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Energy Concept

for an Environmentally Sound, Reliable and Affordable Energy Supply

(abstract)

28. Sep. 2010

 

 

The purpose of the Energy Concept

 

Securing a reliable, economically viable and environmentally sound energy supply is one of the great challenges of the 21st century. A core element of this is the implementation of the pivotal political objectives for our future energy system: Germany is to become one of the most energy-efficient and greenest economies in the world while enjoying competitive energy prices and a high level of prosperity. At the same time, a high level of energy security, effective environmental and climate protection and the provision of an economically viable energy supply are necessary for Germany to remain a competitive industrial base in the long term. We want to strengthen competition and market orientation on the energy markets, which will enable us to secure sustainable economic prosperity, jobs for the future, innovation and the modernisation of our country. The challenges of sustainable energy provision derive in part from long-term global trends. The world’s rising demand for energy will lead in the long term to a pronounced increase in energy prices. Our country’s dependence on energy imports would also continue to increase. Energy consumption currently causes 80 % of greenhouse gas emissions. For these reasons, our present energy supply structures will have to be radically transformed in the medium to long term if we are to achieve energy security, value for money and the targets set by our climate protection policy. We will set the course so that the huge potential for innovation, growth and employment can be tapped as we revamp our energy system.

 

 

Long-term strategy for future energy supply

 

In this Energy Concept, the German government has formulated guidelines for an environmentally sound, reliable and affordable energy supply and, for the first time, mapped a road to the age of renewable energy. The Concept is about designing and implementing a long-term overall strategy for the period up to the year 2050. Our aim is to provide long-term orientation while at the same time preserving the flexibility required for new technical and economic developments. Renewable energy sources are to account for the biggest share in this future energy mix. This energy mix will be dynamic, as conventional energy sources are steadily replaced by renewables. Nuclear energy is a bridging technology on this road. We are aiming for a market-oriented energy policy that is free of ideology and open to all technologies, embracing all paths of use for power, heat and transport.

 

Formulating an integrated, all-round strategy will be decisive. When it comes to electricity, for example, the expansion of renewable energies must be combined with enhanced energy efficiency, the expansion of grids and the construction of new storage facilities.

For buildings, implementing efficiency measures, in particular, has enormous potential. Only if this is fully tapped can the use of renewable energies for heating realise its full effect.

 

As the share of renewable energies increases, the trends in energy costs depend crucially on cost-efficient expansion. In this light, the German government aims both to achieve the expansion targets for renewables and to step up the pressure for innovation and lower costs even further. This is the only way that the sectors concerned can remain internationally competitive and costs to consumers can be contained.

 

The German government submits this Energy Concept having considered the scientific conclusions from the energy scenarios and on the basis of the targets it has defined. We describe what needs to happen in all major fields to ensure an economically viable, secure and environmentally sound energy supply – for industry and for consumers in Germany. The measures outlined here are being implemented rapidly within a continuous process. In this way, we are making an important contribution towards establishing a clear and dependable framework for industry and consumers.

 

 

Climate protection targets

 

Implementing the long-term strategy outlined above and meeting the German government’s targets requires a development path provides orientation to everyone concerned. The aim is not a precision landing. That would not be compatible with the highly diverse economic and technical developments which can be expected. Instead, the development path will send signals to the general public and to the various sectors about whether we are on track to reach our goals in the course of actual events.

 

In line with the coalition agreement, greenhouse gas emissions are to be cut by 40% by 2020, and the industrial nations have agreed to reduce them by at least 80% by 2050, with 1990 being the base year for both measurements. To achieve that reduction in greenhouse gas emissions by 2050, the development path will have to mean: a 55 % reduction by 2030, a 70 % reduction by 2040 and an 80-95 % reduction by 2050. By 2020 renewable energies are to account for 18 % of gross final energy consumption. After that, the German government will seek to make renewable energies account for the following proportion of gross final energy consumption: 30 % by 2030, 45 % by 2040 and 60 % by 2050. By 2020 electricity generated from renewable energy sources is to account for 35 % of gross electricity consumption. Following this, the German government will seek to increase the proportion of gross electricity consumption contributed by electricity from renewable energy sources to: 50 % by 2030, 65 % by 2040 and 80 % by 2050.

