Germany has understood need to change economy’s structure amid energy transition – WEC

The advanced stage of Germany’s energy transition has led the country to understand that a broader change of economic structures is necessary to complete the transformation to a low-carbon society, the World Energy Council (WEC) says. In its World Energy Issues Monitor 2019, the WEC argues that the “overarching climate framework” under which the country has begun its roll-out of renewable energy sources, more efficient technology and electric mobility “has gradually evolved into a socio-economic topic” that now straddles almost all fields of policymaking. This is  illustrated by the strong focus on labour and economic development in Germany’s coal exit commission, the report says. Challenges for the country in 2019 include its increasingly fragmented political system, EU cohesion on power market design, and the development of electricity storage capacities. The WEC says that “energy leaders” have become less patient on critical issues, which means that the energy transition is still in full swing.

Besides Germany’s coal exit commission, the debate over the country’s planned Climate Action Law illustrates the impact of climate policy on the entire economy. The law’s first draft submitted by Social Democrat (SPD) environment minister Svenja Schulze has laid bare deep rifts between her ministry and those responsible for carbon-intensive sectors - meaning the economy and energy ministry, the transport ministry, and the agriculture ministry, all of which are led by ministers from the SPD’s conservative coalition partner, Chancellor Angela Merkel’s CDU/CSU alliance. The latter fear that tight sectoral emissions reduction goals would give the environment ministry too much sway over their own areas of competence.