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EWG’s statement on German government’s proposed electricity market design

The German government’s proposed electricity market design would significantly curb renewable electricity generation and increase its costs. 

The Energy Watch Group (EWG) has evaluated the ‘Electricity market design of the future’ proposed by the German government. The proposed changes and end of government support for expanding renewable energy generation in the middle of the transition to a CO₂-free would significantly increase the price of electricity, impact the federal budget far more than today and significantly slow down the expansion of renewable energy. Other elements of the proposed ‘electricity market design’ are clearly helpful.

The design of the electricity market is of decisive importance for future electricity prices, the demands on the federal budget and the speed with which Germany achieves a CO₂-free energy supply.

Evaluation elements  

These elements of the proposed electricity market design are helpful:

  • Technology-open procurement of dispatchable electric power generation (including biogas power plants converted from base load to peak load).

  • Procuring dispatchable electric power generation separately from the volatile electricity generation and on different conditions.

  • Electricity tariffs that vary over time in order to utilize cheap wind and PV electricity as fully as possible by shifting demand.

  • Grid charges that vary with distance, so as to incentivize distributed electricity generation and thus reduce the investment required for grid expansion.

These elements of the proposed electricity market design are not helpful:

  • Ending government support of renewable power generation including feed-in tariffs that are guaranteed for 20 years long before a CO₂-free energy system has been achieved.

  • The ‘investment cost subsidy’ instrument envisaged instead of the current feed-in tariff would burden the federal budget with some 600 billion €, if the investment subsidy is 50% and some €900 billion € should the investment subsidy be 75%.

Both elements would impose considerable risks on investors in wind and PV power, biogas and green hydrogen power plants, battery and other storage systems and would therefore significantly increase the price of electricity in Germany and slow down the expansion of renewable power generation. The result would be an expensive and paralyzing dead end for expanding renewable power generation in Germany.

Recommendations

Instead, the established and effective procurement within the framework of the Renewable Energy Law (EEG) should be continued until a CO₂-free electricity supply has been achieved. Then and only then should the decision be taken, if and how to end renewable energy support and the EEG framework.

In future tenders, the feed-in tariff should be fully paid for by the electricity price. This unburdens the federal budget significantly and fulfills EU legal requirements. Other than in the past, this does not put additional burdens on electricity customers, since the cost of wind and PV power come down considerably and now only costs around 6 cents/kWh.

These low and stable electricity prices of 6 cents/kWh for wind and PV are achieved in competitive procurements based on the feed-in tariffs. They should be passed on to electricity customers directly, instead of first being converted into highly volatile prices on the electricity exchange, as is the case today.

Removal of the volume caps for procurement. This will accelerate the transition to a CO₂-free electricity supply and remove this investment obstacle.

With the proposed adjustments, a 100% CO₂-free and reliable electricity supply will be achieved quickly and at favorable conditions – to the benefit of all electricity customers and slowing global warming.

Read the full statement & recommendations (in German) here.

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Newsletter August 2024

Germany – Update Power Plant Strategy, risks in financing renewables’ growth

In February, the federal government presented its “Power Plant Strategy”: the con­struc­tion of 4×25 GW fossil gas-fired power plants, which were to be converted to green hydro­gen only in the second half of the 2030s, so as to combine volatile wind and PV power generation with flexible power generation as needed for reliable power supply.

Other flex­ible power sources or a direct transition to green hydrogen power plants were exclu­ded without further justification. And alternatives are available: a simple retrofitting of existing biogas plants from base load to peak load will achieve

  • 30(!) GW of CO2-free flexible power generation – faster than fossil gas-fired power plants
  • 6 billion € lower life-cycle costs for each GW of capacity than peak fossil gas power plants converted to green hydrogen foreseen in the “power plant strategy”
  • keeping the 10% of today’s German electricity generation currently provided by bio­gas remain CO2-free (they would otherwise be retired in the coming years).

With others, including the Council of German States (Bundesrat), the German Rene­wa­ble Energy Association (BEE), the Energy Watch Group advocated using biogas power plants for peak load and including them in Germany’s power plant strategy. This included

  • publishing a short study on the power plant strategy.
  • hosting of the “Green Power Plant Summit” at the Brandenburg Gate with the energy and climate parliamentary speakers of SPD, CDU, and Die Linke and an energy policy specialist of Bündnis 90/Die Grünen.

