( Clean Energy Wire ) – Russia’s attack on Ukraine has added a new dimension to Germany’s ambitious aims for ramping up the share of renewables in its energy system. Marking a “historic turning point,” the fast elimination of fossil fuel imports for Germany practically overnight shifted from being a moral obligation and long-term environmental protection measure to a question of national security and short-term economic stability. Wind power, solar PV, bioenergy, hydropower and other renewable power sources since have become labelled “freedom energies” that can enable the country to vastly reduce its energy dependence and form the bedrock for decarbonising the economy.
This Q&A looks at plans for the transition to a power system based on 100 percent renewables and what can be done to speed it up.
[UPDATE adds information on “Easter Package” renewable energy law reform].
1. What are the current expansion goals for wind, solar and other renewables?
Already before Russia’s invasion, Germany’s government coalition of the Social Democrats (SPD), the Green Party and the Free Democrats (FDP) had aimed to achieve 80 percent renewables in electricity consumption by 2030. Shortly after the war’s outbreak on 24 February, it raised the ambition to 100 percent by 2035, meaning the expansion rate of renewables will have to multiply. In a policy package in April 2022 presented as the “biggest energy policy reform in decades,” the coalition proposed to lift the rollout of wind and solar power “to a completely new level.” Renewables already provided about 54 percent of electricity consumption in early 2022.
Installed onshore wind capacity should reach 115 gigawatts (GW), meaning annual capacity additions will have to reach 10 GW as of 2025. A total onshore turbine capacity of about 56 GW had been installed in the country by 2021. Solar PV installations will amount to 22 GW per year as of 2026 to achieve a total capacity of 215 GW by 2030, up from about 60 GW in 2021. Offshore wind additions are increased as well to reach a minimum of 30 GW by the end of the decade, 40 GW by 2035, and 70 GW by 2045. As ambitious as this sounds, much higher buildout rates are not without precedent in the country. In 2017, Germany installed 5 GW of wind power and solar capacity expansion peaked at around 8 GW before 2012.
The government said it will introduce a second package of legislative reforms by the summer. These will include draft reforms of the Renewable Energy Act (EEG), the offshore wind law, the energy industry law and legislation to speed up power transmission grid development. It will now be sent to parliament and could be adopted still in the first half of 2022, the economy ministry (BMWK) said.
2. Will the planned renewables expansion allow an end to Russian imports and reach climate targets?
Full independence seems unlikely for Germany even with a fully decarbonised energy system due to continued raw material imports and the sheer power capacity needed to implement decarbonisation measures. However, the energy potential that can be exploited using renewables within the country is still significant. Renewables expansion provides the fundament for almost all energy transition activities Germany has planned to reach its goal of full climate neutrality by 2045. Together with increased efficiency to reduce the overall need for energy, the electrification of mobility, heating and other sectors is a cornerstone for ending the use of fossil fuels like petrol in cars or natural gas in heating systems – and renewables allow doing so without causing new CO2 emissions. However, electricity so far only covers a fraction of Germany’s primary energy consumption, where the share of renewables in 2021 stood at a little over 16 percent.
Yet, renewables also provide the foundation for green hydrogen production, which will enable decarbonisation in sectors and applications where electricity so far offers no viable solutions. But building more renewables takes time and offers no quick way out of the current predicament. In its progress report on energy security from late March 2022, the government said the goal to significantly reduce imports from Russia by mid-2024 to 10 percent of gas use would require further diversification of fossil fuel sources, a more rapid ramp-up of hydrogen and the “massive expansion” of renewables. The Easter Package is aimed at becoming the “greatest accelerator since the year 2000,” when guaranteed remuneration was introduced with resounding success for the buildout of wind and solar power installations. Economy and climate minister Robert Habeck had urged that expansion should happen “at Tesla speed”, referring to the US carmaker’s quick construction of a gigafactory for e-cars near Berlin. However, he warned the country still lacks sufficient wiggle room in energy supply to end dependence on Russia swiftly.
3. Are renewable power companies ready to deliver a fast expansion?
Ramping up the production and installation of wind turbines, solar panels and other renewable power installations was made a priority as soon as the new government entered into office at the end of 2021, meaning companies had some time to gear up for a renewed expansion boost. However, consultancy McKinsey said while achieving projected buildout volumes so far had no been a challenge, the ambitious new goals mean the country risks falling behind its own schedule. But solar power industry organisation BSW Solar is confident its companies can deliver on the increased targets, even arguing these represent the “lower boundary of what is necessary” to reach the country’s climate targets and substitute the coal-fired power plants slated for decommissioning. The industry group says expansion to up to 250 GW is possible by the end of the decade, given the political will. In the long-run, the country could install up to 500 GW, it added.
