The Berlin Energy Transition Dialogue 2018
Wednesday, 18 April 16:00
Heating and cooling in buildings not high on the agenda
Heating and cooling in buildings has been largely neglected in the discussions and policies for climate protection, despite big potentials for greenhouse gas reduction, said several participants of the session on solutions for metropolitan areas at the Berlin Energy Transition Dialogue 2018. In the European Union, this is starting to change mostly on a technological level, according to Ursula Hartenberger, Global Head of Sustainability of the Royal Institution of Chartered Surveyors (RICS). However, a major obstacle to finding common answers continues to be the “huge group of stakeholders with different interests and needs,” said Hartenberger. A lot of work also had to be done around raising awareness with consumers and educate about available options for alternatives to traditional fossil fuel-based heating and cooling systems, she said. Max Viessmann, CEO of heating and refrigeration manufacturer Viessmann highlighted the importance of regulation. Reliable and long-term regulation could help avoid big losses for businesses.
Wednesday, 18 April 15:45
The global consequences of renewable energy transformation
The global energy transformation democratises energy access, and will move humanity away from energy systems struggling with scarcity and conflict to a system of peace and abundance, said International Renewable Energy Agency (IRENA) Director-General Adnan Amin ahead of the first meeting of the Global Commission on the Geopolitics of Energy Transformation. The commission was launched in January 2018 by IRENA, with support of the governments of Germany, Norway and the United Arab Emirates. As the global energy transition is happening “much faster than even the most informed people predicted 10 years ago”, the task of the commission is to examine these changes, map out the differences between a renewable and a fossil energy regime and asses the geopolitical consequences, said Ólafur Ragnar Grímsson, former President of Iceland, who will head the initiative as Chair. The “fossil fuel-based, realist” view on international relations has been dominant throughout the 20th century, said Grímsson. “That’s not the current view”. So the commission’s task now is to try and find a better consensus on the consequences of the renewable energy transformation, “so that those in power can have a new, more realistic roadmap” for their decisions, said Grímsson. The group, which includes politicians and expert from all over the world, such as former German foreign minister Joschka Fischer and former WTO Director-General Pascal Lamy, will meet four times in 2018.
Wednesday, 18 April 14:15
Investors, businesses, politics at risk of missing tipping points in transition
Investors, businesses, and politicians run the risk of missing the tipping points in the energy transition, which would leave many conventional energy investments stranded and could see taxpayers picking up the bill, green investment experts warned. “People do not understand how fast marginal change can happen and they do not understand the impact of that marginal change on their business,” said Kingsmill Bond of financial think tank CarbonTracker. He added politicians who ignored the energy transition run the risk of rendering their country “irrelevant”.
Investor Jochen Wermuth agreed, urging Germany to move much faster in areas such as transport. “Germany invented the energy transition. But if we do not move, the carmakers will disappear,” he warned. In many other areas, such as steel making, the technology for low-carbon production already existed and just needed to be scaled up. “Germany is going to fall behind, Germany is going to miss the next industrial revolution just like the Great British Empire did (miss the last one).”
The experts agreed that the transition was on its way and moving fast. Paddy Padmanathan, CEO of Saudi Arabian firm ACWA Power, pointed to the country’s massive investments in solar power and its move to become independent from oil revenue by 2030. Blackrock’s Sverker Akerblom said there was enough capital available and renewables were competitive, but there were simply not enough projects to invest in. A global carbon price would be important to drive investment, he said. Diego Pignatelli of Greentech Capital reminded the audience that similar to the legacy costs of nuclear or the financial crisis, taxpayers ultimately would have to foot the bill for stranded assets. “The reality is that ultimately it is going to be a cost for society, which is probably unfair.”
Wednesday, 18 April 13:45
“Efficiency First” in industry delivers economic and climate benefits
The concept of energy efficiency first in industry has many economic, environmental and security benefits well beyond helping to protect the climate, Claire Range of the German Industry Initiative for Energy Efficiency (DENEFF) said at one of the sessions. It was surprising that companies often did not introduce efficiency measures, as these usually paid back within a short time frame, she said. One reason for this were different interests within the companies, said Fiona Hall, consultant to the ROCKWOOL Group. For example, the person responsible for efficiency strategies was seldom the same person responsible for production, and both often had opposing interests. This issue could only be solved at the top company level, said Hall. She added that especially smaller companies were in need of advising services to avoid making mistakes that could even put them out of business.
