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The global energy transition
Global warming is to be curbed to a maximum of two degrees centigrade over this century. The aim should be to limit it to 1.5 degrees. That's the essence of the first ever global agreement on climate change. It's been almost three months since this target was agreed at the Paris UN Climate Conference at the end of 2015.
At the Second Berlin Energy Transition Dialogue on 17 and 18 March, the global climate targets were once again top of the energy agenda, as ministers and delegates from 74 countries gathered at the Federal Foreign Office to discuss how best to mitigate global warming.
A global energy transition
Energy policies across the globe are an important part of the solution. There is no other tool that has a more profound impact on the climate than energy policy. Three quarters of the greenhouse gas emissions released into our atmosphere are from energy installations. In his opening speech, Federal Minister for Economic Affairs and Energy Sigmar Gabriel said: "If this is to change, we need to engage in international cooperation. This is why the energy ministers carry a great deal of responsibility when it comes to ensuring that the targets agreed in Paris are met."
In Germany, renewables such as solar and wind energy have already become our number-one source of electricity, accounting for almost one in three kilowatt hours of the electricity used in the country (see 'direkt finds'). Across the globe, there is growing awareness for the need to mitigate climate change. Countries ranging from Denmark to California are increasingly relying on renewable sources for their electricity supply. For the first time last year, renewables topped fossil fuels when it comes to total global investment and capacity added.
This goes to show that the energy industry is undergoing a process of transformation, not only in Germany, but also in other pioneering countries. This makes it all the more important to know where we are headed. Germany has set itself a clear objective: our energy needs to be clean, secure and affordable for everyone. "The task of decarbonising our energy systems and of making our energy industry shipshape for the future is certainly one of the defining tasks of this century", said Minister Gabriel, who went on to explain that economic and environmental sense are not mutually exclusive. On the contrary.
More than 300,000 jobs in the renewables sector
"We will only be successful if we demonstrate that the energy transition can deliver both for the climate and for the economy. And that it changes all our lives for the better." Germany has the figures to prove that this is possible indeed. The renewables sector provides work for more than 300,000 people, and these are jobs that are highly qualified, technology-driven and well-paid. The number of jobs created in this industry is ten times higher than the number of job that were once created around nuclear power. And today, approximately 80 per cent of the wind-power installations made in Germany are for export. "We need our energy transition to be more than compatible with a modern and successful economy – we need it to create fresh momentum and new jobs", the minister went on to say.
What policy-makers and industry need to do now
For the energy transition to be a success, policy-makers and industry need to work together. Federal Minister Gabriel highlighted four important points that need to be considered.
- We need to put efficiency first, which means that we must reduce our energy consumption even as our economy keeps growing. For this, the minister said, we need new technologies and investment in research and development. "If you cut your energy consumption, you cut your costs and become more profitable. For this to happen, we need to break the link between economic growth and energy consumption. This will help businesses compete in the global market place, it will make them more competitive and more successful economically." Just by using the right technology, the minister said, it is possible to increase energy performance by 80 to 85 per cent.
- Renewables need to be better integrated into the market so as to further lower their cost. To this end, the existing funding mechanism based on fixed feed-in tariffs is to be replaced with a market-based auctioning system for renewables as of 2017. Under the new system, only the most cost-effective offers will be accepted and the level of funding will be set on the market (see this article for further information)
- We must make the electricity market fit for a greater share of renewables. These are volatile sources of energy. No wind – no wind power, no or little sunlight – no or little solar power. Both fossil fuels and new energy storage technologies are needed to balance out these fluctuations and to stabilise the electricity market. It is for the market to decide which form of back-up power is the most cost-effective and efficient, and to create the right incentives.
- We need to put in place a modern infrastructure that brings electricity from renewables to the places where it is needed. This is why the expansion of the grids must keep pace with the expansion of renewables. Furthermore, the energy transition will rely on the use of digital technology such as smart grids and smart measuring and control technologies.
Integrating the various elements
"We must integrate all these elements to form an overall working system, one that provides a secure supply of energy that is also affordable", said Minister Gabriel. "It is good to see that energy is increasingly being given a more prominent place on the international agenda as well." He said that, as far as Europe was concerned, the only way forwards was to put in place an Energy Union, going on to stress that, last June, Germany had agreed with its electrical neighbours to work closer together on the issue of energy security. The minister then spoke about Germany's energy partnerships, which also demonstrate the country's willingness to engage in international cooperation in this field.
"Energiewende" – a global word denoting a global phenomenon
The second Berlin Energy Transition Dialogue has proven that the energy transition is now being discussed internationally. This is a view shared by Federal Foreign Minister Frank-Walter Steinmeier who confirmed that no matter what continent he visits, he finds that people are so keen to learn more about Germany's energy policy that they have started to refer to it as the "energiewende". "No matter what language they speak."
To watch a recording of the speech delivered by Federal Minister Sigmar Gabriel, please click here.