Germany Leads Way on Renewables, Sets 45% Target by 2030
In July, Germany’s Ministry for the Environment, Nature Conservation, and Nuclear Safety released a draft progress report on the country’s Renewable Energy Sources Act. The Act, adopted in 2000, establishes an advanced “feed-in tariff” in Germany, enabling any company or individual who meets the technical and legal requirements to sell renewable electricity into the power grid for a guaranteed, long-term price for each kilowatt-hour sold. “The Renewable Energy Sources Act is the most important and successful instrument to promote the expansion of renewable energies in the electricity sector,” the report notes.
The report’s findings indicate significant advances in Germany’s renewables sector, including:
- The share of electricity from renewable energy sources nationwide has increased from 6.3 percent in 2000 to 12 percent in 2006.
- The Act resulted in the avoidance of 45 million tons of carbon dioxide (CO2) emissions in 2006, up from 37 million tons avoided in 2005.
- All renewable energy used in Germany—for electricity, heat, and transport fuel—avoided the release of more than 100 million tons of CO2 in 2006.
- More than 9 billion euros (US$12.7 billion*) was invested in new renewable energy installations in Germany in 2006.
- Approximately 240,000 people in Germany were employed in the renewable energy sector in 2006, representing a 40-percent increase over 2004. More than half of these jobs were created by the Renewable Energy Sources Act.
The report also finds that the net economic benefits of renewable electricity in Germany amount to about 6 billion euro ($8.5 billion) per year. While renewable electricity costs the nation’s consumers an estimated $3.3 billion euros ($4.7 billion) annually in differential costs (the cost premium of renewable over conventional power) and the provision of energy balancing (balancing electricity generation and demand), the government estimates that its benefits are far higher. The economic benefits of renewable energy totaled more than 9 billion euro ($12.7 billion) in 2006, including fuel-import savings of 0.9 billion euro ($1.27 billion), avoided environmental and health damages worth approximately 3.4 billion euro ($4.8 billion), and a decline in wholesale electricity prices amounting to 5 billion euro ($7 billion).
By some estimates, renewables will provide about 14 percent of Germany’s gross electricity consumption by the end of this year, well ahead of official targets for 2010. As a result of this success, in July the German government increased its targets for renewable energy to 27 percent of electricity by 2020 (up from 20 percent) and at least 45 percent by 2030. Germany’s success with the feed-in law has also prompted several other countries around the world to adopt advanced feed-in laws. Just last month, a Michigan legislator was the first to introduce a true feed-in law in the United States.
*All conversions use Euro to US Dollar exchange rate as of late October 2007.
Janet L. Sawin is a senior researcher and the director of the Energy and Climate Change Program at the Worldwatch Institute.
For more information: Worldwatch Paper #169: Mainstreaming Renewable Energy in the 21st Century National Policy Instruments, a background paper for the International Conference for Renewable Energies, June 2004 Wind-Works website World Future Council website on feed-in tariffs (available in early November 2007)