For background on Germany’s struggle to wake the “sleeping giant energy efficiency” read the CLEW dossier.
Wednesday, 18 April 10:30
Climate action must not be elite project – environment minister
Climate action “must not be a project for the elites” and policymakers had to ensure that the necessary changes such as an exit from coal-fired power does not leave whole regions behind, said German environment minister Svenja Schulze at the opening of the second day of the Berlin Energy Transition Dialogue. The goal of a climate neutral global economy in this century set in the 2015 Paris Agreement required a successful global energy transition, which was already well underway. Schulze named four key guidelines for decision makers: (1) Climate protection had to be coherent. The gap between international climate targets and greenhouse gas trends has to be closed by regularly examining and raising the ambition of the Nationally Determined Contributions (NDCs, see the CLEW factsheet on the Paris Deal) by Paris Agreement member states, said Schulze. (2) Politicians needed to send “reliable and long-term signals” to gain the trust of citizens and investors. Germany had not been able to sufficiently close its own climate gap, and struggled especially in the non-energy sectors, said Schulze. However, both Germany’s Climate Action Plan 2050 and the planned climate protection law proposed in the new government’s coalition treaty provided the framework to give investors and companies certainty for investment. (3) Government and business investments still had to be better streamlined with climate protection, which ultimately was a “driver of innovation and jobs”, said Schulze. (4) Politicians had to “steer” the transformation to a decarbonised economy “in a responsible way”, said Schulze. The minister, who hails from Germany’s industrial heartland and coal mining state North Rhine-Westphalia, said she knows from experience in her home region that large societal transformations such as a coal exit had to be made a success for the regions and people.
Tuesday, 17 April 16:15
Europeans split over introducing carbon floor price and protecting coal
Views clashed in the Berlin Energy Transition Dialogue session on carbon pricing. Researcher Ottmar Edenhofer professor from Potsdam Institute for Climate Impact Research (PIK) and Mercator Research Institute for Global Commons and Climate Change (MCC) tried to convince audience and panellists that putting a price on carbon was not only a cost efficient but also the most effective way to stop the renaissance of coal power around the world. “Carbon pricing penalises coal usage and it can create revenue which finance ministers around the world can use,” Edenhofer argued.
French Secretary of State for the Ecological and Inclusive Transition, Brune Poirson said that since many EU member states (e.g. Portugal, Denmark, Italy) were planning to phase-out coal, “we are in a position to build a coalition for a carbon floor price now” - something that the German government coalition parties have not found a common position on yet.
But Poland’s Deputy Minister for Energy, Michael Kurtyka, said that most emission decreases in recent history have been “very much due to economic slowdown” and not the investment in renewables or the European Emissions Trading System (ETS). He stressed the different situations that countries were finding themselves in, referring to their economies’ dependence on coal power. “You don’t have to convince me that we can marry ecology and economic success, because I have experienced bad air pollution in Krakow growing up.” The Polish way is to strengthen power storage technologies as a key to successful climate policy, he said.
Tuesday, 17 April 13:35
Politicians neglect power grid in energy transition at own risk – Enel CEO
Investment in upgrading the electricity grid are crucial to keep the energy transition on track, the chief executive of Italian utility ENEL, Franceso Starace said on one of the special panels. A lot investment was urgently needed in making the networks smart. “Digitising networks is very difficult for regulators to understand,” he said. “If you forget the networks, dear ministers, your networks will not carry on” with the energy transition. For utilities, which were in the midst of a transition from fossil fuel to renewable electricity production, the grids were a “very sexy part” of the value chain but needed a lot of investment. His view was echoed by Siemens manager Cedrik Neike. “I am amazed about the progress on renewables, but shocked how dumb the network still is,” he said. “The network is what ultimately makes the energy succeed in the end.”
For more on Germany’s progress – and lack of it – in the dossier on the grid challenges ahead.
