Germany’s Next Energy Revolution
As governments the world over search for new energy ideas to curb per-capita carbon emissions down to sustainable levels, one European nation is perhaps coming up with more answers than most.
By Christoph Burger
GERMANY, HAVING ANNOUNCED its intention to close all of its nuclear power plants by 2022, is fully committed to radically transforming its energy system over the next decades. The goal have been clearly stated: renewable energy is envisioned to become the main source of electricity output. In 2011, the combination of all renewable energy sources already accounted for more than 20% of electricity supply, but this development comes – like any large-scale technical change – at a cost, and major investments in infrastructure and new technology are needed. So how can such a transition be managed without
over-burdening energy consumers financially? What models can be used that are not over-reliant on government subsidies, but that can stand on their own feet? And what lessons can the rest of Europe take from those charged with making it work? Decentralized energy generation will play a key role
in the transformation of the energy system: Residential producers like households, farmers, or small and medium enterprises are not only providing substantial financial resources required for a successful transition – they also use the energy transformation as a means for personal empowerment and social involvement on the community level. My colleagues and I at the European School of Management and Technology (ESMT) in Berlin have spent the last months talking to key stakeholders, entrepreneurs and managers who are currently engaged in working toward a decentralized energy supply and have asked them about how they see the system evolving. Their answers not only sketch a potential trajectory of the German supply structure, but also demonstrate how energy systems in other European countries, including the United Kingdom, may evolve, and how the traditional model of a strict separation of supply and demand may dilute over the decades to come. The key point of Germany’s energy transformation is
that this is not destined to be a ‘one bang revolution’, but a revolution of a million small stings. In other words, multiple, disparate agents will contribute towards starting a snowball effect that will overhaul the existing supply structure and permanently alter
the competitive energy system landscape. Innovative start-ups are creating genuinely new and profitable business models specifically designed towards, and benefitting from, liberalized electricity markets. Over 90 German ‘bioenergy villages’ are currently engaged in the process of establishing largely autonomous island systems. And companies from other industries are exploring opportunities in the new energy world.
... this is not destined to be a ‘one
bang revolution’, but a revolution of a million small stings ...
For example, Volkswagen has entered the
manufacturing of decentralized technologies at mass production levels. Most importantly, more than a million private households and small-scale investors are becoming producers of energy with photovoltaic panels on their roofs and locally-financed wind rotors on nearby hills and in the plains of Northern Germany. Even the four major German energy incumbents
have joined the decentralized movement. German energy giant E.ON is establishing a new business unit responsible for looking at new initiatives in distributed energy that the company can use commercially.
December 2012 75
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