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Topic - Conventional Energy Sources

Still indispensable for a reliable energy supply

Introduction

We are currently transforming our energy system to make it climate-friendly and sustainable. This level of restructuring takes time. Energy from conventional sources is helping us ‘keep the lights on’.

Conventional energy sources still account for two thirds of the electricity that is generated in Germany. However, the ongoing expansion of renewables capacity and the phase-out of nuclear energy will have a lasting impact on the composition of the electricity mix. The electricity market is now being developed into an electricity market 2.0, which is capable of delivering energy security even in a system that is based on a high share of intermittent power from renewables.

Since 3 July 2017, the new SMARD Information Platform (in German language) has been providing information on the electricity market – almost in real time. This includes information on conventional energy sources. SMARD makes this data available in a form that is transparent, intelligible, and well-structured. This makes the platform a useful tool for different groups of users that are interested in following the energy transition and its progress. Experts can also make use of numerous tools for in-depth analysis.

Conventional energy sources still account for two thirds of the electricity that is generated in Germany. However, the ongoing expansion of renewables capacity and the phase-out of nuclear energy will have a lasting impact on the composition of the electricity mix. The electricity market is now being developed into an electricity market 2.0, which is capable of delivering energy security even in a system that is based on a high share of intermittent power from renewables.

Since 3 July 2017, the new SMARD Information Platform (in German) has been providing information on the electricity market – almost in real time. This includes information on conventional energy sources. SMARD makes this data available in a form that is transparent, intelligible, and well-structured. This makes the platform a useful tool for different groups of users that are interested in following the energy transition and its progress. Experts can also make use of numerous tools for in-depth analysis.

Diagrams on conventional energy sources in Germany

Natural gas

Heating, storage, power generation: a multipurpose source of energy

With an annual consumption of approx. 95 billion cubic metres, Germany is one of the largest sales markets for natural gas in the European Union, and is also an important transit country for gas.

Gas will continue to make a major contribution to Germany’s energy supply in the coming decades. Only a small proportion of the natural gas used in Germany is produced in the country, while 94% is imported from Norway, the Netherlands and other countries. Natural gas reaches Germany via pipelines, and is subsequently fed into the German long-distance gas grid and the downstream distribution grids.

An important role in the energy transition

Natural gas is one of the most important primary energy sources in Germany’s energy mix, second only to petroleum. In 2016, its share in Germany’s primary energy consumption amounted to 22.6%.

Whilst the heat market is still by far the most important market for natural gas, this type of fuel is now being used for other purposes as well. In particular, gas can play an important role in the transition from fossil fuels to renewables in the power sector. Furthermore, natural gas also lends itself to being used in the transport sector. It has lower carbon emissions than other fossil fuels and is therefore more climate-friendly.

Infrastructure

The total length of Germany’s gas grid is 511,000 km. The pipelines which go to make up the gas grid are essential for transporting and distributing natural gas. They enable widely varying quantities of gas to be delivered safely over long distances. Considerable amounts of gas are transported across Germany to other EU states.

The Gas Network Development Plan includes measures for the expansion of the network in line with demand and for ensuring secure supply and safe and reliable network operation. Find out more.

Natural gas production in Germany: fracking

In 2016, some 8 billion cubic metres of natural gas was produced in Germany, some of this using conventional fracking methods. Conventional fracking has been used in Germany for many years and is a proven method of extracting natural gas from sandstone rock formations. Safety always comes first, which is why fracking is banned in sensitive areas. The Federal Government has also clearly stated its opposition to the use of “unconventional fracking”; no experience has been gathered with this in Germany so far. Find out more (in German).

Playing safe with the gas supply

The strong dependence on imports means that the instruments for ensuring security of gas supply are vital. Germany’s natural gas supply is very secure and reliable. Germany has the world's fourth-largest gas-storage capacity, which, at close to 24.6 billion cubic metres, is also the largest within the entire European Union.

In December 2015, the Federal Ministry for Economic Affairs and Energy published a list of key principles (in German) (PDF, 36KB) for measures to improve the security of the gas supply. Find out more about securing the gas supply and contingency planning.

