Renewable energy in Germany

Germany was an early leader in the deployment of renewable energy. In 2009, it was described as "the world's first major renewable energy economy". Germany remained the country with the world's largest installed photovoltaic capacity through 2014.

The Renewable Energy Sources Act (EEG) has been a major driver of the expansion of renewable electricity in Germany. It sets a target for renewables to account for at least 80% of gross electricity consumption by 2030. The growth of renewable generation has also required substantial expansion of the electricity grid, including major north–south transmission corridors.

Targets

Since the passage of the Directive on Electricity Production from Renewable Energy Sources in 1997, Germany and the other states of the European Union were working towards a target of 12% renewable electricity by 2010. Germany passed this target early in 2007, when the renewable energy share in electricity consumption in Germany reached 14%. In September 2010, the German government announced ambitious energy targets: After the 2013 elections, the new CDU/CSU and SPD coalition government continued the energy transition, with only minor modifications of its targets in the coalition agreement. These targets include, for renewable energy:

The German Government reported, in 2011, renewable energy (mainly wind turbines and biomass plants) generated more than 123 TWh of electricity, providing nearly 20% of the 603 TWh of electricity supplied. By 2012, all renewable energy accounted for 21.9% of electricity, with wind turbines and photovoltaic providing 11.9% of the total.

As of 2017, renewable sources account for 38% of the net electricity production. Compared to the same period of 2016, energy production from renewable energy sources increased from 182 TWh to 210 TWh. It marks the first year where solar and wind are the biggest source of energy. Power production from nuclear power plants decreased by 10%, due to maintenance. Use of hard coal decreased by 16%, while production from lignite stayed on a similar level and increased for gas by 2.6 TWh.

The renewable installations have come under criticism as well. A balance made in 2017 has shown that whilst emissions in 2016 were 28 percent lower than 1990, the country was likely to fall short of its 2020 target of a 40 percent reduction on 1990 emission levels. The 40 percent reduction target of 2020 will not be met unless "spectacular" additional efforts are made. One significant reason why Germany may miss its 2020 target is because the country's electricity exports have been growing strongly in recent years to surpass France as Europe's largest electricity exporter. A recent study calculates that Germany exports the equivalent of the annual output from 7GW of lignite generation – producing 59 million tonnes of CO₂ emissions in the process, a figure which accounts for around half of the shortfall in CO₂ emissions it needs to meet its 2020 targets. Replacing the baseload power from fossil fuels has proven more challenging after nuclear power plants have been shut down although the proportion of electricity generated by coal for domestic use has been falling year on year.

In July 2019, figures published by the Fraunhofer Institute for Solar Energy Systems (ISE) report that renewable energy is for the first time providing more electricity than coal and nuclear power combined in Germany. Solar, wind, biomass and hydroelectric power generates nearly half of the country's output. Times with negative prices increased as solar and wind power increased. Solar and wind power has low marginal cost, and other production sources with higher fuel costs become less competitive when demand and prices are low. During the COVID-19 pandemic in Germany, solar power in Germany occasionally produced 32 gigawatt (GW). Solar, together with wind and other renewables, accounted for 78% of German power at one point.

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Primary energy consumption

As of 2015, Germany's total primary energy consumption is 13,218 petajoules or 3,672 terawatt-hours. The final renewable energy consumption, split by the sectors, and with their relative share, are:

Electricity sector, with a renewable energy consumption of 31.5% (187.364 GWh)
Heating sector, with a renewable energy consumption of 13.3% (158.662 GWh)
Transportation sector, with a renewable energy consumption of 5.3% (33.611 GWh)

As of the end of 2015, renewable energy sources, such as biomass, biogas, biofuels, hydro, wind and solar, accounted for 12.4% of the country's primary energy consumption, a more than doubling compared to 2004, when renewables only contributed 4.5%.

Although the terms "energy" and "electricity" are often used interchangeably, they should not be confused with one another, as electricity is only one form of energy and does not account for the energy consumed by combustion engines and heat boilers, used in transportation by vehicles and for the heating of buildings.

Industry

Enercon, Nordex, REpower Systems, Siemens, and Fuhrländer are wind-power companies based in Germany. Every third solar panel and every second wind rotor in Germany are German, and German turbines and generators used in hydro energy generation are among the most popular worldwide.

Nearly 800,000 people work in the German environment technology sector; an estimated 214,000 people work with renewables in Germany, up from 157,000 in 2004, an increase of 36%. Estimated German jobs in renewable energy in 2012–2013 were about 370,000.

Siemens chief executive Peter Löscher believes Germany's target of generating 35% of its electricity from renewables by 2020 is achievable – and, most probably, profitable for Europe's largest engineering company. Its "environmental solutions" portfolio, which is firmly focused on renewables, is "already generating more than €27 billion a year, 35 per cent of Siemens' total revenue, and the plan is to grow this to €40 billion by 2015". Ending its involvement in nuclear industry will boost the credibility of Siemens as a purveyor of "green technology".

