Gabriel: energy transition now powered by strong engine

The former Federal Minister for Economic Affairs and Energy on the achievements in energy policy during the current parliament and the challenges faced.

Sigmar Gabriel giving a speech.© BMWi

“We have succeeded in connecting up a strong engine to power the energy transition,” said former Federal Minister Gabriel* in his opening speech at the 24th Handelsblatt Annual Conference ‘Energy Sector 2017’, which took place in Berlin on 24 January. He went on to add that the energy transition had suffered from the fact that individual decisions by the Bundestag had counteracted one another like “gear teeth that don’t interlock”. The coalition government, said Minister Gabriel, had connected up differing aims and had caused the level of reliability and continuity in the energy transition to go down.

Auctions for renewable energy launched at the start of the year

Minister Gabriel also said that over the past few years, the aim pursued in energy policy had been to expand renewable energy in a commercially viable manner and to make the electricity market able to deal with feed-in from renewables. He said that the two reforms of the Renewable Energy Sources Act (the first in 2014, the second in 2017) had been successful in halting the continual rise of the renewable energy surcharge. “We have finally switched to using auctions,” said Minister Gabriel, “and we are now seeing the prices fall.”

Following the success of the pilot auctions for ground-mounted PV installations conducted in 2015 and 2016, auctions are now being used (from January 2017) as the standard measure for determining the rates of funding for electricity generated by large-scale renewable energy installations, rather than these rates being fixed by the government. The bidder who asks for the lowest amount of funding wins. The first auction for large solar power installations over 750 kilowatts (kW) is already underway. Investors have until 1 February 2017 to submit their bids to the national regulatory authority, the Bundesnetzagentur (Federal Network Agency). The first auction to take place for large onshore wind-power installations will be launched on 1 May 2017. Small solar and wind-power installations under 750 kW will, however, continue to receive funding in line with the funding rates stipulated in the 2017 Renewable Energy Sources Act, and will not have to bid in any auctions. This means that there are no changes for members of the public wishing to install a solar-power installation on their roof.

Costs of sector coupling not to be covered by the renewable energy surcharge

In his speech, Minister Gabriel said that the work in energy policy undertaken by the current government had proven very successful. “But we still have great challenges ahead of us and a long way yet to go.” One of the questions still to be answered, he said, was how to finance the additional demand for green electricity in the transport and heating sector that is needed in order to reach climate targets (read more about this issue, known by the term sector coupling). Minister Gabriel said that not everything could be paid for using the renewable energy surcharge, but that the costs needed to be shouldered more broadly.

The next steps to be taken

During the past year, the Federal Economic Affairs Ministry launched two consultation processes – the ‘Green Paper on Energy Efficiency’ and ‘Electricity 2030’ – in order to instigate a discussion on what the next few steps in the energy transition should be. These particularly focused on the question as to what the mid to long-term strategy for reducing energy consumption in Germany should look like. The evaluation reports on the two processes are to be published in spring 2017.

The European Commission has also provided important coordinates for the energy world of tomorrow in its Winter Package, which was presented in November 2016. This package of reforms also features specific proposals on how energy policy across the individual EU countries can be better coordinated in order to raise energy efficiency and modernise the electricity market. EU-level discussions (in the European Council and Parliament) on the individual components of the package are to begin at the start of this year (for more information on the Winter Package, please click here.)

The most important dates in 2017

There are also many other important dates in energy policy coming up over the course of 2017. Germany has the G20 presidency; the Bundestag elections will take place in September, and a few weeks later, the heads of state and government will meet for the UN Climate Conference in Bonn. Here is an overview of the most important dates in German and international energy policy:

  • Berlin Energy Transition Dialogue: From 20 to 21 March 2017, the Federal Government will once again host more than 1,000 international decisionmakers from government, business, and civil society at the 3rd international conference on the energy transition, which will take place at the Federal Foreign Office. The conference will focus on how the transformation of the energy systems around the globe can be successful and how to provide the necessary investment incentives (for more information or to register to attend the conference, please click here).
  • Berlin Energy Days: Taking place from 3-5 May 2017, the Berlin Energy Days conference will comprise a series of specialist events and a trade fair giving an overview of the political, economic and technical developments relating to the energy transition.
  • G20 summit: On 7-8 July this year, the heads of state and government from the 20 most important industrialised and emerging economies will meet in Hamburg. The aim of this meeting will be to settle on a joint position concerning the reduction of subsidies for fossil energy sources. The conference will be chaired by Germany. For more information, please click here.
  • COP 23 The 23rd UN Climate Conference will take place in Bonn from 6-17 November. Although this year’s host is the island state of Fiji, the Summit cannot take place there for logistical reasons. As the headquarters of the UN Climate Secretariat, the city of Bonn was therefore selected to host the conference instead.

* On January 27 Sigmar Gabriel took on his new position as Foreign Minister. Brigitte Zypries was sworn in as the new Federal Minister of Economic Affairs and Energy the same day.