Published in SOLARZEITALTER 2-2024
This record of the interview was translated from German.
SOLARZEITALTER: Already in 2023 and foreseeably in 2024, we see a strong acceleration in the building of renewable energy, especially wind power and solar modules. Could one therefore say, that everything is on the right path following the end of the Ampel coalition, or is that the wrong conclusion? In the election year of 2025, what do you believe are the most important needs to act on the energy transition?
Nina Scheer: For the energy transition it is essential that we continue with an acceleration in the establishment of renewable energy. In view of our successes, we must not slowdown in a mistaken assumption that this will happen faster than expected. Insofar: Yes, we are on the right track. It would however be the wrong conclusion, to remain as we are. That is because the energy transition has many facets. It requires not only the establishment of renewable energy sources, but also the systemic change to them. That means that the electricity system must be tailored towards the fluctuating outputs of wind and solar energy.
On the topic of approval for renewable energy projects, one continues to hear that despite simplifications that have been achieved, approval procedures remain sometimes long and overly complex. Here much more must be done to ensure that on-site help can also be provided, for example through rapid response teams that could expertly deal with queries upon request.
It’s important to stress that the expansion of renewable energie cannot wait. That may seem obvious, but there are many approaches that can slow down this process. For example, when “predictability” is called for and quantity limitation procedures are applied to the expansion of renewables. Quotas for the share of renewables may also represent such a quantity limit. The systemic change requires that the whole system is aligned to the characteristics of renewable energies in order to use storage and other flexibility tools and grids to achieve full electricity supply from renewables and expansion to all sectors. Even if a simplification for storage is found, there must be further steps. All of these questions will be put to a vote through the upcoming 2025 federal election. The CDU/CSU and FDP do not demonstrate a desire to pursue a system change to renewable energies. It causes alarm that CDU-Chancellor candidate Friedrich Merz electioneers about the costs of the “ugly” wind energy and portrays it as a “transitional” form of energy while seriously pursuing the construction of two nuclear fusion power plants in Germany without the technology being able to supply electricity in the coming decades. At the same time, the CDU/CSU claim that it is their intention to rely on market based instruments. The contradiction on display here is bewildering.
SOLARZEITALTER: For months the federal government have been discussing the implementation of a power plant strategy. Most recently it was agreed that from 2028 a capacity mechanism will be operational in Germany. For what purpose do we need such an instrument and which parameters are important for the implementation?
Nina Scheer: Initially, the discussion and the declared and calculated need for an additional security instrument for secure capacity is characterised by failures. If we had used the levers of systematic changeover fully in earlier years, we would not be having the discussion today about a capacity mechanism. The issues in question about the flexibility instruments were addressed in the context of full renewable supply. From today’s perspective, it is therefore important to ensure that neither renewables nor storage options are displaced by newly incentivised power plant capacities. That would not only lead to avoidable price increases, but also a slowing of the systemic switch to renewables. With this background, it is unsuitable that bioenergy capacity would be left idle as a result of a lack of follow-up funding while at the same time, new gas-fired power plant capacities are being expanded. Renewables and their storage capacity must have priority here too. In purely quantitative terms, installation and grid connections present us with serious challenges.
It is regrettable that a law which has already been passed by the Bundestag and come into force (§ 13k EnWG) is currently not being adequately implemented by the transmission system operators and the Bundesnetzagentur (German Federal Network Agency). The law states that one should “utilise rather than regulate”. In contrast to the legal provisions, bids are currently only issued for a limited period of two years and on a flat-rate basis. The first round was without success. Now it remains to be seen, how it will develop. What is problematic is that it was overlooked in the implementation that we intentionally avoided legislating a time limit and a flat-rate. We had instead provided by law for the regulation to be without time limits and not subject to a flat-rate. The only deviations from this are the possibility of additional flat-rate bids for two years. If there is no time limit, it is much more attractive for the investment security of potential operators of electrolysers or for the usage of electricity for heating. We must continue to find solutions to impediments here, which will also help with the systemic changeover.
SOLARZEITALTER: What is the power plant strategy after the end of the Ampel coalition?
Nina Scheer: The power plant strategy can no longer be passed with the governing majority from the Ampel parties. At the same time, there are statements from the Union on the topic. In any case, it is vital that we use the upcoming period to make progress with energy policies. In connection with the federal election there are still many other questions on the programme. One cannot be certain whether the Merz-Union will stand by the coal and nuclear exit consensus of the Merkel era. As always, it is urgent to determine whether a federal government led by the CDU/CSU will make the correct systemic decisions for secure accomplishments with a focus on renewables, flexibility and storage or revert to the old ways of fossil and nuclear. The energy transition in 2025 is therefore once again all about the big picture.
SOLARZEITALTER: Another important topic are the grid costs, which are currently increasing, although the large investments in grid expansion are still to come. How do we solve the situation?