Germany's main competitors in solar electricity are Japan, the US, and China. In the wind industry, it is Denmark, Spain, and the US.

Government policy

The renewable energy sector benefited when the Alliance '90/The Greens party joined the federal government between 1998 and 2005. Support for renewable energy continued to some degree under the following governments, regardless of composition, including the current CDU/CSU and SPD coalition government starting in 2018 but did not prevent the collapse of German solar panel production. The renewable energy sector was aided initially by the Renewable Energy Sources Act that promotes renewable energy mainly by stipulating feed-in tariffs and recently also market premiums that grid operators must pay for renewable energy fed into the power grid; these premiums were reduced under governments without Green party participation. People who produce renewable energy can sell their 'product' at fixed prices for a period of 20 or 15 years. This has created a surge in the production of renewable energy. In 2012, Siemens estimated the total cost of renewable energy would come to at least €1.4 trillion (US$1.8 trillion) by 2030.

For the 2011–2014 period, the federal government set aside 3.5 billion euros for scientific research in the country. Additionally, in 2001 a law was passed requiring the closing of all nuclear power plants within a period of 32 years. The shutdown time was extended to 2040 by a new government in 2010. After the Fukushima incident, the law was abrogated and the end of nuclear energy was set to 2022. After the 2013 federal elections, the new CDU/CSU and SPD coalition in important areas continued the Energiewende of the previous government, but also agreed on a major revision of the EEG.

The German energy policy is framed within the European Union, and the March 2007 European Council in Brussels approved a mandatory energy plan that requires a 20% reduction of carbon dioxide emissions before the year 2020 and the consumption of renewable energies to be 20% of total EU consumption (compared to 7% in 2006). The accord indirectly acknowledged the role of nuclear energy — which is not commonly regarded as renewable, but emissions-free — in the reduction of the emission of greenhouse gases, allowing each member state to decide whether or not to use nuclear-generated electricity.

A compromise was reached to achieve a minimum quota of 10% biofuels in the total consumption of gasoline and diesel in transport in 2020.

Energy transition

Energiewende ("energy transition") designates a significant change in energy policy: The term encompasses a reorientation of policy from demand to supply and a shift from centralized to distributed generation (for example, producing heat and power in very small cogeneration units), which should replace overproduction and avoidable energy consumption with energy-saving measures and increased efficiency.

The key policy document outlining the Energiewende was published by the German government in September 2010, some six months before the Fukushima nuclear accident. In addition, there will be an associated research and development drive. Legislative support was passed in September 2010. Important aspects include:

The policy has been embraced by the German federal government and has resulted in a huge expansion of renewables, particularly wind power. Germany's share of renewables has increased from around 5% in 1999 to 22.9% in 2012, reaching close to the OECD average of 18% usage of renewables. Producers have been guaranteed a fixed feed-in tariff for 20 years, guaranteeing a fixed income. Energy co-operatives have been created, and efforts were made to decentralize control and profits. The large energy companies have a disproportionately small share of the renewables market. Nuclear power plants were closed, and the existing nine plants will close earlier than planned, in 2022.

In May 2013, the International Energy Agency commended Germany for its commitment to developing a comprehensive energy transition strategy, ambitious renewable energy goals, and plans to increase efficient energy use and supported this approach. Nevertheless, the scale of Germany's energy policy ambitions, coupled with the large size and energy intensity of its economy, and its central location in Europe's energy system, mean further policy measures must be developed if the country's ambitious energy transition is to maintain a workable balance between sustainability, affordability, and competitiveness.

Subsidies aimed at stimulating the growth of renewables have driven up consumer energy prices by 12.5% in 2013. To date, German consumers have absorbed the costs of the Energiewende, but the IEA says the debate over the social and economic impacts of the new approach has become more prominent as the share of renewable energy has continued to grow alongside rising electricity prices. The transition to a low-carbon energy sector requires public acceptance, and, therefore, retail electricity prices must remain at an affordable level. Generally, German electricity prices are among the highest in Europe, despite average wholesale prices. At the same time, the IEA said the new energy policy is based on long-term investment decisions, and a strong policy consensus in Germany in favour of large-scale renewable energy commercialisation exists.

The Energiewende has been subject to a number of computer studies. Most concentrate on electricity generation and consumption as this sector is undergoing a rapid transition in terms of technologies and institutions.

Ownership

In Germany, almost half of renewable power capacity was citizen-owned as of 2013, and about 20 million Germans lived in so-called 100% renewable energy regions.

Statistics

Increases in installed renewable electric power capacity and generation in recent years is shown in the charts and table below:

Public opinion

According to a 2017 national survey conducted for the German Renewable Energies Agency, of 1016 respondents 95% supported further expanding renewable energy. Almost two-thirds of the interviewees agreed to renewable power plants close to their homes, with the support increasing further if respondents already had experience with such plants in their neighborhood. With solar farms it increased from 72 to 94%, with wind power from 57 to 69%, and with biofuels from 39 to 56%.