Habeck's Easter package - Are we experiencing the rebirth of the energy transition?

If Easter is the celebration of the resurrection of Jesus Christ from the dead, then the timing for the “great renewables package” could not be more promising. Because, if I may use this analogy, the energy transition in this country is also in urgent need of a revival. Whether the Easter Bunny a.k.a. Federal Minister of Economics Habeck will succeed in breathing new life into the expansion of renewable energies with the amendment of the EEG will soon become apparent. What is indisputable is that their momentum must be accelerated to such an extent in the face of the energy and security policy situation in Europe that we can free ourselves not only from Putin’s dependence but also from the existential climate crisis So what is in this Easter package for renewables? Are the measures enough to revive the energy transition?

by Martin Betzold | Reading time 6 minutes

These are new sounds from the Ministry of Economics. Until not so long ago, the haute couture of federal politics would only have spoken “of renewable energies as a location factor” at gunpoint. In the face of the Russian invasion of Ukraine, we realise that we have been all too happy to see globalisation in Germany from the perspective of division of labour and cost optimisation. The dependencies in this system have been glossed over by returns and profits. This is especially true for our energy supply, Nordstream 2 sends its regards.

Renewable energies are currently undergoing a transformation from a cost factor to a locational advantage.

But perspectives are changing. The low-cost supply of green electricity is said to have been a key criterion for the location of Intel’s new chip factory in Magdeburg. Whoever has green electricity owns the future, that’s how you can see it if your name isn’t Markus Söder. Independence and security of supply are the buzzwords of the day. Renewable energies are currently undergoing a transformation from a cost factor to a locational advantage. In order to use the locational advantage of cheap green electricity from domestic production and, incidentally, to seize the last chance to save the planet, we have to increase the expansion rate of wind farms by a factor of 2 and that of solar power plants by a factor of 4.

“If we want to limit global warming to 1.5 degrees Celsius, it’s now or never,” said Jim Skea, co-chair of the IPCC Working Group III of the Intergovernmental Panel on Climate Change, which presented a new partial report a few days ago. “Without immediate and serious emission reductions in all sectors, it becomes impossible.” One of the most effective ways to reduce emissions is to invest in renewable energies.

Inexpensive, environmentally friendly and quickly scalable

Renewable energies are our greatest chance to solve the climate and energy crisis. This is the guideline for Habeck’s Easter package, otherwise there can be no talk of a rebirth of the energy transition and a real perspective for the future on this planet.

So is the bundle of measures in the planned amendment to the Renewable Energy Sources Act (EEG) sufficient to build around 100 gigawatts of wind and 150 gigawatts of solar power plants by 2030?
No, say industry associations such as the German Renewable Energy Federation (BEE). The planned market ramp-up of renewables can only succeed if the legislative package is improved.

“The present draft bill of the EEG amendment is insufficient to unleash renewable energies. In view of new political realities, the draft must also be re-evaluated in the light of energy sovereignty and security of supply,” said the BEE in a statement on the draft bill of the Federal Ministry for Economic Affairs and Climate Protection.
The industry can and will, but without the appropriate framework conditions, the energy transition cannot be achieved with the necessary urgency.

In practice, this means above all speeding up approval procedures. At present, it takes up to 10 years to develop a wind farm from the green light to the point where it is ready for construction and to have it approved. We will no longer have this time in the future. German thoroughness, especially with regard to nature conservation issues, is delaying project development to an extent that is out of all proportion to the urgency required. Unfortunately. Politicians also seem to have recognised this. Yesterday, the Ministry of Economics and the Ministry of the Environment defused the conflict between wind power and species protection. The proposed standardisation of the procedure for examining and approving wind turbines with a view to endangering birds will hopefully make it possible to speed up approvals for wind farms without neglecting species protection.

The fact is: the energy transition means nothing less than a massive restructuring of our infrastructure in the shortest possible time. This transformation away from a centralised, fossil energy system to decentralised renewable energy plants with fluctuating generation is an opportunity, if it is to be understood as such. In order for us to be able to use this opportunity, we need a regulatory framework. This must be designed in such a way that the market ramp-up of renewables can also take place.

EEG amendment must be improved: Energy transition now!

So what needs to change in Habeck’s Easter package to fulfil Germany’s contribution to limiting global warming? Three Easter wishes for the resurrection of renewables to Robert Habeck and the traffic light coalition:

  1. Privileging renewables: The priority of renewables must finally be enshrined in law in the public interest and, more recently, also in terms of national security. This will speed up tough approval procedures, which are a major brake.
  2. Acceleration of expansion paths: Renewable electricity generation must be oriented towards real electricity consumption. To this end, the number of tenders must be increased significantly and innovation tenders must be made more attractive, especially for hybrid plants, i.e. the combination of green electricity plants and electricity storage.
  3. Climate-neutral electricity market design: The expansion of renewables, which is necessary for climate policy, can only be realised on an economic basis. The discontinuation of subsidies during periods of negative electricity prices must be compensated. This requires a transition from the current time-based subsidisation of green electricity plants over 20 years to a quantity-based subsidisation over the operating life of the plants. Only in this way can their economic viability be put on a secure footing.

Easter Bunny Habeck will be aware of these necessities. The question is whether he will be able to push through the necessary improvements to his Easter package with his coalition partners. The conditions for this are better than ever. Rarely has the pressure to act and, in the face of Russian war crimes, the sovereign’s willingness to act been greater than in these days. Easter 2022 could be the time for the paradigm shift in our energy supply. For real this time. Halleluja!