Nina Scheer: On the basis of the internal electricity market regulations, several years ago the European Court of Justice (ECJ) ruled that in Germany we had to achieve a legal readjustment of responsibilities, which led to a reform of the Energy Industry Act (EnWG) and to the transfer of decision making authority to the German Federal Network Agency (BNetzA). Since then, the BNetzA is responsible for grid costs. From 1st January 2025 a new mechanism will lead to notably lower grid fees in all regions, which were previously subject to significantly higher grid fees as a result of high grid expansions and grid connections. In this respect, there is now consequential relief to regions that were previously heavily burdened with grid fees. This is only an interim result, however. As a result of the massive grid expansion in the coming years, grid fees will increase again. This may be remedied, if the expansion and transformation costs, thus all costs, that aren’t directly in the regulatory, consumption areas, are in future no longer simply funded by the grid fees, but are separated and instead absorbed by the state into the budget. The taking over of part of, or the whole grid by the state, would smooth this transition.
Currently in discussion is however a model that – despite the fact that the initial situations are not necessarily comparable – was already found for the hydrogen core network: an amortisation account. This functions in that the financing is spread out over time and ends up with the consumers and would be supported by the state in the interim time.
SOLARZEITALTER: 2024 is a new record year with hours of negative prices on the spot market, especially due to the high photovoltaic feed-in. Some people are consequently calling for an end to EEG subsidisation. Why is this not the correct solution and what other options for action are there?
Nina Scheer: Today there are already projects without state funding. One must however not carelessly generalise these projects. Different factors decide over the financial feasibility of projects. From the cost of land, their earnings situation, access routes, the power connection situation, use competitors, to the technology that can be used in each case and, last but not least, the actors which must be present on-site. If the potential of renewables and their actors in decentralisation is to be fully utilised and made available to people and businesses and also the grid use will be expanded over time, not only the best areas must come into focus. Indeed, renewables must be taken advantage of in their full range, including on the area side. Without a state financial instrument this state would not be achieved today. The better the systemic changeover, the better financing for renewable energy will fit into this basis. The EU is instructing us from 2027 to place a profit levy on funding. In this sense, we certainly need to reform. On the highest level, the coalition agreed in the 2025 budget on a changeover to investment funding and had initially agreed to examine the practicability through pilot procedures. That should not however be interpreted as an abolition of the EEG, because that has not been agreed.
SOLARZEITALTER: Nevertheless, apparently under pressure from the FDP, in the white paper for electricity market design this summer, the Federal Ministry for Economic Affairs and Climate Action left the agreed course of the Ampel coalition and without gathering practical experience from the pilot projects, unilaterally agreed to a new funding model based upon recommendations of investment cost funding. Following the end of the Ampel coalition, this white paper has been shelved. Will it be revived following the 2025 federal election?
Nina Scheer: There is in fact great astonishment at this proposal, which was clearly not a result of practical experience, but rather a deal between actors, from which on one side, the FDP, would rather abolish existing funding immediately and on the other side, the SPD and the Greens, who wish to stick to and build upon successful developments. I do not believe that investment cost funding can provide the security that led to the huge growth of renewables from the EEG and is currently leading to it again following years of accumulated impediments. The functional capability of the measures must be more central to the technical debate, so that no approaches are adopted which are not suitable to successfully bring the energy transition forwards.
SOLARZEITALTER: The Union supports a return to nuclear energy. The [former] Federal Finance Minister from the FDP demands a delay of the climate goals from 2045 to 2050. In the whole of Europe support is growing for right-wing populist parties, who often deny climate change. How do you view this situation and how do you maintain your confidence?
Nina Scheer: Technically, a return to nuclear energy via the Union is a zig-zag course. That was already the case with the extension in 2010, the retraction of the nuclear phase-out in 2011 and that would now be continued, according to what is in their manifesto. In the Bundestag however, there is generally only talk of moratoriums on nuclear dismantlement and Friedrich Merz is now switching to cooperation with France.
The fact is: the always promised return to nuclear energy is not happening. The international figures currently being circulated are technically forecast figures that must be later corrected. The worldwide share of nuclear energy is receding, the building times of nuclear reactors are growing with rising costs. However yes: there are still decisions to build new reactors. It is nevertheless notable that this is particularly the case in states with nuclear weapons or the states which supply them. In other words: the decision in favour of nuclear energy in these states is not motivated by energy policy, but rather by securing know-how, staff, knowledge and materials and technology for dealing with nuclear energy. In this respect, energy policy cannot be assumed here, if armaments policy is involved. That would lead to misplaced conclusions.
Also systematically considered, it would be a mistake to rely on nuclear energy. Alongside the problems with residual risks, missing final disposal sites and massive costs – it is difficult to regulate and therefore does not fit with the growth of renewable energy. This is exactly where the danger lies: whoever continues to stand by nuclear energy – as unrealistic as a return is – has not understood the systemic challenges of the switch to renewable energy and continues to postpone the required modernisation towards a new energy market order based upon renewable energy. This continued refusal to accept reality has become a heavy burden for energy security. More than 60% of electricity supply now comes from renewables and the framework must therefore now be adapted to the characteristics of renewables – namely, a combination of renewables, flexibility and storage capacity.