The expansion of renewable energy is one of the central pillars in Germany's energy transition. We want to make our electricity supply more climate-friendly and, in light of an increasing scarcity of resources, become less dependent on fossil fuels.
Germany’s electricity supply is becoming "greener" every year as the contribution made by renewable sources is constantly growing. In 2016, renewable energy already covered roughly 29% of gross electricity generation (total volume of electricity generated in Germany) (cf. diagram).
Gross electricity generation in Germany in 2016 in TWh
Renewables are our most important source of electricity in Germany.
The growing significance of renewable energy sources in the The growing significance of renewable energy sources in the power sector is largely due to the Renewable Energy Sources Act (EEG). Since the adoption of the Renewable Energy Sources Act, the proportion of gross power consumption (total volume of electricity consumed in Germany) accounted for by renewable energy has risen from roughly 6% in 2000 to 31.7% in 2016 according to preliminary data. By 2025, 40-45 per cent of electricity consumed in Germany is to derive from renewables.
Energy sources that drive forward the energy transition
Wind and solar energy are the most important forms of renewables. Biomass and hydropower are also valuable building blocks of our energy system.
Solar power: In photovoltaic installations, solar panels directly transform sunlight into electricity. Only a few years ago, solar power was still one of the most expensive forms of renewable energy. Advances in technology have led to solar installations becoming much cheaper, and they are now among the most affordable renewable energy technologies. And the technological development of solar installations is still ongoing, which means that the cost of these installations will probably fall even further in future. At the end of 2015, more than 1.5 million photovoltaic installations with a total capacity of 40 gigawatts accounted for the second largest amount of electricity generation capacity in Germany, behind approx. 26,000 wind energy installations (45 GW).
Wind energy plays a crucial role in expanding renewables. It now accounts for about 12 per cent of the German power supply. Apart from expanding wind energy in suitable onshore locations and replacing older, smaller turbines with modern and more powerful ones – known as repowering – expanding offshore wind energy is playing a growing role. At the end of 2016, Germany’s offshore wind power capacity in the grid reached around 4,108 megawatts (MW). The Federal Government is aiming to bring this figure up to 15,000 MW by 2030.
Biomass in solid, liquid and gaseous form is being used for electricity and heat generation and for the production of biofuels. Almost 60 per cent of the total final energy from renewable sources was generated by the different types of biomass used to this end in 2015.
Infographics on the results of the auctions
Competitive biddings have a cost-cutting effect
Average funding rates for onshore wind energy installation auctions
Dazzling result for photovoltaics: an average rate of implementation of 95% in the first two rounds of bidding
Almost all photovoltaic projects (average rate of 95%) that qualied for funding in the first two rounds of bidding in 2015 have been implemented and are now operational. Infographic as PDF (PDF, 1MB)
Overwhelming part of funding for citizens’ energy companies
Share of funds for citizens’ energy companies in onshore wind auctions
“Citizens’ energy companies” can participate in the auctions on simplied terms. The lion share of funds in the first two rounds of bidding went to citizens’ energy companies. 60 (65) out of 67 (70) projects that were successful in the second (rst) bidding process had been presented by citizens' energy companies and seven (ve) by other players.
per cent share
of renewables in gross electricity generation in Germany in 2016
per cent share
of renewables in Germany’s gross electricity consumption in 2016
per cent share
of wind power in electricity generation from renewable sources in 2016
ct/kWh average level of funding awarded
in the first round of auctions for ground-mounted PV installations under the 2017 Renewable Energy Sources Act (as a comparison: in first pilot auction round, average funding awarded was 9.17 ct/kWh)
2014 Renewable Energy Sources Act
Making the right choices
The Renewable Energy Sources Act (EEG), which entered into force in 2000, is a key driving force for the expansion of renewable energy in Germany. The 2014 revision of the Renewable Energy Sources Act was an important step towards setting the energy transition on a path to success.
The Renewable Energy Sources Act built a platform for the expansion of renewables, enabling them to become one of the mainstays of Germany’s power supply.
The figure in 2000 was only around six per cent. The Act had the aim of enabling young technologies such as wind and solar energy to enter the market with support provided by fixed tariffs and a purchase guarantee.
The 2014 revision of the Renewable Energy Sources Act
stipulated a binding expansion corridor
sharply reduced the costs via a concentration on the cheap technologies of wind power and photovoltaics
stipulated that new large-scale installations are responsible for marketing the electricity they generate (better integration into the electricity market)
halted the rapid rise in electricity prices
The price of electricity is a major factor in the level of competitiveness of energy-intensive industries facing international competition. These companies are covered by the special equalisation scheme, which in certain circumstances provides for a reduced EEG surcharge. Also, the Renewable Energy Sources Act grants self-suppliers and self-generators certain privileges under certain conditions. Find out more about the special equalisation scheme and self-suppliers.
The 2014 Renewable Energy Sources Act prepared the ground for the introduction of competitive auctions. A total of six pilot auctions were held for large ground-mounded PV installations. The average amount of the award dropped from 9.17 ct/kWh in April 2015 to 6.90 ct/kWh in December 2016. You can find out more about this here.