“Renewable energy has priority! No fossil fuel power plant that could already be re­placed by renewables is legitimate. But replacement must also be feasible.” – Nina Scheer, SPD 

“Simply retrofitting the already existing biogas power plants from base load to peak load creates over 10 GW of flexible capacity. That is more cost-effective than the govern­ment’s plan for new gas-fired power plants.” – Thomas Heilman, CDU

  • Support of discussions with Minister Habeck and his team on the issues with analysis and argumentation.

Until summer, the BMWK (Federal Ministry for Economic Affairs and Climate Action) con­tinued to exclude peak load biogas power plants from its power plant strategy. Then in August, Minister Habeck declared the conversion of biogas power plants to peak load a key element of future power generation!

This is an important step towards building the flexible electricity generating capa­city necessary to match the ramp-up of wind and PV power. The next decisive steps are the implementation in legislation and peak power plant tenders.

 

Global news – an elephant in the room and encouraging trends 

In 2023, global warming reached the 1.5°C threshold. 2024 is well on track to be even warmer. Even without detailed weather modeling it is safe to say, that 1.5°C warming is here to stay – and will be exceeded with further CO2-emissions. UN Secretary-General Guterres clearly describes the current climate outlook as a “path to climate hell”, if decisive action is not taken immediately.

In other words,

  • the world’s remaining CO2-budget is zero
  • the obvious minimum con­sequence in keeping with the Paris Agreement is an imme­di­ate worldwide stop to any further invest­ment in fossil fuel production and con­sump­tion: no new or expanded fossil powered electricity gene­ra­tion, heating and cooling systems, transport or industrial processes.
  • current national plans – designed to meet the stipulations of the Paris Agreement – with a gradual reduction of CO2-emis­sions until 2040, 2045 or 2050 are mute. We need zero emissions plus carbon sinks.

So far, these facts have largely been treated as the “elephant in the room”: they have hardly been addressed in national climate policy debates, much less led to action, for fear of the political and economic “costs” an acknowledgement would have.

These “costs” would be greatly mitigated, if a majority of developed and threshold coun­tries act on them simultaneously. We wish the government representatives in the upcoming G7, G20 and COP summits the courage to take that kind of step together.

There have been multilateral steps in that direction but not whole-hearted action: at the COP26 in Glasgow 2021, 40 countries pledged to “shift away” from coal – but not to “stop” invest­ment in coal and the major coal users such as China and the USA did not sign up. Also at that COP, 21 countries including the USA, pledged to stop public financing of fossil fuel projects abroad – but neither private nor domestic financing of fossil fuel projects.

Encouraging trends in this situation are that – other than 5 or 10 years ago,

  • we see that national and regional climate policies do work: CO2-emissions in the EU have steadily been coming down since 2002, in the USA since 2007 and China’s CO2-emis­sions are expected to peak in 2024 – well before the Chinese govern­ment’s official 2030 target. The main remaining challenge is to accelerate climate action.
  • The global production capacity for PV, batteries, BEV and other clean technology getting to rapidly replace fossil fuels is in place at competitive cost. The main remaining challenge is how to quickly deploy these worldwide without incurring the politi­cal and economic costs of Chinese market domination.

Stopping all further investment in fossil fuel assets is a very effective move to make in terms of physical impact und changing mindsets. Doing this jointly with other nations greatly reduces the associated economic and political costs. That is the message EWG is conveying to policy makers as they are returning from their summer (or winter) break.

Exchange with German MP Al-Halak: Hydropower Plants Have Great Potential

The Energy Watch Group was part of the expert panel to evaluate the potential of hydropower, convened by Member of German Parliament Muhanad Al-Halak (FDP spokesman on water policy) on July 5, 2024. Alongside other representatives from business, research, and practice, Dr. Hartmut Fischer, Managing Director, was invited to provide insights on the ecological and energetic value of hydropower.

“Hydropower can do much more than just generate kilowatt hours. Its potentials as a decentralized and climate-neutral energy supply are far from exhausted. It can also make enormously valuable contributions to emergency power supply, especially in blackout scenarios of critical infrastructures, as well as to local flood protection, climate protection, and climate adaptation,” summarized Al-Halak.

Read the press release from the parliamentary office (in German) here.

Foto: German Bundestag/Office Muhanad Al-Halak, MdB

Holocene Project | Hans-Josef Fell talks at SNEC 2024 in China

The Holocene Project: exploring pathways to stopping emissions and removing carbon from the atmosphere to cool the Earth

Hans-Josef Fell speaking at SNEC 2024 in China

June 2024

 

Find the slides here.

Find the Holocene Project here.

