EWG Newsletter January 2024 – Energy Watch Group

This first newsletter in 2024 summarizes our view on the global and German pathways to achieve zero greenhouse gas emissions (“zero emissions”) and cool the planet back down – and where we intend to focus our work in 2024. The Energy Watch Group (EWG) has now expanded its capabilities and independence by evolving into its own non-profit legal entity.

The EWG is a non-profit climate change think tank and network: we accelerate action by

developing suitable goals, effective options and pragmatic policy recommendations at the global, national and local level and
engaging in dialog with decision-makers and the media on that basis.

Global news

The word is speeding towards the 1.5 ^oC threshold on a so far unchecked path: 2023 was the hottest year on record: 1.48 ^oC warmer than the pre-industrial average. Even the five year average – which levels out the current El Niño effect – puts us at 1.25 ^oC above the pre-industrial average. Further warming is being fueled by GHG emissions that are at a historic high. The lukewarm COP 28 commitment to “transition away” from fossil fuels have not raised the chances of a significant decline.

The good news is that renewables are now broadly recognized to not only be climate friendly but also the cheapest energy available to mankind (in transportation combined with electric vehicles and in building heating combined with heat pumps). That has greatly expanded the demand for and supply of renewable energies. Their growth is exponential and has consistently outpaced projections. Wind and PV each added some 50% more capacity in 2023 than 2022: if this exponential growth rate is maintained, staying within 2.0 ^oC global warming may yet be in reach. And contrary to expectations, production capacities for renewable energy technologies do not appear to be a limiting factor for the foreseeable future.

Now, the urgent course of action is to maintain this exponential growth rate until “zero” CO₂ emissions have been achieved. The robust, feasible and macroeconomically profitable paths to get there are already available. Prof. Dr. Mark Z. Jacobson, member auf die EWG Scientist Network, shows that impressively in his new book “No Miracles Needed”.

The key challenges to maintain this exponential growth rate are:

make the feasibility and profitability of the net zero path common knowledge that politics und media disseminate and affirm in their communication,
translate more of net zero’s financial advantages to society into financial advantages for citizens and businesses making the key investment and purchasing decisions – so as to turbocharge the market “pull” towards net zero,
avoid social unrest with the transformation, by compensating any relevant additional costs to the comparatively poor and by offsetting job losses in one sector with job creation in other sectors within each country,
maintain and build a strong domestic industrial base in renewable energy technologies while utilizing the significant Chinese production capacity in these sectors,
remove a myriad of regulations designed to keep the national energy systems locked into fossil fuels and utilities with large central power plants,
and, last not least, stop subsidies for fossil fuels (another 1-7 trillion USD or 1-7 US-cents/kWh in 2022) as well as investment in fossil fuels (1 trillion USD in 2023).

Achieving “zero emissions” prevents further heating of the earth but does not cool it down for centuries. Since global warming will exceed 1,5 ^oC and beyond, significant and long-term damages to nature, human health, economic welfare and national security will result. So, the other urgent course of action is to remove CO₂ from the atmosphere and cool the earth back down. The CCS technologies currently under discussion are expensive and unproven at the necessary scale of capturing hundreds of giga-tons of CO₂. We need more robust and affordable solutions to drive down CO₂. Prof. Dr. Christian Breyer, Chair of the EWG Scientific Board, has championed research in this field.
Once these have been identified, deployment will require a robust funding mechanism, most likely within a framework of international agreements similar to the Paris treaty.

German news

In Germany, the wind- and PV capacity added in 2023 was 75% (!) more than in 2022. and 50% of the electricity generated in 2023 was renewable. To a significant degree, this development is thanks to the actions taken by the governing coalition (greens/social democrats/liberals) – and in spite of the broader criticism it is encountering.

