Key Messages on German Climate and Energy Policy

Geothermal Enlarge image A geothermal power plant in Landau (© picture-alliance/dpa )

The German government knows, that a progressive climate policy is vital for a healthy economy. It leads to economic growth, employment, industrial innovation and greenhouse gas emission reductions. To achieve a low carbon growth path,  the current energy system needs a transformation towards sustainable energy, particularly renewable energy resources. Furthermore, energy can be supplied and used much more efficient and smarter. Baring this in mind, the German government developed a comprehensive energy concept on the basis of scientific studies, which covers the triangle of energy policy: energy security, economics and climate protection.

The German government decided that Germany's energy supply should be generated primarily from renewables by 2050, which are the only sustainable energy source. This requires our energy supply system to be fundamentally restructured, presenting Germany with economic and technological challenges. The Energy Concept of 28 September 2010 and the decisions on accelerating the energy transformation of summer 2011 describe the road towards the new energy era with specific targets, a monitoring process and a sound financing plan, as well as around 180 individual measures.

The main targets of the energy transformation are:

  • Renewable energies:
    - Renewable energies are to achieve an 18% share of gross final energy consumption by 2020, a 30% share by 2030, 45% by 2040 and 60% by 2050.
    - By 2020 renewables are to have a share of at least 35% in gross electricity consumption, a 50% share by 2030, 65% by 2040 and 80% by 2050.
  • Energy Efficiency:
    - Primary energy consumption is to fall by 20% by 2020 and by 50% by 2050.
    - Electricity consumption is to fall by 10% by 2020 and by 25% by 2050, compared to 2008.
    - Compared to 2008, heat demand in buildings is to be reduced by 20% by 2020, while primary energy demand is to fall by 80% by 2050.
  • Climate protection:
    - Climate-damaging greenhouse gas emissions are to be reduced by 40% by 2020, 55% by 2030, 70% by 2040 and by 80 to 95% by 2050, compared to reference year 1990.

How will we reach our targets?

Federal Environment Agency headquarters Enlarge image The Federal Environment Agency headquarters in Dessau is an example of energy-efficient architecture. (© picture alliance / Arco Images G) The energy concept and the decisions within the decisions on the transition of the energy system (“Energiewende”) include the development or revision of nine acts and ordinances.

The main fields of action are:

  • Renewable energies as a cornerstone of future energy supply:
  • Energy efficiency as the key factor
  • An efficient grid infrastructure for electricity and integration of renewables
  • Energy upgrades for buildings and energy-efficient new build
  • The mobility challenge
  • Energy research towards innovation and new technologies
  • Energy supply in the European and international context
  • Acceptance and transparency

I.       Where are we today?

Wind turbine manufacturing Enlarge image A worker inspects a rotor blade at a wind turbine manufacturing facility in Germany. (© picture-alliance/ ZB) At present, our energy supply is not sustainable: It is still largely based on fossil energy sources and we have not tapped the majority of relevant energy saving potentials. Combustion of fossil energy sources releases greenhouse gases, which damage the climate. At present, around 80 percent of all greenhouse gas emissions in Germany are due to energy generation. This is why restructuring our energy supply to focus on renewables is the key to achieving the German government's climate protection targets.

Major progress was achieved in developing renewable energies. In the first half of 2012, the share of renewables in electricity supply reached 25 percent and its still making progress. In only the last 10 years, renewable energy in the electricity sector was quadrupled. In the same time, increasing renewables create challenges for the grid operators. So far, after one year experience with the “Energiewende” the grid system and the power capacity could cope well with the system shift and the shut down of 8 nuclear power plants. Nevertheless, new and smart grids and storage systems have to be developed.

II.     What role does the nuclear phase-out play in the transformation of our energy system?

Following the nuclear disaster in Fukushima, the German government reassessed the residual risk of nuclear power and decided to phase-out the use of nuclear power more quickly than had been planned in September 2010. The German government based its decisions on the recommendations of the Ethics Commission and the Reactor Safety Commission.

The amendment to the Atomic Energy Act laid down a clear and binding step-by-step plan for the phase-out. The last nuclear power plant is scheduled for decommissioning by the end of 2022 at the latest.

III.     Germany is on the way

Power grid Enlarge image High-voltage power mast and wind turbine (© picture-alliance/dpa) This energy concept and the “Energiewende” makes Germany the first country not only to state the goal of keeping global warming within a limited range and reducing emissions, but also to outline concrete steps for getting there.

The focus will remain on increasing the use of renewable energies further - the average share of renewable energies in the electricity generation has alredy reached 25 percent in the first half of 2012.

Increasing the energy efficiency of buildings will also play a vital role, as buildings are responsible for 40 percent of our entire energy consumption and 30 percent of our greenhouse gas emissions.

To reduce carbon emissions in the transport sector and develop electro-mobility, Germany’s goal is to put one million electric cars on the streets by 2020 as well as increasing the share of biofuels. With this energy plan, Germany’s energy supply will become the most efficient and the most environmentally sound worldwide, whilst remaining affordable for both households and businesses.

The “Energiewende” is a 40-year project, but Germany is already keeping track of the energy and climate package of 2008, which laid down the goals for 2020 (and which were taken up in the energy concept).

  1. Emissions

    Germany has already met its 21 percent Kyoto emissions reductions target and in 2011, it emitted 26 percent less than in 1990.

  2. Renewables

    25 % of Germanys electricity production comes from renewable energy. The main instrument for this success is the Renewable Energy Act (EEG) providing a Feed-In Tariff System (FIT). Germany’s feed-in tariff system encourages innovation and the development of production facilities and provides a basis for strong export capacities in the sector. Its main elements are:
    - Grid operators must give priority to renewable energy.
    - A price guarantee exists for a period of 20 years and is regularly adapted according to the market situation, technological development (degression) and energy source.
    - EEG-costs are passed on to the consumer (currently about 3,6 Cent/kWh for private households; the average family (with energy use of 4.000 kWh/year) pays about 12 EUR (US$ 15) per month.

  3. Energy Efficiency

    All buildings must now use renewable energies (biomass, solar- and geothermal energy), and financial rewards exist for feeding electricity from new combined heat and power (CHP) plants into the grid. All new and renovated buildings have achieved a 30 percent cut in energy use in 2009 since energy efficiency measures were first applied, and will achieve a further energy reduction of 30 percent by 2012.

    As of 2010, new buildings may only consume 3 liters of heating oil per square metre and year, and home owners may apply for grants (worth a total of 1.4 billion EUR p.a.) and low priced credits. A further 600 million EUR p.a. is available for educational institutions for supporting energy efficiency in old buildings.

    The German market incentive program spent 500 million EUR on retrofitting existing buildings with heating from renewable energy in 2009, triggering an additional 2.6 billion EUR in private investments.

  4. Economic, social and energy security benefits of investing in low-carbon development

    As of 2011, over 130  million tons of greenhouse gas emissions were avoided, and 390,000 jobs had been created in Germany’s renewable energy industry. Looking ahead, by 2020 the implementation of the climate package will have created 500,000 new jobs, and by 2030 this is set to increase to 800,000.

    Germany’s share in environmental technology is 16% of the total world market. Annual avoided fossil energy imports will be worth approximately 22 billion euros by 2020. Finally, estimates suggest that by 2030, Germany’s national GDP is likely to increase by around 20 billion euros annually and that its national debt would be 180 billion euros lower than without these measures.

Updated November 2012


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Wind Energy Plant (c)