The Role of Germany in the Future of Renewable Energies

Germany is widely regarded as an international frontrunner in the global energy transition. Efforts to promote renewable energy have played a key role in lowering the cost of wind and solar power and contributed significantly to the growth of these technologies around the world. Germany’s energy transition policy is held up as a model abroad and enjoys broad support at the domestic level. In the opinion of many energy experts, future energy systems are likely to be dominated by renewable energies. Precisely how this will come about – and what steps must be taken on the technological and political fronts to achieve this – remains unclear however.

Different visions of our energy future

Numerous studies have been prepared on the future organisation of the energy sector. These studies frequently arrive at different conclusions and highlight different pathways to achieving this future. However, a broad consensus exists among experts that we will see immense growth in global energy demand due to a variety of factors, including population growth in African and Asian countries, improved access to energy systems in developing countries and emerging markets, and improved economic performance in non-OECD countries. The prospects for the future use of fossil resources and the acceptance of planetary boundaries are less clear. Some studies anticipate that fossil energy sources will play an important role – particularly in the case of natural gas. Others suggest that renewables will dominate the energy sector and highlight the lack of alternatives if we wish to curb climate change.

The development of future sustainable energy systems is likely to rest on the adoption of a variety of technological solutions, studies suggest. Digitalisation and automation could improve energy efficiency in both the building and transportation sectors. Wind and solar power systems will be complemented by wave and tidal energy technologies as well as biomass and geothermal systems in future electricity and heat supply systems. Synthetic hydrogen could also play a greater role as a storage technology for energy from renewable sources.

The German energy transition and its global context

In October, the workshop “Renewable Energy Futures: Germany and the World” at the Institute for Advanced Sustainability Studies (IASS) in Potsdam brought together experts to explore a variety of future energy scenarios and reflect on Germany’s changing role in the renewable energy sector in the light of international trends. Discussions at the workshop showed that other countries share many of the challenges faced by Germany. Among these are the expansion and modernisation of ageing grid infrastructures and the legacy costs incurred by existing and planned investments in fossil-based energy resources. As a world-leader in renewable energy, Germany is increasingly faced with competition from China and India, which have become the leading destinations for investments the sector. The USA is also investing heavily in renewable energy. However there is still a tremendous need for greater investment: according to a recent joint study by the IEA and IRENA, meeting the 2°C climate target, will require the investment of an additional US$29 trillion over the period to 2050. Emerging markets are now also moving to promote renewable energies by adopting various instruments such as feed-in tariffs and energy auctions. Again, China and India are emerging as significant actors. The growth of renewables in these countries is being driven by the desire to lower dependence on energy imports, improve air quality, and provide universal access to energy.

Germany is lagging behind the USA, Australia, Singapore and other countries when it comes to the adoption of digitalisation and automation in the energy transition. The frontrunners in this area are pioneering “Smart Cities” built around digital networks to create flexible systems for the production, consumption and transmission of energy. In Germany, concerns around data protection and privacy have slowed this trend. Meanwhile, an international trend towards greater use of biofuels and electric vehicles is increasing the share of renewable energy in the transportation sector. Policies have also been developed to promote car-sharing and autonomous vehicles. China, Norway, and the state of California are all key players in this area.

Germany and the further development in the (global) energy transition

The workshop “Renewable Energy Futures: Germany and the World” also underscored Germany’s role as a major driver of the global energy transition. The participants noted that Germany remains a forerunner in the research and development of energy technologies, and global demand for German expertise in these areas remains strong. The country is also fostering energy transitions abroad through its development cooperation – Germany provides more development assistance in the energy sector than any other OECD country. Germany was also a significant player in the establishment of an international institution to promote a global energy transition: the International Renewable Energy Agency (IRENA).

However, participants at the workshop were also critical of the overall progress made to date: the expansion of renewable energies has slowed in Germany and this loss of momentum is reflected in the lack of progress towards phasing out coal-fired power generation and other fossil-based sources of energy. Changes in legislation have blunted the competitive edge previously enjoyed by renewables. Many domestic and international actors have begun to question Germany’s capacity as a frontrunner of a global energy transition.

Germany, the participants concluded, should build on its key strengths – technological innovation, broad popular support for the energy transition, and its close relationships with important actors in the global energy transition – as it strives to advance the energy transition further. These strengths provide a sound basis upon which Germany can learn from international experiences, defend its position as a trendsetter, and work to overcome challenges at the domestic and international levels, including the need to ensure that energy transitions are sustainable in their social dimension, the development of innovative funding instruments and policy frameworks to facilitate the modernisation of existing building stocks and transportation systems, the expanding role of digital technologies, and expanding energy access in developing countries.

This post was first published on the technewable-Blog on 8 December 2017.