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In focus - European and International Energy Policy

International Energy Policy

Introduction

Source: istockphoto.com/Claudiad

© istockphoto.com/Claudiad

At present, energy imports account for approx. two thirds of Germany’s energy supply. One of the goals of the energy transition is to reduce this dependency on imports in the medium and long term. Combined with action to increase energy efficiency levels, renewables will make Germany less vulnerable to price fluctuations on the international markets for energy commodities. This will have a positive effect on energy security. But at the same time, it is also true that we will continue to rely on imports of oil, hard coal and gas for our energy supply for the foreseeable future. This is why one of the most important objectives of Germany’s external energy policy is to ensure that we will be able to depend on reliable and affordable energy imports in the long term.

The energy system must be incrementally adjusted to help us limit the global rise in temperatures to a maximum of 2 degrees Celsius. For this to happen, we need the global economy to undergo a transformative shift, which means severing the link between economic growth and the consumption of resources. The world’s population is growing extremely fast, resulting in ever-greater pressure on finite natural resources. The energy transition is a transformative project that goes beyond technical and economic innovation. It is about profound transformation, not only with regard to the ways in which we generate energy, but also with regard to how we use it in our cities and our transport system, in industry and in our private homes.

These changes are not limited to Germany, but need to be addressed by every country and by decision-makers at national, European and international level. Germany is therefore seeking to forge new partnerships internationally and engage in dialogue. We are doing this under our foreign economic and energy policies.

The Paris targets call for a profound and global energy transition

The transformation of the energy system is the energy sector’s contribution to reaching the global climate targets that were agreed at the Paris conference. In their study entitled “Perspectives for the Energy Transition: Investment Needs for a Low Carbon Energy System”, the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA) presented the first-ever calculations of the amount of investments needed in the global energy sector to reach the targets set out in the Paris Agreement. The study, which was presented at the Berlin Energy Transition Dialogue, a global conference, which was held on 20 March 2017, was conducted with the support of the Federal Ministry for Economic Affairs and Energy and sought to answer the questions of what investments will be needed and how it will be possible to avoid investments in energy technologies that are harmful to the climate. The study is available for download here.

The Federal Ministry for Economic Affairs and Energy has committed itself to the following three goals:

  1. Maintaining good relations with the countries exporting major energy resources and acting as transit countries for energy supplies to Germany and Europe: this is to ensure that German and European investors in energy projects can enjoy a favourable and stable economic climate and that we will be able to continue to rely on secure and reliable energy imports in the long term. The focus here is on projects designed to diversify our supplier base and transport routes. In the long term, Germany may also become able to draw on large sources of renewables abroad, i.e. PV from the North African desert or offshore wind from the Irish Sea.
  2. Cooperating with countries consuming or supplying large quantities of energy: We seek to work with major consumers of energy such as Brazil, China and India, and with large producers of energy such as Russia as we develop new technologies for clean energy, energy efficiency and renewables. Every bit of progress achieved in these countries when it comes to making energy systems more efficient and making greater use of renewables will help take the edge off the global competition for ever-scarcer energy resources and also mitigate climate change.
  3. Work in multilateral organisations, forums and initiatives: Rendering the global energy markets more transparent, more competitive, and more environmentally-friendly. This is to be achieved by way of active involvement in multilateral organisations, forums, and initiatives. Broadening and intensifying international dialogue on forward-looking energy policies around renewables, energy efficiency, markets and climate change. Germany is a member of many international institutions, including: the International Energy Agency, the International Energy Forum, the International Organisation for renewable energy, the International Atomic Energy Agency, the Energy Charter Treaty, the Global Bioenergy Partnership, the Clean Energy Ministerial, the REN 21 network, Sustainable Energy For All, the G7/G8 and the G20.

In the pursuit of these goals, Germany is building new bilateral energy partnerships and intensifying its existing partnerships.

Apart from its work to support energy partnerships, the Federal Ministry for Economic Affairs and Energy also uses its many instruments for promoting foreign trade and investment, including the Energy Export Initiative (in German) as part of its energy policy. The objective here is to open up attractive markets for German exports of modern energy technologies.

Further information

In view of Germany’s high level of dependency on energy commodities and the three-pronged approach upon which the energy transition is built the German government has in recent years entered into a number of bilateral energy partnerships with major energy-producing, transit and consumer countries.

The energy partnerships are part of the remit of the Federal Ministry for Economic Affairs and Energy and are characterised by the following features.

