POWER May 2013 - 34

ENERGY POLICY
Germany's Energy Transition
Experiment
Germany has chosen to transform its energy system within a few decades-an
ambition that has evoked equal admiration and confusion. Has Europe's
largest economy embarked on a rational path to an energy future that will
make it the bellwether for global acceptance of renewables, or will the
complex array of current challenges encumber its grand transformation?
By Sonal Patel
A
comprehensive legislative package
passed by Germany's federal cabinet
and its bicameral legislature (comprising
the Bundesrat, the federal council,
and the Bundestag, the federal parliament)
in the summer following Japan's Fukushima
nuclear catastrophe in 2011 adopted 120 individual
measures previously proposed in a
2010-unveiled " Energy Concept " and laid
the groundwork for Germany to set its energy
supply system on a new footing by the
middle of the century.
The transition to a new energy era-described
by the German term Energiewende-
will be a " Herculean task, " German Chancellor
Angela Merkel has admitted, bigger, perhaps,
than efforts to bridge the infrastructure development
gap following German reunification.
But if the transition is successful, Germany
could model how an export-oriented industrial
nation staking its future on a high share
of renewables can be globally competitive.
If it stalls, the nation with the world's fourthlargest
economy by nominal gross domestic
product could flounder economically, miring
grandiose ambitions in the European Union
(EU)-and around the world-to combat climate
change with renewables.
Making an Energy Transition
The goals of the transition are certainly " ambitious "
for Germany, an industrial heavyweight,
but they are " clear, " Federal Minister
of Economics and Technology Philip Rösler
contends in a recent policy brochure. Along
with a complete withdrawal from nuclear
power by 2022, the country will strive to
replace 80% of electricity generated today
by conventional sources with renewables by
2050 and shave energy consumption by a fifth.
Complex hurdles will have to be overcome,
Rösler acknowledges. " [The transition] goes
hand in hand with the necessary grids, power
stations and storage technologies, and therefore
involves the development of a completely
new energy system, " he says. And the only
34
way to achieve it without putting an " undue
burden " on businesses and consumers and to
ensure long-term acceptance of the transition
is to prioritize " technology-neutral, marketoriented,
and cost-effective instruments. "
It helps that Germany has been on a sustainability
trajectory for awhile, some industry
observers point out. The term Energiewende
was coined three decades ago, in response to
the oil shocks of the 1970s, by Öko-Institut,
an ecological think tank that defined the transition
as " growth and prosperity without oil
or uranium. " That idea took root in political
discourse during the 1980s, and in 1991, the
first feed-in-tariff (FIT) policy backing renewables
was introduced. After it was revised and
extended in 2000, Germany enacted the Renewable
Energy Sources Act (ErneuerbareEnergien-Gesetz,
or EEG)-the policy that
perhaps most forcefully drives Germany's
post-Fukushima energy transition.
Nuclear's Slow Death
In 2000, under then-Chancellor Gerhard
Schröder, Germany's first center-left coalition
of Social Democrats (SDP) and the
Green Party implemented a nuclear phaseout
with the passage of Atomausstieg, a controversial
policy change that stymied nuclear
generators' unlimited lifetime licenses and
strong legal guarantees. Under that law, the
country's 19 then-operational nuclear plants
were allotted a specific amount of electricity
(2,623 billion kWh, or an average of 32
years) of lifetime production that they could
feed to the grid before mandatory shutdown.
It allowed those hefty allowances to be sold
or transferred to other power plants for a
profit, however, ameliorating protests from
nuclear generators-particularly newly born
E.ON, which amassed ownership of 12 of the
19 reactors after the merger of Germany's
biggest utilities, Veba and Viag. The industry-government
compromise also included
a government commitment not to introduce
any " one-sided " taxation measures.
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Just a decade later, in an attempt to lay the
groundwork for future German energy policy
to mitigate climate change, and-as a global
recession raged-to reap a portion of tremendous
profits utilities said they would earn if reactor
lifetimes were extended from the average
32 years to 60 years (as in the U.S.), the coalition
government of Chancellor Angela Merkel
agreed to levy a €2.3 billion annual tax on the
country's four nuclear owners-RWE, E.ON,
EnBW, and Vattenfall Europe. In return they
got permission to operate reactors on average
12 years beyond 2021. The tax was to be used
to subsidize renewables until at least 2016.
Merkel-a former environment minister in
the mid-1990s under conservative Chancellor
Helmut Kohl-was in September 2010 the
head of a grand center-right coalition government
that included her own liberal-conservative
Christian Democratic Union (CDU), the Christian
Social Union (CSU), and the businessfriendly
Free Democratic Party (FDP). She had
then called the reactor lifetime extension compromise
" a reasonable technical solution, " noting
that at the time, nuclear power accounted
for about 22.6% of net electricity consumption.
Merkel's assessment that the renewable sector
was not capable of filling the energy gap
if Germany was entirely rid of nuclear power
was directly in line with the coalition's newly
unveiled " Energy Concept " -the ambitious energy
policy with a 40-year trajectory that called
for, by 2050, greenhouse gas cuts of at least
80%, increasing renewables to 80% in electricity
supply, and a 50% reduction in primary energy
consumption compared to 2008 levels.
The Pushback
Then the natural and nuclear disaster at Fukushima
happened. In the whirlwind of events following
the Japanese catastrophe in March 2011,
Merkel's government reversed its stance on
nuclear power and, citing safety concerns, immediately
instituted a three-month moratorium
on all nuclear plant operation for safety checks.
Merkel later decreed that seven of Germany's
POWER | May 2013
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POWER May 2013

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