Germany’s Energy Transition: What can other countries learn from it?

Editor’s Note: This post is part of the on-going collaboration between S&S and GreenBuzz to promote increased dialogue between sustainability practitioners, academic experts, and the general public. GreenBuzz chapters in different cities coordinate on-the-ground events for a word-of-mouth driven community of professionals engaged in sustainability, bringing sustainability leaders together to connect with each other and to discuss specific sustainability topics. S&S will publish excerpts, summaries, and discussions generated by these events in order to facilitate on-going debate and make the information presented at these events available to a world-wide audience.


On Thursday, 25 February 2016, GreenBuzz Berlin organized a panel discussion on ‘Germany’s Energy Transition’ under their Sustainability Panel event series. Guests from many sectors participated, including: Andreas Brabeck, Head of Politics for Grid and Distribution at RWE, Florian Simon, Key Account Manager at Naturstrom, Fabian Zuber, former Managing Director at Bündnis Bürgerenergie and Senior Consultant in New Energy Markets at Büro F, Dr. Corinna Klessmann, Principal Consultant at Ecofys Germany and Dr. Malte Schneider, Director of Climate-KIC (moderator).

As a response to multiple demands, including the Fukishima nuclear reactor disaster of 2011, and a desire and need to be more environmentally friendly, Germany has made impressive strides in its energy transition. Although challenges still exist, many important lessons can be taken from the German case study and applied to other countries, both developed and developing. Commenting on this, Ulrike Hinz, a founding member of GreenBuzz Berlin and organiser of the panel discussion, says “Collaboration is key to a successful energy transition. Therefore, one of the most important learnings is how to enable and motivate different stakeholders to be part of and drive change.”

Use of decentralised energy systems to overcome challenges

Across Germany, individuals, house hold owners, small businesses are increasingly installing solar systems in order to generate their own electricity and reduce their reliance on the national electricity grid. Typically, excess energy that the user generates can be sold to the national supplier by being fed back into the local or national electricity grid for an agreed price.

This model holds particular relevance for other countries of different geographic size, population or GDP, as a lack of energy generation continues to be a significant challenge for the entire African continent. Many countries have also struggled to reliably transmit power to rural and remote locations at an affordable price. The use of decentralised systems – from basic models that can power a few lights and a charger to high tech models able to generate power for entire households and energy intensive devices like fridges and TVs – are a realistic and viable alternative option.

Reducing costs for transitioning to renewable energy

The increased uptake and usage of various renewable energy solutions has, overall, resulted in the price of such solutions decreasing. The more users that switch to renewable energy solutions, the cheaper the costs will become. A dramatic reduction in costs (at all levels from manufacturing to installation to maintenance) has already occurred in recent years and this is set to continue. An awareness of available alternative solutions and knowledge of the benefits of such solutions is also essential.

Increased uptake of such solutions will also inspire further innovations in the field which will likely result in added benefits for the user. Innovation could lead to improvements in many different areas including generation efficiency, life span of systems, energy storage and system protection against surges (from lots of wind or sunshine) as well as in energy payment techniques and systems. The greater the cost reduction, the more likely it is that other countries (in particular developing ones) and their citizens will have the opportunity to benefit from all of these factors.

Large space for innovations, start-ups and crowd funding

Although great progress has been made in Germany and beyond, an opportunity still exists for further innovation at all stages of the energy value chain, to take place. Start-ups in particular, are playing an increasingly important role in the German business environment and economy. Carolin Kruse, a fellow board member of GreenBuzz Berlin, says “that it is important to try new models, discuss ideas and inspire citizens to make the change happen through changing their energy provider, heating system and transport behaviour and by the use of apps such as Changers and co2online.”

Certainly, there is no ‘one solution for all’. Different solutions, products, distribution channels, funding and payment mechanisms will have to be invented or adapted to meet the needs of local markets. In acknowledging the high level of entrepreneurship across many developing countries, there is the potential that these entrepreneurs could be a driving force for innovations, similar to start-ups in Germany. To facilitate innovations, innovators and start-ups should not be restricted and held back by bureaucracies. Incentives such as tax breaks and a stable policy environment would certainly help enable entrepreneurs to drive further developing of the renewable sector.

A stable policy environment

Though many organisations can still find a way to innovate, operate and supply products or services to a market in economies despite an instable political environment, the establishment of a stable policy and regulatory environment is likely to generate more support for the transition to a more energy efficient economy. A stable environment can help attract new investment, organisations (including start-ups) and innovation while it can also generate ‘trust’ for the government. A major reason as to why Germany has embarked on such a large scale transition to renewable energy is due to its stable policy and regulatory environment.

While the government is not immune to policy criticisms, policy makers and regulators in Germany are actively encouraging citizens to generate their energy needs through renewable energy sources rather than fossil fuels (although these still do represent a large component of Germany’s overall energy mix). Different incentives, whether direct from the government or through renewable energy companies and operators, have been developed and provided to speed up the transition.

Such a stable environment remains a challenge for many developing countries. One exception has been the creation of the Renewable Energy Independent Power Procurement Programme (REIPPP) implemented by the South African government. Through this programme, independent power providers enter into a public private partnership with the government, and are licensed to develop renewable energy that can be fed into the national grid for an agreed price. Started in August 2011 this programme has been so successful that it has been described by one investor as being “the most successful public-private partnership in Africa in the last 20 years.”

It is evident that both Germany and the rest of the world have a long way to go to fully transition to a more energy efficient economy. Great progress has been made, more is expected, and innovation in the sector will continue with pace. The Paris Climate Change Agreement of December 2015 also provides more hope. Panel discussions like these enable progress, findings, learnings as well as challenges to be shared. Although focused on the German case study many such findings, learning and lessons can be applied to other countries and continents.

Image courtesy of Flickr. Originally published by S&S on March 18, 2016.


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