Now, the most urgent course of action in Germany is also to maintain an annual growth of installed capacity by more than 50% and therefore reach zero emissions well before the mid-2030s. The key challenges to maintaining this exponential growth in Germany are similar to those on the global level, e.g.

the political and media narratives hardly reflect how feasible and economical the path to zero emissions can be made. Once claims have been broadly accepted, they are rarely questioned, even if they no longer hold true (e.g. that green hydrogen and e-fuels predominantly need to be imported), limiting the range and effectiveness of options considered. And, measures are often discussed emotionally but with incomplete or incorrect facts. For the building energy law passed in 2023, that significantly eroded both its CO₂-impact and the broader social consensus on climate action.
the German government subsidizes oil, gas and coal with at least 30 billion Euro per year. The government’s 2023 revenues from emissions trading (ETS and BEHG ) were a good 15 billion Euro. In other words, the government’s fossil subsidies provide twice as much incentive to consume fossil fuels as emissions trading incentivizes reducing fossil fuel consumption.
neither federal and state governments nor the main political parties have a climate action plan to reach zero emissions that is fully calculated and validated in its technical, emissions and financial effects (investments and annual costs/revenues of citizens, businesses and government). That kind of plan is necessary for broad support of climate action. Its measures should be designed to generate strong financial incentives to act, be socially fair, fiscally responsible, easy to understand and strengthen both economy and international competitiveness.

Items on the 2024 agenda of the federal government and parliament currently include:

Power plant strategy („Kraftwerksstrategie“) – It will be important not to achieve a flexible response to fluctuating wind and PV generation solely by building expensive centralized natural gas or green hydrogen power plants but to draw from the most cost effective mix of sources for balancing electric demand and supply („technologieoffen“), incl. other energy sources such as water and local biogas, energy storage and demand side management step by step. The power plant strategy should include the necessary changes in electricity market design, to generate the incentives and supply for this best mix of flexibility sources.
Solar package („Solarpaket“) – further simplification of planning and permitting of wind and PV generation
Resilience – develop and enact mechanisms to maintain and build sufficient national and EU production capacity for renewable energy technologies such as wind mills, PV panels, energy storage, electric vehicles and heat etc. for a good degree of independence from China and other suppliers.

Since we will already are heading towards a world that is 2.0 ^oC above preindustrial levels, it is important to stop engaging in bridging technologies („Brückentechnologien“) – such as replacing coal with natural gas – but invest our time, money and political capital to directly go into CO₂-frei solutions. Prof. Dr. Claudia Kemfert, Chair of the EWG Scientific Board, has shown that building stationary LNG-Terminals would lock Germany into an expensive LNG-supply above and beyond likely demand for 1-2 decades.

There are further challenges on the local level: federal and state government create a framework with regulations and financial support. However, implementation of „zero emissions“ largely happens at the municipal and county level and is often held up by a variety of factors. These range from limited staff and know-how in local government for planning and permitting renewable energy solutions to imminent losses municipal utilities and budgets will encounter with the historically profitable but now strongly shrinking gas consumption. To achieve exponential growth of CO₂-free electricity, heat and mobility in and with municipalities, solutions to these challenges need to be developed and disseminated now.

Energy Watch Group

Based on this global and national outlook on climate action, we expect to focus our work in 2024 on:

Zero Emission

Develop „zero emission“ roadmaps for countries, states and cities that are economically attractive, socially just and fiscally responsible as well as easy enough to understand and implement.
Engage in the political and media narrative on climate action with intuitive and well researched material, that shows how economic and feasible exponential growth of renewable electricity, heat and mobility and reaching “zero emissions” is. This includes key data, that is currently not reported or misreported.
Support implementation of „zero emissions“ at the city and county level
Develop and disseminate other solutions to obstacles on the „zero emissions“ path (e.g. resilient supply chains) and items on the political and government agenda (e.g. power plant strategy)

Cooling the earth back down

Develop technically and economically feasible and scalable solutions for cooling the earth back down and achieving the historic CO₂-concentration of 350 pm or less.
Derive meaningful zero emission and carbon capturing targets.

Our organizational set up
While continuing our work as the think tank and network “Energy Watch Group” in 2023, we made an organizational adjustment by creating our own non-profit legal entity and transitioned our work into this new framework. This makes EWG more effective by increasing control over revenues and expenses. The name of the legal entity is „EWG Energy Watch gUG” (due to German law on legal entity names we could not call it „Energy Watch Group gUG”). This name will only appear when acting as legal entity (e.g. contracts, bank account, receipts for donations). Hans-Josef Fell is and remains president of the Energy Watch Group. Dr. Hartmut Fischer is managing director of the EWG Energy Watch gUG. Felix Rodenjohann is the other shareholder.

Your contribution

Any suggestions are welcome regarding our choice of focus areas, solutions in these areas and dissemination of these solutions. Please direct them to office@energywatchgroup.org.
And your donations will help us continue our work with good impact!