Trade and regulation of the gas market

The German gas market is characterised by a large number of privately organised operators in the areas of networks, storage operations and gas trading. There are currently two market areas in Germany (NCG and Gaspool), each with their own coordinator who ensures that access to the gas grid and market activities is carried out in an efficient fashion. 16 long-distance gas companies are currently operating on the German gas market – other players are the distribution system operators, storage facility operators, and traders. The EU internal market package for the liberalisation of the market for electricity and natural gas, most recently amended by the Third Internal Energy Market Package, redefines the areas of activity of market players. To promote competition, the operators of gas supply networks and storage facilities are separated from natural gas trading activities. The electricity and gas supply grids are regulated by the Federal Network Agency (in German) and the regulatory authorities of the Länder.

Gas price and costs

As is the case for other goods and services, natural gas prices are not regulated but are set according to supply and demand. Prices are based on different cost components.

Acquisition costs include the gas purchase price and transport costs. Distribution costs are all the costs involved in transmitting natural gas to the end customers. These costs also include all costs associated with the expansion and maintenance of the natural gas grid. The natural gas tax is based on the Energy Tax Act under which the level of natural gas consumption in the various areas of application is taxed.

Where network operators use public land for laying and operating gas pipelines, they must pay the concession fee to the respective local authority. You can find out more about the gas prices here.

Looking ahead to power-to-gas: Storing energy in the gas grid

Another important and promising use for the gas grid is emerging. By converting electricity from renewable sources into methane and feeding it into the gas grid, the latter could serve as a huge reservoir for several billion kilowatt hours of energy. A number of research and demonstration projects aimed at using this technology over the next decades are currently underway. Find out more.

Gas-based mobility

Promoting the use of natural gas as a fuel is one way to cut the carbon emissions in the transport sector, because vehicles fuelled by natural gas emit hardly any particulates or nitrous oxides. For this reason, the Economic Affairs Ministry has launched the “Round Table on Gas-Based Mobility”. The aim is to enable the transport sector to achieve a share of four per cent of final energy consumption by 2020. Find out more.

Hard coal and lignite

An energy source for power stations and industry

Hard coal and lignite still play an important role in the energy mix: almost 22% of primary energy consumption is still based on these energy sources.

Coal and lignite are among the most important energy sources for power generation. Some 37% of our electricity was generated from coal and lignite in 2017 (lignite: 22.5%, hard coal: 14.1%).

Hard coal: a raw material for electricity generation and the steel industry

The main consumers of hard coal in Germany are the power stations and the steel industry. In 2017, power stations accounted for approx. 78% of total consumption of hard coal, the steel industry for approx. 20%, and other industry, home fires and small-scale consumers for roughly 2%. The German hard-coal mining industry has been undergoing a process of restructuring for some decades. Output and the number of mines and employees are constantly falling. On 31 December 2018, the extraction of hard coal will cease in Germany when the last two mines, Prosper-Haniel and Ibbenbüren, are closed. In view of this development, imports now cover more than 90% of the supply of hard coal and hard coal products on the German market (50.3 million tonnes in 2017). For further information on the extraction and subsidisation of hard coal, please click here.

Lignite: a domestic fossil energy source

There are three areas in Germany that still have active lignite mines, all of them open-cast mines. These are Rhine, Lusatia and Central Germany. In 2017, their combined annual extraction rate was approx. 171.3 tonnes. Germany is the world’s leading extractor of lignite, ahead of China, Russia and the United States. For more information on hard coal and lignite, please click here.

Mining statistics: facts and figures on mining in Germany

Germany has a long mining tradition, and mining continues to play an important role today. Around 55,000 people are employed in mining operations; they mainly extract coal, gas, oil, potash and salts. In cooperation with the mining agencies of the Länder, the Federal Ministry for Economic Affairs and Energy publishes an annual report as part of the series Der Bergbau in der Bundesrepublik Deutschland - Bergwirtschaft und Statistik. The report (known as the “Blue Booklet” because it was originally bound in blue) contains comprehensive data from all the mining companies in Germany and provides detailed statistics.

Petroleum and Motor Fuels

A raw material for transport

Oil continues to be one of the main forms of energy used in Germany. Oil and motor fuels account for 34% of our primary energy consumption, and the bulk of this is imported.

With a share of approx. 34% of primary energy consumption in 2016, oil remains the largest primary energy source in Germany. Back in the 1970s, oil accounted for more than half of primary energy consumption, but its share dropped in the 1980s, largely due to the increased use of gas for heating. Oil plays an important role in the transport sector: 94% of final energy consumption in the transport sector is accounted for by oil (2015).