 

Distinguished guests and friends,

It is a great pleasure to accept your invitation and an immense honor to speak with you today. It brings me immense joy to witness the growth of clean technology here in China. When we in Germany adopted the Renewable Energy Act in the German Parliament in 2000, we aimed to create a foundation for a new economy and electric industry based on renewable energy. We took on significant responsibilities and hoped to contribute meaningfully to the global efforts.

Initially, Germany led the world in renewable energies, particularly in solar, wind, and biogas. However, today, China has taken the lead, and I am profoundly grateful for China’s outstanding development in the renewable industry. It is inspiring to see the advancements here.

Back in 2000, when Germany’s Parliament passed the Renewable Energy Act, we were already aware of the global challenges we faced, such as global warming. We recognized the urgent need for new zero-emission technologies, not just to reduce emissions. Unfortunately, the world did not follow suit quickly enough, and we now witness numerous climate disasters: heatwaves, floods, storms, wildfires, rising sea levels, droughts, hunger, refugees, wars, and more. We must act swiftly to address these issues.

We also foresaw conflicts and wars over resources, particularly oil. Where there is oil, conflicts often follow. Our vision was to create peace through 100% renewable energy, which can lead to a more peaceful world. Additionally, we recognized the severe pollution of our air, water, and soil, which makes people ill. Clean technology brings health benefits to the world, making 100% renewable energy crucial for addressing these challenges.

Focusing specifically on climate issues, we have seen the alarming increase of carbon dioxide in the atmosphere. Before industrialization, the level was 280 parts per million (ppm). The planetary boundary for a secure life is 350 ppm, which we exceeded in 1990. Now, we have reached 420 ppm, and global temperatures continue to rise rapidly. Last year, we experienced 1.5°C of global warming, and the Copernicus Research Center in Europe recently reported that the last 12 months saw 1.63°C of warming. The acceleration of global temperature rise is alarming.

Thus, we must set a new target for climate protection: reducing atmospheric carbon dioxide to below 350 ppm. This requires stopping all emissions and removing hundreds of gigatons of carbon from the atmosphere to cool the Earth. We aim to launch a new research project, the Holocene Project, to explore pathways to achieve this target. This includes stopping all emissions in the energy sector, creating a circular economy without emissions or waste, and promoting green growth to absorb carbon dioxide from the atmosphere.

To succeed, we need research funding and collaboration. If you are interested in joining this policy project, please let me know. Achieving 100% renewables is no longer a question of economics or technology but of political will. I see strong political will in China, evidenced by its high growth rates in renewable investments. However, the rest of the world must follow.

Last year, in 2022, Bloomberg reported that most investments in clean technology were directed towards renewable energies and electric transportation. Nuclear power plays a minimal role due to its high cost and slow implementation. Renewable energy, particularly solar power, is growing rapidly, with significant installations in China.

We must continue to fight for advancements in storage technologies, such as batteries, to balance the fluctuations in renewable energy production and to power clean vehicles. The economic advantages of renewable energy are clear, as it is cheaper than fossil fuels when considering the costs of carbon capture and storage.

At the SNIEC conference last year, I saw promising figures indicating that China’s growth in clean technology is doubling every two years. This tremendous growth rate can lead to 100% renewables within a decade, which is essential for achieving our climate goals. By canceling coal, oil, natural gas, and nuclear power, and focusing on renewables, we can boost the economy and protect the environment.

China has set an example with projects like the massive solar farms in Inner Mongolia and Shangu Province. These projects not only provide clean electricity but also create additional benefits, such as shading desert areas to promote plant growth and cooling water to improve shrimp and fish farming.

China is now the leading nation in clean technology, and you have the potential to become a 100% renewable country within a decade. Achieving climate neutrality by 2060 is commendable, but we need to act faster to prevent further climate disasters. Together with Europe and other nations, we can influence global climate conferences and set a new target: reducing atmospheric carbon dioxide to 350 ppm to protect the climate and stabilize global temperatures.

Thank you very much for your attention.

 

Press release | Hans-Josef Fell receives Global Solar Leaders Award

Shanghai, June 12, 2024 – At the 17th International Photovoltaic Power Generation and Smart Energy Conference and Exhibition (SNEC PV+) in Shanghai yesterday, Hans-Josef Fell was awarded the Global Solar Leaders Award, one of the world’s most prestigious prizes in the field of solar energy. With his political work, he has made a significant contribution to the breakthrough of photovoltaics, first in Germany and then worldwide. 

