The German general election 2017- parties‘ manifestos – Energy
Traditionally, in German election campaigns, energy policies play an important role in any party’s manifesto, more often than not having dediced upon potential coalition options.
However, in 2017, as the parties‘ recently published programmes show, the issue is no longer a top contender. It seems to be common understanding that major energy policy decisions have been taken, with the ‚Energiewende‘(the transition towards a largely renewable energy-driven energy system) to be well under way. Now is the time, though, to set the course for a ‚Energiewende’ 2.0, and any future government needs to clarify the development steps to lead the way from an elec-tricity generation-driven system change towards a transformation of the entire energy system, combining energy policies with environmental and mobility policies.
Our energy brief analyses the German parties‘ election manifestos, takes a look at energy policy goals, technologies likely to receive legislative support and core themes for potential coalitions.
The ever more complex intricacies of Energy regulation
Politicians dealing with the myriad complexities of energy policies bemoan a diminishing interest on the part of fellow politicians, frequently pointing to the over-complexity of the subject. Germany’s Renewable Energy Act testifies to that challenge: Its first version (2000) included a total of 13 para-graphs, whereas the amended 2017 version swelled to 171 paragraphs.
Lobbyists and other stakeholders are already busy making suggestions for the legislation’s next amendment. It remains unclear, though, if the Act will undergo reforms once again: While Germa-ny’s Social Democrats and the Green Party wish to adhere to its current shape, viewing tenders as the ‚means of choice‘ to determine subsidies, the Conservatives, Chancellor Merkel’s CDU, calls for a step by step exit, yet without offering a concrete plan as to financing.
Germany’s LibDems, the FDP, for its part, claim that the Act’s initial target, namely to secure market entry for renewable energies, has been reached. They are now unequivocally asking to abolish its ‚continuing subidiaries‘.
The Renewable Energy Act in its current shape, though, is much more than a subsidy system. Be-yond that issue, it provides a regulatory framework as to renewable development goals and indi-vidual technologies. Simply abolishing the Act would not help to solve the undoubtedly existing cost problem – since most renewable assets operate under a continuation permit and would be eligible to receive fixed remuneration, blocking the way to a swift cost decrease for end-consumers.
Also, we would be in need for a new and comprehensive legal framework to define technical and system-stabilising prerequisites. These, so far, have been provided by the Renewables Energy Act. Should, e.g., a newly elected government coalition between Conservatives (CDU) and LibDems (FDP) take office in October 2017, a repeal of the Renewable Energy Act would be far from obvious. The quest for the legislation’s alternative financing, though, seems to be one of the common de-nominators among the German major political parties.
Instead, a new government might offer a concrete plan how to evolve the system currently stipu-lating cost allocations and fees to include all available energy sources. The German Ministry of Eco-nomics is busy working on that option, already having kindled a controversial debate within the capital. It seems fair to assume that the Ministry’s role and influence is likely to increase further. And in case a new Minister takes office in October 2017 on, there ist he possibility we might see less of the current tendencies to centralise. Also, policies might open up to consider novel technologies that will serve to secure and build Germany’s position as a leading exporter of energy technologies.
Paris Climate Agreement and minimum price for CO2
All signatories of the G20 Paris climate accord are committed to curbing greenhouse gas emissions – decarbonisation is about to become an objective of federal environmental and energy policies. There is no consensus, though, on how to reach this goal. Alas, major EU players seem to view the introduction of a CO2 minimum price to be the most effective strategy, France being among the drivers. Lately, the French Environment Secretary Hulot called for a price of 30€/ton from 2020 on and 100€ from 2030 on.
In Germany, all political parties more or less agree that EES and a CO2 minimum price will be major means to achieve decarbonisation, with the notable exception of the Liberal Democrats who reject meddling with the formation of prices as a matter of principle.
