IN DEPTH: Decoding Merkel on RE

Chancellor Angela Merkel’s party in its election manifesto reiterates its commitment to the Energiewende – the transition away from nuclear power by 2022.

However, there is a major emphasis on the affordability of Germany’s energy supply and without mentioning detailed targets for renewables.

“Consumers and the economy need an energy supply that is secure, affordable and clean over the long term,” reads the mostly blurry manifesto that was approved on Sunday jointly by Merkel’s Christian Democratic Union (CDU) and her Bavarian sister party, the Christian Social Union (CSU).

Affordability can be read as a code word for a renewed push after the elections to limit the price of renewable energy, which could mean hardship for the renewables industry.

Germany’s environment minister Peter Altmaier, a CDU member, and economics minister Philipp Rösler from the liberal Free Democrats (FDP) earlier this year made a proposal for harsh cuts to feed-in tariffs (FITs), with the aim of containing electricity costs that soared in part due to a surcharge paid by consumers to finance renewable support.

But the measures were in effect blocked by Germany’s powerful states, which objected in particular to retroactive cuts in support that had been part of the proposals, making any reform to the renewables act only possible after federal elections on 22 September.

The CDU/CSU manifesto – like Altmaier and Merkel – insists on a reform of Germany’s Renewable Energy Act (EEG), but to the relief of the renewables industry also states that any retroactive measures need to be excluded.

“The transition of energy supply needs stable and reliable conditions,” the text states. “Planning security is the basis for investments in the construction of new wind parks on high seas or for modern power plants.”

At the same time, Merkel’s conservatives also stress that power needs to remain affordable for energy-intensive industries that face stiff foreign competition. The passage reads like a reply to the Green Party manifesto, which lobbies for a cut in exceptions for heavy industries in the payment of the renewables surcharge that finances FITs.

The CDU/CSU fears that high electricity costs in Germany – supposedly due to rising FITs for renewables – undercut the competitiveness of heavy industries with their counterparts in countries such as the US, where the current shale gas boom has made power much cheaper.

The manifesto adds that supply should be based on renewable energies and lower power consumption – but unlike that of opposition parties leaves out concrete future renewable targets.

The government currently has a target to meet 35% of Germany’s electricity demand by renewables by 2020, 50% by 2030 and 80% by 2050.

The opposition Social Democrats (SPD) and Greens in their own manifestos both demand a faster transition to an economy based on renewable. But prominent members of Merkel’s CDU such as EU Energy Commissioner Günther Oettinger have called for a slow-down in the build-up of renewables.

The CDU/CSU manifesto remains unclear at this point. It notes the Energiewende should be advanced both with determination and caution.

But in synch with a recent speech by Merkel, it stresses that “after a rapid development in recent years, it is important to link the next steps closely to the build-up of electricity grids and that of other energy sources” to ensure that electricity from Germany’s windy north will actually find its way to the country’s power-thirsty industrial centres to the south.

In practice, that could mean slowing down the expansion of renewables if high-voltage power lines across the country aren’t built fast enough.

The CDU/CSU in its election programme also states the continued need for coal and gas power plants, and even wants to accelerate the construction of new fossil capacity in order to guarantee reserve capacities  at times of little wind or sun.

That puts it in direct opposition to the Greens, which are demanding an exit not only from nuclear, but also from fossil power. But it aligns the conservatives with the SPD – traditionally close to the coal industry.

More favourably for the renewables industry, Merkel’s party also emphasises the need for energy storage systems such as pumped-storage hydropower, or power-to-gas technologies.

Opinion polls two months before the election on 22 September are still too close to call, but show an advantage for Merkel and her CDU/CSU. But the Chancellor will continue to need a coalition partner.

While it is still unclear whether she would reach a majority with the FDP, a so-called “grand coalition” with the SPD would have a much more stable majority. 

A link-up with the Greens would also be possible, at least in theory. While the Conservatives and the Greens have different ideas on how fast they want to go fully renewable, they now for the first time share a determination to exit nuclear power and have become much closer on social and economic issues.

Politicians on both sides, such as Altmaier, and the Green state premier of Baden-Württemberg, Winfried Kretschmann, have said that they can imagine a Conservative-Green government.