© REUTERS/Wolfgang Rattay

It was hailed as a breakthrough: nearly four months after the election Chancellor Angela Merkel’s conservatives and the Social Democrats agreed to launch formal negotiations on forming a government together, again. In a 28-page draft policy agreement, the negotiating parties listed the compromises they had spent weeks wrangling over – and skirted around the issues where no agreement could be reached.

During negotiations, the two sides appeared ready to drop German-authored plans to lower carbon dioxide emissions by 40 percent from 1990 levels by the year 2020 because it simply wouldn’t be feasible – the country has only managed to slash 27 percent until now. In the end, however, they kicked the can further down the road, appointing a commission to create a blueprint for reducing emissions as quickly as possible and gradually phasing out coal power.

It is a glaring departure from the green image Germany has built. Just a handful of years ago, the country’s Energiewende, or energy transition, was seen as a shimmering example of how the world could beat climate change that the German term itself—rather than “energy transition” or “clean energy revolution”—was being used in American media.  This was its raison d’etre – and the physicist-chancellor Angela Merkel appeared fully convinced of its promise, which she showcased in international climate conferences, winning her the moniker die Klimakanzlerin, or the climate chancellor.

And even though renewable energy generation in Germany broke more records in 2017, growing to cover an astounding 36.1 percent of the country’s electricity needs, that won’t offset the country’s rising carbon emissions enough to meet its own goal of reducing greenhouse gas emissions by 40 percent in 2020.

Breaking Up Monopolies

Germany commenced its Energiewende less than two decades ago by breaking up the monopoly of a few giant utilities and setting market conditions for wind and solar power, as well as bioenergy, to become one of the economy’s primary sources of power. In addition, it created over 300,000 jobs, local revenue for rural areas, and cutting-edge exportable technology.

Inspired by Germany’s ingenuity and gumption, I undertook to learn everything I could about Germany’s visionary experiment by visiting the citizen-prosumers on the ground from the Baltic Sea to the Black Forest, and interviewing the Energiewende’s thinkers. I authored a blog about Germany’s clean energy revolution and wrote dozens of articles for English-language media. For five years, I lived and breathed the Energiewende, convinced that Germany was a determined pioneer in an effort that would keep our planet livable for future generations of human beings and other species.

Yet, despite Merkel’s vigorous push after the meltdown at the Fukushima power plant in Japan in spring 2011, Germany’s commitment to the mission has since fallen off dramatically. It is now a middling contender in the field of climate protection, ranked a lowly 29 out of 61 countries worldwide by the NGO Germanwatch. About two years ago, I noticed that there was ever less new hailing from Germany to write about. I cancelled my blog.

There’s a good measure of hypocrisy in the way Germany continues lecturing other countries like the US about climate protection while it falls ever further behind on its own 2020 emissions reduction goals. As much as Washington deserves a lecturing on the topic, Germany no longer has the cachet to do it.

Playing the Spoiler

These days Berlin even plays the spoiler, throwing its weight around in the EU to the detriment of progressive environmental legislation, as it is currently doing on the EU’s long-awaited climate and energy package—seminal legislation, currently in draft form, that will underpin the transformation of the European energy system until 2030. Germany has pushed to weaken provisions that would open up energy markets to citizens’ initiatives and other new business entrants – the very actors who ignited the grassroots Energiewende in the first place.

One reason for Germany’s demise as climate leader is not public opinion, which overwhelmingly backs the Energiewende and is fearful of climate change. On the contrary, it’s Germany’s grand coalition of Christian Democrats (CDU/CSU) and Social Democrats (SPD), which will most probably be renewed this year for another four-year term. Indeed, Germany’s two biggest parties came to power four years ago talking not about hitting Germany’s emissions targets or prompting the Energiewende’s next exciting breakthrough, but rather about how to slow it down. And this they did.

Chancellor Merkel still pays lip service to climate issues, but her party’s commitment to Germany’s automobile industry is obviously greater. She’s illustrated this by pushing to lower emissions standards for cars made in the EU, allowing the EU carbon trading scheme to collapse, and turning a blind eye to the testing standards of Germany’s diesel gas-guzzlers.

The Social Democrats, her partner in office, haven’t been any better, putting the interests of a small number of coal miners and recalcitrant fossil fuel companies above those of the planet. Germany burns more coal than any other country in Europe; state-subsidized, coal-fired plants provide 37 percent of its power, most of it from lignite, the dirtiest kind of coal. At the recent UN climate summit (in Bonn, Germany, of all places), the Germans refused to join a coalition of 19 countries led by Canada and the UK to set a date for ending coal use. In fact, new coal pits are still being excavated in the west of the country.

