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The energy transition going global
asWith wind power being used in Mexico, solar thermal installations in Morocco and hydrogen-powered buses in South Africa, it is obvious that the energy transition has turned into a global movement. Like Germany, many countries across the globe are seeking to fundamentally overhaul their energy systems, moving away from fossil fuels such as coal and gas to renewable energies that are compatible with the environment and our climate. Depending on where each country starts from and what its priorities are, there will be very different different ways to achieve this.Geography, natural resources and GDP all need to be factored in. There can be no perfect solution that would work everywhere. The energy transition is presenting Germany with major challenges, and the same is true of many other countries.
But despite the need for different strategies, it is often possible to take individual solutions and adapt them to a new context. Often it just takes a little tweak or two to adjust a strategy or technology that has proved successful in Germany to the needs of another country. This is why, for more than ten yours now, Germany has been engaged in dedicated energy partnerships and dialogues with various individual countries.
Join forces to speed up the energy transition and bring down its cost
Germany’s energy partnerships and dialogues are designed to foster dialogue with partnering countries about the energy transition, and to allow for both sides to learn from one another. Items on the agenda include the expansion of renewables capacity, energy efficiency, grid and systems integration of renewables, and grid expansion. If both sides can find better solutions for these issues, this is good news for their economies and for the global energy transition, which will proceed more quickly and – thanks to economies of scale – at a lower price. Across the globe, funding rates for renewables are decreasing where they are determined by way of auction, as is the case in Germany and other countries. In Mexico, for instance, average funding rates for solar and wind power have dropped to little more than two U.S. cents per kilowatt hour. The lowest rate for funding paid for a solar installation in Saudi Arabia is currently 2.2 U.S. cents per kilowatt hour. The United Arab Emirates has also posted a new record low of funding, in this case 7.3 U.S. cents per kilowatt hour for a solar thermal power plant. And Germany is no exception. In fact, funding rates have been halved compared to 2015 levels: the lowest rate for solar power is now 3.86 euro cents per kilowatt hour, the figure for onshore wind power is 3.8 cents, and three offshore wind installations are already able to manage completely without funding – with operators relying entirely on the prices paid on the power market.
Eleven energy partnerships, seven energy dialogues
Germany is engaged in closer cooperation on the energy transition with almost 20 countries now, all trying to further speed up the process and reduce its cost. Among the countries Germany is working with are Brazil, China, India and Mexico, which which it has formed energy partnerships. The country is also engaged in energy dialogues with Japan, Russia, the USA and others. Last year in 2017, new dialogues were launched with the United Arab Emirates, Australia and Iran (for more information, please consult the 2017 Annual Report). The Federal Ministry for Economic Affairs and Energy is the lead ministry for the German side in the energy partnerships and dialogues.These instruments also help German companies working in the energy sector gain better access to foreign markets and investment opportunities. In this way, they work in concert with the Energy Export Initiative launched by the Federal Ministry for Economic Affairs and Energy and designed to support SMEs working in energy as they venture onto new markets (click here to learn more about the Energy Export Initiative).
A time to make friends: The Berlin Energy Transition Dialogue
The annual Berlin Energy Transition Dialogue (BETD), which has been hosted by the German Federal Government on 17 and 18 April 2018 at the Federal Foreign Office, aimed to add fresh momentum to the global energy transition. It was the fourth consecutive gathering of ministers and other high-ranking policy-makers, business representatives, scientists and civil society activists. They were all coming together to discuss the latest trends, multilateral agreements and promising business models: In what ways and how fast are blockchain technology, virtual power plants and smart business ideas changing the world’s energy markets? Does the future belong to electric mobility or to synthetic fuels? How can we meet the targets set out in the Paris Agreement? And what should be the energy sector’s contribution to this?
Recent studies analysing the global energy transition
The Federal Ministry for Economic Affairs and Energy, which co-hosted the conference together with the Federal Foreign Office in a lead capacity, has commissioned two studies to be published in time for the BETD. One will be presented by the International Energy Agency (IEA), which will be focusing on the role of energy efficiency in the global efforts to reach the Paris climate targets (available soon on the BETD website). The second study, which has been conducted by the International Renewable Energy Agency (IRENA), looks at the role of renewables and their contributions to the global energy transition. Both texts will provide new insights that are relevant to decision-makers from the political sphere.