Energy Policy

If we are to remain internationally competitive we must all ensure that the third “energy transition” (or Energiewende) within 11 years is a success. For German industry, as well as citizens, insecurity regarding long-term planning is the worst case scenario.

The energy transition will only be a success if all levels of government and all sections in society work together. While the federal, state and municipal levels of government have a duty to ensure that the correct policies are formed which guarantee both affordability and security, members of the business community and society as a whole must cooperate with each other regarding the necessary upgrading and expansion of essential infrastructure. In light of these challenges the economic council’s expert commission on energy has set up a working group on energy infrastructure. The aim of this group is to provide a constructive critique of the government’s implementation of the energy transition.

Key demands of the Economic Council include:

Less state interference in the setting of electricity prices

Today, the average annual electricity bill for a three person household in Germany adds up to around 878 Euro, of which 400 Euro end up in the hands of the state. The total amount of taxes paid on energy consumption increased by 800 % between 1998 and 2011. This financial burden needs to be reduced. Otherwise, the competitiveness of German firms is put at risk.

Renewable energy sources should be brought to the open market as soon as possible

Far from strengthening the expansion of renewable sources of energy, the excessive amount of subsidies granted in recent years has weakened the renewable energy sector substantially. The overriding goal should be to support in particular those methods of renewable energy production which have proven to be the most cost efficient. This will not only ease the financial burden on consumers but also revitalize the whole renewable energy industry. To ensure that the renewable energy sector is fit for the future and to avoid price contortions within the common European market, renewable energy sources need to be brought onto the open market. Furthermore, in the long term an EU-wide standard for renewable energy subsidies must be introduced.

Expansion of existing energy infrastructure requires the support of all stakeholders

To guarantee a secure energy supply for consumers it is essential that barriers to investment in the expansion of the grid are removed. Round table talks at regional level involving all stakeholders are an integral part of the process to convince both politicians and citizens of the necessity of electricity grid expansion. In order to remove potential bottlenecks in the expansion of the grid, the planning permission process should be harmonized so as to apply to all federal states equally. A license should be granted for an initial five year period to allow for a certain amount of long term planning. Energy storage devices should be exempted from system usage charges.