In 2016, domestic sales of oil products amounted to approx. 104 million tonnes. In quantitative terms, the main oil products were diesel fuel (38.4 million tonnes), gasoline (18.3 million tonnes), naphtha (16.5 million tonnes), which is used for petrochemicals, and light fuel oil (15.8 million tonnes). Other oil products include kerosene (9.2 million tonnes) and heavy fuel oil (4.5 million tonnes); the latter is used in industry.

For some years, biofuels like bioethanol and biodiesel have been helping to cover the energy supply and to mitigate climate change. Find out more about the alternative fuels here.

Trade in and imports of oil

In 2016, Germany’s crude oil imports amounted to approx. 91 million tonnes. This is eighteen million tonnes less than a decade before. Russia is Germany’s number-one supplier, accounting for just under 40% of the country’s crude-oil imports last year. In 2016, some 22.4 million tonnes was imported from Norway and EU Member States – a figure that corresponds to less then a quarter of Germany’s crude oil imports. Find out more about the trade in oil here.

Extracted, transported, refined: how oil gets to Germany

Crude oil is imported to Germany via four cross-border crude oil pipelines and via the ports of Wilhelmshaven, Brunsbüttel, Hamburg and Rostock. Pipelines from the ports of Wilhelmshaven, Brunsbüttel and Rostock lead to various refineries. The pipeline infrastructure is owned by the oil-processing industry; it is generally operated by companies which are jointly owned by several oil companies. The storage of crude oil and of intermediate and finished products takes place both below ground in caverns and above ground in refineries and in numerous tanks outside refineries. In total, the tank storage capacity in Germany amounts to approx. 62 million cubic metres; 40% this takes the form of caverns. For more information, please click here.

The markets for motor and other fuels

The sale of diesel, gasoline and other motor fuels like LPG and natural gas takes place via more than 14,000 roadside fuelling stations and around 350 fuelling stations on autobahns. In addition to the major oil companies, numerous independent companies are active on the motor fuel market. Click here to find out more.

As is the case for other goods and services, gasoline and diesel prices are not regulated but are set by supply and demand. The crude oil price has a major influence on the availability of these fuels and thus on the price at the petrol pump. Find out more about the alternative fuels here.

Our goal is to gradually reduce dependency

Among the sectors that depend on a reliable supply of oil are private and commercial transport, shipping, aviation, heating, and manufacturing. As we have seen in the past, better energy efficiency, energy conservation and a switchover to technologies using other sources of energy can help reduce our dependency on oil. Given our high level of dependency on oil imports and the risks affecting the world market, however, there is a need to take precautions against short-term disruptions to supply. Within the Federal Government, the Federal Ministry for Economic Affairs and Energy is in charge of ensuring energy security and taking precautions to cope with energy crises. You can find out more about contingency planning here.

Nuclear energy

Phasing out nuclear power without compromising on security

As part of its energy transition, Germany has decided to phase out nuclear power. At present, there are 7 nuclear power plants still operating in Germany. These will be successively shut down, with the last ones closing by the end of 2022.

Ever since the catastrophic accident at the Japanese Fukushima nuclear power plant, there has been strong consensus in Germany in favour of a nuclear phase-out. This process is to be completed by 2022.

Nuclear power plants in Germany

A total of 37 nuclear power plants have been built in Germany and put into commercial operation since 1962. At present, there are 7 nuclear power plants still operating, generating approximately 10,000 MW. These plants are now being taken off the grid in a pre-defined order: the Gundremmingen B nuclear power plant at the end of 2017, followed by Philippsburg 2 by the end of 2019, and Grohnde, Gundremmingen C and Brokdorf by the end of 2021. The three newest plants, Isar 2, Emsland and Neckarwestheim 2, will be disconnected from the grid no later than the end of 2022.

Financing of the nuclear phase-out secured for the long term

Under the Atomic Energy Act and in line with the polluter-pays principle, it is the operators of nuclear power plants (NPPs) that must pay for the shut-down and dismantling of the NPPs, and for the management of the nuclear waste produced by them, including the cost of final storage.

In December 2016, the Bundestag and the Bundesrat adopted the Act Reorganising Responsibility for Nuclear Waste Management (317 KB, in German). It entered into force on 16 June 2017 following its approval under state aid rules by the European Commission. At the same time, a fund for the financing of nuclear waste disposal was established. This fund takes the form of a foundation under public law.

