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Renewable energy sources are some of the most important sources of electricity for Germany, and the expansion of renewables is one of the central pillars in Germany's energy transition. Our energy supply is to become more climate-friendly, and is also to make us less dependent on imports of fossil fuels.
Germany’s electricity supply is becoming “greener” every year. The share of renewables in electricity consumption has steadily grown over the last few years – rising from around 6% in 2000 to around 38% in 2018. This means that the 35% target for 2020 was reached earlier than expected.
By 2025, 40-45% of electricity consumed in Germany is to derive from renewables. This is the aim set out in the Renewable Energy Sources Act.
The following diagram provides an overview of Germany’s electricity mix:
Renewables are also becoming more important with regard to heat supply. At present, they account for 13.9% of final energy consumption for heat and cooling. By 2020, this share is to reach 14%.
Energy sources that drive forward the energy transition
Wind and solar energy are the most important forms of renewables. Biomass and hydropower are also valuable building blocks in our energy system.
Solar energy: in photovoltaic installations, solar panels directly transform sunlight into electricity. New solar installations are among the most affordable renewables technologies. At the end of 2018, the number of PV installations stood at 1.6 million. These produced around 45 gigawatts of electricity, making PV the second largest source of renewable electricity after onshore wind energy, with an installed capacity of over 52 gigawatts.
In the heating sector, solar collectors use energy from the sun to generate heat for domestic hot water or industrial processes.
At present, wind energy is the driving force in expanding renewables. In 2018, onshore and offshore wind energy installations accounted for an installed capacity of 52.5 and 6.4 gigawatts respectively. In total, approximately 110 terawatt hours were generated by onshore (90.5 TWh) and offshore (19.5 TWh) installations. The share of wind energy in Germany's gross electricity consumption now stands at 18.6%. According to plans drafted by the Federal Government, offshore wind capacity is to reach 15 GW by 2030.
Biomass in solid, liquid and gaseous form is used for electricity and heat generation and for the production of biofuels. Biomass accounts for almost 23% of renewable electricity generation, 86% of the renewable energy in total heat and cooling consumption and 88% of the renewables in final energy consumption in the transport sector.
More information on the development of renewable energy can be found (in German) at www.erneuerbare-energien.de.
Since 3 July 2017, the new SMARD Information Platform (in German) has been providing information on the electricity market – almost in real time. This includes information on renewable energy sources. SMARD makes this data available in a form that is transparent, well-structured and easy-to-understand. This makes the platform a useful tool for different groups of users that are interested in following the energy transition and its progress. Experts can also make use of numerous tools for in-depth analysis.
Results of the auctions conducted pursuant to the Renewable Energy Sources Act
The results of the auctions for expanding wind power and photovoltaics conducted pursuant to the 2014 and 2017 Renewable Energy Sources Act show that the reforms have been a step in the right direction and are paving the way for making the energy transition a success. The average rates of funding awarded have fallen for almost all generation types. In the case of photovoltaics, for example, the auctions are resulting in significant falls in average funding levels for ground-mounted installations.
Infographics on the results of the auctions
Competitive auctions have a cost-reducing effect
Average funding awarded in the auctions for ground-mounted PV installations Enlarge
High realisation rates averaging around 95% for ground-mounted PV installations from the first five auction rounds show that almost all the projects awarded funding are actually built. Infographic as PDF (PDF, 128 KB)
In addition to the auctions focusing on one specific source of renewable energy, the 2017 Renewable Energy Sources Act also provided for the implementation of a pilot project where joint auctions for PV and onshore wind power capacity will be held between 2018 and 2020, resulting in a competition between different technologies. More information about how the level of funding will be determined can be found (in German) at Erneuerbare-Energien.de
Four key figures on renewable energy
29.0
per cent share
of renewables in gross electricity generation in Germany in 2016
31.5
per cent share
of renewables in Germany’s gross electricity consumption in 2016
11.9
per cent share
of wind power in electricity generation from renewable sources in 2016
4.33
ct/kWh average level of funding awarded
in the first round of auctions for ground-mounted PV installations under the 2017 Renewable Energy Sources Act (as a comparison: in first pilot auction round, average funding awarded was 9.17 ct/kWh)
2014 Renewable Energy Sources Act
Making the right choices
The Renewable Energy Sources Act (EEG), which entered into force in 2000, is a key driving force for the expansion of renewable energy in Germany. The 2014 revision of the Renewable Energy Sources Act was an important step towards setting the energy transition on a path to success.
The Renewable Energy Sources Act built a platform for the expansion of renewables, enabling them to become one of the mainstays of Germany’s power supply.
The figure in 2000 was only around six per cent. The Act had the aim of enabling young technologies such as wind and solar energy to enter the market with support provided by fixed tariffs and a purchase guarantee.
