A recent report by the Federal Environment Agency (UBA) indicated that Germany will need to rely heavily on renewable energy sources as the country's nuclear power plants are gradually phased out.
Germany is already a global leader in renewable energy production, having generated 17 percent of its electricity through renewables in 2010, but some believe Germany could be doing even better.
And the country will have to ramp up such “green” energy production considerably if Chancellor Angela Merkel's government still intends to reduce carbon emissions by 40 percent from 1990 levels by 2020, as part of efforts to combat global warming.
“Germany's highly developed infrastructure, creative economy, innovation-oriented demand, and civil society” all factor into renewable energy taking on a more prominent role, Martin Jänicke, founding director of the Environmental Policy Research Centre (FFU) at the Free University of Berlin, told The Local.
But while Germany's technology prowess remains top rate, some believe its outdated energy policies are slowing the progress of renewable energy production.
“Policy, at this stage, is a precondition for technology to develop further and for Germany to realize its energy sustainability goals,” said Rainer Quitzow, a research fellow at the FFU.
Some policy mechanisms already in place have helped spur innovation, such as feed-in tariffs, which pay renewable energy generators a premium price for the energy they produce.
But if renewable energy is to help compensate for the eventual loss of nuclear power, a broader range of policy measures is necessary to create the kind of monetary incentives developers require.
The greatest potential for growth and profit, according to Quitzow, lies in the modernisation of the renewable energy grid – and the key to this is smarter public policy and investment.
“Grid development requires large-scale coordination and investment by the government – the private sector alone can't achieve that,” Quitzow said.
“Private companies are handling the bulk of grid development right now, but with profit as their main motive, much of their investment also serves the interests of nuclear energy and coal. Only the public sector has the capacity to make the grid both profitable and compatible with renewable energy.”
According to Jänicke, the most promising area of public investment is the “micro-grid” system, in which regional grids serve the power needs of a localized area.
The main advantage of micro-grids is their efficiency. Power is generated and stored locally, so a wind or photovoltaic plant in Lower Saxony, for example, does not waste energy connecting with an energy storage site in Norway.
Nearly eight million people in Germany already receive electricity from these decentralized networks, and as nuclear power plants are taken offline, investment in renewable micro-grids is expected to rise, if for no other reason than the profits to be had.
“Efficient production allows micro-grids to generate a surplus of renewable energy that can be exported for profit to other regions,” Jänicke said.
The micro-grid system produces energy that is both environmentally and financially sustainable, but government investment is essential to keep the market competitive.
“Without market growth, you don't have technological innovation,” Jänicke said, explaining that a healthy market, in turn, creates incentive for innovation. “There is an interplay of feedback mechanisms in renewable energy creation, and that can be stimulated only by new and ambitious policy.”