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Germany 2020 Energy Policy Review Germany 2020 Energy Policy Review INTERNATIONAL ENERGY AGENCY Germany 2020 Energy Policy Review Germany 2020 Energy Policy Review INTERNATIONAL ENERGY AGENCY The IEA examines IEA member IEA association the full spectrum countries: countries: of energy issues including oil, gas Australia Brazil and coal supply and Austria China demand, renewable Belgium India energy technologies, Canada Indonesia electricity markets, Czech Republic Morocco energy efficiency, Denmark Singapore access to energy, Estonia South Africa demand side Finland Thailand management and France much more. Through Germany its work, the IEA Greece advocates policies Hungary that will enhance Ireland the reliability, Italy affordability and Japan sustainability of Korea energy in its 30 Luxembourg member countries, Mexico 8 association Netherlands countries and New Zealand beyond. Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States The European Commission also participates in the work of the IEA Please note that this publication is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/t&c/ Source: IEA. All rights reserved. International Energy Agency Website: www.iea.org Foreword The International Energy Agency (IEA) has conducted in-depth peer reviews of its member countries’ energy policies since 1976. This process not only supports energy policy development, but also encourages the exchange of and learning from international best practices and experiences. In short, by seeing what has worked – or not – in the “real world”, these reviews help to identify policies that achieve their objectives and bring concrete results. Recently, the IEA has moved to modernise the reviews by focusing on FOREWORD some of the key energy challenges in today’s rapidly changing energy markets. Germany is an important and active member of the IEA. I am grateful to Peter Altmaier, Federal Minister for Economic Affairs and Energy, for his collaborative spirit and commitment to building a secure and sustainable energy future. Together, we co- organised the first Global Ministerial Conference on System Integration of Renewables in Berlin in October 2019. The event brought together government ministers, industry chief executives and other high-ranking officials from around the world to share best practices and innovative ideas to help fully grasp the opportunities of wind and solar energy. Since the IEA review of German energy policies in 2013, the Energiewende has remained the defining feature of the country’s energy landscape. In place for nearly a decade, the Energiewende is a major plan for transforming the German energy system, making it more efficient and supplied mainly by renewable energy sources. It aims to phase out electricity generation from nuclear power by the end of 2022. To date, the Energiewende is clearly visible in electricity generation, where it has been effective at increasing the share of renewable energy supply. Still, despite progress on lowering overall emissions, Germany is struggling to meet its near-term targets. This is in large part because of uneven progress across sectors, with notable challenges in transport and heating. Now, the government must refocus its efforts to achieve stronger emissions reductions in these other sectors. The IEA welcomes the recently adopted climate action plan, which includes a carbon price in the transport and heating sectors, as an important step in the right direction. Energy security remains a focus area for the IEA, and I am pleased to observe that Germany has maintained a high degree of oil, natural gas and electricity supply security. As the nuclear and coal phase-outs increase Germany’s reliance on natural gas, it will be increasingly important for the country to continue efforts to diversify its gas supply options, including through the import of liquefied natural gas. I strongly believe that both policy and regulatory reforms can move Germany towards a cost-efficient, equitable and sustainable path to meeting its highly ambitious energy transition goals. It is my hope that this report will help Germany as it undertakes this crucial endeavor. Dr Fatih Birol Executive Director International Energy Agency 3 ENERGY INSIGHTS 1. Executive summary .....................................................................................................11 Overview ............................................................................................................................11 Emissions targets ..............................................................................................................11 Electricity transition ............................................................................................................12 Beyond electricity ..............................................................................................................14 Energy security ..................................................................................................................15 Key recommendations: ......................................................................................................15 2. General energy policy .................................................................................................17 CONTENTS OF TABLE Country overview ...............................................................................................................17 Supply and demand ...........................................................................................................19 Institutions ..........................................................................................................................24 Energiewende ....................................................................................................................26 Pricing and taxation ...........................................................................................................31 Assessment .......................................................................................................................32 Recommendations .............................................................................................................35 ENERGY SYSTEM TRANSFORMATION 3. Energy and climate change ........................................................................................37 Overview ............................................................................................................................37 Energy-related CO2 emissions ..........................................................................................38 CO2 drivers and carbon intensity .......................................................................................40 Institutions ..........................................................................................................................41 Emissions reduction targets and policies ..........................................................................42 Focus area: Decarbonising heat and sector coupling .......................................................50 Adapting to climate change ...............................................................................................56 Assessment .......................................................................................................................57 Recommendations .............................................................................................................59 4. Energy efficiency .........................................................................................................63 5 TABLE OF CONTENTS Overview ............................................................................................................................63 Energy consumption by sector ..........................................................................................65 Institutions ..........................................................................................................................69 Energy efficiency policy .....................................................................................................69 Assessment .......................................................................................................................77 Recommendations .............................................................................................................80 5. Renewable energy .......................................................................................................80 Overview ............................................................................................................................83 Supply and demand ...........................................................................................................84 Institutions ..........................................................................................................................88 Policies and measures ......................................................................................................89 Assessment .................................................................................................................... 106 Recommendations .......................................................................................................... 109 6. Energy technology research, development and demonstration ......................... 113 Overview ........................................................................................................................
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