Germany’s Grid and the Market: 100 Percent Renewable by 2050?

Most of Germany’s pro-Energiewende voices think that Germany will far exceed its 2020 target of 35% clean energy. The Heinrich Böll Foundation, a Green think tank, is definitely among them. It argues that Germany could — with the right policies — go 100% renewable by 2050.

But for Germany to do it, argues the report “A European Union for Renewable Energy,” there has to be greatly improved cooperation. The EU targets, road maps, and action plans are steps in the right direction, but they fall far short of a comprehensive EU common energy policy.

The report, commissioned by the Heinrich Böll Foundation European Union and prepared by independent experts, argues that most European countries’ current energy grids are antiquated, nationally organized, and designed for fossil fuel and nuclear energy sources. The grids are composed mostly of one-way transmission cables connecting large production facilities, like coal-firing plants and nuclear reactors, to residential and commercial hubs.

Since the requisite storage technology is still largely undeveloped, what is needed are “smart,” flexible, decentralized grids that crisscross the continent and beyond. In contrast to the “dumb” decentralized networks of the fossil-fuel age, a smart grid is a digital network that links customers with dispersed suppliers, like those operating wind parks and solar installations, through the Internet. The wider-reaching and “smarter” this network is, the better its ability to match weather-dependent supply surpluses and demand needs, both regionally and across borders.

Since grid construction needs as long as ten years to be realized, potential grid investors would need an unshakable commitment to renewable energies to invest in such a costly project. The report underscores a number of measures to get the ball on an all-European system rolling, including a “review” of the EU treaty that stipulates that the national states have full authority to determine their own energy supplies as they wish. Ultimately there must be a guarantee that nationally minded states don’t obstruct plans for an European grid system.

As for Europe’s current energy markets, they too tend to reflect national priorities and a fossil fuel-dominated system that the EU is supposedly committed to phasing out. The report argues that “open and hidden” subsidies for fossil fuels and nuclear must be abolished in order to even the playing field between renewable and conventional energies.

Moreover, Europe is a patchwork of diverse incentives, subsidies, and related taxes. About two-thirds of EU countries have a feed-in tariff along the lines of Germany’s successful model. Its essence is that utilities are required to buy renewable energy from private producers at a higher-than-market price in order to cover the producer’s investment in solar modules, wind turbines, biogas plants, or other production installations.

A key recommendation is the gradual harmonization of incentive and subsidy programs based on best practice models, including but not limited to the feed-in tariff. “To make prices within the internal energy market more transparent and attract cross-border investment,” says Sascha Müller-Kraenner, the report’s chief organizer, “today’s systems have to be better connected, based on feed-in tariffs. Remuneration systems like tenders and auctions for big producers such as offshore wind farms can help make today’s system even more competitive, but this doesn’t mean replacing the most successful elements of the feed-in tariffs.”

Lead image: German traditional windmill via Shutterstock

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Paul Hockenos is a Berlin-based author who has written about Europe since 1989. Paul is the author of three major books on European politics: Free to Hate: The Rise of the Right in Post-Communist Eastern Europe, Homeland Calling: Exile Patriotism and the Balkans Wars, and Joschka Fischer and the Making of the Berlin Republic: An Alternative History of Postwar Germany. From 1997-99 he worked with the international mission in Bosnia and 2003-04 in Kosovo. Since then, Paul has held fellowships with the American Academy in Berlin, the European Journalism College in Berlin, and the German Marshall Fund. He was an editor at Internationale Politik, Germany’s leading foreign affairs journal, for five years. He is currently author of the blog Going Renewable and is writing a book about Germany’s energy revolution.

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