Seit September 2019 unterstütze ich als studentische Hilfskraft das gesamte Team des Clusters für Erneuerbare Energien Hamburg bei der Entwicklung, Umsetzung und Nachbereitung vielfältiger Fachveranstaltungen. Parallel studiere ich meinen Master in Energy Policy. Diese Kombination aus Praxis und Theorie birgt viele tolle Chancen, meine Kenntnisse im Bereich der Erneuerbaren-Energien-Branche und nachhaltiger Energiepolitik zu vertiefen. (Janina Grimm)
The current role and challenges of wind power in the electricity system of Germany – A short report
Germany’s future is electric, renewable and emission free.
Today, renewable energies provide more electricity to German energy consumers than fossil energy sources do. In the medium to long term, the German government foresees to support the renewable energy deployment even further.
Great challenges are related to the climate friendly re-design of Germany’s electricity system. Renewables have great benefits. However, they come with important downsides regarding, inter alia, energy security issues, social costs and market related risks.
This report addresses all the above-mentioned features and main challenges inherent to the German electricity system, paying special attention to the role and challenges of wind power, currently the country’s most predominant renewable energy source.
Germany‘s electricity system in a nutshell
Generation and consumption
Germany is the most electricity-intensive country within the European Union. Still, it could provide itself completely with self-produced energy: since 2003 the gross electricity consumption of Germany has consistently been lower than its generation (BMWi: 2020). While consumption is declining in recent years due to price development, temperature influences and energy efficiency efforts (BDEW: 2019), electricity production rates are relatively stable since 2015.
Last year, the total electricity consumption in Germany was equal to 579.8 billion kWh (BMWi: 2020). At the same time the country’s electricity generation was of 646.8 billion kWh, representing a higher amount than the national demand (BMWi: 2020). This electricity surplus is being traded to other European countries (BMWi: 2020; Eurostat: 2018).
Energy resources portfolio – from fossil fuels to renewables
The power supply in Germany relies on a broad mix of different energy sources. At the turn of the century, this portfolio has clearly developed in favour of renewable energies.
According to the Federal Network Agency (BNetzA), in Germany generation plants with a total capacity of 221.3 gigawatts (GW) are currently installed. Renewable energies account for a share of approximately 121 GW. Consequently, also the share of renewable energies in electricity production has increased dramatically. As a result, in 2019 renewable energies accounted for 42.1 percent of the German gross electricity consumption.
As the share of renewable energies steadily increases, the share of nuclear energy, lignite and hard coal in the energy source mix of the German power supply is declining. Today, all three energy sources together account for only 40 percent of the total electricity generation, compared with 84 percent in 1990.
The ongoing expansion of renewable electrification significantly contributes to the German climate protection targets. Greenhouse gas emissions have been reduced since 1990. Total CO2-emissions fell by around 344 million tonnes or 27.5 percent by 2017 (Umweltbundesamt: 2019). In 2018, emissions with a total greenhouse gas potential of around 187 million tonnes of CO2 equivalents were avoided. The electricity sector accounted for over 144 million tonnes (BMWi 2019: 24). Power generation from wind energy avoided most greenhouse gas emissions with 76.3 million tonnes (Umweltbundesamt 2020: 49).
Main challenges for Germany’s ‘green power’ deployment – exemplified by wind energy
Despite of the favourable emission reduction trend witnessed in Germany, future projections state that under current and planned policies, the country will miss to achieve its mitigation targets of 55 percent reduction by 2030, and climate neutrality by 2050 (Umweltbundesamt: 2020). Consequently, it will also fail to increase the share of renewables in electricity consumption scheduled by a percentage of at least 80 percent for 2050.
Hence, better and more efforts are needed to encourage the deployment of renewables and to overcome challenges related to their integration into the German energy system. According to Ellaban et al. (2014), there exists a great variety of potential barriers: regulatory and administrative, infrastructure, technical, economic, financial and market, public acceptance and environmental (Ellaban et al. 2014: 759).
Government policies play a crucial role for addressing these barriers and for determining the success of renewable energy integration into the system. The case of German wind power provides a good example for how policies influences the shape of electricity systems and share of different energy sources.
Wind energy in Germany – from a success story to a potential pit fall
Over the past decades, a set of different policy instruments have been implemented by the German government to incentivise the integration of variable renewable energies.
These efforts had positive impacts for the integration of variable renewable energies into the German electricity system. The most prominent, because most effective support scheme so far takes the shape of the Renewable Energy Act (EEG – Erneuerbare Energien Gesetz), adopted in April 2000 (BMWi 2019: 27). The EEG’s remuneration system is based on a fixed, regressive feed-in tariff for renewable sources, providing low revenue risks to investors and, hence, strong incentives for renewable energy deployment.
The wind energy sector has profited immensely from it. The gross electricity production from onshore and offshore wind energy has increased from around 40 billion kWh in 2010 to 132 billion kWh in 2019 (BWE: 2018). As a result, today wind energy plays the most dominant role for green electrification in Germany. During the first quarter of 2020, for the first time in German history wind power represented with 34.9 percent of the total amount of electricity fed into the grid. On German territory around 30 thousand wind turbines are installed. This corresponds to an installed capacity of almost 60 GW. Off-shore wind presents an installed capacity of 7.5 GW.
Along with the successful depoyment of wind energy, other economic benefits came along. Wind energy is a job engine for Germany. Today, around 135,000 people were directly or indirectly employed in the wind industry (BWE 2020: 8). Furthermore, the increasing production of wind energy let to considerable wind power price drops. Wind turbines in Germany already produce cheaper electricity than newly built fossil power plants (Pfeiffer: 2011; BWE 2017: 54). This trend is also influenced by the increasing technology performance wind energy has undergone in Germany (BWE 2018: 45). The EEG encouraged private investment as well. From 2008 to 2017 an approximate amount of 60 billion Euros were devoted to the construction of new wind turbines (BWE 2017: 13).
Regardless of this positive trend, in 2018 the expansion of onshore wind energy in Germany had dropped significantly, namely by 55 percent in comparison to 2017. In 2019, the installation rate has declined even further (BWE 2020: 11).
The reasons for this sudden fall are of political nature. First, the new EEG amendment of 2017 represents a shift from the feed-in tariff mechanism to a tendering scheme. This policy change increases the risks for investors significantly. Second, in order to respond to massive civic protests regarding the negative landscape and ecological impacts of wind turbines, the federal government is planning to release additional construction barriers in the shape of a 1000-meters-distance control of wind turbines to residential areas. If the Federal Ministry of Economics follows through, up to 40 percent of possible wind locations could become restricted (Der Spiegel: 28.11.2019). Third, the transmission infrastructure – the only option able to connect distant wind farm locations with energy hot spots, is lacking development for years.
This report shows how Germany has made tremendous efforts to decarbonize its electricity system by supporting the integration of renewable energy, mainly over the past two decades. Based on the experience with wind energy deployment, the paper could illuminate how decisive the policy design can be regarding shape the national mix of energy resources and to reduce or increase risks to investors and other relevant players.
Based on the last sections’ findings, it can be concluded that in order to achieve the national reduction goals, private sector investment need to be encouraged again, grid-infrastructure needs to develop faster and the territorial restriction planned need to be alleviate.
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