Electricity from the wind and sun

The development of renewable energy, along with energy ef ciency, is a pillar of the Energiewende. Wind, the sun, hydropower, biomass and geothermal energy are climate-friendly and local sources of energy that make Germany less dependent on fossil fuels and play a key role in climate protection.

The use of renewables is most advanced in the electricity sector. Since 2014, they have been the most important source of energy in Germany’s electricity mix, supplying more than a third of the power consumed in the country. Ten years earlier, they met only nine percent of demand. Targeted funding is the reason for this success. It began in 1991 with the Electricity Grid Feed Act, which introduced fixed feed-in tariffs and compulsory purchasing with the aim of opening the market to new technologies. This was followed by the Renewable Energy Sources Act in 2000. It has three key components: guaranteed feed-in tariffs for various technologies; priority grid feed-in; and a surcharge system that shares the resulting additional costs among all electricity consumers.

Since the Renewable Energy Sources Act entered into force, there has been a steady rise in annual investments in new wind farms and PV plants in particular, but also in woodfired and biogas plants. The high demand has resulted in the creation of a new sector, with over 338,000 jobs in Germany alone. It has also boosted the efficient mass production of renewable energy technologies, thus leading to substantial price drops worldwide. For example, a solar module cost 75 percent less in 2014 than it did five years earlier. A kilowatt-hour of solar electricity received the equivalent of 50 eurocents in funding in Germany in 2000 – it now receives an average of between four and five eurocents. Despite moderate sunshine in central Europe, solar energy has become an important source of electricity in Germany. PV systems now provide around one fifth of the electricity from renewable energies.

Wind power is currently the most important renewable source of electricity. Electricity supplied by onshore wind turbines now costs only between 1.9 and 2.5 eurocents per kilowatt-hour on average.
The challenge for Germany is to steer the expansion of wind and solar energy so that these sources remain affordable and increase security of supply. This is why the German Government has restructured funding for renewable energies in the electricity sector. This expansion focuses on the inexpensive technologies of wind and solar energy. Annual expansion corridors for the individual technologies make it easier to plan and steer the development of renewable energies. Operators of renewable energy plants are required to sell increasing amounts of their electricity on the market, like other plant operators, thus taking on greater responsibility for the energy supply system. Since 2017, the amount of funding provided to all plants with an output of over 750 kilowatts has been calculated via calls for tenders for specific technologies. This affects around 80 percent of the annual expansion. There are also regional differences as regards expansion. Wherever there are shortfalls in the electricity grid, the amounts tendered are lower. These measures will enable the success story of renewable energies in the electricity sector to continue. The cost savings associated with the revised funding system are also helping to ensure that better use is made of the economic advantages of the Energiewende.