  • Each of the partnerships is based on a binding document that takes the form of a memorandum of understanding signed at a high political level;
  • Cooperation at a practical level takes place within a formalised structure of dedicated groups;
  • The political orientation of the cooperation is determined by a high-level steering group;
  • The specific project work takes place in bilateral working groups which meet on a regular basis and with significant involvement from the business community.

Further to this, offices have also been established in India, Morocco, Tunisia, Turkey and China under the energy partnerships with these countries. These offices support the work of the relevant bodies and serve as contact points for the stakeholders on both sides.

Aims of the energy partnerships

The main aim of cooperation within the energy partnerships is to support the expansion of renewable energy and the wider use of efficient energy technology. This helps both to mitigate climate change and to ease the global competition for ever scarcer energy commodities, and thus also enhances our long-term energy security.
In addition, the partnerships serve to improve opportunities for German firms to export energy-efficient products and innovative energy-related installations. The partnerships thus also help to promote German exports.

There is to be regular intergovernmental dialogue and specific joint projects are to be implemented in order to ensure that the goals of the energy partnerships are met.
Cooperation projects can be divided into the following basic categories:

  • Political backing for close-to-market investment and research projects;
  • Support for energy-related projects linked to climate change mitigation and development cooperation, which can be used to demonstrate German technology solutions and individual aspects of the energy transition (e.g. funding provided by the German Climate Technology Initiative, the International Climate Initiative and German development cooperation);
  • Discussion of fundamental issues, particularly in terms of the economic policies governing mutual market access, investments and corporate cooperation in the energy sector;
  • Support and advice for the partner countries on issues of the energy industry and on regulatory and technological aspects.

The working groups are designed to encourage active participation by the business community. This gives companies the opportunity to present their energy technologies and explain how these can be used to solve specific problems. Further to this, each energy partnership has a networking platform designed to help companies enter into bilateral cooperation.

The added benefit of energy partnerships compared with other formats for cooperation is that it links up high-level g2g dialogue and specific, target-driven project work involving the business community, whilst also providing opportunities for b2b matchmaking. In countries where the state has a dominant influence on commerce, it is especially important that problems faced by German and European companies with regard to market access, cooperation and investment projects can be raised with the decision-makers on the partner side, which also includes those in the upper political echelons.

Furthermore, the energy partnerships provide an umbrella structure for what used to be separate activities conducted by different ministries, implementing organisations and the business community on both sides .The aim in this is to make the activities being undertaken by energy partnerships coherent and more comprehensive. Where it makes sense to do so, the various activities can also be dovetailed with development and technical cooperation and Germany’s instruments to promote foreign trade and investment. This has to be examined on a case-by-case basis.

The energy partnerships can further be used to bundle the interests of the private sector with a view to developing solutions for market-access problems and barriers to investment which affect a whole number of companies. This can reduce the amount of time and money which individual companies need to spend on efforts to develop markets.

The main focus of the practical cooperation with major energy supply and transit countries is on providing political backing to projects of German and European investors and importers to secure our energy supply. In particular, this includes projects to further diversify the countries and transport routes supplying our energy needs.

Examples of energy partnerships

Examples of existing energy partnerships include the German-Norwegian energy cooperation, the German-Russian modernisation partnership (focusing on cooperation on energy efficiency), the energy partnerships with Nigeria and Turkey (in German) and the partnerships with Northern African countries Morocco (in German), Tunisia (in German), and Algeria (in German). Saudi Arabia has also declared an interest in closer energy cooperation with Germany.

Together with other ministries, the Economic Affairs Ministry maintains a number of bilateral energy partnerships with major consumer countries like India, China, South Africa (in German) and Brazil (in German), which account for a growing share of the global consumption of fossil fuels and hence have a growing influence on world market prices for these commodities.

