Skip to main content
SpringerLink
Log in
Book cover

The European Dimension of Germany’s Energy Transition pp 283–300Cite as

Rising Energy Prices Due to Inefficient Support for Renewables: An Economic Assessment of the Status Quo and Alternatives in Germany

  • Chapter
  • First Online:

  • 1134 Accesses

Abstract

At the European national and subnational levels exists a multitude of laws and programmes for the promotion of renewable energies. Taking Germany’s energy transition as an example, the most important regulations for the electricity, heat and transport fuel markets are the Renewable Energy Sources Act (EEG), the Renewable Energies Heat Act (EEWärmeG), the Law on Cogeneration of Heat and Power (KWKG), the Energy Tax Law and the Biofuel Quota Act. In addition to market incentives directly linked to the renewable energy markets, the electricity and heating sector is influenced by the regulations of the European Union Emissions Trading System (EU ETS). Comments on these support programmes and targets range from scathing to praising. We argue that a fundamental reform of the support system for renewable energies in Germany is required if the largest possible contribution to climate mitigation is to be achieved at the lowest possible cost. We show how such a support system could be designed in practice. Since the support system for renewables in Germany is not independent from European climate policies, we discuss possible support systems under the assumption that the EU ETS remains in place.

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   139.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD   179.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Notes

  1. 1.

    At the same time, the number of producers exempted from payments for the EEG tripled between 2010 and 2014 and reached a production volume of almost 18% of total electricity production (Delzeit et al. 2014).

  2. 2.

    Based on personal correspondence of the authors with the certification system International Sustainability and Carbon Certification (ISCC).

References

  • Acemoglu, D., Aghion, P., Bursztyn, L., & Hemous, D. (2012). The environment and directed technical change. American Economic Review, 102, 131–166.

    Article  Google Scholar 

  • Aghion, P., David, P. A., & Foray, D. (2009). Science, technology and innovation for economic growth: Linking policy research and practice in ‘STIG Systems’. Research Policy, 38, 681–693.

    Article  Google Scholar 

  • Agora Energiewende. (2015). Die Energiewende im Stromsektor: Stand der Dinge 2014. Retrieved from http://www.agora-energiewende.de/fileadmin/Projekte/2014/Jahresrueckblick-2014/Agora_Energiewende_Jahresauswertung_2014_web.pdf

  • Álvarez, F., & André, F. J. (2015). Auctioning versus grandfathering in cap-and-trade systems with market power and incomplete information. Environmental and Resource Economics, 62(4), 873–906.

    Article  Google Scholar 

  • Bardt, H. (2014). EEG 2.0: Ein zweiter Schritt muss folgen (No. 5/2014). IW policy paper.

    Google Scholar 

  • BioKraftQuG. (2007). Gesetz zur Einführung einer Biokraftstoffquote durch Änderung des Bundes-Immissionsschutzgesetzes und zur Änderung energie- und stromsteuerrechtlicher Vorschriften (Biokraftstoffquotengesetz). BGBl, (Federal Law Gazette) I, p. 3180.

    Google Scholar 

  • Boersen, A., & Scholtens, B. (2014). The relationship between European electricity markets and emission allowance futures prices in phase II of the EU (European Union) emission trading scheme. Energy, 74, 585–594.

    Article  Google Scholar 

  • Bofinger, P. (2013). Förderung fluktuierender erneuerbarer Energien: Gibt es einen dritten Weg? Gutachten im Rahmen des Projekts „Stromsystem - Eckpfeiler eines zukünftigen Regenerativwirtschaftsgesetzes“, Auftraggeber: BadenWürttemberg Stiftung gGmbH unter Federführung der IZES gGmbH (Institut für ZukunftsEnergieSysteme).

    Google Scholar 

  • Böhringer, C., & Lange, A. (2012). Der europäische Emissionszertifikatehandel: Bestandsaufnahme und Perspektiven. Wirtschaftsdienst, 92(1), 12–16.

    Article  Google Scholar 

  • Borghesi, S. (2011). The European emission trading scheme and renewable energy policies: Credible targets for incredible results? International Journal of Sustainable Economy, 3(3), 312–327.

