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Year 2 of Germany's Energy Transition

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Year 2 of  Germany's Energy Transition
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After a decade characterised by the take-off of renewable energies, Germany decided in 2010 to make them the top priority. At the same time, it decided to make exemplary efforts in terms of energy efficiency and the reduction of greenhouse gases. The audacious nature of this policy was strengthened by the “turn” taken in 2011 to give up nuclear energy in the wake of the Fukushima accident.

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Given the initial results for 2012, Germany seems to be on target for reaching its national objective, of 18% renewable energy within total consumption by 2020. Germany is also well placed to reduce its planned cut in electricity consumption of 10%. The country will also meet its commitments, both international and European, concerning greenhouse gas emissions. In contrast, recent trends suggest it will be increasingly difficult for Germany to meet its own, domestic goal of cutting emissions by 40%, by 2020. Furthermore, it is hard to see how Germany will be able to bring down total energy consumption by 20% by 2020 (from 2008 levels), or increase the share of renewables in electricity production above 35%.

Success with this latter objective is largely dependent on reinforcing networks, both for transmission over long distances and for local distribution. It is not sure that the delays accumulated in both areas will be made up for by 2020, despite the rapid legislative adjustments that have already been made. By favouring intermittent energy sources - wind and solar power - Germany also faces problems of managing frequent production fluctuations. The long term solution to this lies in storing electricity. However, despite the considerable efforts in research and development, the technologies necessary for this will doubtless not be available on a large scale before the end of the present decade. These efforts could nevertheless provide German industry with interesting advantages in sectors of high potential, such as electric vehicles.

Measures to promote renewable energies are also costly, and constitute another threat slowing down their development. Until now, this cost has been born by household consumers and small firms, with large industries being sheltered from such costs. Yet these rising costs are being increasingly criticised. Changes are likely of follow in the wake of the national elections which took place on the 22 September 2013, and their impact on the future pace of renewable electricity production remains unknown. Yet so far the sector has a positive image due to the jobs it creates. The latter are going to depend more and more on foreign outlets, though the misadventures of photovoltaic solar energy indicate the uncertainties hanging over the sector. Renewable energies however do have a major advantage in that they have been able to set up financial sources that are both solid and not very costly.

Such financing facilities do not seem to be available to most European countries. This illustrates a specific characteristic of German renewables, namely that their development in Germany also depends on the reaction of other European states. The latter are affected physically by the massive arrival of electricity from wind and solar power being produced in Germany, and economically by the disruptions this leads to in wholesale markets. So far, the response of other countries has been poorly coordinated by the European Commission which seems to have been caught on the wrong foot by the implementation of capacity mechanisms, in some countries, or by the demands to reconstruct the market model.

 

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978-2-36567-206-1

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Year 2 of Germany's Energy Transition

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Michel_Cruciani

Michel CRUCIANI

Intitulé du poste

Ancien chercheur associé, Centre Énergie & Climat de l'Ifri

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Climate & Energy
Center for Energy & Climate
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Ifri's Energy and Climate Center carries out activities and research on the geopolitical and geoeconomic issues of energy transitions such as energy security, competitiveness, control of value chains, and acceptability. Specialized in the study of European energy/climate policies as well as energy markets in Europe and around the world, its work also focuses on the energy and climate strategies of major powers such as the United States, China or India. It offers recognized expertise, enriched by international collaborations and events, particularly in Paris and Brussels.

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Can carbon markets make a breakthrough at COP29?

Date de publication
30 October 2024
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Voluntary carbon markets (VCMs) have a strong potential, notably to help bridge the climate finance gap, especially for Africa.

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Taiwan's Energy Supply: The Achilles Heel of National Security

Date de publication
22 October 2024
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Making Taiwan a “dead island” through “a blockade” and “disruption of energy supplies” leading to an “economic collapse.” This is how Colonel Zhang Chi of the People’s Liberation Army and professor at the National Defense University in Beijing described the objective of the Chinese military exercises in May 2024, following the inauguration of Taiwan’s new president, Lai Ching-te. Similar to the exercises that took place after Nancy Pelosi’s visit to Taipei in August 2022, China designated exercise zones facing Taiwan’s main ports, effectively simulating a military embargo on Taiwan. These maneuvers illustrate Beijing’s growing pressure on the island, which it aims to conquer, and push Taiwan to question its resilience capacity.

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India’s Broken Power Economics : Addressing DISCOM Challenges

Date de publication
15 October 2024
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India’s electricity demand is rising at an impressive annual rate of 9%. From 2014 to 2023, the country’s gross domestic product (GDP) surged from 1.95 trillion dollars ($) to $3.2 trillion (constant 2015 US$), and the nation is poised to maintain this upward trajectory, with projected growth rates exceeding 7% in 2024 and 2025.  Correspondingly, peak power demand has soared from 136 gigawatts (GW) in 2014 to 243 GW in 2024, positioning India as the world’s third-largest energy consumer. In the past decade, the country has increased its power generation capacity by a remarkable 190 GW, pushing its total installed capacity beyond 400 GW. 

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The Troubled Reorganization of Critical Raw Materials Value Chains: An Assessment of European De-risking Policies

Date de publication
30 September 2024
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With the demand for critical raw materials set to, at a minimum, double by 2030 in the context of the current energy transition policies, the concentration of critical raw materials (CRM) supplies and, even more, of refining capacities in a handful of countries has become one of the paramount issues in international, bilateral and national discussions. China’s dominant position and successive export controls on critical raw materials (lately, germanium, gallium, rare earths processing technology, graphite, antimony) point to a trend of weaponizing critical dependencies.

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