Germany's energy transition too slow to reach 2030 targets – govt advisor
Clean Energy Wire: You have assessed the progress of the German energy transition for many years. Is there more or less to criticise about the government’s efforts in this field today?
Andreas Löschel: A lot has changed in energy policy. If you compare where we were ten years ago to where we are today, we have made a big step forward. However, at the same time expectations have increased, especially with the new goal of climate neutrality. When we say in our expert opinion on the monitoring report that the measures have to be adapted, it also means that many of these already go in the right direction, for example on CO₂ pricing or the energy price reform, which was tackled as part of the coronavirus economic stimulus packages.
Issues that are relevant in the long term – such as the hydrogen economy – have found their way into the political debate. So, we see that many proposals we’ve had in previous reports are actually tackled by the government now. Due to the higher expectations we are still impatient, but many things go in the right direction.
Germany has likely reached its greenhouse gas reduction target for 2020, also due to the pandemic effects, as well as some other targets. Does that mean the government can pat itself on the back and relax?
Not everything happened due to the pandemic. The EU emissions trading has delivered, and not only in 2020, but also in the previous year. People often blame politics when things are not going well, but in this case it has contributed to steering things in the right direction.
Still, beyond the target year 2020 we, of course, look at what will be necessary in the long term, and assess key progress over recent years. How did energy productivity, heating demand, final and primary energy consumption and emissions develop over the past years, and how do they need to change in this decade to reach the 2030 targets?
The speed we had in recent years is not sufficient for the next ten years if we want to reach the 2030 targets, especially in energy efficiency but also in transport and renewables. Those are issues we’ve long talked about and while there have been improvements, ambition has increased faster.
In this and previous expert opinions you’ve put a focus on the developments at the EU level. What does a higher EU 2030 target mean for a German national target, and the country’s energy and climate policy in general?
That’s also something that has changed over the past ten years. Back then we focused very much on Germany, but one of the most important realisations is that we can only succeed with the energy transition if it’s a European effort – both from a regulatory standpoint and by using the potentials. We’ve looked at what a 55 percent reduction target in the EU means for Germany, but also what opportunities does Europe have to reach the targets.
"The new EU 2030 climate target means that we have to raise our national target towards 65 percent, and that the share of renewables will probably rather be 70 percent."
While it depends on many assumptions, we estimate that a European 55 percent target means that we have to raise our national target towards 65 percent, and that the share of renewables will probably rather be 70 percent [of power consumption; current goal 55%]. Renewables expansion will sharply accelerate, and we will likely have a faster coal exit due to higher CO₂ allowance prices, and may have largely phased it out by the end of the 2020s.
The European Commission plans to present proposals to reform all major energy and climate legislation by June 2021 – the “Fit for 55 package”. You have long called for more closely tying national with European energy and climate policy, so is 2021 a once in a lifetime opportunity to do just that?
We have a really big opportunity to use the momentum of progress we’ve seen in many areas. We will have to see what’s possible considering Germany’s political calendar this year, as we have national elections in autumn. But, yes, now is exactly the moment to create the right framework.
Treating renewables targets more at a European level, expanding electricity and hydrogen infrastructure, technology development and value creation – all these are topics that have to be viewed more and more as European. So the European Commission’s proposals will play a big role also for the German energy transition.
Is renewables expansion in Germany by 2030 possible to the extent you deem necessary to reach the climate targets, considering a higher overall power consumption?
This is going to be very challenging. In our view, power demand will be higher than the government’s national energy and climate plan [NECP] assumes. Sector coupling will accelerate, so transport will need more electricity, the hydrogen strategy still needs to be fully included in the calculations, and industry will increasingly turn to power-based processes. To reach a higher target, this means a doubling of today’s renewables capacity. Whether this will actually succeed is far from decided.
You propose to explore the option to have renewables investments in other EU states count towards national targets. What would that look like and how would you prevent that national efforts in turn are too little?
We can tackle a lot of challenges with a European approach. In Europe we have enough renewable energy potential, but of course investments in other countries should not come at the expense of national efforts. It’s more about creating something 'on top'. That means we have to think about how to get away from the national support schemes. For renewables, but also in terms of climate action measures in sectors such as transport and buildings, we will see more flexibility in the future.