The grand coalition’s tepid endorsements of renewables and its changes to support systems have caused investment in renewables to drop to its lowest since 2007; permits to build onshore wind parks have been capped at just 2.8 GW a year through 2019—a gross underachievement compared to the 4.6 GW of installments in 2016.  New investment in and deployment of solar power is lagging in a similar way. Moreover, half-hearted energy savings measures failed to stem the still-rising volumes of oil and gas used in transportation, heating, and industry.

Wrong Moment

This is absolutely the wrong moment for Germany to be curbing renewables. Despite the fact that Germany’s renewables have replaced many gig watts of fossil-fuel generated energy, Germany’s emissions have not declined significantly over the last decade. Although this is in part explained by the economy’s growth, the country’s total emissions increased every year over the last three years.

Merkel long ago forfeited her title as climate chancellor, failing time and again to stand up for the climate. She barely mentioned the environment in her election campaign this year (the Social Democrat candidate Martin Schulz wasn’t any better on the topic).

While it’s hard to fall lower than US federal climate protection polices under the Trump administration, I’m not surprised by Trump’s negligence. But I hadn’t expected Germany to balk so suddenly.

After Trump’s election victory and the looming prospect of America’s retreat from the global stage, there was immediate speculation that Germany would assume the mantle of leader of the free world. This, of course, was never a serious option considering Germany’s humble military and skittish geopolitics. But it could have stepped in and led the world on climate protection.

Not so long ago, German energy specialists immodestly called the Energiewende “Germany’s gift to the world.” It was. Now, the least Germany can do is not to play the spoiler.

The post Political Climate Change appeared first on Berlin Policy Journal - Blog.

© REUTERS/Leonhard Foeger

In his State of the Union speech on September 9, Jean-Claude Juncker, president of the European Commission, broached a topic that until now had been virtually absent from discussion about the refugee emergency. Climate change, he said bluntly, is one of the root causes of the ongoing exodus. Global warming is responsible for longer-lasting droughts, more violent storms, and rising sea levels that worsen the living conditions of hundreds of millions. Its fallout, Juncker warned, will trigger massive south to north refugee flows that will only increase in the years to come – unless the EU and its international partners get serious about reducing greenhouse gases in the atmosphere.

In a welcome show of foresight, Juncker said that an “ambitious, robust, and binding“ climate treaty is critical to prevent unmanageable emigration. A watershed moment is approaching, he warned: the United Nations climate change conference in December in Paris. The meeting’s goal is to forge an international treaty that will keep global warming below 2 degrees Celsius – an aim that looks increasingly unlikely even in the best of scenarios.

The term “climate wars” was popularized by the German scholar Harald Welzer. He argues that one of the powerful new forces already shaping the 21st century is a scarcity of resources – food and water, arable soil – which the rise in global temperatures and ever more extreme weather has exacerbated.

As a result of climate change, he argues, “inhabitable spaces shrink, scarce resources become scarcer, and injustices grow deeper, not only between north and south but also between generations.” Countries in the southern hemisphere will suffer drought, floods, and soil erosion. Our not-so-distant future, he wrote presciently in his 2011 book Climate Wars: What People Will Be Killed For in the 21st Century, will be marked by violent conflicts over drinking water, enormous refugee movements, and civil wars in the world’s poorest countries.

The drivers of the current migration flows are complex and diverse: the Syrian war, poverty in the Balkans, instability in Iraq, Afghanistan, and Eretria. It may not be as visible as, say, the march of Islamic fundamentalism, but climate change already plays a major role in these places and these conflicts. Yet it is just a taste of what could be to come.

Take the war in Syria, which has caused four million people to flee since 2011. One of the war’s often overlooked causes was water shortage. A severe, years-long drought that began in 2007 caused crops to fail and crop land to turn into desert. The US author of a major study on the war and natural resources, Columbia University‘s Richard Seager, argues that the drought destabilized Syria by forcing 1.5 million migrants from rural communities to flee their homes. The drought “was made more intense and persistent by human-driven climate change, which is steadily making the whole eastern Mediterranean and Middle East region even more arid,“ says Seager.

It would be wrong to say that climate changed “caused” the uprising in Syria 2011 – or other conflicts in the region. The core factors driving it were political: the dictatorship, poor governance, economic mismanagement. Climate protection alone thus won’t solve them.