The wind power industry is more cautious regarding a fast scale-up. German Wind Power Association (BWE) said the current expansion plans already are “very ambitious”. Due to a near total collapse of turbine construction in Germany in the past few years, many companies had scaled down domestic production capacities to focus on markets abroad. The BWE said it expects manufacturers to recalibrate their focus back towards their home market given the perspective of a sustained boost to installations in Germany, an assumption that is backed by resurging interest in wind power auctions as of early 2022. “A forceful expansion will be imperative,” the group said. However, the lobby group said Germany could install up to 200 GW of onshore wind by 2040 if the country shed its “bureaucratic corset.”
For the German Renewable Energy Federation (BEE), the industry’s umbrella organisation, the current targets do not yet reflect the situation resulting from the war in Ukraine and the new focus on supply security. It expects the government to pull more levers to ensure that renewable power can replace fossil fuels, as power demand in general is set to grow to at least 750 terawatt hours (TWh) by 2030. The BEE stressed that bioenergy could play a central role in the push away from Russian fossil power by simultaneously providing alternatives for the power sector, heating and mobility. However, this would require a massive roll-out of electrolysers for biogas plants. Biogas could “immediately” replace 5 percent of Germany’s Russian gas imports, according to the European Biogas Association.
4. Which hurdles are obstructing a fast expansion? And how can they be overcome?
Expansion progress in recent years has been below target values for a wide range of reasons, including cost pressure, low investor confidence and difficulties with project licensing and lawsuits against new installations, particularly regarding onshore wind turbines. The following hurdles are the most important to overcome for the renewables expansion to become faster.
5. What about the parallel expansion of grids and storage capacity?
A power system based on 100 percent renewables needs a variety of storage technologies to become flexible enough for servicing an entire country. These include battery storages, either small ones at home or industrial-scale batteries in factories and pumped-hydro storage, biogas and hydrogen made with renewable power for other large users. Sector-coupling approaches like power-to-heat also allow the direct integration of renewables into the heating sector. In its coalition agreement, the government said that as of 2025, every new heating system had to be operated with 65 percent renewable energy, such as green hydrogen. But the electrolysers needed to turn electricity into hydrogen also require long licensing procedures. Solar PV could also play a significant role in substituting heating gas, lobby group BSW Solar said, arguing that a lack of adequate policy instruments is what keeps solar from being “unleashed” in the sector. Retrofitting existing oil and gas heating systems with additional solar thermal installations could reduce fossil power use significantly and renewables could also play a greater role in district heating, both with solar and geothermal power.
More storage options also mean that less power has to be fed into the grid. But the power grid is still in need of considerable investments to make it ready for the end of fossil and nuclear power. Grid expansion and modernisation that allows the integration of added capacity of renewables and replaces fossil power plants will be just as important as constructing more wind turbines and solar panels. The large planned transmission lines that are needed to connect windy northern Germany with industry centres in the south are said to be “years behind schedule.” Furthermore, local distribution grids have to be upgraded to become more flexible to allow for feed-in by prosumers with solar panels on their homes.
The many decentralised and intermittent renewable power installations require that electricity surplus flows can be redirected through distribution grids during peak input times, such as periods of heavy winds or sunny days around noon. Storage options and load management are one way to provide flexibility, but retrofitting grids to allow for bi-directional power flows will be required too, industry group BEE said. Renewable power association LEE Niedersachsen said bioenergy plants could quickly ramp up their output if load management was improved. In times of high wind power output, too many biogas plants would still be turned off too often to shed load, which also cuts off heat generation with biogas. A better integration of heat and power supply management could offer quick relief, the LEE said.
6. How can Germany’s renewables push be integrated in European climate neutrality plans?
Germany’s central position in Europe makes the integration into a broader European energy transition framework an obvious aim. Renewable power industry group BEE said EU coordination still has considerable room for improvement, given the new urgency posed by the looming standstill of energy trading with Russia. The European Comission’s REPowerEU package has to be integrated into national law quickly in order to make headway regarding a pan-European renewable power system.
Even if rising energy prices are causing concerns over the EU Green Deal’s planned comprehensive carbon pricing system, a better coordination of energy transition efforts offers numerous no-regret investment opportunities for the bloc that helps to make its energy supply both more resilient and more sustainable. The EU Commission said its “Repower EU” plan scheduled for spring 2022 could include higher renewable power goals to take into account the aim of freeing Europe from its dependence on Russian supplies.
According to an analysis by Finnish energy company Wärtsilä, Europe as a whole could halve gas consumption by 2030 by doubling its renewable power capacity. Adding about 80 GW of renewable power capacity per year, roughly twice the current level, would allow it to bring the renewables share in production from roughly 33 percent in 2022 to more than 60 percent at the end of the decade — a “sizeable but realistic” task for European governments, the company said. If the envisaged buildout is achieved, all of Europe could not only massively reduce fossil fuel imports but also have a net-zero energy system by 2040, 10 years earlier than planned.
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