Local utilities need new alliances - study / Levy for wind acceptance
PwC / VKU
Local energy suppliers say that alliances in the industry and with new outside players are needed to secure their economic success in the future, according to a study conducted by the consultancy PricewaterhouseCoopers (PwC) and commissioned by the German Association of Local Utilities (VKU). New business areas could best be developed this way, as risks and know-how can be shared and transferred. The study is based on interviews of local utility representatives, and PwC includes a market analysis and proposals on how companies should act. The study’s “management summary”, seen by the Clean Energy Wire, says that municipal utilities are under pressure due to increasingly complex regulatory regimes, digitalisation, and competition. “There hardly exists a business model for conventional [power] generation in the current market environment,” writes PwC, and adds that renewables generation is seen more positively by local utilities.
For background, read the CLEW factsheet Small, but powerful – Germany’s municipal utilities.
The German government must take precautions to secure citizens’ acceptance for future wind power expansion, as it is a central pillar of the country’s energy transition, writes the energy think tank Agora Energiewende* in a report. Municipalities located near wind parks should in the future receive a “fair” share of these parks’ revenues through a levy paid by operators. “People should get more out of having new wind farms set up near their home,” said Agora Energiewende head Patrick Graichen. The money could, for instance, be used to help finance new kindergartens or other community projects. The think tank also calls on the government to let citizens participate in the planning process for new wind farms from an early point on.
*Like the Clean Energy Wire, Agora Energiewende is a project funded by Stiftung Mercator and the European Climate Foundation.
Cologne Institute for Economic Research (IW)
The EU’s plan to introduce stringent energy consumption targets could be counterproductive if the aim is to effectively and cost-efficiently decarbonise Europe’s economy, says a new study conducted by the Cologne Institute for Economic Research (IW). On the one hand, large-scale decarbonisation relies on energy-intensive sector coupling technologies – which would actually increase energy needs. On the other hand, additional measures could run counter to the EU Emissions Trading System (EU ETS). “In sectors covered by the EU ETS, one should not be forced to use additional energy efficiency instruments. They add to the cost burden for companies without helping the decarbonisation efforts,” says the author, Benjamin Tischler. Instead, he proposes to include all relevant economic sectors in the EU ETS, and to only introduce additional policies that “remedy market imperfections”.
The EU’s plan to allow fuel from felled trees to qualify as renewable energy could accelerate climate change, writes Felix Creutzig of the Mercator Research Institute on Global Commons and Climate Change (MCC) in a guest commentary in the Süddeutsche Zeitung. It makes sense to count woody debris as regenerative biomass. However, using tree trunks creates an incentive to clear complete forests, and the argument that forests absorb a sufficient amount of CO₂ emissions during their growth has been proven wrong in several scientific studies, writes Creutzig. Trees need decades to absorb sizeable amounts of CO₂, and wood that is burned emits more CO₂ than coal per generated kilowatt hour of electricity.
Read the guest commentary in German here.
For background, read the CLEW dossier Bioenergy in Germany, and the factsheet Bioenergy in Germany – facts and figures on development, support and investment.
Possible negotiations to extend Germany’s grand coalition government should put a special focus on international competitiveness, as the US under President Donald Trump is increasingly becoming a rival, writes the Christian Democratic Party’s (CDU) energy politician Thomas Bareiß in a guest commentary in the Handelsblatt. “The Energiewende must not become an industry location disadvantage,” writes Bareiß. The ’shale gas revolution‘ in the US will likely guarantee low electricity prices in the US for decades, and Germany should “put more emphasis on affordability again” and continue with measures to balance out high Renewable Energy Act (EEG) costs, he writes. Germany should clearly advocate for free global trade.
Find the guest commentary (behind paywall) in German here.
For background, read the CLEW dossier Energiewende effects on power prices, costs and industry, and follow the latest developments on building a new German government.
The only way to enable “Chancellor [Angela] Merkel’s next government to reach the 2020 climate target is to exit from coal-fired power generation,” writes Jennifer Morgan, executive director of Greenpeace International in a guest commentary in the Frankfurter Rundschau. During recent visits to Asia, Morgan had witnessed the international reaction to news that Germany might give up on its 2020 climate target. “In China, South Korea, and Taiwan – countries that currently set the guidelines for their future energy supply – nuclear and coal companies gratefully pounce on Germany’s lily-livered energy policy,” writes Morgan. Merkel must no longer supply international climate protection critics with “cheap excuses,” and should make sure that concrete steps toward Germany’s coal exit are included in the future coalition treaty, rather than being decided by a commission by the end of 2018, writes Morgan.
Find the guest commentary in German here.
For background, read the CLEW article German party leaders agree energy policy blueprint for coalition talks, and the coalition watch.