Germany’s 2022 renewables and efficiency reforms
2022 is the year of energy reform in Germany, the federal coalition government of Social Democrats (SPD), Green Party and Liberal Democrats (FDP) pledged when it took over in late 2021. Its aim was to accelerate renewables growth, the hydrogen ramp-up, the decarbonisation of the heating and transport systems and power grid expansion. By the end of 2022, most of the necessary legal changes will be enacted so that the following three years would start to show how these changes make a “physical” difference, which the government’s performance can be measured against, the climate and economy minister said in early June 2022. The reforms are part of a more comprehensive “climate action programme” (Klimaschutz-Sofortprogramm) that the government aims to present before the end of 2022.
The economy and climate ministry (BMWK), which is in charge of most of the new legislation, announced in January 2022 in an initial stock take of the energy transition that Germany faced a drastic backlog in emission reduction efforts and was headed for a massive climate target miss of 15 percent in 2030 if no new measures were implemented. A month later, the ministry presented the first plan for its legislative schedule, saying that it would tackle the various areas needed to accelerate renewables growth etc. in two large packages – one before Easter (Easter Package) and one in the summer (Summer Package), both sometimes called the “planning acceleration packages” or “emergency programme.” Parliament adopted the Easter package in July, and the government later split up the summer package into several individual reform efforts.
Info-Box: Germany’s climate targets and emissions
Germany aims to become greenhouse gas neutral by 2045. It has set the preliminary targets of cutting emissions by at least 65 percent by 2030 compared to 1990 levels, and 88 percent by 2040.
Compared to 1990, emissions in Germany have fallen by 38.7 percent in 2021. In 2020, the drop was just under 41 percent. Germany’s greenhouse gas emissions increased by 4.5 percent between 2020 and 2021 in an expected rebound during the economic revival after the pandemic.
Apart from the energy sector, where emissions have fallen considerably since 2010 thanks to renewables deployment, the other sectors are more or less stagnating. According to the national Climate Action Law, every sector has decreasing emission reduction targets that it has to meet every year. In 2021, the transport and buildings sectors did not achieve their annual reduction target.
The following are the major elements of the legislative packages proposed by the government, and their status in the legislative process:
Relief for power consumers: abolishing the renewables levy
(Bundestag decided act to change EEG on 28 April, Bundesrat agreed on 20 May)
- Among the first measures to be introduced, the federal parliament has already changed the Renewable Energy Act (EEG) and abolished the renewables surcharge that consumers pay on the power price. Planned for 2023, the government moved the end of the surcharge forward to 1 July 2022. While it was originally meant to lower electricity prices to incentivise consumers to switch to electric cars and heating systems, it is now mainly going to work as a relief measure for consumers suffering under high energy prices
ACCELERATE RENEWABLES BUILDOUT
Renewable Energy Act (EEG): higher buildout targets and tenders
(The Bundestag decided act to change EEG on 7 July, Bundesrat agreed on 8 July)
- Reform of EEG intends to align renewables expansion within the power sector with the goal of limiting global warming to 1.5°C.
- 2030 target: share of renewables in power consumption to reach at least 80 percent.
- Germany aims to roughly double its onshore wind capacity to 115 gigawatts (GW) by 2030 (160 GW 2040), meaning annual capacity additions will have to reach 10 GW as of 2025.
- New Solar PV installations will total 22 GW per year as of 2026 to achieve a total capacity of 215 GW by 2030 (400 GW 2040), up from about 60 GW in 2021.
- Higher feed-in tariffs for rooftop solar power installations to incentivise expansion.
- Introduces the principle that the use of renewable energies is of overriding public interest and will be given priority over other concerns (e.g. species protection) until greenhouse gas neutrality is achieved.
- To increase public acceptance, citizen-led energy initiatives will be exempt from participating in the tender scheme (capacity limits: 18 MW wind, 6 MW solar). It will be made easier for local communities to benefit financially from wind parks and ground-mounted solar PV nearby.
Renewable Energy Act (EEG): more renewable power for the winter
(Bundestag decided act to change EEG on 30 September, Bundesrat agreed on 7 October)
- In a second reform, the government aimed to make more renewable energy available in the short term. It allowed higher capacities for certain solar parks taking part in auctions in 2023 (instead of a proposed “special crisis” solar auction of 1,500 MW in January), and introduced rules to help produce more electricity from solar PV, and biogas facilities in 2022 and 2023
Onshore wind power laws: 2 percent target & distance rules
(Bundestag decided act for laws on 7 July, Bundesrat agreed on 8 July)
- Law on land for wind energy needs prescribed targets for each federal state to ensure 2 percent of Germany’s surface area will be reserved for onshore wind power by 2032 (more than twice the area currently designated).
- Germany's 13 larger states must designate 1.1-1.8 percent of their surface area to onshore wind power by 2027. By 2032, they must reach their respective targets of 1.8-2.2 percent.
- The country's three city states (Berlin, Hamburg and Bremen) must use 0.5 percent of their area for wind power by 2032 (0.25% by 2027).
- Depending on their wind conditions and the size of their nature protection areas, certain states will only have to reach slightly less than the 2 percent share, while others must achieve slightly more. States can make deals among each other to fulfil their obligations.
- The minimum distance rules between wind turbines and residential areas that currently stop designating more area to wind power in several German states will be allowed to remain in force, but only if the state fulfils its contribution to national wind power buildout targets.
