Germany has taken some fundamental energy decisions this year and can provide a good case from which other countries can learn from. On July 27, 2011, Dr. Felix Matthes from the Oeko Institute outlined the three strategic approaches of Germany’s energy transformation by 2050 as part of the Congressional Climate Series hosted by the World Resources Institute and the Heinrich Boell Foundation:
1) Increasing energy efficiency – There already exists a European Union directive on Energy Performance of Buildings which states that all new buildings must almost be energy neutral by 2020. In addition, Germany has implemented its own national policies that support the renovation process of buildings. Funds are now not only made available through the European Emissions Trading Scheme but also through a special tax deduction for the renovation of buildings.
2) Maintaining carbon free energy in all sectors – In the power sector the focus is already on renewable energies. However, in the interim period new highly efficient and flexible gas power plants will likely be built as back-up power. The construction of new coal fired power plants can currently be seen as very unlikely. Here, the economics of coal fired power plants in Germany just do not add up due to the significant increase in renewable energies and the fact that there will be full auctioning of emissions allowances under the European Emissions Trading Scheme. Given the significant role of electricity for the decarbonization for many sectors, the fast and early transition of the power sectors to renewables will become even more important in transforming the energy system. Germany’s renewable energy targets are thus being implemented and reviewed on a regular basis. Additionally, Germany has put in place a strong transport innovation program for electric mobility with the goal of having one million electric cars on its roads by 2020, six million by 2030.
3) Setting the strategic focus on long-term goals – Sectors with long living capital stocks, such as buildings and power plants, will play an even bigger role in Germany’s long term energy planning. Making sure that adequate infrastructure for this transition is in place requires a long term strategy. As such, the planning process creates the basis for regulators to license related investments and provides certainty around the future of the grid system. In Germany, special emphasis will be given on extending the grid system in such a way as to transmit the electricity from the northern parts to the southern parts of the country. Smart distribution networks will aid this process as they can manage large shares of electric cars and power production from decentralized sources as well as sufficient storage options to deal with large shares of variable power sources.