In his speech at the opening panel of the conference, Fell emphasized that China has the potential to lead the world towards 100% renewable energy and thus effective climate protection within a decade. He praised the progress and innovations that China has made in the field of renewable energies in recent years and emphasized the country’s central role in the global energy transition. 

“The current exponential growth in solar and wind energy, battery technology, electromobility and other sectors could lead China to climate neutrality by 2035 if it continues unabated. China’s official goal of becoming climate-neutral by 2060 is far too late in view of the urgent need to protect the climate,” Fell said in his speech. 

Hans-Josef Fell is a globally recognized pioneer and advocate for renewable energies. As co-author of the Renewable Energy Sources Act (EEG) in Germany, he has contributed significantly to the development of photovoltaics, biogas, wind power, hydropower and geothermal energy and laid the foundations for a sustainable energy policy in over 60 nations. China also adopted the basic principles of the EEG and thus established itself as the world market leader for solar energy.   

The Global Solar Leaders Award is presented annually by the Global Green Energy Industry Council, the Global Solar Council and others to outstanding individuals who have made a significant contribution to the promotion and development of solar energy. The award recognizes Fell’s tireless commitment and significant influence on global energy policy. 

The full press release can be found here in English and German.

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Climate action – unresolved business challenges for German municipal utilities

Energy Watch Group – Newsletter 3 – 2024

German municipal utilities are key to the success of climate action. They often operate the local natural gas network, power grid and district heating – all of which need to be transformed and adjusted significantly to achieve CO2-free electricity, heat and mobility.

If municipal utilities push ahead with this transformation and adjustment, climate action is accelerated. If municipal utilities slow walk these changes – as is still the case too often – climate action is slowed down as well. This is not just due to inertia. There are some real obstacles for municipal utilities and municipal governments that need to be resolved: lack of investment capital, vanishing natural gas profits and new business models for which these utilities are not yet sufficiently equipped.

Regarding the lack of capital for investment: municipal utilities need to

  • hook up PV and wind plants to the grid and simultaneously adapt the network to increased electricity consumption by heat pumps, electric cars and process heat in industry.
  • decarbonize district heating and expand the capacity and length of its network in implementation of municipal heat plans due to be completed by 2026 or 2028.

There are varying estimates, how much investment that will require in total. But GEODE, a EU-wide federation of local heat and electricity network operators, estimates that district heating alone will require some 400 billion € investment by German municipal utilities. Due to their overall high debt level, many utilities will have difficulties securing loans for that much investment.

Regarding vanishing natural gas profits: the natural gas service is the main profit pool for many municipal utilities, often providing a significant part of the municipal subsidies for a city’s public transport and swimming pools. As the German Secretary of Commerce and Prof. Dr. Claudia Kemfert, the chair of the EWG scientific board,  say: it will hardly be replaced by green hydrogen. As no other similar profit pool is in sight as of yet, municipal utilities show some reluctance to aggressively reduce natural gas consumption by pushing district heating or heat pumps for building heating.

Regarding new business models, there is a broad spectrum of options available to municipal utilities (some of these can at least partially replace the current natural gas profits). Examples are: generate low cost renewable electricity for local resale, provide joint electricity storage for roof-top-PV owners, and leasing heat pumps. But municipal utilities largely lack the coherent strategy, know-how and entrepreneurial culture necessary to implement these new options profitably and at scale.

A national discussion has begun on how to overcome these obstacles, so that municipal utilities can and will make faster and stronger contributions to climate action in their communities. At the Handelsblatt Jahrestagung „Stadtwerke“ on April 9th and 10th in Berlin, many of the solutions that are currently being developed and tested throughout Germany will be presented and discussed. The Energy Watch Group will contribute solutions to this discussion.

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New Policy Paper | Shaping the German power plant strategy

German power plant strategy needs adjustment

On February 5th, the governing German coalition announced key points of its future power plant strategy (“Kraftwerksstrategie”). The strategy addresses how to increase the flexible generating capacity in Germany needed when wind, solar, water and other renewables do not generate enough to meet the electricity demand due to weather conditions (low solar and wind input). The key points are

  • the German government going out to tender for construction of four new natural gas power plants at a capacity of 2.5 GW each. These power plants are then to be converted to green hydrogen fuel in the timeframe 2035-2040.
  • establishing a “market based, technology-neutral capacity mechanism” for buil­ding further flexible capacity, which is to be designed by summer 2024.

