Renewables industry decries "incoherent" German energy policy as next crisis looms
Clean Energy Wire
Germany’s renewable energy industry has accused the government of lacking a coherent plan for energy policy and sowing uncertainty, which could result in slowing the expansion of wind and solar in the country.
At a time when Germany is going through what shapes up to become the second major energy crisis in four years due to the conflict in Iran and the surrounding region, the government's energy policy is fraught with inconsistencies and mixed messages, said Ursula Heinen-Esser, head of the Renewable Energy Federation (BEE). Leaked information, official announcements, and policy proposals suggest that “we’re faced with an approach that does the opposite of creating more energy independence and negatively impacts renewables,” Heinen-Esser said during a joint press conference with other industry leaders in Berlin.
After the energy crisis fuelled by Russia’s war on Ukraine, the Iran war represents another major threat to Germany’s fossil fuel supply. The conflict has led to a steep increase in global oil and gas prices and threatens to cause energy prices to spike across the board and undermine economic recovery in Europe’s biggest economy. Even before the war started, economy minister Katherina Reiche announced more affordable energy prices to revive economic growth as one of her most important policy goals.
What is known so far about the government’s energy policy ambitions has the potential to let renewables expansion “collapse,” Heinen-Esser said. This includes legislation such as the grid package, the upcoming reform of the Renewable Energy Act (EEG), the Power Plant Strategy for backup capacity from gas plants, and the Building Modernisation Act to decarbonise the sector. “Every renewable energy sector is massively affected,” the industry lobbyist argued.
The BEE president said difficulties in Germany’s energy transition that were highlighted by Reiche need to be addressed, including the lagging modernisation of the power grid and high costs. However, the current approach instead risks creating more uncertainty and scaring away investors, she said. Plans by the government to cut compensation for renewable energy operators in regions with insufficient grid capacity alone could cause a drop in investments of more than 40 billion euros in the coming years, Heinen-Esser said, citing an industry-commissioned analysis by consultancy Enervis.
The head of the German Solar Association (BSW Solar), Carsten Körnig, said that plans to eliminate support for small rooftop solar panels below a capacity of 25 kilowatts would amount to the “largest attack on our industry in 15 years.” The surge in private solar installations had already cooled, Körnig said, arguing that this indicated no excessive support is in place at the moment. Cutting the support regime altogether would likely cause new installations to drop by half, which in turn would negatively affect decarbonisation plans for heat and transport through home-based solar power, Körnig added.
In the buildings sector, a proposed elimination of the 65-percent minimum renewable energy share for new heating systems would clear direction for the industry and increase uncertainty, said Martin Sabel of the German Heat Pump Association (BWP). “The Building Modernisation Act has to provide certainty about how we can reach the sector’s climate targets and achieve more energy sovereignty,” Sabel said. But reducing regulation would mean that support mechanisms and prices remain the only guardrails steering technological change in the sector, he argued.
The criticism by the renewables industry about the government's policy plans follows that of Germany's key climate advisors, the Expert Commission on Climate Change. One day earlier, the council said that the government's new comprehensive package of climate action measures is “highly unlikely” to be sufficient to reach legally binding emission reduction targets.