Renewable fuels needed for successful energy transition – but economics not there, yet
Synthetic fuels produced with renewable electricity will be needed for a successful energy transition, for example for power storage and heavy-goods transport, said Michael Sterner, Professor for energy storage and energy systems at East Bavarian Technical University Regensburg (OTH), at a session on renewable fuels at the Berlin Energy Transition Dialogue. “With power-to-x, the technology is there, but the economics are not,” said Sterner. “We need the regulatory framework for large-scale development.” With power-to-gas, the existing natural gas infrastructure can be used for renewable gas as part of the energy transition in the future, said Inga Posch, managing director of gas infrastructure association FNB Gas. “This could save a multi-billion-euro amount,” said Posch. Thierry Lepercq, Executive Vice President of energy company engie, said that especially the role of hydrogen was important for Europe. “China has done solar, has done batteries… it’s over. There’s one thing where it’s not over: that’s hydrogen,” said Lepercq. Europe now needed a trillion-euro initiative. “And it’s not just about saving our planet. It’s about saving our economy, our industry.”
Tuesday, 17 April 11:15 am
Governments must bridge payback time of key efficiency investment – IEA’s Birol
Government’s across the globe must bridge the gap between investments in energy efficiency and their ultimate payback in order to achieve the energy savings needed to meet the climate challenge, the head of the International Energy Agency (IEA), Fatih Birol said. “Cost savings outweigh the investment costs,” he said. “The problem is payback time. Industrialists and consumers are impatient. This is the role for the governments.” Birol stressed that progress was needed urgently as energy efficiency alone could help to stabilise carbon emissions. “2017 was a bad year for energy efficiency,” he said. Progress had slowed “dramatically” and the rate of energy savings was now only half of what was needed to meet the climate challenge.
For background on Germany’s struggle to wake the “sleeping giant energy efficiency” read the CLEW dossier.
Tuesday, 17 April 10.50 am
Fragmented national energy solutions won’t deliver scale - EU commissioner
European countries have to coordinate their energy transition policies, as “we know that fragmented national solutions won’t achieve sufficient scale,” , said Maroš Šefčovič, vice President of the EU Commission and head of the "Energy Union" project. The world was in the midst of the fourth industrial revolution which “can and should be led by Europe”, he said. European Union member states knew to share their Energiewende experiences not only among themselves, but also with the rest of the world. Many years ago, Germany was a “lonely pioneer” in boosting renewable energy, but the Energiewende has since ceased to be a purely German project, he said. “Green energy has become a global and irreversible reality” and a “very sustainable job creator”, said Šefčovič. The commissioner also highlighted that it was important to not take political decisions behind closed doors, and to explain it to a wider public. “I know that to talk about energy is very often seen as a topic to be discussed by the experts. I think it’s our common duty to engage personally and explain why the energy transition is important,” said Šefčovič.
Tuesday, 17 April 10am
“Energy transition can be a business model - if you're among the first”
The Energiewende (energy transition) is both „open-heart surgery on a national economy” and a move that can bring “prosperity to the whole world” Germany’s energy minister Peter Altmaier said at the fourth Berlin Energy Transition Dialogue.
Altmaier told an audience of some 2000 government representatives, energy experts and business people from 90 countries that the energy transition – the move away from fossil to renewable energy sources – would help to produce a lot more energy with a lot smaller burden on the environment. But he stressed that the transition was a business model as well. “If you’re among the first movers, there is business to be made with the energy transition.” In order to achieve this, the whole society would have to rally behind the project. If executed successfully, the German example showed that rural regions in particular could benefit from a switch to a sustainable energy production. Altmaier also reiterated that Germany would ultimately phase-out coal, though he dodged the question whether the government's planned coal commission would succeed in coming up with a detailed plan by the end of 2018. He stressed that ending the "polarised debate" about fossil fuels was one of his top priorities as minister and the commission was the way to achieve this.
"Energy transition is a necessary condition for a peaceful world"
Germany’s foreign minister Heiko Maas highlighted the security aspect of transforming national energy systems to renewable sources. “An energy transition is not a sufficient solution for but a necessary condition for a stable and peaceful world,” he said.
Producing renewable energy could help countries to become less dependent on those fossil fuel exporting states who could put pressure on those they deliver their raw materials to, Maas said. He urged all countries to work together to prevent the dangers from global climate change, which threatened the livelihoods of millions and forced them to leave their homes. "We do not have endless time," Maas said. A multilateral approach could create more stability and more wealth in many regions of the world.
See a CLEW Dossier on international security aspects of the Energiewende here.