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Article - Renewable Energy

Renewable Energy

Introduction

Renewable energy is the most important source of electricity for Germany, and the expansion of renewables is one of the central pillars in Germany's energy transition. Our energy supply is to become more climate-friendly, and is also to make us less dependent on imports of fossil fuels.

Solar plant; Source: iStock.com/nullplus

© iStock.com/nullplus

Germany’s electricity supply is becoming “greener” every year. The share of renewables in electricity consumption has steadily grown over the last few years – from around 6% in 2000 to around 36% in 2017. As set out by the renewable Energy Sources Act – or EEG – 40-45% of electricity consumed in Germany is to derive from renewables by 2025.

This diagram provides an overview of Germany’s electricity mix:

Gross electricity generation in Germany in 2017, Working Group on Energy Balances, status: February 2018 Enlarge

Gross electricity consumption in Germany in 2017 in TWh; preliminary figures incl. some estimates; **regenerative part; last updated: February 2018

© Working Group on Energy Balances

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. New solar installations are among the most affordable renewables technologies. At the end of 2017, the number of PV installations stood at 1.6 million. These produced around 43 gigawatts of electricity, making PV the second largest source of renewable electricity, followed by onshore wind energy.
  • Wind energy plays a crucial role in expanding renewables. Onshore and offshore wind energy combined account for around 16% of Germany’s electricity generation. At the end of 2017, a total of 5,407 megawatts (MW) of offshore wind capacity was linked up to the grid. 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. Biomass accounts for 24% of renewable electricity generation, 87% of the renewables’ share in total heat and cooling consumption and 88% of the renewables’ share in final energy consumption in the transport sector.

More information on the development of renewable energy can be found (in German) at www.erneuerbare-energien.de.

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 renewable 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.

Results of the auctions conducted pursuant to the Renewable Energy Sources Act

The results of the first auctions for expanding wind power and photovoltaics conducted pursuant to the 2014 and 2017 Renewable Energy Sources Act show that the reforms have been a step in the right direction and are paving the way for making the energy transition a success.

Infographics on the results of the auctions

Competitive auctions have a cost-reducing effect

Average funding awarded in the auctions for ground-mounted PV installations

Average funding awarded in the auctions for ground-mounted PV installations Enlarge

© BMWi

The switch from statutory funding rates to auctions has led to a decrease in the average level of funding awarded for ground-mounted PV installations.
Infographic as PDF (PDF, 124KB)

In addition to the auctions focusing on one specific source of renewable energy, the 2017 Renewable Energy Sources Act also provided for the implementation of a pilot project where joint auctions for PV and onshore wind power capacity will be held between 2018 and 2020, resulting in a competition between different technologies. More information about how the level of funding will be determined can be found (in German) at Erneuerbare-Energien.de

Four key figures on renewable energy

29.0
Symbolicon für Grüner Strom

per cent share
of renewables in gross electricity generation in Germany in 2016

31.5
Symbolicon für Sonne

per cent share
of renewables in Germany’s gross electricity consumption in 2016

11.9
Symbolicon für Windräder

per cent share
of wind power in electricity generation from renewable sources in 2016

4.33
Symbolicon für Geld

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.

Publications on renewable energy

2017 Renewable Energy Sources Act

Competition-based funding for renewable energy

Competition-based funding for renewable energy

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.

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 Act here.

Infografics

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.

Click here to find out more.

Distribution system symbolizes the eletrcity market of the future; Quelle: Getty Images/Hans-Peter Merten/The Image Bank

© Getty Images/Hans-Peter Merten/The Image Bank

Renewable heat and transport

Using renewables for heating

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.

Scaffolded building symbolizes enhancing energy efficiency in buildings; Source: istockphoto.com/OGphoto

© istockphoto.com/OGphoto

Energy Export Initiative

Off to new markets!

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.

Press releases

  • 17/04/2018 - Joint press release - European and International Energy Policy

    Federal Government continues international dialogue on the Energiewende – Berlin Energy Transition Dialogue 2018 opens

    Open detail view
  • 11/06/2018 - Press release - The Energy Transition

    EU Energy Council in Luxembourg: Energy Ministers pave the way for the European energy transition

    Open detail view
Solaranlage zum Thema Erneuerbare Energien; Source: iStock.com/nullplus