German Advisory Council on the Environment

Keeping the target in view - New SRU Special Report on the German Energiewende

Date 2013.11.27

“We need to make energetic progress with the transformation of the energy system”, urges Professor Martin Faulstich, chair of the German Advisory Council on the Environment (SRU), presenting its special report on “Shaping the electricity market of the future”. The long-term objectives in the fields of climate change mitigation, energy efficiency and the expansion of renewable energy must remain the yardstick by which current reforms are measured.

Germany is committed to reducing greenhouse gases by 80 - 95% by 2050, in order to make its contribution to the international goal of preventing global warming from exceeding 2°C. This will only be possible with renewable energy sources. A supply system based entirely on renewable energy is cheaper and more eco-friendly and safeguards more jobs than one based on conventional energy supplies. For this reason there is a need for further rapid progress on expanding renewable energy. On the basis of available studies, the SRU concludes that the renewables-based share of electricity can be boosted to 60-70% by 2030 at an additional annual cost to the economy of well below €10 billion. This is less than 0.4% of GDP and less than one sixth of the total energy costs of households and industry. The SRU takes the view that there is currently no need to use quantity regulating instruments such as quotas, expansion ceilings or auctions which slow the pace of renewable energy expansion.

In its special report, the SRU calls for a more honest approach to the discussion of costs. The close focus on the EEG surcharge overstates the cost situation and makes it easy to lose sight of the overall economic benefits of transforming the energy system. Energy-intensive industries have profited from this transformation because they have been largely exempted from the EEG surcharge and also have to pay much lower spot prices for electricity. This fact must be given greater weight in the debate about the competitive position of energy-intensive industries in international competition.

The SRU is nevertheless of the opinion that renewable energy sources should be exposed more to the challenge of market forces. It therefore recommends changing the promotion system to mandatory direct marketing with a variable market premium. This premium should be sufficient to ensure the refinancing of investments and the continuous growth of renewable energy.

Conventional electricity supplies must be subordinated to the needs of renewable energy. Operating large numbers of coal-fired power stations is not compatible with the transformation of the energy system. Flexible gas-fired power stations are indispensable for the transition to a power supply system with a large proportion of renewable energy, and the current surplus capacity of base-load power plants must gradually be reduced.

As the most important individual measure for supporting this transition, the SRU therefore recommends raising carbon prices to reflect more ambitious European climate objectives for 2020 and 2030. As part of a triad of goals for renewable energy, energy efficiency and climate change mitigation, the German Government should aim for a European climate target of at least 45% to be achieved by measures within the EU. There will also be a need for more ambitious national measures of a price-related or regulatory nature to make conventional power supplies more flexible and climate-friendly during the transition period.

In addition, the SRU recommends providing a stable guidance and investment framework in the form of a national Climate Change Act with targets in ten-year steps. The transformation of the energy system also calls for better cooperation between the ministries concerned and between the national, regional and local levels of government. This cooperation should be coordinated by a Minister of State within the Federal Chancellery. The SRU advises against an energy ministry because it would not be able to provide the necessary coordination.

 

The special report “Shaping the electricity  market of the future” can be downloaded from www.umweltrat.de or ordered from the SRU secretariat.

 Further information is available from Dr. Christian Hey, Tel: +49 30 263696-0.

The SRU has been advising the German Federal Government on environmental policy issues for over 40 years. The composition of the Council – seven university professors drawn from a variety of disciplines – ensures a comprehensive and scientifically independent appraisal that takes account not only of scientific and technical, but also of economic, legal, and political considerations.

 The Council currently has the following members:

Prof. Dr. Martin Faulstich (Chair), Clausthal University of Technology

Prof. Dr. Karin Holm-Müller (Deputy Chair), Rheinische Friedrich-Wilhelms-Universität Bonn

Prof. Dr. Harald Bradke, Fraunhofer Institute for Systems and Innovation Research ISI in Karlsruhe

Prof. Dr. Christian Calliess, Freie Universität Berlin

Prof. Dr. Heidi Foth, Martin Luther University in Halle-Wittenberg

Prof. Dr. Manfred Niekisch, Goethe University of Frankfurt and Director of Frankfurt Zoo

Prof. Dr. Miranda Schreurs, Freie Universität Berlin

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