Curbing fossil fuel use, Germany's success

Consumers in Germany are being asked to bear much of the price of the energy transition

If negotiators in Paris reach an agreement on a global plan to rein in the use of fossil fuels, the next question becomes this: How can the participating countries fulfil their pledges to do their part? They may get some direction from Germany, which has claimed some early success in diversifying its energy sources and balancing economic growth with environmental concerns.

Many other nations and political and business leaders had scoffed when Germany set out to make the transition from carbon-emitting power plants to renewable energy, committing itself to developing new energy sources, reducing consumption, phasing out nuclear power and investing in a low-carbon future.

But last year, Germany, the world’s fourth-largest economy, reached a milestone by reducing its overall energy consumption while still recording modest economic growth of 1.5 per cent, breaking a traditional pattern in which nations see their energy use fall only during recessions. The share of renewable energy use has continued to rise as the use of fossil fuels has fallen — all while tempering the concerns of industry about rising costs and maintaining global competitiveness.

“Germany is the first country in the world to show they can uncouple growth from burning of fossil fuels,” said Jim Yong Kim, president of the World Bank. “This is the main task of our generation.”

Not that the efforts have been without challenges. As Germany has accelerated its phaseout of nuclear power, it has at times relied too heavily on coal-fired power plants, and it will need to make deeper cuts to its yearly carbon emissions if it is to meet the goal of a 40 per cent reduction from 1990 levels by 2020, a target that the government set for itself.

High-power transmission lines to carry wind-generated power from turbines in the north to factories in the south have run up against not-in-my-backyard resistance, and the automobile industry’s foot-dragging on curbing emissions recently has been laid bare by US regulators who caught Volkswagen cheating on its numbers for diesel cars.

German consumers are being asked to bear much of the price of the energy transition, which the government projects will be at least 550 billion euros ($597 billion) by 2050, in order to shield energy-hungry heavy industry from higher costs. This has left households with far higher electricity rates than their counterparts in most other countries.

Most recently, experts have warned that the influx of nearly one million people this year seeking asylum could cause a spike in emissions. “It is important that we address the issue of population now, or it could jeopardise our 2020 goals,” said Andreas Loeschel, a professor of economics at the University of Muenster and an adviser to the government.

Still, Barbara Hendricks, Germany’s environment minister, said she believed that the country could meet its climate goals. She said the ability to expand the economy while reducing energy use was a major achievement. “That is the decisive point for sustainability, to be as or more successful, while using fewer resources,” Hendricks said.

Few thought it was possible. But since 2000, across party lines, German governments have passed laws and set regulations encouraging the production of solar, wind and bioenergy, in a programme known as the Energiewende, or Energy Transition. At the same time, businesses, enticed by subsidies and prodded by Berlin, have worked with researchers on new ways to improve efficiency.

The foundation for the entire effort has been the support of German citizens, who have been willing to shoulder the burden of increased costs in the short term, in the hope of leaving their children with a cleaner, more sustainable system. That course is now being sought by nearly 200 countries in Paris, which aim to wean the planet from dependence on energy produced by fossil fuels.

Germany has already realised its goal of increasing the share of power generated by solar, wind and other renewable sources, without hurting industry or plunging the nation into darkness. Last year, those energy sources accounted for 27.8 per cent of all power consumed, for the first time edging out lignite, or brown coal, the country’s favourite fossil fuel. The national goal for renewables is 35 per cent by 2020. In the long term, Germany’s ambitious goals are to reduce levels of greenhouse gases by at least 80 per cent of 1990 levels in 2050, with 60 per cent of energy consumed from renewable sources.

Dirk Messner, a member of the German Advisory Council on Global Change, which advises the government, recalls being invited in 2011 to present a study on German climate policies at the Brookings Institution, in Washington. “The attitude then was, ‘Go ahead, you can take the lead on this one,’” Messner said. “There were many at the time who considered this a wacko-green idea.”

Tough transformation task

That was the year an earthquake and tsunami in Japan and the consequent meltdown of atomic reactors in Fukushima managed to accomplish what decades of anti-nuclear protests had not: prompt Chancellor Angela Merkel’s government to speed efforts to close by 2022 all of the country’s remaining 17 reactors, a major source of low-emissions power.

That made the energy transformation task even tougher, and many industry leaders complained about rising energy prices caused by the hefty taxes and surcharges that have underwritten the process. The government responded by waiving the surcharges for companies that could prove a strong need for energy; some 2,000 were exempted.

The bill was passed onto consumers, and electricity prices for a three-person household have risen 68 per cent since 1998, according to the German Association of Energy and Water Industries. Yet public support remains strong. A survey by TNS Infratest pollsters this year showed a strong majority of Germans continue to back the energy transformation effort, with 67 per cent saying they favoured the government’s policies.

Lignite looms as Germany’s potential Achilles’ heel. While generous tariffs to accelerate investment in solar and wind power helped spur renewable energy development, no similar incentives were offered to address the dependence on soft coal, Germany’s only abundant native fossil fuel.

Hendricks, the environment minister, has recently called for the country to shutter its lignite-fueled power plants in 20 to 25 years. Miners’ unions and businesses say that would kill jobs and overburden the power industry, but environmentalists say that is not fast enough.

Germany, Hendricks said, needs to set targets and be willing to work toward them, as it did with renewable energy. “Everyone is looking at us to see if we can make it,” she said.