- Repowering old wind turbines, i.e. replacing them with powerful new models, is made easier by changes to the Buildings Act.
More onshore wind power
- To increase wind power production over the winter 2022/2023, lawmakers allowed operators – for a limited period until 31 March 2023 – to exceed limit values for protection against noise and shadow impact. This enables them to generate more electricity, especially during the night.
(Bundestag decided act on 30 September, Bundesrat agreed on 7 October)
- Following an agreement between the economy and transport ministries from April 2022, the German air navigation service provider DFS is reducing the size of its protected areas around omnidirectional radio beacons to make space for more wind turbines.
Offshore wind power law
(Bundestag decided act to change law on 7 July)
- Offshore wind power capacity is increased to reach a minimum of 30 GW by 2030, 40 GW by 2035 and 70 GW by 2045 (up from almost 8 GW in 2022).
- Tenders will amount to 8,000-9,000 MW annually in 2023/2024 and then decrease gradually to about 4,000 MW from 2027.
Change to species protection rules to allow for more wind energy utilisation
(Bundestag decided act to change law on 7 July, Bundesrat on 8 July)
- One of the major obstacles to wind power development in recent years has been the drawn-out planning procedure (up to 5-8 years) that delayed the addition of new capacity and deterred investors. The reasons for this included the wide range of rules on species protection around new constructions (i.e. wind turbines). The government wants to reduce the permit procedure process to 2 – 3 years during the current legislative period.
- The BMWK together with the environment ministry has presented a compromise that aims to reconcile bird protection and wind energy expansion by making changes to the Federal Nature Conservation Act (Bundesnaturschutzgesetz) and other legislation.
- Parliament decided on the proposals, including the introduction of a set of nationwide legal standards for the assessment of risks of bird collision with wind turbines, to make it easier to repower existing sites and by allowing wind parks in landscape protection areas. (Landschaftsschutzgebiete)
Building Code – Facilitating renewable installations in former open pit mines, hydrogen installations
(Government proposed, Bundestag debates)
- The government proposed rules that favour hydrogen production near wind parks, and would allow states to easily install renewables facilities on former open pit mines.
Speeding up planning and permit procedures
(Government aimed to propose in autumn, but coordination among ministries delayed the process)
- The government aims to present a “comprehensive acceleration package” which will focus on administrative processes, digitalisation and staffing with regard to approval and planning procedures.
- Chancellor Scholz together with government heads of the federal states aim to agree a “pact to speed up planning, permit and implementation” on 8 December.
Acceleration of grid expansion
(Bundestag decided act to change law on 24 June, Bundesrat on 8 July)
- The “Easter Package” also includes changes to grid planning at the federal level. In general, all future power network planning is to be undertaken to achieve a climate-neutral grid in the most efficient way possible, and to ensure that the grid will serve the needs of the renewable expansion.
- To make grid planning and building faster – Germany lags behind its grid expansion plans by several years – permit procedures are to be simplified and hurdles are to be lowered, e.g. by streamlining spatial planning and approval procedures by partially dispensing with federal sectoral planning and by publishing planning documents electronically (for stakeholder processes).
More changes for grid expansion
(Bundestag decided act on 30 September, Bundesrat agreed on 7 October)
- Lawmakers decided on several more pieces of legislation for reforms. Among other things, these allow the temporary increase in capacity utilisation of the extra-high voltage grid at short notice without prior approval, and made the construction and better utilisation of offshore connection lines easier.
EFFICIENCY MEASURES
New energy efficiency law
(Ministries debate economy ministry proposal, cabinet could decide 21 December or earlier)
The government is set to propose an energy efficiency law. Energy efficiency targets are set for 2030, 2040 and 2045 for primary and final energy, which correspond with the requirements of the current European Commission proposal for the amendment of the EU Energy Efficiency Directive. They are also compatible with the ambition level of the national climate protection law, reported Tagesspiegel Background. It also wrote that the cabinet is set to decide on a draft in December 2022.
Reform of the federal funding for efficient buildings (BEG)
- As a first step, the government has aligned the BEG with clear climate protection criteria and focussing on the existing building stock.
- From January 2023, a new programme for newly constructed buildings will follow.
Building Energy Act: Reform of the efficiency rules for new homes
(Bundestag decided act to change law on 7 July, Bundesrat on 8 July)
- From next year, the statutory minimum efficiency standard for new buildings will be raised to efficiency class EH 55, which means its primary energy needs must not exceed 55 percent of those of a reference building.
Presenting another programme for measures in the building sector on 13 July, the government said a further reform in 2023 would:
- raise the standard to EH 40 by 2025.
- stipulate that newly installed heating systems must be operated by at least 65 percent with renewable energy from January 2024.
Reform of the CO2 price on heating fuels – split between landlords and tenants
(Bundestag decided on 10 November)
- Tenants living in well-insulated homes in Germany will have to shoulder the lion’s share of their CO2 costs for heating, while landlords must cover most of the bill in inefficient buildings. Lawmakers have decided on a tiered cost-sharing system. Before landlords were able to pass on the carbon price on heating fuels fully to their tenants.
INDUSTRY
Carbon contracts for difference
(in preparation)
- The BMWK is preparing a funding guideline that starts a programme for Carbon Contracts for Difference (CCfD) for industry. This is to facilitate the introduction of climate-friendly processes in primary industries, to reduce their risks and operating costs, and improve efficiency. Reuters reported a draft at the end of November, which still needs to be discussed with other ministries