However, climate change exacerbated existing problems – and Syria is hardly the only country in the Middle East and North Africa where water is in short supply. Lebanon, Jordan, Israel, Iraq, and Iran are drying up, while East African countries such as Somalia and Sudan could descend into drought-fuelled conflict at any moment, says Seager. Lebanon, Jordan, Iraq and Afghanistan are highly vulnerable, as is Central America, particularly Mexico. This means the US cannot look away – which would be hard anyway given the wildfires in California this past summer.

In fact, there are ever more signs that the US has an eye on the problem, which could be one of the motives behind President Obama’s new focus on climate issues. During a trip to Alaska in August, US Secretary of State John Kerry used unusually apocalyptic language when addressing a global warming conference. “You think migration is a challenge in Europe today because of extremism, wait until you see what happens when there’s an absence of water, an absence of food, or one tribe fighting against another for mere survival,” he warned.

Even a few Republicans have linked security and global warming. Late last year, Obama’s then defense secretary, Chuck Hagel – a Republican – called climate change “a threat multiplier.“ “The loss of glaciers will strain water supplies in several areas of our hemisphere,” he said. “Destruction and devastation from hurricanes can sow the seeds for instability. Droughts and crop failures can leave millions of people without any lifeline and trigger waves of mass migration.”

Hagel singled out the Sahel region of Africa, which stretches from Senegal in the west to Eritrea in the east, including parts of Mali, Niger, Sudan and Nigeria. There desertification has placed millions at risk. As Craig Bennett, CEO of Friends of the Earth, points out, “mass migration will be occurring in many regions of the world, with or without armed conflict.” Even in years cooler than this one – the hottest on record ever – Eritrea, Sudan and Nigeria experienced exodus because of water shortages.

As helpful as the frankness of Hagel and the military establishment is in underscoring the danger of global warming, it’s also important that the Pentagon does not somehow become the main actor in finding a solution. Climate protection funding should not go to the military, an institution whose expertise is not environmental conservation.

It’s a lot to ask of European and international leaders to look down the road when they’ve got fires to douse all around them. But much of the heavy lifting for the Paris summit has already been done. Many experts believe that an agreement in Paris that fixes short-term commitments and five-year cycles with reviews of countries’ carbon emission cuts is the way to go. It would lack a larger vision beyond 2030, but it would secure greenhouse gas reduction until then. Long-term commitments without interim benchmarks could allow countries to slip behind on compliance. It might be the best we’ll get.

Some experts are now saying that even the 2 degree goal is now unrealistic – 3 degrees is now what we can hope for. Keep in mind that the damage we’re seeing now – if indeed climate change is behind it, which we can’t be sure of despite the high likelihood – is the consequence of temperatures rising less than one degree.

Even so, the Paris summit remains an historic opportunity that the EU can build on, recapturing the position it once held as trail-blazer and best practice model on climate change. In his speech, Juncker admitted that the EU is “probably not doing enough” to tackle climate change. He’s right. Indeed, it’s not an issue Juncker often alludes to. The EU has announced greenhouse gas emission cuts of 40 percent by 2030, which is commendable. But it’s not enough to secure a global commitment that will halt the processes of climate change. Moreover, environmental groups say the EU has yet to spell out how it will hit its climate and energy targets. Hopefully Juncker’s admission is a sign that the refugee crisis has created new momentum to tackle global warming.

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© REUTERS/Jason Ree

1. It Can Happen Fast

Germany has managed to move more quickly than any other major industrial country in transforming its electricity sector into one based on renewables. In just 15 years time, Germany has raced from having a power sector with about 5 percent of its power coming from renewable sources (mostly small hydro-electric plants) to generating a full third of its electricity from them, including on- and off-shore wind, bio-energy, hydro, thermal, and photovoltaic solar. On July 25, on a sunny and relatively windy day, Germany’s renewables accounted for 74 percent of its electricity.

This is a faster shift than anyone, even the environmentally minded Green party, anticipated in 2000 when the Renewable Energy Resources Act was passed. The key to the transition’s success: a surcharge on electricity (the feed-in tariff) that helped investors pay for the initial investments into renewable energy generation technology as prices for the generation technology plummeted. Optimists like Greenpeace Germany, who are pushing for the Energiewende to be accelerated, say that Germany could have two-thirds of its power generated from renewable sources by 2030, and 100 percent by 2050. The German government is more conservative: it expects to be 80 percent renewable by 2050.

