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German Energy Transition

  • German Energy Transition
    • The energy transition is the changeover of a society from dependence on 'dirty fuels', such as hydrocarbons and uranium, to an energy supply system based on sustainable renewable sources. Known by its German term, the "Energiewende" is taking place in a number of countries, and enjoys a special promotion in Germany.

      The energy transition is the result of two major problems: the non-internalization of social and environmental costs in conventional energy supply, and climate change. In addition, the decarbonisation of the energy industry, by ending the use of fossil fuels such as oil, coal and natural gas, will create a long-term stabler economy, and greatly reduce pollution.

      In Germany, the nuclear power industry will be forcibly shut down in 2022. The Energiewende plans for the replacement of nuclear power and fossils by renewable energy sources for electricity generation, by steps, from the 27.4% in 2014, 35% in 2020, 50% in 2030, 65% in 2040, to 80% in 2050.

      Transition Issues
      • Measures taken to reduce emissions, with a focus on greenhouse gases (GHG), but also SOx, NOx, ozone and particulate matter air pollution.
      • Increased penetration of generation facilities based on intermittent RES
      • Electricity market liberalization (i.e. breaking the stranglehold of fossilists on policy, and enabling consumer choice)
      • Distributed generation (smartgrid and micro systems (e.g. rooftop PV) instead of centralised generation)
  • EEG Tariff
    • The network operators are charged for the costs of compulsory remuneration, which they recoup through sales of EEG-financed electricity on the market. The difference between the amount to be paid to producers for electricity generation and their income forms the basis for the calculation of the EEG levy paid by electricity consumers.

      In 2012, the revenues were 4.5 billion euros, and the expenditures (compulsory remuneration) 19.5 billion euro. The EEG levy was therefore € 14.0 billion (72% of the price).

      Regulation on the EEG-Compensation Mechanism (Verordnung zum EEG-Ausgleichsmechanismus, AusglMechV): since 17 July 2009, latest edition 17 February 2015 (amendment 13.10.2016, in force 01.01.2017). R.E.-generated electricity is sold directly to transmission network operators, and therefore there is no longer any obligation on the utilities to take up R.E.

      The additional costs resulting from the generation of EEG electricity are, however, still charged to the utilities and thus also to the final customers via an EEG levy. In addition, the AusglMechV contains provisions for a more transparent calculation of the EEG tariff.

      The revised allocation (rolling) mechanism (Wälzungsmechanismus), adopted by the Regulation, is seen as a decisive factor in the sharp drop in stock market electricity prices as of 2010 and the rapid rise in the EEG levy over the same period.


      Financial: the long-term high cost for the consumer is trying the patience of the 93% of Germans who support the development of renewable energy.

      Consumer protection entities criticise the unequal distribution of the burden. Large consumers (in 2016, 2.137 large industrial companies) are to a great degree exempt from the levy (they saved &euro4.8 bn in 2014), shifting the burden to the small to medium-sized enterprises and the private consumer (non-privileged consumers).

      Industry warns of potential loss of competitiveness for German industry, since Germany has higher standards than other countries, making the international market an uneven playing field.


      Composition of the electricity charge 2016. Average prices for the supply of electricity to households in Germany:

      • Network charges, measurement, billing: 7.07 cents (24.6%)
      • EEG Tariff: 6.35 Cent (6.85 cents in 2017) (22.1% in 2016, and c. 23.5% est. for 2017)
      • Power generation, sales: 6.11 Cent (21.3%)
      • Sales tax: 4.58 cents (16%)
      • Electricity tax: 2.05 cents (7.1%)
      • Concessions: 1.66 cents (5.8%)
      • Other tariffs: KWK, §19 NEV Offshore: 0.86 cents (3.0%)
      • Total: 28.69 cents each kWh
  • German Environment Agency Energy Policies
    • The (German) BMUB Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (till 17 Dec. 2013 BMU, Federal Ministry for the Environment, Nature Conservation and Nuclear Safety) has set ambitious and inspiring targets with regards Germany's commitment to combat climate change through the reduction of greenhouse gas emissions.

      BMUB seeks to create the legislative and incentive framework for a consistent improvement in energy efficiency, as a key element of their sustainable climate and energy policy, 28 September 2010, and the Energy Transition Decisions of 6 June 2011 .

      The goal is to reduce primary energy consumption by 20% of the 2008 level by 2020, and 50% by 2050; and electricity consumption by 10% of the 2008 level by 2020, and 25% by 2050; i.e. an average increase in energy productivity of 2.1% per annum.

      Furthermore, it was decided, in the long term to reduce the primary energy demand of existing buildings with the aim of having a nearly carbon-neutral building inventory by 2050. The heating demand of buildings should be reduced by 20% by as early as 2020.

      Germany is also working on a European level for an ambitious and binding package of measures to increase energy efficiency, so that across Europe there will be energy savings of 20 percent by 2020.

      BMU Climate Targets

      The German national and European climate and energy policies are confronting the twin challenges of finding solutions to climate change, while at the same time ensuring a workable energy price structuring.

      More than 80% of Germany's greenhouse gas emissions are related to energy. Energy and climate policies of the future are therefore heavily emphasising energy efficiency and the development of sustainable energy sources.

      Greenhouse gas emissions not related to energy are primarily produced by industry and agriculture. GHG emissions must also be reduced in these sectors, if long-term climate protection targets are to be achieved.

      The long-term goal is to make Germany's energy supply as nearly CO2 neutral as possible by 2050, necessitating a reduction in the 1990 CO2 GHG emissions from 80 to 95 percent. Intermediate goals for 2020 and 2030 need to be achieved via measures and instruments - the closer we are the more concrete these can become.

  • German Energy Law
    • EDL-G is the German Law on energy services and other energy efficiency measures.

      EDL-G Gesetz über Energiedienstleistungen und andere Energieeffizienzmaßnahmen, Latest edition: 15/4/2015 (Law on energy services and other energy efficiency measures)