Annual Report 2018
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GERMANY

Jochen Bard and Fabian Thalemann Fraunhofer IEE

During 2018 renewable energy in Germany saw record production levels with renewable sources accounting for 38.2 % of energy consumption - generating as much electricity as coal for the first time. These figures were achieved on the back of high levels of sunshine during the warmest summer ever recorded and 3 GW of photovoltaic construction - the first resurgence in PV since 2013. Wind generation also increased with an added capacity of only 3.7 GW almost 40% less than in 2017. Offshore wind provided 2.7% to the energy consumption with a production of 19 TWh and a total capacity of 6.3 GW at the end of the year and another 1.4 GW of new capacity expected for 2019 under the expiring previous feed in tariff legislation (EEG 2014).
After years of decline, the tender results for new wind and solar power rose for the first time in 2018. The latest contracts are at 6.26 Cent/kWh for onshore wind and 4.66 Cent/kWh for offshore wind power and 4.69 Cent/kWh for photovoltaics. Not enough approvals for onshore wind energy and a still restrictive surface area for ground-mounted solar plants mean that, contrary to the international trend, the results of the tenders are rising in Germany. 
The draft for the so-called “Energy Omnibus Act” that entered the legislative process in November also envisages 'special auctions' to be held. These are designed to speed up the process of expanding the use of renewables and support the attainment of the climate targets. Over the next three years, an additional four gigawatts of capacity both for on-shore wind-powered installations and for solar installations will be auctioned. Under the new legislation, there will also be auctions for innovation. These are designed to test new pricing mechanisms or any other measures making the system more competitive.

Germany's greenhouse gas emissions fell significantly by around 51 Mt or 5.7 % compared to 2017 and are now 31.7 % below the 1990 level at a total of 854 Mt. The reduction is a result of lower primary energy consumption in the industry sector as well as in the heating and transport sectors. A flat economy in the energy-intensive industries and a decline in sales of natural gas, heating oil and diesel contributed to this development. The current gap to achieve the 2020 climate protection target of minus 40 % compared to 1990-levels thus amounts to 103 Mt of CO2. (source: Agora Energiewende (2019): Die Energiewende im Stromsektor: Stand der Dinge 2018. Rückblick auf die wesentlichen Entwicklungen sowie Ausblick auf 2019. www.agora-energiewende.de)

In summer of 2018 the Federal Ministry for Economic Affairs and Energy launched the Electricity Grid Action Plan to accelerate the expansion process by streamlining planning procedures and improving the way projects are overseen. Existing grids are to be optimised using new technologies and operating strategies. At a grid summit in September, Federal Minister Altmaier and the energy ministers of the Länder, who are responsible for most decisions relating to the expansion of the grid – including planning permissions – agreed on a legislative package to speed up the process of grid expansion.

The Federal Government announced plans to provide € 6.4 billion in funding for energy research up to 2022 within the 7th Energy Research Programme adopted in September 2018 representing an increase of approx. 45% over the period from 2013-2017. The “living labs” or “reality labs” established as part of the energy transition will be made an essential pillar of energy research in Germany. This project type allows for experience to be gained and for regulations to be honed and improved before they are rolled out but in a limited pilot region over a limited period of time.  Furthermore, startups are to be given better access to research funding. In contrast to the former editions of the Energy Research Programme, which only provided funding for individual technologies, the focus in the coming years will also be on horizontal issues such as digitisation and sector coupling (Source: Federal Ministry for Economic Affairs and Energy: “Energy transition progress in 2018” from 20.12.2018, http://www.bmwi-energiewende.de).