    Article  MathSciNet  Google Scholar 

  • Branger, F., Ponssard, J. P., Sartor, O., & Sato, M. (2015). EU ETS, free allocations, and activity level thresholds: The devil lies in the details. Journal of the Association of Environmental and Resource Economists, 2(3), 401–437.

    Article  Google Scholar 

  • Brink, C., Vollebergh, H., Verdonk, M., & van der Werf, E. (2014). Quantifying the effects of reforming the EU emissions trading system. A computable general equilibrium analysis. Fifth World Congress of Environmental and Resource Economists, Istanbul, Turkey.

    Google Scholar 

  • Buchholz, W., Frank, J., Karl, H. D., Pfeiffer, J., Pittel, K., Triebswetter, U., et al. (2012). Die Zukunft der Energiemärkte. Ökonomische Analyse und Bewertung von Potenzialen und Handlungsmöglichkeiten, ifo Forschungsberichte, 57.

    Google Scholar 

  • Bundesministerium für Wirtschaft und Energie (BMWI). (2015). Die Energiewende gemeinsam zum Erfolg führen - Auf dem Weg zu einer sicheren, sauberen und bezahlbaren Energieversorgung. Retrieved from http://www.bmwi.de/BMWi/Redaktion/PDF/Publikationen/die-energiewende-gemeinsam-zum-erfolg-fuehren,property=pdf,bereich=bmwi2012,sprache=de,rwb=true.pdf

  • Bundesministerium für Wirtschaft und Energie (BMWI). (2016). EEG Novelle 2017. Kernpunkte des Bundestagsbeschlusses vom 8.7.2016, Bundestagsdrucksache 18/8832, Berlin.

    Google Scholar 

  • Delzeit, R., Henke, J., Klepper, J., Schmitz, N., & Söder, M. (2014). Schlussbericht: Optionen für eine konsistente Förderung erneuerbarer Energieträger. So far unpublished report of a project (22031512) financed by the German Agency for Renewable Resources (FNR).

    Google Scholar 

  • Diekmann, J., Kemfert, C., Neuhoff, K., Schill, W. P., & Traber, T. (2012). Erneuerbare Energien: Quotenmodell keine Alternative zum EEG. DIW-Wochenbericht, 79(45), 15–20.

    Google Scholar 

  • EEG. (2014). Gesetz für den Ausbau erneuerbarer Energien EEG 2014. BGBl, (Federal Law Gazette) I, p. 1066. Last changes 29 June 2015 (BGBl. I p. 1010).

    Google Scholar 

  • EEG. (2017). Gesetz zur Einführung von Ausschreibungen für Strom aus erneuerbaren Energien und zu weiteren Änderungen des Rechts der erneuerbaren Energien vom 13.10.2016. BGBl I, p. 2258.

    Google Scholar 

  • EEWärmeG. (2008). Gesetz zur Förderung Erneuerbarer Energien im Wärmebereich.

    Google Scholar 

  • Ellerman, A. D., Convery, F. J., & De Perthuis, C. (2010). Pricing carbon: The European Union emissions trading scheme. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Ellerman, A. D., Marcantonini, C., & Zaklan, A. (2014). The EU ETS: Eight years and counting. Robert Schuman Centre for Advanced Studies Research Paper No. 2014/04.

    Google Scholar 

  • Endres, A. (2013). Umweltökonomie. 4., aktualisierte und erweiterte Auflage. Stuttgart: Kohlhammer.

    Google Scholar 

  • EnergieStG. (2006). Energiesteuergesetz. BGBl, (Federal Law Gazette) I, p. 1534. Last changes 18 July 2014 (BGBl. I p. 1042).

    Google Scholar 

  • EU-President Junker. (2014). Retrieved from http://www.euleadingrenewable.eu/

  • European Commission. (2009). Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC. Official Journal of the European Union, L140/16 of 5.6.2009.