The 2014 revision of the Renewable Energy Sources Act
stipulated a binding expansion corridor
sharply reduced the costs via a concentration on the cheap technologies of wind power and photovoltaics
stipulated that new large-scale installations are responsible for marketing the electricity they generate (better integration into the electricity market)
halted the rapid rise in electricity prices
The price of electricity is a major factor in the level of competitiveness of energy-intensive industries facing international competition. These companies are covered by the special equalisation scheme, which in certain circumstances provides for a reduced EEG surcharge. Also, the Renewable Energy Sources Act grants self-suppliers and self-generators certain privileges under certain conditions. Find out more about the special equalisation scheme and self-suppliers.
The 2017 Renewable Energy Sources Act has ushered in the next phase of the energy transition: funding rates for renewable electricity are no longer fixed by government, but are basically determined via a competitive market-based auction scheme – a fundamental change in funding renewable energy.
The expansion of renewable energy continues to be one of the key pillars of the energy transition. The share of renewable energy is to be increased from its present level of around 32% up to 40-45% in 2025 and up to 65% in 2030 according to the coalition agreement. The next phase of the energy transition will focus on bringing about more competition, a continuous expansion with effective steering, restrictions on costs, stakeholder diversity and dovetailing with grid expansion.
Steering the expansion, limiting the costs and maintaining stakeholder diversity
The Renewable Energy Sources Act (EEG), which entered into force in 2000, is a key driving force for the expansion of renewable energy in Germany. The 2014 revision of the Renewable Energy Sources Act was an important step towards setting the energy transition on a path to success. Find out more about the Renewable Energy Sources Act and its 2014 revision here (in German).
The 2017 Renewable Energy Sources Act is currently the key instrument to achieve effective annual quantitative steering and to bring renewables closer to the market. Since 1 January 2017, the level of funding has been determined on the market by auction. The core aspects of the revised Renewable Energy Sources Act are outlined in this presentation (in German) (PDF, 552 KB). Further information can be found here (in German).
A package of measures is to ensure that the 2017 Renewable Energy Sources Act maintains stakeholder diversity. For example, simplified auction models have been introduced, and the conditions applying to citizens’ energy companies taking part in onshore wind auctions have been relaxed. Further to this, small PV installations of up to 750 kW are exempted from the auctions.
Importing renewables from other European Member States
Opening up renewable energy auctions to European Member States
The 2017 Renewable Energy Sources Act is anchoring the energy transition on a cross-border basis: auctions for funding for renewable energy are now to be opened up to other countries: 5% of new renewables capacity to be installed each year will be opened up to installations in other European Member States (approx. 300 megawatts/year). The cross-border auctions will take place in addition to the national auctions, which are only open to installations located in Germany.
In 2016, initial experience was gathered with Denmark by means of a pilot project on reciprocal opening of auctions for ground-mounted PV installations. The auctions held by the Federal Network Agency and the Danish energy agency were open to bidders with installations located in Germany or in Denmark. These were the first cross-border auctions in Europe.
Drawing on experience gained from this tender, further cross-border auctions are planned to be carried out in the future. Also, these cross-border auctions are to be extended to include the possibility to cooperate on onshore wind energy projects.
More than half our energy is used for heating and cooling purposes. If we want the energy transition to be successful, it is therefore crucial to also expand the use of renewable energy in the heating sector.
Renewables are taking on an ever more important role in the heating market. Between 2000 and 2016, the share of renewables in final energy consumption for heating and cooling tripled, rising from 4.4% to 13.4%.
Within the heat market, the use of renewable energies is regulated by the Renewable Energies Heat Act. Under this law, builders of new buildings are required to generate a percentage of their heating requirements from renewable sources of energy, to undertake certain compensatory measures such as installing additional insulation, or to use combined heat and power systems or district heating.
In addition to the Renewable Energies Heat Act, the Federal Government uses the Market Incentive Programme (MAP) to increase the proportion of heat generated from renewable sources. Under this programme, assistance is provided primarily for existing buildings to promote the use of renewable energy technology in the heat market, such as solar thermal installations, wood pellet heating systems and efficient heat pumps.
Renewables in transport
In the transport sector, biofuels like bioethanol, biodiesel and biogas have been helping to cover the energy supply and to mitigate climate change for several years now. In 2016, the share of final energy consumption in transport covered by renewable energy stood at 5.1%. The renewables in question consisted almost entirely of biofuels for cars, trucks, trains, ships and aircraft. But renewables are also becoming ever more important when it comes to powering more electric vehicles. Electric mobility is low-carbon mobility and helps to bring electricity from renewable sources, such as solar and wind energy, into the transport sector.
The Energy Export Initiative provides support for small and medium-sized companies in Germany’s energy sector, and helps them access new markets abroad.
The initiative targets companies that provide solutions around renewable energy, energy efficiency, smart grids and energy storage. The focus is also shifting to new technologies like power-to-gas and fuel cells. So why don’t you use this export initiative to boost your company’s exports? For more detailed information about the initiative and its various components and for an events calendar, please click here and visit the export initiative’s website.
