Germany’s Energy Transition

Martin Voelker
CRES Jefferson County Chapter

Prof. Christop Stefes on how citizens’ power created clean power.

Germany’s impressive – nay: revolutionary! – transition from fossil fuels and nuclear to renewables was not the brainchild of elder statesmen nor commissioned technocrats.

Instead, as political scientist Christoph Stefes points out in a fascinating talk for Jeffco CRES, it traces back to a citizens movement and several lucky ‘windows of opportunity’ which allowed this revolution to go forward.

Germany is of course known as the industrial powerhouse of Europe but it also was among the first nations with a strong, effective environmental movement. Its Green Party entered parliament in 1983 (thanks to a system of proportional representation) and eventually formed a coalition government with the Social Democrats. The Greens were part of the popular anti-nuclear movement fueled by the Chernobyl disaster. They realized right away saying ‘No!’ to nuclear power did not suffice; they also needed to develop alternatives, and they brought about a surge in research and implementation of solar and wind power at state and municipal level.

Their first big victory was passing a federal feed-in tariff law in 1990 (StreG) that guaranteed an attractive price for feeding electricity back into the grid. Suddenly it made sense for ordinary citizens to put solar PV on their roofs, buy into community solar gardens or wind power, and that got the ball rolling. Under normal political circumstances such a law would never have passed. However this came at just the right time: During the German reunification, its foes, the big utilities, were completely preoccupied rebuilding the decrepit power sector in East Germany and didn’t react fast enough.

Eight years later the first ‘Red-Green’ coalition government took over, passing a revision of the feed in law in 2000 (EEG). This was followed by the Eco Tax which put a price on carbon fuels and made renewables more attractive. While taxes are no more popular in Germany than in the U.S., this carbon tax quickly gained acceptance because its proceeds go toward lowering the social security contributions which are shared between employers and employees. Nobody wants to see those savings go away.

The coalition government also rolled out information campaigns to solidify the already large support for the “Energiewende” (as the energy transition is called). What really explains the staying power and popularity of renewable energy in Germany are the concrete and visible benefits accruing not just to small elites but to individuals and society at large. Private individuals made up forty percent of owners of installed renewable energy producers (in 2010), as opposed to only 6.5% owned by the main utilities. Thus the profits are very widely shared. Many millions of citizens have skin – or rather equity – in the game.

Germany has seen huge growth in renewable energy where the number of jobs quadrupled in a single decade. Renewable energy jobs are now projected to reach half a million by 2020, on par with the chemical industry, having already overtaken the pharmaceutical industry (280k). The car industry, by comparison, employs about 750,000 people. It also comes as no surprise why Germany would be promoting renewable energy internationally, since it is a well positioned exporter of related high tech goods and technology. And internally, the wind industry in particular has brought jobs to depressed regions in the north and east of the country.

Additional benefits are:

  • reduced dependence on Russian natural gas imports,
  • health benefits from cleaner air, and cascading effects on avoided treatment costs and job productivity, and
  • substantial reduction in green house gases.

The latter benefit is plays a big part in Germany’s latest road map which sets carbon reduction targets of 40% by 2020 (compared to 1990) and a nuclear phaseout by 2022. Ironically, the faster phaseout date was made politically feasible curtesy of Fukushima. Because these benefits are well understood by the general public, support for increased use of renewable energy is phenomenally high: in 2014 it stood at 92%.

And that is despite PR efforts by carbon intensive industries to belittle or denigrate the Energiewende. One of their claims was it would “cost too much.” But while electricity rates did in fact go up, electricity bills only rose a negligible 1%, thanks to concomitant improvements in energy efficiency, and so the public wasn’t swayed by industry propaganda.

The coming years, however, will see a shift in the industry as new energy legislation under Angela Merkel’s conservative government favors the big utilities. Rather than distributed power generation their approach looks toward the higher efficiency associated with large projects that are the home turf of the Big Boys.

But proponents for renewable energy have their work cut out for them in other ways as well. They need to direct their attention to improving energy efficiency in Germany, couple this with smart grid implementation, expand the grid to allow electricity to flow from the north to the industrial centers further south, and tackle storage (although pumped hydro already offers part of that solution). The storage issue will eventually allow intermittent sources to fully reshuffle the energy mix. The huge amount of political capital this energy revolution has built so far will help turn these ambitious plans into reality – and into a model worth replicating.

Prof. Stefes’ full talk is available on the CRES YouTube channel.