15. July 2022 By Georg Benhöfer, Stephen Lorenzen and Lars Zimmermann
Easter in summer – Habeck’s Easter Package approved
Things usually get stressful again right before a long-awaited holiday. Handovers need to be planned, neighbours need to be recruited to water the flowers and there’s usually that one important project that you would have really liked to have completed before the holiday.
At least the staff of the German Federal Ministry for Economic Affairs and Climate Protection and Federal Minister Robert Habeck should be familiar with this. Last week – shortly before the start of the summer recess – they pushed what’s called the Easter Package (Osterpaket) through the Bundestag and Bundesrat, and thus, according to Habeck, the ‘largest legislative package in the energy sector in recent decades’.
We’ll give you an overview of what the package involves.
At the beginning of the year, Robert Habeck presented the opening balance sheet on climate protection (Eröffnungsbilanz Klimaschutz) (check out our blog post for more information). The result of the balance was clear: while emissions have fallen by an average of 15 million tonnes per year in recent years, they need to fall at a rate of 36 to 41 million tonnes annually from now on. A goliath undertaking.
Habeck has announced adjustments to the regulatory framework in particular in order to make up the leeway. Two major omnibus bills are to be drafted to this end. The first – the Easter Package – was presented in the spring as a draft bill and passed through the cabinet around Easter. A summer package, which will then pass through the Bundestag and Bundesrat in the second half of the year, has already been announced as well.
The overarching goal
The over 500 pages of the Easter Package amend several pre-existing laws. In particular, Germany’s Offshore Wind Energy Act (Wind-auf-See-Gesetz, WindSeeG), Energy Industry Act (Energiewirtschaftsgesetz), Federal Requirement Plan Act (Bundesbedarfsplangesetz), Grid Expansion Acceleration Act (Netzausbaubeschleunigungsgesetz) and Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz) are affected. In the following, we’ll attempt to reduce the various changes to the most significant points.
The new goal stipulated in the Renewable Energy Sources Act is that by 2030, 80 per cent of all electricity in Germany should be generated using renewable energies and by 2035, the number should be almost 100 per cent. For comparison: in 2021, the share of renewable energies in gross electricity consumption was 41 per cent. In order to reach this goal, the total share of renewable energies must double within just shy of a decade. In addition, electricity consumption will continue to increase in the coming years due to the ongoing and targeted electrification efforts in sectors such as transport and heating. This goal can therefore be described as ambitious with a clear conscience.
The new principle at the heart of the package
Constructing renewable energy plants has an impact on the environments in their immediate vicinity: land gets used up, noise pollution occurs, birds can die and much more. Therefore, careful consideration must always be given as to whether or not negative impacts on the environment are acceptable outcomes of constructing a plant. In light of this, the Easter Package anchors a specific principle in the Renewable Energy Sources Act which states that the use of renewable energies is in the overriding public interest and serves public safety. Renewable energies should therefore be considered priorities when taking protected resources into consideration in future. This means, for example, that the ban on offshore wind turbines in protected areas will be dropped and replaced by a case-by-case assessment.
Accelerated expansion of renewable energies
The expansion phases for onshore wind energy and solar energy are being significantly increased. Ten gigawatts (GW) of wind energy are to be added each year as of 2025. Most recently, in the year 2021, around 2 GW was added. From 2022 to 2025, the expansion rate will gradually be increased to the targeted 10 GW per year. The same applies to solar energy, where the expansion rate was set at 22 W per year as of 2026. The difference to the status quo is vast here as well: in 2021, around 5 GW was added to the expansion rate for photovoltaic systems. Tender volumes and feed-in tariffs were adjusted and set accordingly.
In addition, German states are now obligated to make two per cent of their total land area available for the expansion of wind energy by 2032. Only 0.5 per cent of the country’s land is currently available for this purpose. The intermediate goal is 1.4 per cent by 2026. In line with the principle of giving priority to renewable energies described above, an amendment to the Federal Nature Conservation Act should also allow for nature reserves to be included in the search for places to develop wind energy.
Protecting and involving citizens
Various parts of the Easter Package address citizens directly. For example, citizen-led energy projects can be realised in future without having to participate in a mandatory tender beforehand. In addition, consumers are expected to be better protected in that suppliers who become insolvent will be obligated to notify the Federal Network Agency and the customers themselves three months in advance of a scheduled power shut-off that affects household customers. What’s more, the levy under the Renewable Energy Sources Act has been dropped for all consumers since 1 July 2022. It will be financed through Germany’s federal budget in future.
The 500-page-thick Easter Package includes a number of other measures in addition to the changes mentioned above. Among them are things such as focusing the use of biomass on highly flexible peak load power plants, testing concepts for storing renewable energies in hydrogen with corresponding reconversion into electricity and involving wind farm operators in financing grid expansion.
Far-reaching consequences despite political compromises
The Easter Package is giving the energy industry new impetus. Not all the contents and formulations have survived the journey from draft bill to law. For example, there’s criticism from various corners which contends that the original goal of having a climate-neutral electricity system by 2035 no longer exists and has been replaced by the goal of having nearly all of the electricity supply generated using renewable energies by 2035. Nevertheless, the implications of the changes coming into force as a result of the Easter Package shouldn’t be underestimated and are likely to have a significantly noticeable impact on all stakeholders in the years to come.
Robert Habeck is also aware of this and explained that the country will change as a result of the legislative package. He also tuned the country in to the fact that unusual measures might be necessary in the near future, which may also place unreasonable demands on the population.
The Easter Package reemphasises the fact that the challenges of transformation are immense and that the energy industry is one of the most exciting and dynamic industries of the future. We’re happy to be able to accompany our customers on this path and remain curious about what other changes the Summer Package has in store.
By the way, you can find out more about our services in the energy sector on our website. Our experts bring the right mix of technology expertise and sound understanding of your digitalisation project.
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