Further information

  • 02/06/2017 - Press release -

    Press release: Exchange of views on energy transition with China – State Secretary Baake met with Vice Minister Hu Zucai

    Open detail view
  • 30/10/2016 - Press release - European and International Energy Policy

    Press release: Baake at Energy Transition Conference in China

    Open detail view
  • 24/02/2016 - Press release - The Energy Transition

    Press release: Continued Chinese interest in German energy transition - State Secretary Baake receives Deputy Minister Zheng in Berlin

    Open detail view

Further information

Clean Energy Ministerial - CEM

The Clean Energy Ministerial (CEM) is a multilateral forum that was set up to promote sustainable energy generation around the world. It was established at the initiative of the USA. Prior to the COP 15 climate conference in Copenhagen in 2009, the major economies – all substantial emitters of greenhouse gases – drew up ten technology action plans for a number of low-carbon technologies, which were to serve as a constructive contribution to the negotiations. Within the CEM, these technology action plans have been translated into initiatives focusing on specific issues and technologies. The Federal Ministry for Economic Affairs and Energy heads the Multilateral Solar and Wind Working Group along with Denmark and Spain. As part of this working group, a ‘global atlas’ depicting the places where there is potential for exploiting renewable energy was launched. This delineates areas where there is potential for developing renewable energy. The atlas project, to which Germany has made a heavy contribution (work undertaken by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, and, from 2014, by the Federal Ministry for Economic Affairs and Energy), is now being continued by IRENA. The multilateral working group has also developed studies on increasing the potential for value creation from renewable energy and on the design of auctions for the promotion of renewables. It is additionally involved in initiatives to raise the energy efficiency of electric appliances, as well as initiatives on electric mobility and smart grids.

Other initiatives within the CEM are dedicated to implementing the plans for bioenergy, hydropower, sustainable cities, improved access to energy in developing countries and gender mainstreaming in the energy sector. Every year, the progress made within these initiatives is presented to ministers at the annual conference. The first of these ministerial conferences was held in Washington, D.C., in 2010.

Energy Charter Treaty

The European Energy Charter was signed in 1991. It marked the launch of the Energy Charter Process, in which the countries of eastern and western Europe express their will to increase the level of cooperation in the energy sector.

The Energy Charter of 1991 is to be distinguished from the Energy Charter Treaty (ECT) of 1994, the latter setting out rights and obligations under international law concerning access and protection of investments, transit, and trade in the area of energy. It entered into force together with a Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA) in 1998. The ECT has been signed by 51 countries, including all the EU Member States, the republics of the former Soviet Union, Japan, the European Community (now part of the European Union) and Euratom, with a view to developing the potential for energy in the contracting parties and safeguarding the energy security of the EU. The Treaty sets out binding rules on investment in production and generation, trade in energy, energy transit and the protection of foreign investment. It also provides for dispute-settlement mechanisms for the resolution of state-state and investor-state disputes. The Protocol on energy efficiency promotes energy efficiency policies and cooperation on energy efficiency.

The ECT remains today the only multilateral agreement containing legally binding rules on energy cooperation at multilateral level. Where there are violations of obligations under the Treaty, sanctions can be imposed on the member states. The ECT also established the Energy Charter Conference and the Energy Charter Secretariat. These institutions provide a forum for discussion on issues of energy policy and on developing the ECT. The Federal Ministry for Economic Affairs and Energy takes part in this process within the above institutions.

On 20-21 May 2015, Germany and 62 other countries joined together with the EU, EURATOM, and the Economic Community of West African States (ECOWAS) to sign a political declaration called the International Energy Charter. The Charter was developed as a means of enabling other countries to move closer to accession to the Energy Charter Treaty. In signing the International Energy Charter, countries not party to the ECT are, for example, granted observer status. In June 2016, the countries party to the ECT decided to extend the tenure of the current Secretary-General, Mr Urban Rusnák to include the period of 2017-2021.

G7

Since 2014, the G7 energy ministers have been holding regular meetings again. In 2014, the Rome G7 Energy Initiative for Energy Security (PDF: 175 KB) was adopted. In 2015, under the German presidency, Federal Minister for Economic Affairs and Energy Sigmar Gabriel initiated talks on securing a sustainable energy supply. He also launched discussions on how competitiveness and climate protection can be combined when it comes to reorganising energy supply. During the two-day summit, the energy ministers adopted the G7 Hamburg Initiative for Sustainable Energy Security, which was set out in a joint communiqué by the G7 energy ministers (PDF: 162 KB).

At the beginning of May 2016, the energy ministers met again, under the Japanese G7 presidency in Kitakyushu. Once again, the issue of energy security was at the top of the agenda, with a strong focus placed on economic growth. At this meeting, the G7 energy ministers adopted the "Kitakyushu Initiative on Energy Security for Global Growth" (PDF: 144 KB).

For further information on the G7, please click here.

G20

Coordination on energy policy within the G20 is organised by the Energy Sustainability Working Group (ESWG), which was established in 2013.