The 2014 Renewable Energy Sources Act paved the way for making the energy transition a success. The 2017 revision of the Renewable Energy Sources Act rings in the next phase of the energy transition: from 2017 onwards, funding rates for renewable electricity will no longer be fixed by government, but will be determined via a market-based auction scheme – a fundamental change in funding renewable energy.
The expansion of renewable energy continues to be one of the key pillars of the energy transition. We want to increase the share of renewable energy from its present level of around 33% up to 40-45% in 2025 and to 55-60% in 2035. The next phase of the energy transition will focus on bringing about more competition, a continuous expansion with effective steering, restrictions on costs, stakeholder diversity and dovetailing with grid expansion.
Competitive auctions help steer the expansion and limit the costs
The 2017 Renewable Energy Sources Act is the key instrument to achieve effective annual quantitative steering and to bring renewable energies closer to the market. Since 1 January 2017, the level of funding has been determined on the market by auction. The core aspects of the revision of the Renewable Energy Sources Act can be found in this this presentation (PDF, 552KB). The first auctions under the new rules of the 2017 Renewable Energy Sources Act have already taken place and have shown that the average level of funding awarded has again decreased since the last bidding round. Further information can be found here.
Maintaining stakeholder diversity
By exempting small installations that generate no more than 750 kW from the obligation to take part in the auctions, relaxing rules for citizens’ energy companies bidding in auctions for onshore wind funding, and streamlining all auction models, we are making sure that the diversity of stakeholders will be maintained.
The expansion of renewables capacity and of our grid capacity is to be better synchronised
The Federal Government and the Länder are sticking to the existing grid expansion plans. However, the pace of work needs to pick up. Nevertheless, there will be bottlenecks in the transmission grid in some regions of Germany during a transition period, particularly in the north of Germany. It is therefore important to ensure that the energy which we generate can also be transported to consumers. For this reason, during a transition period, the expansion of onshore wind energy will be subject to local adjustments where there are significant bottlenecks in the grid.You can find out more about grid expansion here.
Find out more about the 2017 Renewable Energy Sources Acthere.
Infographics - Renewable Energy
Infographics:Sum of the price on the electricity exchange and the renewable energy surcharge in cent/kWh
Importing renewables from other European Member States
Opening up renewable energy auctions to European Member States
The 2017 Renewable Energy Sources Act is anchoring the energy transition on a cross-border basis: auctions for funding for renewable energy are now to be opened up to other countries: 5% of new renewables capacity to be installed each year will be opened up to installations in other European Member States (approx. 300 megawatts/year). The cross-border auctions will take place in addition to the national auctions, which are only open to installations located in Germany.
In 2016, initial experience was gathered with Denmark by means of a pilot project on reciprocal opening of auctions for ground-mounted PV installations. The auctions held by the Federal Network Agency and the Danish energy agency were open to bidders with installations located in Germany or in Denmark. These were the first cross-border auctions in Europe.
Drawing on experience gained from this tender, further cross-border auctions are planned to be carried out in the future. Also, these cross-border auctions are to be extended to include the possibility to cooperate on onshore wind energy projects.
More than half our energy is used for heating and cooling purposes. If we want the energy transition to be successful, it is therefore crucial to also expand the use of renewable energy in the heating sector.
Renewables are taking on an ever more important role in the heating market. Between 2000 and 2015, the share of renewables in the heating sector tripled, rising from 4.4 per cent to 13.2 per cent.
Within the heat market, the use of renewable energies is regulated by the Renewable Energies Heat Act. Under this law, builders of new buildings are required to generate a percentage of their heating requirements from renewable sources of energy, to undertake certain compensatory measures such as installing additional insulation, or to use combined heat and power systems or district heating.
In addition to the Renewable Energies Heat Act, the Federal Government uses the Market Incentive Programme (MAP) to increase the proportion of heat generated from renewable sources. Under this programme, assistance is provided primarily for existing buildings to promote the use of renewable energy technology in the heat market, such as solar thermal installations, wood pellet heating systems and efficient heat pumps.
Renewables in transport
In the transport sector, biofuels like bioethanol, biodiesel and biogas have been helping to cover the energy supply and to mitigate climate change for several years now. Renewables accounted for 5.3 per cent of the fuel used in the German transport sector in 2015. The renewables in question consisted almost entirely of biofuels for cars, trucks, trains, ships and aircraft. But renewables are also becoming ever more important when it comes to powering more electric vehicles. Electric mobility is low-carbon mobility and helps to bring electricity from renewable sources, such as solar and wind energy, into the transport sector.
The Energy Export Initiative provides support for small and medium-sized companies in Germany’s energy sector, and helps them access new markets abroad.
The Initiative targets companies that offer solutions in the area of renewable energy, energy efficiency, smart grids and energy storage. You can use the services provided under the Energy Export Initiative to promote your business! Valuable information on all the services available under the Initiative and an events calendar can be found here.
03/08/2016 - Press release - Grids and Grid Expansion