Conceptualizing a policy as broad and ambitious as Energiewende – Germany’s goal to transition nearly 100 percent of its electricity supply to renewable energy by 2050 – is one thing. Implementing it is another thing entirely. What is required is good governance, as Peter Sopher explains.
For this, ‘good governance’ is required – or as the Hertie School defines it: “an effective, efficient, and reliable set of legitimate institutions and actors engaged in a process of dealing with a matter of public concern.”
Energiewende’s implementation presents significant governance challenges. It is a public matter that requires cooperation and coordination from various public and private actors, as well as top-down decision-making. It also comprises diverse political levels and jurisdictions – global, European, federal, state, and municipal – as well as interest groups, cooperatives, alliances, banks, and individuals.
While Energiewende is very much a German policy designed for a German political context, there are still lessons the U.S. (and any country considering an energy transition for that matter) can learn from the challenges Germany has faced in developing a governance strategy to go where no one has gone before: overhauling the modern electricity system as we know it to make the German power grid more clean, efficient, resilient, and dynamic.
Overlap on the federal level
Many of the governance challenges associated with Energiewende stem from its long-term nature and dependence on variables that are not entirely within the government’s control.
On a federal level, six ministries have relevant jurisdictions concerning Energiewende. The two most important actors are the Federal Ministry of Economics and Energy (BMWi) and the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB). While there has been recent progress in clarifying ministries’ authorities, there is still overlap among ministries’ responsibilities. For example, ‘energy efficiency’ improvement is an objective for the BMWi and BMUB, as well as for the Federal Ministry of Transport and Digital Infrastructure (BMVI). For details on the Energiewende responsibilities of the relevant federal ministries and other governing bodies, refer to the supplementary table here.
States’ rights cause inconsistencies
Germany’s federalism adds a wrinkle of complexity to the Energiewende governance. The country’s sixteen states (Bundesländer) operate autonomously on many Energiewende-related subjects, such as state support schemes, permitting procedures, regulation of construction, and land-use planning. All states (Länder) have their own agendas; so, inconsistencies between federal and state goals are inevitable. For example, both northern and southern states would like to increase their supply of renewables, but all these states moving forward on this ambition could lead to over-capacities. This is a problem because oversupplies of power to the grid can stress and damage transmission and distribution infrastructure, leading to reliability concerns. At the moment, however, Germany is a hallmark for electric grid reliability.
While states have recently agreed to improve cooperation and relinquish more planning competencies to the federal level (the Act to Accelerate the Expansion of Electricity Networks in 2011 streamlined approval and transferred competencies from states to the federal government) unclear jurisdictions and lack of accountability are still prevalent and, thus, planning and implementation problems are likely to persist. There must be a clear, accepted understanding that the higher level of government has authority, if conflicting agendas among lower levels of government arise.
Energiewende is inherently political
While an energy transition is inherently political, steps that shelter an energy transition’s governance structure from partisan politics improve stability. Partisan politics renders individual governing bodies’ positions dynamic; and, thus, how the moving parts of an energy transition work together as a unit frequently fluctuates. Additional levels of government (ex. local, state, federal) intensify this flux.
At present, Barbara Hendricks and Sigmar Gabriel head the BMUB and BMWi, respectively. Both are members of the Social Democratic Party (SPD), a political party that aligns itself in the middle between the sustainable energy coalition (SEC) and the conventional energy coalition, but leans SEC. While Energiewende is a program with long-term 2050 goals, the heads of these governing ministries fluctuate more regularly; since Energiewende’s official start in 2010, there have been 3 different heads of the BMWi. The political leanings – specifically, whether ministers are proponents or opponents of Energiewende – of these ministries in the future is an unknown that will impact the efficiency and effectiveness of Energiewende’s implementation.
Hertie School explains that, with respect to Germany’s Energiewende,
“Political steering is not entirely coherent, jurisdictions remain unclear, and processes are ineffective. This is largely due to the various levels of governance and conflicting party strategies. To a certain extent the different parties can be attributed to one of the two major advocacy coalitions. However, certain parties have established their own policy proposals. This results in a variety of possible political scenarios that create uncertainty about the future governance processes of Energiewende… Depending on the future government, the federal steering of Energiewende will increasingly represent interests of the conventional or sustainable energy coalition. However, due to the multi-level government structure of Germany, lower levels of government might still head into different directions and undermine federal decisions.”
This underscores the uncertainties that arise when an ambitious energy transition with long-term goals relies on a sustained, favorable political backdrop. An energy transition is inherently political, but prudent measures to minimize political risks exist.
EDF does not advocate for any changes to Germany’s Energiewende’s governance structure. For future energy transitions elsewhere, however, it should be noted that there are ways to organize governance – such as creating administrative positions for appointees with indefinite terms – that are less prone to the instabilities associated with partisan politics.
Energiewende’s dynamic development will require continued flexibility in its governance structure. Overlapping responsibilities of federal ministries must be minimized as the program evolves and Germany’s federalism preserved while states work together to optimize the country’s electric grid. This flexibility, however, must not extend to the rigor with which Energiewende’s goals are pursued, as a key to Energiewende’s success is how it develops within the political agendas of fluctuating heads of state, some of whom might oppose Energiewende in future years.
This post by Peter Sopher, Energy Policy Analyst at Environmental Defense Fund, was first published on EDF’s Energy Exchange blog, where it is the last blog post in a six-part series on Energiewende, which describes best practices gleaned from the German experience and examine their U.S. applicability. It is reposted with permission by EDF.