    Google Scholar 

  • European Commission (EC). (2014). 30/04/2014 – Consolidated version of Directive 003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02003L0087-20140430&from=EN

  • European Council. (2014, October 23/24). 2030 Climate and energy policy framework – conclusion. EUCO 169/14. Retrieved from http://data.consilium.europa.eu/doc/document/ST-169-2014-INIT/en/pdf

  • Fischer, C., & Newell, R. G. (2008). Environmental and technology policies for climate change mitigation. Journal of Environmental Economics and Management, 55, 142–162.

    Article  Google Scholar 

  • Frondel, M., Schmidt, C. M., & Vance, C. (2012). Germany’s solar cell promotion: An unfolding disaster. Ruhr Economic Papers 309 (353), Bochum.

    Google Scholar 

  • Gawel, E., Lehmann, P., Prukus, A., Söderholm, P., & Witte, K. (2016). The rationales for technology-specific renewable energy support: Conceptual arguments and their relevance for Germany. UFZ Discussion Papers, No. 4/2016.

    Google Scholar 

  • German Advisory Council on the Environment (SRU). (2013). Shaping the Electricity Market of the Future (Den Strommarkt der Zukunft gestalten). Sondergutachten, Sachverständigenrat für Umweltfragen. Berlin.

    Google Scholar 

  • Handelsblatt. (2014). Wo ist der Strom noch teurer als in Deutschland? Retrieved July 14, 2015, from http://www.handelsblatt.com/technik/das-technologie-update/frage-der-woche/kostspielige-energiewende-wo-ist-der-strom-noch-teurer-als-in-deutschland/9552378.html

  • Haucap, J., & Kühling, J. (2012). Zeit für eine grundlegende Reform der EEG-Förderung: Das Quotenmodell (No. 33). DICE Ordnungspolitische Perspektiven.

    Google Scholar 

  • Hermann, H., Cludius, J., Förster, H., et al. (2014). Ausweitung des Emissionshandels auf Kleinemittenten im Gebäude- und Verkehrssektor. Climate Change 03/2014, Umweltbundesamt.

    Google Scholar 

  • IPCC. (2013). Climate change (2013). The physical science basis. Contribution of working Group I to the fifth assessment report of the intergovernmental panel on climate change (p. 1535). Cambridge: Cambridge University Press.

    Google Scholar 

  • IW Consult. (2014, November 25). BDI-Energiewende-Navigator 2014: Monitoring zur Umsetzung der Energiewende. Berlin. Retrieved July 14, 2015, from http://www.iwkoeln.de/studien/gutachten/beitrag/iw-consult-bdi-energiewende-navigator-2014-201042?highlight=energiewende

  • Jacobsson, S., & Lauber, V. (2006). The politics and policy of energy system transformation—explaining the German diffusion of renewable energy technology. Energy Policy, 34(3), 256–276.

    Article  Google Scholar 

  • Juergens, I., Barreiro-Hurlé, J., & Vasa, A. (2013). Identifying carbon leakage sectors in the EU ETS and implications of results. Climate Policy, 13(1), 89–109.

    Article  Google Scholar 

  • Kalkuhl, M., Edenhofer, O., & Lessmann, K. (2013). Renewable energy subsidies: Second-best policy or fatal aberration for mitigation? Resource and Energy Economics, 35, 217–234.

    Article  Google Scholar 

  • Kraft-Wärme-Kopplungsgesetz. (2002). Gesetz für die Erhaltung, die Modernisierung und den Ausbau der Kraft-Wärme-Kopplung. BGBl, (Federal Law Gazette) I, p. 1092. Last changes 21 July 2014 (BGBl. I p. 1066).

    Google Scholar 

  • Krewitt, W., & Schlomann, B. (2006). Externe Kosten der Stromerzeugung aus erneuerbaren Energien im Vergleich zur Stromerzeugung aus fossilen Energieträgern. Deutsches Zentrum für Luft-und Raumfahrt (DLR), Institut für Thermodynamik, Fraunhofer Institut für Systemund Innovationsforschung, Gutachten für das Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit, Stuttgart.

    Google Scholar 

  • Lehmann, P. (2013). Supplementing an emissions tax by a feed-in tariff for renewable electricity to address learning spillovers. Energy Policy, 61, 635–641.