The Act assigns the respective responsibilities around nuclear disposal and provides for secure, long-term financing for the decommissioning and dismantling of nuclear power plants and the disposal of nuclear waste, without either shifting the costs on to taxpayers or jeopardising operators’ business.

In other words, this piece of legislation ensures that the operators of nuclear power plants will continue to be in charge of managing and financing all activities linked to the decommissioning and dismantling of the installations, and to the correct packaging of nuclear waste. In contrast, it is the Federal Government that will be responsible for organising and financing interim and final storage. On 1 July 2017, the funds to cover the costs for interim and final storage, which will amount to up to €24 billion, were transferred by the operators into the fund administered by the Federal Government.

Previously, on 26 June 2017, the Federal Ministry for Economic Affairs and Energy and the executive directors of the energy companies signed an agreement under public law in recognition of the new division of responsibilities as assigned under the new legislation. This agreement has delivered legal certainty for both the Federal Government and the energy companies. It also puts an end to the many legal disputes that have been fought around the subject of nuclear-waste disposal and the phase-out of nuclear energy. You can find the text of the agreement here (PDF, 4 MB; in German).

The board – which is charged with establishing and supervising the foundation – convened for the first time on 19 June 2017 and took various important decisions of an organisational nature. Click here (PDF, 72KB) for more detailed information on the division of responsibilities around the nuclear phase-out.

The Act is to implement the recommendations made by the Commission to Review the Financing for the phase-out of nuclear energy. This means that, for the first time, the responsibilities for organising and financing the disposal of nuclear waste will be brought together. The Commission (PDF: 1.18 MB, in German) has been set up by the Federal Government on 14 October 2015. This expert commission was to draw up recommendations as to how to organise the financing for the shut-down and dismantling of nuclear power plants and for the management of nuclear waste in such a way that companies will be capable of meeting their long-term obligations under nuclear law. On 27 April 2016, the Commission completed this task by presenting its unanimous recommendations for action in a report to the Nuclear Energy State Secretaries Committee. You can find the Commission's recommendations in the final report (PDF: 969 KB, in German).

Expert report assessing the provisions made in the nuclear-power sector ('stress test')

The expert report assessing the provisions made in the nuclear-power sector ("stress test”) (PDF: 2.75 MB, in German), which was commissioned by the Federal Ministry for Economic Affairs and Energy on 10 October 2015, served as a major basis for the Commission's work. According to the report, the energy companies are capable of bearing the cost of dismantling the nuclear power plants and disposing of the nuclear waste. The provisions made for these purposes by the companies concerned totalling €38.3 billion are based on estimated costs in current prices amounting to around €47.5 billion. The experts have confirmed that the estimated costs are plausible and complete and that the provisions had been correctly incorporated into companies' balance sheets.

The German government had also commissioned a comprehensive study into the legal aspects (in German) of the provisions made in the nuclear-power sector and the related need for reform.

Final disposal of radioactive waste

A suitable site is being sought for the secure storage of highly radioactive waste over a period of a million years. The Repository Site Selection Act entered into force in July 2013 and guarantees that there will be an open-ended, transparent and science-based site selection process. The Federal Ministry for Economic Affairs and Energy is responsible for basic research into nuclear disposal; this research is non-site-specific and application-oriented. The focus is on the question of safe handling and disposal of radioactive waste. In the funding concept entitled “Research on the Disposal of Radioactive Waste” (2015-2018), the Ministry has presented a more detailed description of the research and development work. You can find out more about this here.

Research to improve reactor safety

The research on the safety of nuclear energy undertaken by the Federal Ministry for Economic Affairs and Energy contributes towards what is recognised internationally as a high safety standard in German nuclear power plants. It defines the state-of-the-art when security assessments are made. The funded research projects provide, for example, calculation tools for the assessment and analysis of procedures in nuclear power plants and investigate the behaviour of materials in conditions found in nuclear power plants. This work also helps to maintain the expertise which continues to be needed in the use of nuclear technology and in radiation protection in medicine, industry and research.

In view of the international trend towards continued use of nuclear energy, the German government wishes to retain the skills needed to assess the safety of nuclear power plants in neighbouring countries and, if necessary, to make proposals for improvements. For this reason, research on the safety of nuclear energy is increasingly taking place in the context of international cooperation, e.g. in the EU (Euratom) and the OECD Nuclear Energy Agency.

Coal, symbolic of Conventional Energy Sources; Source: mauritius images/Cultura