Adopting said strategy would possibly allow the German Chancellor to dispose of another sensitive issue: With a CO2 minimum price, and step by step, coal-fired power plants will become uneconom-ic to the point of disappearing from the German energy system altogether. A decision on EU level might serve to quench a (likely Green party-triggered) debate on the exit of coal from the German energy mix. This in turn leaves another door open for the Conservatives as to future coalitions. Also, it serves to legitimise coal exit vis a vis heavy industries, labour unions and the coal industry-defending ‚Bundesländer‘, the German states, in the German Bundestag.
Sector interconnectivity – profound changes in the transport and mobility sector loom+
There is consensus among the German parties: putting renewable energies to use in other sectors than electricity generation will be indispensable for decarbonisation and to reach the climate pro-tection objectives. Particularly with regard to the transport and mobility sector, major changes are looming – not least since some EU countries, UK and France among them, announced plans to ban diesel engines from 2030 or 2040 on. Germany’s Greens are with them on this subject. Thea are the only party explicitly demanding a complete permit withdrawal for combustion engines from 2030 on. As to e-mobility, all other parties (Greens included) agree on promoting it for climate and industrial policy reasons. How swiftly it will be implemented on a large scale, though, largely depends on charging infrastructure as well as the integration capacity of distribution grids. As to the infrastructure, all parties underline their intentions for development. The Conservatives provide concrete aims, promising 50,000 new charging stations. Its twin party, Bavaria’s CSU, goes one step further, aiming to take the lead with regard to ‚Mobility 4.0‘ and to supply 7,000 publicly accessible chargers until 2020.
However, a clean-cut ‚copper strategy‘ to strengthen the transmission grid system will likely result in significant cost increases, apart from being limited by simple physics. Instead, intelligent solutions that offer promising ways to provide flexibility should be considered more systematically.
Market entry for electricity storage
Renewable energies fluctuate in generation – thus, their system integration needs intelligent con-trol technologies and storage facilities. The German government has invested heavily in pilot pro-jects and concrete recommendations are to be expected. As to storage, all parties agree on boost-ing R&D to speed up development. Favoured technologies vary: While the CDU focuses on battery cell production, LibDems and Socal Democrats call for developing a variety of storage technologies, the SPD explicity mentioning market entry progams.
New players and potential conflicts in energy policies
Germany’s Federal Council, the ‚Bundesrat‘, is likely to gain importance in shaping future energy policies, since today’s division lines are more defined by regional adherence than affiliation to a political party. This development might prove to become tricky for a potential Conservative-Lib Dem government. Also, it surely calls for more openness to a ‚give-and-take‘ approach with regard to the German states.
Transmission grid extension? Yes
Locally, some grid extension projects continue to be disputed – on federal level, though, all parties agree to move on with projects already decided. The CDU underlines the work done during the past legislative period, whereas the SPD reiterates its demand for intelligent technologies. Also, and interestingly, in their current election manifesto, the Social Democrats softened their approach as to the re-municipalisation of the distribution network.
Overall, it is fair to expect a future German coalition government to come up with rather inconcrete energy policy objectives. Instead, ever shifting power balances between federal and state levels and the relentless pace of technological advancements will secure a more pragmatic iterative policy making.
As of today, the biggest common ground is to be found should the governing coalition of CDU and SPD be elected into office once again. It would likely move to implement a CO2 minimum price, de-velop sector coupling and intensify storage R&D.
The Renewable Energy Act, on the other hand, would likely to stay in existence, thanks to the Social Democrats, while alternative financing options would surely be scrutinised.
A government including the LibDems might call the status quo into question. The party puts for-ward concrete, partly markedly different positions that, admittedly, might get watered down dur-ing government building.
The Green party’s program, for their part, falls short of expectations. Energy policy always having been one of the party’s core areas, this year’s program focuses on the mobility sector instead, sug-gesting potential convergences with the reigning Conservatives. That shift in focus, may be read as a signal, majorities provided, to negotiate either a CDU-Green coalition or even test the waters for a ‚Jamaica‘ trialog between Conservatives, LibDems and Greens.