2. Renewables Don’t Hurt the Economy  

Germany provides stellar evidence that renewable energy expansion, if done correctly, won’t stunt economic growth. While Germany has made incredible strides in expanding renewables, its highly industrialized economy was one of the first to crawl out of the recession in 2009-2010, and grew steadily in all of the non-crisis years between 2004 and 2015. The transition obviously hasn’t lessened Germany’s competitiveness on the global market, as the country exported more in 2014 than ever before (and increased its already lopsided trade surplus to $234 billion) despite international crises, sanctions against Russia, and sluggish global growth. One export record after another has been shattered – even now, when the rest of Europe’s economies are still mired in a nasty funk.

Moreover, the renewables sector has created about 372,000 jobs in Germany, while other aspects of climate protection policy, like energy efficiency, alternative mobility, educational and training programs, research and development, the decommissioning of nuclear reactors, and grid expansion, may have added at least another 1.5 million posts. The most obvious winners of the Energiewende are those farmers, small- and medium-sized businessmen, and citizen’s groups that have invested in renewable energy and sell it to the power grid. Ask nearly any Bavarian farmer if he or she is for expanding renewables – the farmer will likely say “yes”, even if he or she balks at cutting grid corridors through the Alps.

3. The Workhorses Are Solar and Wind

Each country, region, and municipality will, in the future, have a mostly local energy mix that will reflect its natural resources, needs, and weather patterns. Some countries, like Iceland, can rely on thermal power from volcanic sources in the earth. Others, like the southern Balkans and Norway, will have large hydro-electric works to draw on. But most of the renewable power production in the near future will come from solar photovoltaic and onshore wind power. These two technologies are the backbone of Europe’s transition so far, and have the best prospects for becoming yet cheaper and more effective at the same time.

A recent report by the Berlin-based think tank Agora Energiewende argues that solar photovoltaic is already cheaper than fossil fuels in the sunniest parts of the world, and will be cheaper just about everywhere by 2025. “Solar energy has become cheaper much more quickly than most experts had predicted and will continue to do so,” says Agora Director Patrick Graichen. “Plans for future power supply systems should therefore be revised worldwide. Until now, most of them only anticipate a small share of solar power in the mix. In view of the extremely favorable costs, solar power will, on the contrary, play a prominent role, together with wind energy – also, and most importantly, as a cheap way of contributing to international climate protection.”

4. Involve the Grassroots

Germany’s Energiewende has not been driven by the big gas and power utilities – on the contrary. The existing utilities, deeply invested in nuclear and fossil fuels as they are, have tried to put the brakes on the Energiewende. Rather than invest in the renewables revolution like so many smaller investors, they bet against it – and lost. This is why their profits have plummeted in Germany, while a whole cottage industry of smaller producers and renewable offshoots have capitalized on the transition. The four largest utilities in Germany have only six percent of the share of renewable production – although they are now, finally, scrambling to jump on board. In fact, about two-thirds of the clean power generation facilities are in the hands of farmers, individuals, energy co-ops, citizen’s groups, small- and medium-sized businesses, green investment funds, and municipalities. It is this hands-on engagement that has made the Energiewende in Germany popular, and thus possible. It has promoted a vast democratization of the energy sector, empowering citizens in a business once dominated exclusively by multinationals

5. Nuclear Power is Not Necessary

Germany has been expanding renewables at the same time that it has pursued an exit from nuclear power and hit tough EU greenhouse gas reduction targets. Americans, even American leftists, tend to be much friendlier to nuclear energy than Europeans, particularly the anti-nuclear Germans. But no matter which side you fall on, Germany offers proof that nuclear energy is not necessary to transition to green energy. Contrary to alarmist reports that Germany would have blackouts or power outages in the aftermath of the 2011 Fukushima nuclear disaster, when Chancellor Angela Merkel shut down a third of Germany’s nuclear plants and accelerated a phase-out of the rest, Germany has experienced very few outages, fewer than neighboring countries such as pro-nuclear Czech Republic and France.

