into new mobility world.
Please note: The Clean Energy Wire will investigate the prospects of German carmakers in a green mobility future in a dossier to be published in the coming days.
China is placing a radical bet on e-mobility by tabling a proposal to drastically increase e-car sales and ensuring a high share of those vehicles will be made by Chinese auto manufacturers, report Markus Fasse, Stefan Menzel and Stephan Scheuer in Handelsblatt. “These are alarming developments for German carmakers.” Their position in e-mobility is weak, and China is a hugely important market for them – VW sold 45 percent of its cars in China last year. “Behind closed doors, several carmakers worry they might be pushed out of this promising market in the longer term.”
Read the article in German (behind paywall) here.
Energy & Carbon Blog
Czech investor EPH’s acquisition of Vattenfall’s German lignite operations could be “a high stakes game” because lignite is “front and centre among risks facing investors from global efforts to slow climate change”, writes Gerard Wynn on the Energy & Carbon Blog. Wynn lists three possible explanations for the purchase: “First, they [EPH] don’t believe that Germany will meet the 2030 emissions target. Second, they believe that another sector, not lignite, will bear the burden of reductions. Or third, they expect to be compensated for any forced early retirements.”
Find the blog entry in English here.