    Article  Google Scholar 

  • Lehmann, P., & Gawel, E. (2013). Why should support schemes for renewable electricity complement the EU emissions trading scheme? Energy Policy, 52, 597–607.

    Article  Google Scholar 

  • Leprich, U., Grashof, K., Guss, H., Klann, U., Weber, A., Zipp, A., et al. (2013). Stromsystem-Design: Das EEG 2.0 und Eckpfeiler eines zukünftigen Regenerativwirtschaftsgesetzes. Institut für Zukunftsenergiesysteme (IZES)/Lehrstuhl Prof. Dr. Peter Bofinger Universität Würzburg/Büro für Energiewirtschaft und technische Planung (BET), Saarbrücken/Würzburg/Aachen.

    Google Scholar 

  • Nader, N., & Reichert, G. (2015). Erweitert den Emissionshandel! Effektive und effiziente Reduktion von Treibhausgasen im Straßenverkehr. Freiburg: Centrum für Europäische Politik. Retrieved from http://www.cep.eu/Studien/cepInput_ETS-Erweiterung/cepInput_ETS-Erweiterung.pdf

  • Palmer, K., & Burtraw, D. (2005). Cost-effectiveness of renewable electricity policies. Energy Economics, 27, 873–894.

    Article  Google Scholar 

  • Perman, R. (2011). Natural resource and environmental economics (4th ed). Pearson Education.

    Google Scholar 

  • Petrick, S., & Wagner, U. (2014). The impact of carbon trading on industry: Evidence from German manufacturing firms. Kiel Working Paper, No. 1912.

    Google Scholar 

  • Purkus, A., Gawel, E., Deissenroth, M., Nienhaus, K., & Wassermann, S. (2014). Der Beitrag der Marktprämie zur Marktintegration erneuerbarer Energien: Erfahrungen aus dem EEG 2012 und Perspektiven der verpflichtenden Direktvermarktung (No. 21/2014). UFZ Discussion Papers.

    Google Scholar 

  • Rickels, W., Görlich, D., & Peterson, S. (2015). Explaining European emission allowance price dynamics: Evidence from Phase II. German Economic Review, 16(2), 181–202.

    Article  Google Scholar 

  • Schneider, S. H., & Goulder, L. H. (1997). Achieving low-cost emissions targets. Nature, 389, 13–14.

    Article  Google Scholar 

  • Sijm, J. P. M. (2002). The performance of feed-in tariffs to promote renewable electricity in European countries. Report ECN-C02–083, Energy Center of the Netherlands (ECN), Petten.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Kiel Institute for the World Economy, Kiel, Germany

    Ruth Delzeit, Gernot Klepper & Mareike Söder

Authors
  1. Ruth Delzeit
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Gernot Klepper
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Mareike Söder
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Mareike Söder .

Editor information

Editors and Affiliations

  1. Department of Economics, Helmholtz Centre for Environmental Research – UFZ, Leipzig, Germany

    Erik Gawel

  2. Department of Economics, Helmholtz Centre for Environmental Research – UFZ, Leipzig, Germany

    Sebastian Strunz

  3. Department of Economics, Helmholtz Centre for Environmental Research – UFZ, Leipzig, Germany

    Paul Lehmann

  4. Department of Economics, Helmholtz Centre for Environmental Research – UFZ, Leipzig, Germany

    Alexandra Purkus

Rights and permissions

Reprints and permissions

Copyright information

© 2019 Springer Nature Switzerland AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Delzeit, R., Klepper, G., Söder, M. (2019). Rising Energy Prices Due to Inefficient Support for Renewables: An Economic Assessment of the Status Quo and Alternatives in Germany. In: Gawel, E., Strunz, S., Lehmann, P., Purkus, A. (eds) The European Dimension of Germany’s Energy Transition. Springer, Cham. https://doi.org/10.1007/978-3-030-03374-3_16

Download citation

  • DOI: https://doi.org/10.1007/978-3-030-03374-3_16

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-03373-6

  • Online ISBN: 978-3-030-03374-3

  • eBook Packages: EnergyEnergy (R0)

Publish with us

Policies and ethics

Search

Navigation