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31 Aug 2021, 11:38
Benjamin Wehrmann

German election primer - Faster renewables expansion vital for next government's climate policy

Wind turbine by energy company RWE near a coal mine in western Germany. Photo: RWE / Klaus Görgen
Wind turbine by energy company RWE near a coal mine in western Germany. Photo: RWE / Klaus Görgen

Ahead of Germany’s September federal election, almost all parties in parliament are calling for climate policies that quickly and lastingly reduce greenhouse gas emissions. The country’s plans to achieve climate neutrality by 2045 depend largely on the rapid expansion of renewable power sources. Wind turbines, solar panels and other renewables are needed to substitute coal and nuclear plants that are gradually dropping out of the power mix, and to satisfy growing demand for electricity used for low-carbon technologies, such as electric cars or green hydrogen production. But even as climate neutrality is a common goal, there is little consensus on how to achieve it in practice. This overview shows the state of play of renewables in Germany, what hinders their construction, how they are financed and what the next government faces. [UPDATES Top candidates' renewables expansion proposals]

What role do renewables play in election campaigns?

  • Gearing the German economy towards climate neutrality and averting the worst climate change effects are among the biggest concerns of many voters. The government's emissions reduction plans for industry, mobility or heating hinge greatly on sufficient renewable power. But the build-out of solar PV, wind power and biogas capacity has been trailing target volumes significantly for years.
  • Most parties' leading candidates, including Armin Laschet (CDU/CSU), Olaf Scholz (SPD), Annalena Baerbock (Green Party) and Christian Lindner (FDP), have all said they agree that cutting red tape and removing other hurdles to faster renewables expansion must be a major priority for the next government coalition.

How are Germany’s climate targets and renewables expansion interlinked?

  • The new EU target of a 55 percent greenhouse gas emissions reduction by 2030 compared to 1990 implies a quick boost to expanding renewable power in practically every European country. Germany in particular needs this rapid expansion, as it is concurrently phasing out its nuclear and coal power plant fleet over the next years.
  • A 2021 landmark ruling on climate policy by the country's highest court added further pressure on the government to deliver on emissions reduction, compelling it to bring forward the target year for greenhouse gas neutrality by five years to 2045.
  • Researchers have found that the country in theory could convert its entire energy demand to renewables within the next two decades. According to the German Institute for Economic Research (DIW Berlin), Germany could reach 100 percent renewables by 2035 if the construction volumes for renewables, in particular wind power, are greatly increased and European cooperation on power supply security is improved.
  • But energy policy researchers from the EWI Institute at the University of Cologne doubt that Germany can even reach 65 percent by the end of the decade. Depending on demand in 2030, the share could be as low as 55 percent, the EWI said. German Renewable Energy Federation (BEE) calculates that the country needs 77 percent renewables by 2030 to achieve climate targets and a significant decrease in fossil fuel usage by the end of the decade.

What is hindering renewables expansion in Germany?

  • Land use planning and other administrative prerequisites for renewables construction are the responsibility of the 16 states. But the roll-out differs greatly despite pledges by state governments to wholeheartedly support the energy transition. Northern states, for example, have led wind power installation rankings for years, while southern and central German states like Greens-led Baden-Württemberg or conservative-led North Rhine-Westphalia and Bavaria lag far behind, not least due to state rules on minimum distances to residential areas or environmental protection. Likewise, federal law, for example regarding proximity to infrastructure like aviation or the military, is also obstructing the expansion.
  • The slow development of grid and storage infrastructure to better distribute and manage renewable power is also a hindrance. Grid operators have warned that expanding the power line infrastructure needs equal attention, given that the wind and solar power are often generated far from industrial centres, where consumption is highest.

What about funding for renewable power expansion?

  • The question of how to fund new installations has been linked to renewables expansion ever since the country launched its renewables support about two decades ago. Guaranteed remuneration greatly contributed to a fast rise of renewable power technologies but has also meant that German households pay one of the highest power prices in the world.

What's the current status of renewable power technologies?

  • Onshore wind power is already Germany's most important renewable electricity source and is also projected to cover the bulk of its clean energy needs in the future. The technology is expected to grow from a total capacity of 55 gigawatts (GW) in 2021 to 71 GW by the end of the decade. Capacity growth was strong until 2017, when fixed remuneration was replaced with tenders, and dropped steeply in the three years that followed. The government introduced an action plan for the sector in 2020 to speed up new construction and also to retain capacity at risk of being taken off the grid because guaranteed remuneration had expired after 20 years. Construction figures slightly rebounded in 2021 and are expected to reach about 2 GW by the end of the year. However, this is still much lower than the 4 GW annual expansion target set out in the latest renewable energy act (EEG) reform.     
  • Germany’s offshore wind sector is facing a lull in activity after the government curtailed offshore wind targets and reorganised the allocation of marine areas for the technology, which is expected to play a crucial role in hydrogen production and act as a reliable base load provider in the power system. New projects in the North and Baltic Seas will not be implemented before 2023.
  • While solar capacity has expanded much more rapidly than wind power in the past years, the growth rate is still far from that seen as needed to meet emissions reduction targets – and also rather unbalanced across the country. The latest EEG reform envisaged nearly doubling capacity from 52 GW in 2021 to 100 GW by 2030. In the first half of 2021, construction of new solar PV installations soared by more than 20 percent to over 3 GW. This is in line with the annual EEG goal of 6 GW, but according to industry association BSW Solar the figure would have to be at least three times higher to match emissions reduction ambitions.
  • Apart from increasing the renewables share in power production, also Germany's transport sector is supposed to be weaned off fossil fuels in the next years. Besides electric vehicles, biofuels in liquid transport fuels should bring the share of renewable energy in transport to nearly 30 percent by 2030.

What do the parties say?

  • Almost all of the parties expected to make it into parliament support a fast further expansion of renewable power capacity. With the exception of the far right AfD, which claims climate change is not linked to human activity and argues that Germany should abandon emissions reduction efforts altogether, all parties propose varying approaches to how more clean power installations can be connected to the grid in a cost-efficient way.
  • While the official government goal for the renewables share in power consumption in 2030 still is 65 percent, the coalition member SPD says the country should strive for 100 percent only ten years after that, by 2040. The Greens even want to bring the date forward to 2035 and the Left Party says it should be achieved "as fast as possible". The conservative CDU/CSU alliance, which has led the German government for the past 16 years, has said it wants to achieve a much faster roll-out by streamlining licensing procedures and wants to retain capacity by modernising turbines at existing locations.
  • The Greens, the SPD and the Left Party all aim to ensure that solar panels are made a standard for all new buildings. The conservatives also advocate a "solar package" to boost the technology and continue to fund old installations to keep them on the grid. Unveiling his "energy masterplan," CDU/CSU candidate Laschet promised a support programme to make the use of rooftop solar more widespread and affordable and generally push renewable power technologies under the slogan "more market, less regulation."
  • SPD candidate Scholz said he would make renewables expansion a priority right at the beginning of his term and "write expansion targets into law" to ensure the country is on track towards climate neutrality.
  • Pro-business party FDP, on the other hand, says it wants to do away with state-sponsored renewables funding altogether and let the different technologies compete on the market freely. For this, the FDP wants to ease regulation on self-supply and storage, which could decisively change investors’ calculations.
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