 

By 2020 primary energy consumption is to be 20 % lower than in 2008, and 50 % lower by 2050. This calls for an annual average gain in energy productivity of 2.1 %, based on final energy consumption. Compared with 2008, we seek to cut electricity consumption by around 10 % by 2020 and 25 % by 2050. The building renovation rate will need to double from the current figure of less than 1 % a year to 2 % of the total building stock. In the transport sector, final energy consumption is to fall by about 10 % by 2020 and by about 40 % by 2050, the baseline in this case being 2005.

 

The German government will use scientifically tested monitoring to determine whether actual progress is within the corridor marked out by the above development path and to what extent action needs to be taken. This monitoring, undertaken every three years on behalf of the government, is to be performed using a transparent procedure that remains to be established, and the outcomes will be discussed with all stakeholders. The monitoring strategy to be developed is intended to ascertain whether we are on track to reach our targets. Affordability and cost efficiency will be included as factors. A further aim will be to identify existing barriers and changing conditions and, where appropriate, to formulate any additional measures that may be required. The monitoring

results will be published.

 

 

Key findings from the scenarios

 

On behalf of the German government, external experts drew up a number of scenarios for the Energy Concept to indicate not only the challenges facing future energy policy but also solutions, policy measures and environmental and economic implications. The outcome shows that the path to the age of renewable energy is possible and passable. But it is likewise clear that there is still a substantial need for action in all fields and that the requisite conditions must still be created for a radical restructuring of the energy supply.

 

The findings of these scenarios are not forecasts. It would be more accurate to regard these scenarios as rough route maps or as a compass which, if certain conditions are met, can signpost the way to the destination and describe essential action. All these scenarios assume that additional investment will be required up to 2050 in order for the ambitious climate protection targets to be achieved. The expected volume of investment is in the order of magnitude of some 20 billion euros a year. These investments will, however, lead to lower energy imports and higher savings in terms of energy costs. Additionally, they will reinforce the leading position of German companies in the field of environmental and energy technologies.

 

Building renovation will be a central focus. In this field, it is vital to more or less double the current rate of renovation. At the same time, according to the scenario calculations, extending the operating lives of nuclear power plants will lower electricity prices. In the broader view, this means that the investments additionally required will exert a positive impact on growth and employment, and the experts estimate that the extended operating lives will enhance this effect.

 

The energy scenarios have also shown that in 2050 wind energy will play a key role in electricity generation. This calls for a massive expansion of onshore and offshore wind power capacity. If the growing proportion of renewable energy is to be integrated effectively, it is crucial for the expansion of German and European grids to follow closely. Europeanisation and cost optimisation are key drivers in a macroeconomic assessment of changes in the electricity market. Germany’s role in a European electricity market will entail considerable imports of electricity, but at certain times considerable exports as well. The scenarios assume that on grounds of cost efficiency Germany will import a substantial share of its electricity requirement in 2050. The extent to which Germany remains a base for electricity generation will depend largely on the framework conditions. We will design these to make use of the available potential for innovation, growth and employment as the energy supply is restructured, and to secure the highest possible level of national value-added in the energy sectors at competitive prices in the long term.

 

Drawing on these scenarios, the measures below describe what needs to be done in all major fields of action (electricity, heat and transport) so that we can ensure an energy supply that is both environmentally sound and at the same time economically viable and secure in the long run, in the interests of industry and consumers alike. The German government is hereby creating a reliable framework for investments by industry and by private households.

 

The Energy Concept is in line with our guiding principle of utilising modes of financing that ensure fairness between generations. Future-oriented and sustainable energy supply and use is possible only if we take action to ensure the necessary financial leeway by reducing new borrowing in a step-by-step process over the coming years and placing our public finances on a solid and viable basis for the long term. Objectives of energy, climate and budget policy must therefore be harmonised. To implement the Energy Concept, with its long-term orientation, a new special “energy and climate fund” will be established for the additional funding required, with an economic plan being drawn up each year. Payments by power plant operators will make a fundamental contribution to this fund. From 2013, this will be supplemented by the additional revenues from auctioning emission allowances that exceed the sums already specified in the framework of financial planning. Furthermore, the relevant budget allocations will also apply.

 

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