Germany reaffirms 2030 renewable targets but highlights slowing rooftop solar growth and possible missed wind goals
New subsidy models, like CfDs and spatial planning tools, aim at efficient renewable integration
Energy transition success depends on pragmatic planning, grid expansion, flexibility, hydrogen ramp-up, and technological diversity, according to the BMWE report
The German Federal Ministry for Economic Affairs and Energy (BMWE) has released its much-anticipated energy transition monitoring report. It reaffirms the 2030 target of 80% renewables and states that expanding photovoltaics, wind, and other renewable sources remains important, but calls for an ‘honest assessment’.
The report, titled “Energy Transition. Efficient. Make it Happen.” (or “Energiewende. Effizient. Machen.” in German), was prepared by BET Consulting GmbH (BET) and the Energy Economics Institute at the University of Cologne (EWI) on behalf of the BMWE.
For solar PV, the country’s 215 GW target for 2030 remains within reach, provided there are no fundamental changes in the implementation requirements, such as land availability or economic conditions. However, analysts see the expansion momentum slowing down in the rooftop solar segment of late, which could impact target achievement. Onshore and offshore wind targets of 115 GW and 30 GW are likely to be missed.
It expects the country’s electricity demand to likely remain within 580 TWh and 700 TWh, with large consumption sectors being industry, building, and transport.
The government has proposed to end fixed feed-in-tariffs (FIT) and payments at negative prices, while introducing contracts for difference (CfD) or clawback mechanisms and mandatory direct marketing for new plants, according to an initial assessment of the report’s recommendations by Aurora Energy Research.
“The new CfD subsidy scheme focuses on better market integration, potentially shifting more costs to renewables,” according to Claudia Günther of Aurora Energy Research.
Report writers also recommend that renewable deployment and storage be aligned with grid needs using spatial planning tools. Favorable sites will benefit from cheaper, faster connections, while investors in congested areas will face higher costs, adds Aurora.
The complete BMWE report is available on its website.
Following the release of the report, Katherina Reiche, Germany’s Federal Minister for Economic Affairs and Energy, proposed 10 key measures that she says promote business and competition. They are:
1. Honest needs assessment and planning realism
2. Promote renewable energies in a market- and system-friendly manner
3. Synchronously expand grids, renewable energies, and decentralized flexibility
4. Rapidly implement a technology-open capacity market
5. Promote flexibility and digitalization of the electricity system
6. Maintain and expand uniform and liquid energy markets
7. Review funding regimes, systematically reduce subsidies
8. Drive forward research and promote innovation
9. Promote hydrogen ramp-up pragmatically, reduce overly complex requirements
10. Establish CCS / CCU as climate protection technology.
Reiche said that energy transition is at a crossroads and requires reliability, security of supply, affordability, and cost-effectiveness of the energy system for it to succeed, since safe, clean, and affordable energy can secure jobs and maintain competitiveness.
“We now need an honest assessment. The energy transition can only succeed with more pragmatism and realism. Energy policy decisions must not generate misinvestments or overregulation, but must focus on the market, technological diversity, and innovation. In this way, we create the basis for an energy transition that is not only climate-neutral, but also crisis-proof, economically viable, and reliable for everyone,” she stated, leaving a lot to interpretation.
In a LinkedIn post, German energy influencer Tim Meyer pointed out that the minister fails to provide an analysis of high energy prices. He questioned the absence of concrete steps for the government to create what it calls a technology-open capacity market by 2027, and no mention of the acceleration of the electrification of mobility, heating, and industry, which are significant markers of electricity consumption. Meyer, however, lauds the idea of making new power plants potentially hydrogen-capable.
Germany’s solar PV association BSW Solar said, “New, rapidly growing electricity consumers such as heat pumps, electric vehicles, AI data centers, and air conditioning units will significantly increase electricity demand in the future. Against this backdrop, the federal government must now massively advance the expansion of renewable energies and storage technologies.”
It also stressed that the government must refrain from capping subsidies for new solar roofs as proposed by Reiche earlier, rather draw the right conclusions from the report, such as offer incentives for flexibility and improved grid utilization (see Germany Mulling End To Subsidies For Small-Scale Solar Systems).