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The Energiewende Paradox: Rising German Emissions Despite an Emphasis on Renewable Energy Policy

November 17, 2015
Germany has been a global leader in renewable energy over the past two decades.  Much of the advance in renewable energy in Germany has been fueled by an aggressive approach to energy policy built around the German Energiewende, or Energy Transfer.  However, the past few years have seen gains in CO2 reductions reverse slightly as closures of nuclear power plants have ignited renewed growth in coal.  In this article, we explore the context for the tension between reductions in nuclear power and its implications for coal and carbon emissions.

Background:

As the world turns its attention to the Paris climate change talks, new approaches to addressing CO2 emissions increasingly rise to the forefront of policy discussions. In the context of the recent bilateral agreements between the US and China, much of the attention at the talks will be tied to attempts to reconcile differences between the US and developing powers such as India and China. European nations also figure to play an important role in the discussions. 

In Europe, carbon emissions have declined over the past two decades.  However, emission levels stayed relatively flat from 1993-2008; the recent downturn in the global economy has contributed to the fairly dramatic decrease in CO2 emissions after 2008. [1]  

European Union CO2 per Capita

Source: European Commission

Uptake of renewable energy sources has been fairly dramatic in Europe.  Though renewable energy sources make up only ~11% of the total energy consumption, renewable forms of energy have seen a dramatic rise in production capabilities over the past twenty years. [2] The line graph below shows the rapid increase in wind energy production over the past twenty years.

European Union Sources of Energy 

 

Source: European Commission

European Union Electricity from Wind Power

Source: European Commission

As the largest economic power in the EU, Germany occupies an interesting role in the European Union’s energy policy landscape.  Germany imports a substantial portion of the country’s energy.  The energy portfolio of Germany in terms of sources of energy for consumption appears quite similar to that of Europe with respect to renewable forms of energy (~10% renewables). [3]

German Sources of Energy 

Source: European Commission

 

However, simply stating the portfolio misses the larger transformation that has been afoot in Germany over the past few decades.  Substantial growth in renewable forms of energy have transformed the German energy sector.  The growth of German renewable energy can best be put into context by comparing the role of renewables in energy production in Germany against the roles of renewables in France and the UK.  Germany has dramatically outpaced both countries in the growth of renewable energy production, and this can best be seen in the following graph showing the fraction of energy production from renewable sources for the three countries over the past two decades.



Proportion of Energy Production from Renewables Source: European Commission

Energiewende:

The emergence of renewable forms of German energy production is best understood as a result of aggressive policy interventions by the German government. Specifically, the German government has been involved in pushing a transformation in energy policy that is known as the Energiewende.  The Energiewende represents an attempt to move the country’s energy production and usage from nuclear and fossil fuels to renewable forms.  

Researchers from the Jülich Research Centre in Germany have attempted to trace the origins of the Energiewende, and they place the beginnings of the Energiewende over thirty years ago. [4]  After the division of Germany in the the aftermath of World War II, West Germany focused energy policy primarily on lignite and hard coal.  When West Germany emerged from the Paris Agreements in 1955 as a sovereign state in NATO, nuclear power became a new potential centerpiece for German energy policy. Hake et al. from Jülich have argued that the development of nuclear over the following decades coincided with challenges in the markets for coal and oil, as import prices for both declined and threatened the sustainability of the German coal industry. Backlash against nuclear development accumulated in the 70’s, and in the 80’s, the Chernobyl disaster inspired considerable concern among the German populace, which translated into restrictions and a new outlook on nuclear power from the government. In 1991, then Chancellor Helmut Kohl and his government shepherded through a bill called the Feed-In Act, which amongst other things allowed renewable energy users to sell excess power back to the grid. [5] In 2000, the government built on the Feed-In Act with a law called the Renewable Energy Act that modified rates for energy sold back to the grid so that rates were dependent on investment levels as opposed to a retail rate.  In the same year, the German government also came to an agreement to close all nuclear facilities by the year 2032.

Climate change and energy continued to expand as a national political issue under Chancellor Angela Merkel’s leadership.  In 2007, Merkel joined other European leaders in agreeing to a 20-20-20 agreement, which promised to reduce greenhouse emissions by 20%, increase energy efficiency by 20%, and increase renewable use by 20% by 2020. [6]

Success of the Energiewende: 

The broad Energiewende has had success in pushing a dramatic shift in German energy policy.  The subsidization of renewable energy sources motivated a rapid growth in the renewable energy sectors.  Production of wind energy has grown dramatically over the past two decades.

German Wind Electricity Production 

Source: European Commission

The growth in renewable energy production has also seen rises in costs of electricity for Germans.  It has been estimated previously that German energy prices are in excess of 40% more than the European average. [7] 

Energiewende Paradox:

While the growth in the renewable sector is promising, the last few years have seen reductions in CO2 emissions begin to slow and even reverse.  In the aftermath of the Fukushima nuclear reactor disaster in 2011, Chancellor Angela Merkel reversed her decision from the previous year to prolong closing certain nuclear reactor sites. [8] The result of this shift in nuclear policy was the relatively rapid shutting of several large nuclear reactor sites.  While this turn away from nuclear is consistent with aims of the Energiewende, it has also contributed indirectly to an uptick in carbon emissions as the closure of nuclear reactor sites opened room for different energy sources, with coal (specifically lignite coal) stepping primarily into the void.  The result of increased coal energy production is greater CO2 emissions, explaining the increase in CO2 emissions seen in 2012 and 2013. [9] Thus, recent years have seen the emergence of an Energiewende Paradox, where increased renewable energy production has been coupled with increases in CO2 emissions.  

The challenge for policy makers in Germany is to develop a method to effectively prevent the conversion of nuclear energy to coal.  There are obvious difficulties.  These, of course, include the high prices of existing renewable energy sources.  But they also include the power of coal lobbies in German politics.  Legislation earlier this year stalled after intensive lobbying by the coal industry applied pressure to key German politicians. [10]

Despite aggressive goal setting and commensurate legislative action, Germany sits in a precarious position.  Wrestling with the dangers of nuclear and the costs of carbon emissions will not be easy, and a new solution that delicately balances both interests will be required. 

References:

  1.  “Energy By Country,” European Commission, accessed November 12, 2015. European Commission.

  2.  Ibid.

  3.  Ibid.

  4.  Hake, Jürgen-Friedrich, Wolfgang Fischer, Sandra Venghaus, and Christoph Weckenbrock. “The German Energiewende–History and status quo.” Energy (2015).

  5.  “Energy Transition: The German Energiewende,” The Heinrich Böll Foundation, accessed November 12, 2015. The Heinrich Böll Foundation.

  6.  Ibid.

  7.  “The costly muddle of German Energy Policy,” Financial Times, October 6, 2014. Financial Times.

  8.  James Conca, “Germany’s Energy Transition Breaks the Energiewende Paradox,” Forbes, July 2, 2015. Forbes.

   9.  Josie Le Blond, “Coal resurgence darkens Germany’s green image,” Financial Times, October 13, 2015. Financial Times.

   10.  Ibid

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