“The potential of renewable energy sources is huge”

18 May 2021

Economist Claudia Kemfert is a strong supporter of the widespread use of renewable energy sources in the interests of sustainability and security of supply. Here, she outlines her position.

© IMAGO / H. Tschanz-Hofmann

Claudia Kemfert, who works at the German Institute for Economic Research (DIW) and at Leuphana University in Lüneburg, is recognized as a convinced advocate of the extensive use of sustainable sources of energy. On Thursday of this week, she will debate the issue of future energy supplies with the chemist Walter Leitner from the Max Planck Institute for Chemical Energy Conversion and RWTH Aachen University. The discussion is the second in the series “Energy of the Future” organized by the Center for Advanced Studies at LMU and the Cluster of Excellence “e-conversion”.

How large is the potential supply of renewable energy in Germany and in Europe generally?

Kemfert: In a word, huge. Solar energy alone has an enormous potential. But that’s also true of wind energy, geothermal energy, hydroelectric power, biomass and other forms of energy. Together, they can supply all our energy needs from renewable sources. This will make the whole energy sector less centralized, more flexible and at the same time more integrated. We will demonstrate, based on a number of simulations, that an energy system which is based entirely on renewable sources is not only technically feasible, it is also capable of providing dependable supplies of energy for all sectors of the economy at all times. Not only that, these simulations show that this strategy is economically efficient, since the cost of these systems is much lower than that of conventional supply systems, and the required investment will generate innovation, added value and new jobs. An energy system that relies solely on renewable sources of power is not only more economical than the current model, it also provides more jobs – not just in Germany and Europe. Moreover, studies have shown that renewable sources can meet all our energy needs anywhere in the world, and that this approach is both practical and profitable.

Which sources do you regard as the most important?

Kemfert: Solar and wind are probably the most important elements, but all renewable sources will need to be exploited to ensure reliability of supply. Renewable sources can generate energy at least as reliably as conventional power stations, many of which are outdated, inefficient and inflexible. Wind, solar, biomass, hydropower and other can meet future demands for energy because they can be integrated into networks that ensure continuity of supply. The dynamic and decentralized nature of renewable energy sources is actually a big advantage. It reduces the risk of oversized grid expansion, creates optimal conditions for electromobility and facilitates the use of sustainable energy in buildings. Innovative “prosumer”, who generate and consume electricity while feeding some of their surplus into the power grid, and decentralized energy storage such as batteries – including those used in electric vehicles – can all help to stabilize the grid. This will require intelligent energy management, which can be achieved by a combination of the appropriate technical infrastructure and digitalization.

What are the major obstacles to the practical implementation of such a policy?

Kemfert: The biggest obstacle is the lack of political will. After the ruling of the Federal Constitutional Court, which calls on the German government not to postpone climate protection to future generations, politicians must quickly make improvements. In no time at all, the emission reduction targets were brought into line with EU requirements. But targets alone are not enough to protect the climate. The appropriate framework conditions are still lacking. Above all, renewable energies must be expanded much faster than before, expansion targets must be massively increased, approval procedures must be simplified, financial participation models must be expanded, market barriers must be dismantled and citizen energy must be strengthened. We need an annual expansion of 10 GW of wind and 20 GW of solar energy, i.e. at least a quadrupling of the current expansion rates, in order to cover the rising electricity consumption. So far, the Federal Government has ignored the rising demand, and done nothing to cater for it. If this continues, we will run into a shortfall in the supply of energy from renewable sourcesIn addition, we must make greater efforts to save energy at all levels – by stimulating energy-oriented renovation of buildings, encouraging efficient energy use in industry and extending the use of rail transport and electromobility. Renewables and efficiency first!

What political steps would be needed – in the short and the long term – to ensure that this potential can be realized? Is the price of carbon dioxide an appropriate instrument for this purpose?

Kemfert: We need a whole series of measures. The price of CO2 is a supplementary mechanism. Within the framework of EU emissions trading, the CO2 price is currently rising sharply due to the tightening of climate targets. This means that, for the first time, the trading scheme is having a real regulatory effect, and coal-powered generating stations are being priced out of the market. For the industry as a whole, the current price is undoubtedly a challenge, but modernization and decarbonization of the sector is long overdue. So it makes sense to provide support for it, in the form of investment alliances and carbon contracts for difference, which are intended to mitigate the effects of price volatility. In the case of heating and motor fuels, the Federal Government has introduced a fixed price for CO2, which is set to rise from 25 to 65 euros per metric ton of CO2 by 2026. In light of the very low level of price elasticity in the transport sector, this measure is unlikely to act as an effective incentive for consumers to choose more climate-friendly modes of mobility. To achieve such an effect, we need to create a range of tools. These should begin with more stringent CO2 limits for vehicles, the introduction of a route-dependent toll system and a defined quota of electric automobiles for newly registered passenger cars, as well as measures to enhance the use of rail and public transport networks, and the expansion of recharging facilities for electric vehicles, bicycle and pedestrian lanes. A change in road traffic regulations that dispenses with the prioritization of automobiles is long overdue. We also need to abandon the one-sided focus on road transport in the planning of transport infrastructure. A planning structure that promotes climate stabilization and sustainability, instead of hindering these goals, is urgently required. – In this respect, the road traffic sector has more catching up to do than any other.

Following the recent decision by the Constitutional Court, the Federal Cabinet has now set out more ambitious targets for the reduction of emissions. Will the new law accelerate this development?

Kemfert: Yes, it will. The ruling represents a turning point, the immediate reactions demonstrate how quickly the adjustment of the climate protection goals can happen. Of course, setting targets is not enough. Steps must now be taken to formulate a more effective policy on climate protection. In the US, President Biden has shown how an intelligent climate policy, coupled with investment and the development of new markets, can open up new business opportunities and stimulate innovation, increase added value and create new jobs. Germany needs to boost investment in modernization, primarily in digitalization and infrastructure. We are now in a position to solve three crises simultaneously. The energy crisis can be tackled by strengthening resilience and enhancing reliability of supply by expanding the role of sustainable technologies. The economic crisis can be overcome by the resulting investment in key future markets, and the climate crisis can be resolved by the reduction of greenhouse gases. It’s a win-win-win situation.

Prof. Dr. Claudia Kemfert heads the Department of Energy, Transport and Environment at the German Institute for Economic Research (DIW) and holds a professorship at Leuphana University in Lüneburg. She is also Co-Chair of the German Council of Experts on Environmental Issues, which advises the Federal Government.

The questions raised by the growing need for efficient and sustainable ways of generating energy are now more urgent than ever. Novel scientific approaches to the problems of energy storage are a vital component of environmentally friendly economic and climate-related policies. The Cluster of Excellence e-conversion, a collaborative venture between LMU and the Technical University of Munich (TUM), is actively engaged in such research. This lecture series will give the wider public the opportunity to learn more about current trends in research on renewable energy sources and their political implications. On 20 May 2021, Professor Claudia Kemfert and Professor Walter Leitner (MPI for Chemical Energy Conversion and RWTH Aachen University) will discuss “The Potential of Sustainable Energy Production with Professor Ueli Heiz (TUM). For further details on how to register for this event, and information on the series as a whole, see the CAS Website.

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