16 Sep 2016 | Kerstine Appunn

New economy ministry proposal to fire up renewables in all sectors

To decarbonise Germany’s economy, small amounts of renewable electricity will have to replace large amounts of fossil fuel. The policies to make this Energiewende happen must be decided now, the economy ministry says in a new discussion paper. Greater efficiency and making renewables more competitive in heating and transport are the bottom line.

Germany’s Ministry for Economic Affairs and Energy (BMWi) on Friday published a wide-ranging discussion paper with concrete measure to fire up its energy transition, zeroing in on wind and solar electricity, efficiency technologies, and renewables use across all sectors. The paper “Power 2030,” is focused on finding concrete measure to achieve the Energiewende, and lists 12 long-term trends for the country’s energy economy. It foresees that solar and wind power will dominate Germany’s energy system, covering half of its total energy demand by 2050. Biomass will mostly be used as fuel for shipping and aviation instead of for making electricity.

The measures and trends are based on scientific scenarios. But the logic of science alone won’t bring about change, the government says. Instead, it says, considerable effort is required to implement them. “By 2050 we want to largely avoid greenhouse gas emissions by investing in efficiency technologies and renewable energies,” said BMWi state secretary Rainer Baake in a press release. “But to achieve this, we need to reduce energy consumption considerably.”

The ministry stresses that today’s choices and investments regarding heating systems, buildings and power stations will affect the energy system of the 2050s which is why the energy policy guiding these developments has to be drawn up now.

Making renewable power more competitive in transport and heating

The ministry wants to apply the “efficiency first” principle (lately announced in a green paper on efficiency in August 2016) across all sectors: buildings, transport and business. In addition, it envisages sector coupling as a key pillar of the transition. In order to replace a “large amount of fuel with a small amount of renewable electricity,” particularly when driving cars, generating heat and producing goods, the paper stresses the need to make electricity more competitive in these sectors. The problem for competitiveness, the ministry says, is that electricity is currently the energy form most heavily burdened with levies to finance the energy transition. Other fuels, particularly those used for heating, are not, it says. When the BMWi last proposed a discussion about raising fossil fuel taxes in order to increase opportunities for renewable solutions in these sectors, the transport ministry and other actors heavily criticised the idea.

Other elements seen as pivotal for the energy transition’s future in Germany in the paper are establishing a fleet of modern combined heat and power plants, expanding the power grid and reforming how it is financed, integrating European power markets and the digitalisation of the energy sector.

The German Renewable Energy Federation (BEE) said the paper included some “sensible impetus” but criticised that none of the suggestions were new. Similar proposals had been made by the ministry during the power market reform but had not been implemented, BEE deputy director Harald Uphoff said. The association criticised giving efficiency a greater importance than developing renewables. “Renewable energies and energy efficiency are two important pillars of the energy transition. They must not be pitted against each other,” Uphoff warned.

The economy ministry’s planning push comes just after the Ministry for Environment (BMUB) presented a new version of its “Climate Action Plan 2050”, which included similar suggestions for the decarbonisation of Germany’s economy and energy system. That plan is currently under review by other ministries, after Angela Merkel’s Chancellery initiated a cut of its ambitious language.

What will happen next

The discussion paper will be presented to other ministries, industry stakeholders and civil society organisations for comment, which can be submitted until 31 October 2016. In 2017, the ministry will publish a report on the discussion. The ministry has almost completed its reform plans for this legislative period (e.g. reform of Renewable Energy Act, reform of power market design) and general elections are going to be held in autumn 2017.

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