It aims to phase out nuclear power by the next decade while cutting green house gas emissions by 40 percent on 1990 levels. But it has led to spiralling fuel costs and exposed a lack of investment in power lines, while turning off nuclear power has ironically increased reliance on fossil fuels. The shift has cost Germany €20 billion this year.
Here Thomas Grigoleit director of renewable energies at the government-backed development agency, Germany Trade and Invest, argues that the Energiewende has already had several successes and will make Germany even stronger.
When Germany started with the pioneering programs promoting renewable energies in the early nineties, who would have thought that they would culminate with as radical a vision as the German Energiewende?
But with constantly-rising costs of fossil fuels and ever-falling prices for renewables over the past few years, and in the aftermath of Fukushima, no-one in Germany is questioning the fundamental logic of this ambitious goal anymore. Today the Energiewende can be regarded as a national movement, with more than 10,000 people investing in renewable energy systems each month and all bringing Germany closer to energy independence step by step.
In 2012, renewable energies – including wind, solar panels, bio-energies and hydropower – contributed 23 percent to Germany's gross electricity consumption and produced 9.3 percent more energy than in 2011. This helped reduce CO2 emissions by 146 million tonnes and added more than €25 billion to the German economy, including €6 billion in savings on fossil fuel energy imports. More than 350,000 people are working in the sector in Germany today.
The Energiewende has already reached some important milestones, putting Germany well ahead of its economic rivals. Solar grid parity for instance - the point at which electricity from solar power is as cheap as conventional electric power - was reached as far back as 2011.
A whopping 47.7 percent more photovoltaic energy was produced in 2012 than in 2011 which contributed about 4.7 percent to German energy consumption during 2012. In the foreseeable future, German solar energy will become so competitive that a viable solar market is expected to develop completely independently from any governmental incentive scheme.
However, the massive increase of renewable energies, mainly wind and solar energy, is creating new challenges for the overall power system. On April 18th at noon, the combined wind and solar power production in Germany peaked at 35.6 GW, the first time ever that solar and wind had combined to produce more than 50 percent of power on a high-consumption day during the working week.
A few weeks later, on Sunday June 16th at 1pm, wind and solar output constituted 60 percent of Germany's production.
This increasing volatility of energy prices needs to be compensated, and the implementation of smart grids and energy storage to harness all this power is top of the current agenda. High fluctuations of electricity generation by wind and solar also have to be balanced by energy storage and smart grid technologies so that electricity demand can be met by supply in the future.
The Energiewende is now entering its second stage. Handling a few percent of renewable energy in the system is not the big challenge. But operating more than 20 percent renewables, which peak to more than 60 percent at times, is a much bigger challenge. Whereas the focus of the past decade was on the generation side and the increase in production, it's now much more about integrating these massive renewable capacities efficiently into our system.
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Being the first industrialized country to go through this fundamental shift, we are confident that the specialized expertise and solutions being created right now will be one of our unique strengths to export in the future.
Thomas Grigoleit is director of renewable energies and resources at economic development agency, Germany Trade and Invest