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Germany’s Energiewende

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Abstract

The impacts of Germany’s energy cooperatives today can only be observed against the background of a detailed understanding of the country’s energy system, current dynamics, desired energy system goals and aligned challenges. Hence, this section provides an overview of Germany’s ongoing energy transition. Section 3.1 outlines the historical context, 3.2 describes Germany’s energy system goals, and 3.3 discusses the difference between decentralised and centralised system approaches. Meanwhile, Sect. 3.4 identifies system challenges.

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Notes

  1. 1.

    The appointment of the Ethics Commission for a Safe Energy Supply, as well as its member composition, was also criticised because, among other reasons, it was argued that the full abandonment of nuclear power had already become a society-wide consensus. Furthermore, the commission did not include representatives of the anti-nuclear power movement or leading nature conservation associations (see for example, Füchs, 2011).

  2. 2.

    The energy concept of 2011 is based upon the energy concept from 2010 and the resolutions of the Bundesregierung (German Cabinet) from 2011 (Federal Ministry for Economic Affairs and Technology and Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety 2010; The Federal Government 2011).

  3. 3.

    (See for example, Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety 2012; Umweltbundesamt 2010; WWF Deutschland et al. 2009; Greenpeace 2009; The German Advisory Council on the Environment 2011; Peter 2013; Umweltbundesamt 2014; Fraunhofer Institute for Solar Energy Systems 2012; Nitsch 2014).

  4. 4.

    The merit order is a concept used in the German energy wholesale market for ranking available power capacities according to marginal costs. The price of electricity is determined on the spot market through the most expensive power plant that is still needed to satisfy current electricity demand (merit order) (Sensfuß and Ragwitz 2007, p. 2). The merit order seeks to ensure that overall costs of power generation are minimized, because only the most convenient power production plants are used in order to meet national power demand.

  5. 5.

    Once installed, renewable power plants can be operated at very low costs, as they draw upon energy resources, in particular wind and solar radiation, that can be used at no cost.

  6. 6.

    Leading associations and initiatives, such as Greenpeace, Friends of the Earth Germany (BUND) and German Institute for Economic Research, are against such a capacity market, because they assume that it may subsidise fossil-fuel power plants that have become inconvenient in the context of increasing renewable energy (German Institute for Economic Research 2013; Greenpeace and Friends of the Earth Germany 2013).

  7. 7.

    Other important regulations include the Renewable Energy Heat Act (EEWärmeG 2015), which guides the use of renewable heating and cooling in buildings; the cogeneration law (KWKG 2016), which regulates implementation and use of highly efficient combined heating and power plants; the energy reduction decree (Energieeinsparverordnung EnEV 2014), which supports energy efficiency; and the bio-fuel quota law (Biokraftstoffquotengesetz BioKraftQuG), which coordinates the national introduction of bio fuels.

  8. 8.

    Amendments to the EEG were passed on 8 July 2016. Even though the amendments did not take effect until January 2017, they are called EEG 2016 throughout the thesis, following the official draft being passed by the German Bundestag (Deutscher Bundestag 2016).

  9. 9.

    The costs for promoting renewable power are paid by energy consumers in the form of an EEG surcharge (EEG-Umlage), which makes up a large part of individual electricity bills. The EEG surcharge was increased from 0.19 cents/kW h in 2000 to 6.24 cents/kW h in 2014 (Mayer and Burger 2014, p. 2). Criticism arose, however, claiming that renewable energy development would lead to an unreasonable rise of individual electricity costs. It was not, however, only the continual increase of renewable power plants that led to raising the EEG surcharge, as other factors, such as the aligned decrease of energy stock exchange prices and the exemption of companies with high power costs from paying the EEG surcharge (§ 64 EEG 2014), strongly influenced it (Mayer and Burger 2014).

  10. 10.

    According to EEG 2014, operators of renewable power plants with a capacity above 500 kilowatts until 2016, and above 100 kW from 2016 onwards, have to market their power directly on the stock exchange. The final tariff that they receive for their power is formed of two components: the stock exchange price and a market premium, which is equal to the difference between the stock exchange price and the guaranteed feed-in tariff. This way, operators of bigger power plants still receive a guaranteed return on investment for their power over 20 years but are, at the same time, responsible for marketing their power. The aim of this regulation was to foster the integration of renewable energy into the conventional energy market (§§ 40–54 EEG 2014). EGG 2016 combines the direct marketing concept with a tendering model (Deutscher Bundestag 2016).

  11. 11.

    Whether or not the tendering model is amplified to biomass capacities is in the process of analysis (Federal Ministry for Economic Affairs and Energy 2016b, p. 1).

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Debor, S. (2018). Germany’s Energiewende. In: Multiplying Mighty Davids?. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-77628-6_3

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  • DOI: https://doi.org/10.1007/978-3-319-77628-6_3

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-77627-9

  • Online ISBN: 978-3-319-77628-6

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