Since the Australian presidency in 2014, the issue of energy efficiency has been a top priority, having been laid out in an action plan on energy efficiency adopted by the G20, which is coordinated by the International Partnership for Energy Efficiency Cooperation (IPEEC). Under the Turkish presidency in 2015, topics on the ESWG agenda included access to energy in Sub-Saharan Africa, market transparency, renewable energy, energy efficiency, and the reduction of inefficient subsidies for fossil fuels. The discussion on the expansion of renewable energy and on improving energy efficiency has gained further traction during the Chinese presidency. The meeting of the G20 energy ministers in Beijing at the end of June 2016 focused on how to achieve a sustainable energy supply. The G20 energy ministers have adopted various action plans which are to be implemented in the coming years. They include: a voluntary action plan on renewable energy (PDF: 612 KB), a G20 Energy Efficiency Global Leading Programme (PDF: 787 KB) and an action plan on access to energy in Asia and the Pacific region (PDF: 612 KB). The final declaration can be found here (PDF: 393 KB). The final declaration can be found here.

Germany took over the G20 Presidency on 1 December 2016. The ambitious work of the Working Group on Energy and Sustainability will also be continued under the German presidency.

Further information about the G20 is available here and on the website of the Chinese G20 presidency.

SE4ALL – The Sustainable Energy for All initiative

“Sustainable energy for all” is the aim of an initiative launched by UN Secretary General Ban Ki-moon in 2011. Apart from ensuring universal access to modern energy services, the initiative wants to double the speed of annual energy efficiency improvements and the share of renewables in the global energy mix. These targets are to be attained by 2030

Today, 1.3 billion people worldwide have no access to electricity. Unless additional efforts are made, this figure is forecast to remain virtually unchanged until 2030. The same is true of almost 3 billion people who rely on traditional biomass for their energy supply.

A high-ranking group of 46 advisors from business, government and civil society has drawn up an agenda for action in order to implement the three individual targets. As the relevant steps are then taken, it will be necessary to combine the efforts made by both the public and private sectors and civil society in order to increase the overall impact. At the United Nations Conference on Sustainable Development in Rio (Rio+20), 50 countries from Africa, Asia, Latin America and the group of the Small Island Developing States, plus a large number of companies, local governments and various groups from civil society, presented their own commitments towards implementing the Action Agenda. The initiative thus succeeded in harnessing the political momentum from the Rio+20 negotiations to mobilise support..

International Atomic Energy Agency (IAEA)

With 164 member states, the International Atomic Energy Agency (IAEA) is the world’s leading organisation for global nuclear cooperation. It is headquartered in Vienna. The IAEA has set itself the goal of promoting reliable, safe and peaceful use of nuclear energy and nuclear technology. The main decision-making bodies are the General Conference, which once a year brings together representatives of all member states, and the Board of Governors, which consists of representatives from 35 countries and is the IAEA’s steering committee. Since December 2009, Japan’s Yukiya Amano has been Director General of the IAEA. The IAEA Secretariat employs more than 2300 staff. The Federal Republic of Germany acceded to the IAEA in 1957. Germany has been represented on the Board of Governors without interruption since 1972. Germany provides. 6.9% of the funding for the IAEA, making the country the third-largest contributor after the U.S. and Japan

The IAEA is an important pillar in the global efforts to prevent military use of nuclear energy. It is responsible not least for monitoring the Treaty on the Non-Proliferation of Nuclear Weapons. In particular, it carries out inspections to prevent the unlawful misuse of nuclear material for military purposes.

In order to achieve its goals, the IAEA promotes measures to improve security and safety around nuclear installations and fissile materials. In the context of Technical Cooperation, the fields of basic and materials research, nuclear medicine, industrial applications, agriculture, food hygiene and water supply in developing countries are becoming increasingly important.

The International Energy Agency (IEA)

The International Energy Agency (IEA) is one of the world’s most important energy organisations. As an autonomous institution within the OECD, it acts as a voice for the industrialised nations, which all consume high levels of energy, and currently consists of 29 OECD member countries. Given the strong growth in energy demand outside the OECD countries, the IEA has set out to deepen its relationships with major emerging countries that are not OECD members. In November 2015, the IEA granted China, Indonesia and Thailand Association status, with more countries set to follow.