6. Disincentivize Coal-Fired Generation

Germany deserves kudos for greening the power sector, but not for pro-actively driving down the share of its energy generated by coal, the dirtiest of all energy sources. In fact, coal’s share in the German mix even increased slightly from 2012 to 2014, although it was still lower in 2014 than at its height in 2010. (It is currently on the way down again.) This is not because renewables couldn’t fill the gap left by the shut-down nuclear plants, but because the German government and the EU refused to put a price on the burning of fossil fuels that would make its use prohibitive. The 2005-launched EU emissions trading scheme was born with a flaw that rendered it ineffective, and the EU, led by its German energy commission, refused to fix it. The lesson: it is not enough to support renewables; coal has to be taxed and disincentivized in other ways. The fossil fuels industry will put up a fierce fight, as it has in Europe, but limiting it is imperative for bringing emissions down.

7. Expand and Smarten the Grid Now

Germany was too slow to expand and upgrade its grid networks, which has slowed expansion and irked some of its neighbors. The fact is that much of the time, there’s too much renewable energy in the German network. Meeting supply with demand when using weather-dependent green energy means either having significant natural storage capacity, like Norway does, or requiring a decentralized smart grid to distribute electricity effectively. Germany is now playing catch-up with grid expansion.

In terms of energy policy and use, the US is very different from Germany in many ways. But the German experience is still relevant: it is an economic heavyweight, with sophisticated, energy-intensive production sectors like those in North America. The Germans are out in front on renewable electricity, but notably behind in other areas, like alternative mobility, for example – where Berlin could learn something from California. US policymakers would do well to take the Energiewende into consideration when plotting their own approach to climate protection.

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(c) REUTERS/Wolfgang Rattay

The current German government has received a good deal of grief from environmentalists and Energiewende supporters lately. This is because it scaled back subsidy programs for the expansion of renewably-generated electricity and called to life tendering procedures that are more likely to benefit larger rather than smaller companies or energy cooperatives. And indeed, the expansion of renewables in the power sector, as well as the mushrooming of coops, has slowed – but not stopped.

But it has also been doing something else for which it hasn’t been given enough credit: namely rounding out the Energiewende. Late last year, Berlin gave energy efficiency the biggest push ever with a package of measures aimed at cutting the country’s emissions by 62-78 million tons of CO2-equivalent by 2020. This is a big step toward meeting its 40 percent climate target. I’ve said it before: Bravo!

It has also been pushing hard for new power grid corridors, despite stiff opposition within the coalition. (This has now gone on far too long and it’s high time that Merkel puts her foot down with the stubborn Bavarians.)

Now it has taken on another long neglected field, namely heat. Until now the Energiewende has concentrated almost exclusively on electricity. And indeed, its greatest accomplishments so far come in the power sector: 27.8 percent of Germany’s electricity supply comes from renewables. On the contrary, in the heating and cooling sector, final energy consumption is lagging way behind: just 9.9 percent, far below 2020’s 14 percent target.

But last week Merkel’s coalition put into motion an initiative to boost the use of renewable heating in buildings. The supports are only worth €300 million – just a drop in the bucket, really, but intended to give a push to the expansion of large solar thermal collectors and biogas production. The support for solar and biogas heat will be revenue dependent – in other words, in the form of a market incentive program like the one that has benefited solar photovoltaics and onshore wind over the last decade. SMEs will benefit from a 10-percent bonus for investing in renewable heat, and large companies will be eligible for further investment grants and loans. The financing is aimed to benefit mostly older residential and commercial buildings – the biggest sinners when it comes to efficiency.

“Through improved incentives we want to significantly speed up the expansion of renewable energy in the heating market,” said Sigmar Gabriel, Germany’s Minister for Economic Affairs and Energy and leader of Angela Merkel’s SPD coalition partner. “We also want to open the program more strongly to the commercial sector.” Getting more businesses, particularly SMEs, involved is critical to keeping popular support behind the Energiewende.

Although it is unclear, writes ENDSEurope, which technology the new guidelines benefit most, the biogas sector sees it favorably. The program’s incentives could cover as much as 30 percent of a facility’s net investment in the construction and expansion of biogas pipelines for untreated biogas.

The program and the new energy savings criteria will enter into force in April 2015.

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(c) REUTERS/Thomas Peter

I’ve been picking the brains of some German experts about the year ahead of us for the Energiewende. What should happen in 2015, and what should we keep our eyes on?

So I asked, among others, Patrick Schmidt, senior project manager and partner at Ludwig Bölkow Systemtechnik, a German strategy and technology consultancy firm in the fields of energy, mobility, and sustainability, located near Munich.

