Energiewende: assessing Angela Merkel’s clean energy legacy

The Energiewende initiative, which received legislative support in 2010 but could be described as a continuous process with an unclear start date, was warmly received both in Germany and internationally for its ambition and scope. The country established bold emissions reduction targets, committing to a 40% reduction in greenhouse gas emissions compared to 1990 levels by 2020, 55% by 2030 and 95% by 2050. In terms of renewable energy capacity, the country aims for renewables to account for 80% of its energy mix by the middle of the century.

Under the Energiewende, Merkel’s government presided over a massive expansion of installed renewable energy capacity in the country, incentivising wind and solar project development with a feed-in tariff – established before Merkel’s time in office by the Renewable Energy Act (EEG) of 2000 – providing guaranteed remuneration for new clean energy brought on to the grid.

As a result, Germany saw rapid gains in renewable generation sources delivered between 2010 and today. Onshore wind capacity doubled between 2010 and 2018, from 26.8GW to 52.7GW, while solar has grown from a smaller base of 17.9GW to 45.3GW last year.

Despite the early and obvious gains, including regular uplifting stories of renewables virtually powering the entire country on particular days, perceptions of the Energiewende today are considerably less positive than they used to be. This is primarily because, despite the billions that Berlin has spent on the energy transition, Germany is on course to miss its first milestone emissions reduction target by some margin in 2020, with longer-term goals looking uncertain as well. 

The estimated 866 million tonnes of CO2 equivalent (CO2e) emitted in Germany in 2018 were far above the target of 750 million tonnes of CO2e, and the consensus is that it will now be impossible to meet the 40% reduction target by 2020. 

“If emissions reductions continue at the same pace as they did over the past decade, the 2020 CO2e targets will only be reached eight years later and the 2030 targets will not be reached until 2046,” said McKinsey senior partner Thomas Vahlenkamp in September.      

So why has Germany struggled to meet its targets despite such a dramatic ramp-up of renewable energy capacity? The factors are legion, including stagnant or rising emissions from the country’s transport and industrial sectors (the former not helped by the 2015 diesel emissions scandal and other breaches by German car manufacturers), a lack of coherent government oversight, power transmission issues and high electricity prices for consumers. 

But there is one underlying issue that is perhaps more central to the Energiewende’s disappointing performance. Following the nuclear plant meltdown at Fukushima in 2011, the German government announced a commitment to phase out the country’s fleet of nuclear reactors by 2022.

 
While the German government’s move away from nuclear power is a legitimate one, responding to safety concerns and a strong anti-nuclear sentiment among the population, it has nevertheless left an increasingly worrying gulf of baseload power generation. Removing low-carbon nuclear from the equation – only seven German nuclear plants are still operating and awaiting decommissioning – has effectively extended the role and operating life of the country’s coal-fired plants, many of which are fuelled by lignite, soft coal that is easier to mine but far more carbon-intensive to burn.

The precipitous reduction in nuclear generation in the wake of Fukushima – 204GW installed capacity in 2010 down to 9.5GW in 2018 – creates a need for reliable back-up power when intermittent solar and wind sources don’t get the conditions they need to produce, and has stymied any attempt to significantly reduce coal’s share in the energy mix. Installed capacity of hard coal-burning plants has barely reduced (28.4GW in 2010, 42.2GW in 2018), while lignite-based generation is completely stagnant at 21.2GW in 2018 compared to 21.3GW in 2010.

There are now calls from influential figures in Germany to delay any further nuclear ramp-down to avoid simply swapping a societally undesirable generation method for a categorically dirtier one. Merkel’s government has set a target of 2038 for the complete shutdown of all coal plants, which has been described by environmental campaigners as insufficient and contrary to Germany’s commitments under the Paris Agreement.

“If climate protection really matters to us, the nuclear power plants need to run longer,” said Volkswagen chief executive Herbert Diess this year in an interview with the Tagesspiegel newspaper. “The priorities are the wrong way round: first we need to get out of coal, and then out of nuclear power.”

Given that public opinion in Germany makes reversing course on nuclear unlikely, it’s all the more important that the onshore wind sector, the country’s largest single source of renewable power, continues to develop strongly. However, until reliable large-scale energy storage can be delivered, intermittency will continue to threaten the security of supply and extend the life of coal-fired plants.

Even here, in the midst of the German wind power success story, there are major problems to overcome. After years of enviable growth in installations, the country’s wind sector has slowed to a crawl. Just 35 wind turbines totalling 287MW were added across Germany in the first half of 2019, when accounting for turbines that were decommissioned in the same period – an 80% reduction on H1 2018 and the lowest rate of installations in nearly 20 years. Considering that wind and solar capacity would need to increase by 5GW a year to meet the country’s target of 65% of energy from renewable sources by 2030, this is worrying.

The wind sector faces multiple hurdles, including tough regulatory hurdles to get wind farms approved amid regular and fierce local resistance (often on grounds of wildlife protection, but sometimes as a result of NIMBYism). There is a great deal of work left to expand power transmission lines from the country’s windy north to the industrial heartland in the south, with only 950km of new lines added of a recommended 7,700km to solve the north-south transmission bottleneck. Here again, local resistance is a problem, with campaigners often forcing much more expensive underground lines to be built.

What’s more, the feed-in tariffs offered since 2000, which played a huge role in Germany’s wind and solar expansion, are due to expire from 2021 onwards, meaning an increasing number of wind farms could become unprofitable and close. The government has been transitioning towards a competitive auction system for new wind capacity, but with the uncertainties around planning and financing, the last six auctions have all been undersubscribed, with the latest round in October attracting applications for only around a third of the capacity auctioned.

“It’s clear that the permitting process in Germany is not fit for purpose,” said WindEurope head of advocacy and messaging Viktoriya Kerelska in August. “The fact that’s it taking longer and longer to get a permit is undermining Germany’s target of 65% renewables in electricity by 2030 just as we need to be intensifying build-out efforts.”

During a town hall event in August, Angela Merkel was asked what she hoped children would read about her in history books 50 years from now. Her response, reflecting humour and just a hint of resignation: “She tried.” 

Few would argue that Merkel has shown enormous commitment since taking power in 2005 as she has stoically steered Germany’s government through a global financial meltdown, various European crises and the rise of populist politicians antithetical to her centrist style. On energy and climate change, too, Germany has taken a leadership role under Merkel’s stewardship, driving immense investments into renewable energy and garnering a justified reputation as a constructive collaborator in the reduction of emissions and the reduction of emissions and the decarbonisation of energy systems in Germany and elsewhere. 

But the complex dynamics of the Energiewende have brought as many steps back as forward for Germany’s climate efforts, threatening the country’s targets and leaving unanswered questions over its long-term energy future.

“With Merkel's tenure as German chancellor now coming to an end, her greatest failure would seem to be that she has done so little to advance climate policy, despite it having been a key issue for her early in her political career,” wrote the editorial staff of Der Spiegel in a wide-ranging investigation into the Energiewende this year.  

Merkel has certainly tried, as the history books will surely acknowledge, but with the arguably premature rejection of baseload nuclear generation, there’s a risk that she and her government may have tried just a little too hard in the wrong areas.