The IEA was founded in response to the first oil crisis in 1974. Its initial mission was to ensure an undisrupted supply of oil. To achieve this goal, its member countries have agreed to hold at least 90 days of emergency oil stocks.

In addition, the IEA is a central platform for sharing experiences and advising policymakers on virtually all aspects of energy policy, such as questions of energy security, energy efficiency and of cooperation on technology. In terms of expanding renewable sources of energy, the International Energy Agency focuses particularly on how these can be integrated into the energy system as a whole.

Much-noted flagship publications of the IEA include regular in-depth country reviews that also set out energy policy recommendations (Germany was last reviewed in 2013) as well as the annual World Energy Outlook (WEO), a comprehensive international reference on energy policy with forecasts currently extending up to 2040..

International Renewable Energy Agency - IRENA

The International Renewable Energy Agency (IRENA) is an intergovernmental organisation dedicated to the worldwide promotion of the growth and sustainable use of renewable energy. It was founded in Bonn in 2009 and currently has 149 members, with an another 27 states presently in the accession process.

IRENA is headquartered in Abu Dhabi, United Arab Emirates. The IRENA Innovation and Technology Centre, one of its three core divisions, is based in Bonn. IRENA currently works with over 100 international experts.

IRENA serves as the global voice in international discussions on renewables. It is also a platform for countries to share knowledge on what approaches have been successful when it comes to developing renewable energy, an efficient policy environment for promoting renewables, capacity building, financing mechanisms, and energy-efficiency programmes related to renewable energy. In its capacity as an advisory body, IRENA provides access to information on renewables, ranging from technical expertise to economic data and scenarios highlighting the potential for developing renewables. It serves as an adviser on renewables to industrialised countries, developing nations, and emerging economies. As it conducts its work, IRENA cooperates closely with governments, national and international institutes, NGOs, and the private sector.

International Energy Forum (IEF)

The International Energy Forum (IEF) is the product of the dialogue that has already been taking place between oil-producing and oil-consuming countries. Its main aim is to promote global energy security - particularly through trust-building high-level energy dialogue and the fostering of greater market transparency. Energy security is of crucial importance for a country like Germany in particular, which is greatly dependent on imports of oil and gas. At the heart of the efforts to increase transparency in the oil sector is the Joint Organisations Data Initiative (JODI) database. This has been coordinated by the IEF Secretariat since January 2005 - originally as the Joint Oil Data Initiative - and has now been expanded to include the JODI Gas Database, which has been publicly accessible since May 2014. The work is supported by the Asia-Pacific Economic Cooperation (APEC), the Statistical Office of the European Union (Eurostat), the IEA, the Latin American Energy Organization (OLADE), the Organization of the Petroleum Exporting Countries (OPEC) and the UN Statistics Division (UNSD).

Every two years, the IEF holds what has become the world’s largest meeting of energy ministers of producer and consumer countries. Germany is a permanent member of the IEF Executive Committee. Like other major energy-consuming countries, Germany also provides financial support to the Secretariat.

REN21

The Renewable Energy Policy Network for the 21st Century (REN21) is a global policy network that was founded following the ‘Renewables 2004’ conference. The Network, in which Germany has played a huge part – both in its inception and development, plays a key role in supporting countries hosting International Renewable Energy Conferences (IRECs) as they design and organise the event. REN21 is made up of representatives of governments, international organisations, civil society and the private sector – from the fields of energy, the environment and development.

Every year, REN21 publishes the Renewables Global Status Report (GSR), which tracks the annual global growth of renewables. The Report has become the standard point of reference for information on the development of investment in renewable energy. The report sets out the current state of installed renewable capacity around the world, as well as its global distribution. It also provides information on growth targets, policy instruments and information on global investment in renewable energy. Additionally, there is an interactive map displaying information relating to individual countries.

The Global Bioenergy Partnership (GBEP)

The Global Bioenergy Partnership (GBEP) was initiated by the G8 and founded in 2006. The GBEP Secretariat is attached to the UN Food and Agricultural Organization (FAO) in Rome. A total of 23 countries and 14 international organisations are currently partners (members) of GBEP, including many industrialised countries. A further 22 countries and 11 international organisations have observer status (including many from Asia and Africa).

One of Germany’s key aims is to strengthen and advance the initiative through active involvement in the Partnership. A key milestone here has been the development of the GBEP Sustainability Indicators for Bioenergy which enable the use of biomass to be characterised based on various sustainability criteria..

Further information