Patrick is the kind of expert that is working on the cutting edge of the Energiewende. He grew up in Freiburg, the southern German city that pioneered “Ökostrom” (green electricity), studying electrical energy technology in Karlsruhe before working on renewable energy and mobility projects for the European Parliament, the German Bundestag, and the automobile industry. Since 2012 he’s been working in connection with the Federal Ministry of Transport and Digital Infrastructure (BMVI) on mobility and fuel strategy.

First, he says, renewable energy expansion in Germany has to be moved into higher gear again. Germany has to “shift the build-up of renewable power systems up one gear,” he says. “The deployment of renewable power systems has been very successful in driving down technology costs. Renewable systems like photovoltaics and wind, for example, have become cost-effective for households and industry through their mass application in Germany. Unfortunately, changes in the regulatory framework in recent years have resulted in slower deployment rates. These barriers must be overcome for Germany to remain in the trajectory for a sustainable development to 2050.”

Second, Patrick argues that Germany has to think broadly about “regulatory frameworks” that allow for more options to integrate fluctuating renewable power production. “Currently,” he says, “the focus of integrating fluctuating renewable power from photovoltaics and wind power is focused on the expansion and smartening up of power grids. But complementary technology options are: supply-side flexibility, demand-side flexibility, energy storage.”

Lastly, there’s lessening the environmental impact of the transport sector, which has so far been a flop in Germany. He’s for “greening conventional transport fuels with renewable power.” What exactly does he mean? “Power-to-methane and power-to-liquids are fuels that allow for a smooth Energiewende through established transport fuel infrastructures and drives, i.e., they are of ‘drop-in’ quality and thus a good starter to get things going in the transport sector. Certainly, these drop-in fuels come at a cost in the beginning, which would have to be shared and borne among users of conventional fuels. What can be taken for granted is that technology costs will be driven down with increasing amounts of renewable power-to-anything fuels in the market. The past ten years have shown how fast progress can be with the Energiewende in the electricity sector. A view into the rearview mirror shows that the energy transition in the transport sector has not gained at the same pace – but it could.”

(NB. Patrick Schmidt’s personal views do not necessarily reflect those of Ludwig Bölkow Systemtechnik.)

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(c) REUTERS/Ina Fassbender

2014 saw the Energiewende, Germany’s renewable energy transition, clear a few formidable hurdles and post some encouraging gains. But there were setbacks, too.

First there were the production numbers, which should increase from year to year as renewable capacity expands – and if the weather plays along, which it did. For the first time ever, renewables led power production in Germany, outpacing nuclear, black coal, and lignite (but not lignite and black coal combined). Renewables generated 27.3 percent of Germany’s electricity, up from 25 percent last year. Moreover, energy consumption dropped by 3.8 percent while the economy grew by 1.4 percent, which the Berlin think tank Agora Energiewende said is a sign that investments in energy-saving devices and equipment are paying off.

Very big – and welcome –  news is that coal-generated power decreased, as did carbon emissions. Over the past two years more coal was used than 2011 levels and GHG emissions crept up. This was enormously damaging to the reputation of the Energiewende, both in Germany and abroad. Critics carped: what’s the use of it if emissions go up?

Moreover, in 2014 the wholesale price for power dropped to a record low of €33 per megawatt hour from €38 in 2013, which enabled Germany to export more power than ever before. As for consumers, they benefited too as prices fell slightly for private buyers.

2014 also saw the much-heralded reform of the EEG, Germany’s renewable energy law. As expected, the Merkel government cut back the feed-in tariff for solar PV and onshore wind, which will slow expansion. It also introduced auctioning as a mechanism to finance renewable generation. This is good news for big producers, like the utilities that can play ball at this level. But it’s not welcome news for Germany’s smaller producers, who to date have been the backbone of the Energiewende. Most of them are simply too small to compete for tenders of this size.

The year ended with an unexpected Christmas present: Germany finally got behind energy efficiency and ratcheted up the pressure on utilities to cut emissions more dramatically, which translates into less coal-fired production. The new program will slash carbon emissions by between 62 million and 78 million tons by 2020. A reduction of 25 to 30 million tons will come by way of energy efficiency. There will be tax incentives for the renovation of existing buildings’ heating and hot water systems as well as 40 billion euros from public and private schemes. In total, this means an additional 70 to 80 billion euros in investment in efficiency between now and 2020. Moreover, the Merkel government finally got tough with the electricity sector, signaling it has to cut back an additional 22 million tons of carbon emissions by capping coal-fired power generation.

These measures were vigorously applauded by the greater Energiewende community, which had come to doubt the Merkel administration’s commitment to the project.

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