Energy transition not on track: readjustments urgently needed
Date 2024.03.07
“The success of the energy transition is of paramount importance for Germany. Its goals are very ambitious. However, the Federal Government is not on track when it comes to electricity supply,” was the sobering assessment of our President Kay Scheller on the publication of a special report “The success of the energy transition is important for acceptance among the population, Germany as a business location and the achievement of climate protection targets”, Scheller added. “The Federal Government should take our audit findings as an opportunity to eliminate identified shortcomings.”
The energy transition is a Government's key project for the future. It is supposed not only to contribute to climate protection, but also to reduce Germany's dependence on fossil fuels imports.
The Government therefore considers the use of renewable energies to be in the overriding public interest. Having weighed other protected assets, it has prioritised expansion efforts until electricity generation is almost greenhouse gas-neutral.
We last reported on the failures of the then federal government in the energy transition in 2021. Since then, the risks in all areas of energy policy have intensified.
Security of supply: Government lags behind targets
Electricity generation from renewable energies is to be massively expanded. However, it is subject to daily, seasonal and weather-related fluctuations. It must hence be secured by backup power plants. In addition, the growing share of electricity from renewable energies needs to be transported to consumers. The Government must create reliable framework conditions so that the players involved make the necessary investments. However, Government is lagging behind its targets:
- In particular, the targets for the expansion of onshore wind energy will not be achieved in the foreseeable future. In 2023, the Federal Network Agency was only able to award contracts for half of the quantity stipulated by law.
- The Federal Ministry for Economic Affairs and Climate Action will probably not be able to keep to the schedule for the expansion of backup power plants.
- The urgently needed grid expansion is 6,000 kilometres and seven years behind schedule.
Affordability: High electricity prices as a risk
Very high electricity costs are already a burden on Germany as a business location and on private households.
The energy transition goes hand in hand with massive costs, and further price increases are likely. The expansion of the electricity grids alone will require investments of more than €460 billion by 2045 (more than four times as much as in the period from 2007 to 2023).
Different from prior procedures, the Government must clearly state the system-related costs of the energy transition. Plus, it must ultimately define what it means by an affordable electricity supply.
Environmental compatibility: important data not available
The expansion of renewable energies is of paramount importance for a greenhouse gas-neutral energy supply. At the same time, it is associated with negative impacts on the environment. Scarce land and resources are utilised and biodiversity is impaired.
The Government cannot guarantee that the energy transition will have as little impact on the environment as possible. This is because there is insufficient or no data available for many of the environmental impacts caused by the energy transition.
The Government must ensure that the energy transition takes sufficient account of the environmental interests requiring protection. To this end, it must swiftly introduce an effective target and monitoring system for environmental compatibility. This is necessary in order to identify undesirable effects of the energy transition on individual protected assets at an early stage and to be able to take appropriate countermeasures.
More information on our audit findings and recommendations can be found in our special report to the two houses of German Parliament and the Federal Government. Please note: The report is only available in German.