Germany needs flexible, CO2-free power capacity to offset variability in wind and solar power generation. But to first build large new natural gas plants and then convert them to green hydrogen is economically and ecologically the wrong path. It

  • is the most expensive option. Much cheaper, faster and more reliable options include directly converting the existing natural gas plants to green hydrogen fuel (35 GW capacity), converting the existing biogas power plants from baseload to flexible load operation (12-24 GW capacity) and expanding the use of electricity storage for short term flexible load (currently 1-2 GW).
  • extends fossil fuel burning and adds to global warming without compelling reason.

Pursuing this path serves the fossil fuel industry, large utilities and large power plant suppliers. It does not serve German citizens, businesses or climate goals.

That is why the design of flexible capacity procurement should be changed to

  • require the power plants to be CO2-free from the start and
  • allow proposals from power plants of all sizes (not only 2.5 GW and more) and fuel stocks (not only green hydrogen) and from power storage operators

in these coming months and before a tender is put out.

Regarding the “capacity mechanism” details were not provided in the press statement and may yet need to be defined. It is the EWG-position that this should include:

  • differentiating electricity prices by time in order to shift demand towards peaks and away from lulls in wind and solar power generation – thereby narrowing gaps between renewable power supply and demand
  • procuring flexible capacity for the remaining gaps in long-term contracts via the mechanisms fixed prices or utility tenders for capacity. These should allow all types of power capacity (e.g. green hydrogen, biogas, geothermal, battery and other storage) and providers (from large to fairly small including citizens’ energy cooperatives) to compete.

In Germany, the mechanisms exchange (“Strombörse”) and state tenders have proven less than effective in terms of best price for electricity customer and of quickly growing supply of renewable power.

The Energy Watch Group has developed a briefing on these key points, including recommendations on tender and mechanism design in the coming months.

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Newsletter February 2024

Reality check for global hydrogen hype

The great attraction of green hydrogen has been and is that it can be used to gene­rate CO2-free electricity when needed to compensate for variation in wind and solar power generation – and that it can be used to maintain combustion as a source for industrial heat, building heat and vehicle propulsion. That is why green hydrogen has been seen as a key part of the renewable energy future for the past 30 years and subsidized to the tune of hundreds of billions USD.

But so far, green hydrogen has not delivered on the hype. The recent Global Hydro­gen Review 2023 of the International Energy Agency shows that demand for green hydrogen still hovers at less than 1% of total hydrogen demand and 0,004% of global energy use. Wind power alone generated more than 800 times that much energy.

The main reason is that so far and for the foreseeable future there is no business case for green hydrogen, where electric or biogas alternatives exist. The World Energy Council currently sees the levelized cost of producing renewable hydrogen at an average of 3,50 USD per kg or 0,35 USD/kWh (hydrogen-derived efuels will necessarily be even more expensive). That is some 10x more than the current cost of wind and solar power of 0,03-0,04 USD/kWh. In addition to this gap in energy costs, most vehicle and other technology for hydrogen use is significantly more expensive to buy and operate than equipment for using electricity or biogas.

This lack of good business cases is illustrated by some snap shots of the industry:

In other words, it is time to scale the scenarios down to where green hydrogen is and could remain without alternatives as governments are beginning to realize:

  • contribution to longer term storage of wind and solar power
  • selected industrial processes and perhaps – as efuel – in aviation

This reduces the amount of pipelines and other infrastructure needed for green hydrogen and allows both private investors and governments to focus on competitive applications instead of generating expensive stranded assets.

EWG Annual Report 2023

Globally 2023 was a year of both unpleasant and encouraging news for climate change. We are rapidly approaching the 1.5-degree Celcius threshold with high and unthrottled CO2 emissions and there are already significant negative impacts on both humankind and nature. At the same time, renewables have surpassed fossil and nuclear energy globally in terms of added generation capacity and investment volume.

This trend is reflected in Germany as well. In a concerted effort, the German government has passed numerous measures to set the course for a sizeable expansion of renewable energy in the sectors electricity and heat. The installed capacity of wind and solar power plants in 2023 is approximately 50% higher than that of 2022. However, significant progress is nor foreseeable in the transportation sector, and the Building Energy Act was significantly diluted before being passed.

In 2023, the Energy Watch Group became a non-profit leagl entity – the EWG Energy Watch UG. This strengthens the EWG, giving it more independence in financing and its operation. Hans-Josef Fell continues to serve as President of the EWG.

Download EWG Annual Report 2023 (DE)

Download EWG Annual Report 2021 (DE)

Download EWG Annual Report 2020 (DE)

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EWG Newsletter January 2024

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.
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