Germany’s biggest energy companies call for energy transition “restart” and fewer rules
Clean Energy Wire
The German energy transition requires a “restart” as the country is on the verge of establishing a climate neutral energy system and renewables already account for about 60 percent of electricity production, the two leading energy companies RWE and E.ON have said in a joint statement. “The long stretch of the road towards climate neutrality cannot be negotiated with an energy transition approach based on old assumptions,” the companies said.
The country had relied too much on “top-down” measures and “fell in love with plans” and regulations to achieve its energy transition, thereby losing sight of “the greater good,” the companies argued. The energy transition had created more than 15,000 legal norms in the past 25 years that would increasingly undermine efforts to achieve the “energy policy target triangle of having secure, affordable and climate neutral energy,” they wrote.
An “energy transition 2.0” instead should factor in peoples’ concerns about costs and give them greater freedom in implementing decarbonisation measures. While most people support the goal of achieving climate neutrality, they equally have a distaste for “administrative paternalism,” RWE and E.ON said. What the country now needs to get its transition on track again is “not a chainsaw” but a trimmed-down rulebook that spells out targets without prescribing ways to achieve them, they argued.
The European Emissions Trading System (ETS) should function as the “central, overarching market mechanism” for reaching decarbonisation targets, the companies added. Likewise, the country should reform its energy market design away from fixed remuneration for new renewable power installations; ensure greater flexibility in the grid to manage supply and demand; and aim for a "pragmatic" launch of the national hydrogen infrastructure.
The companies led by CEOs Markus Krebber (RWE) and Leonhard Birnbaum (E.ON) said that the country’s energy system was on course for a costly “over-dimensioning” and that factors such as projected electricity demand and specific expansion targets for individual technologies should be reviewed to keep grid costs in check. A clear and realistic electrification scenario was needed for example in the transport, industry and heating sectors to decide which investments are needed and which hinge on certain electrification scenarios prevailing. “This will allow the country to adapt the further course on the basis of experiences gained by the early 2030s,” the companies said. Long-term climate targets should remain unaffected by these steps, they added.
