A TALE OF TWO COUNTRIES: RENEWABLE ENERGY IN GERMANY

The document examines Germany's 'Energiewende', a policy aimed at reducing CO2 emissions by 80 percent by 2050 and phasing out nuclear power. It highlights that while feed-in tariffs (FiT) increased residential electricity prices, they successfully reduced the cost of solar PV by more than 80 percent and wind by about half, benefiting global energy markets. The author notes that renewable growth has more than offset the reduction in nuclear power, though the transition requires new 'flexibility markets' to manage intermittency and new business models for utilities facing declining profits from conventional generation.

• Germany's energy transformation policy, the Energiewende, aims to reduce CO2 emissions by 80 percent by 2050 and includes a parliamentary-supported decision to phase out nuclear power within a decade.
• The use of feed-in tariffs (FiT) to create investable returns successfully drove down the cost of renewable technologies, with solar prices dropping more than 80 percent and wind prices decreasing by approximately half.
• While renewable energy tariffs contribute to high residential electricity prices—accounting for about 20 percent of the total cost—the high penetration of renewables has simultaneously lowered wholesale electricity prices, creating savings of approximately 5 billion Euro per year.
• The growth of renewable energy has more than compensated for the loss of electricity generation resulting from the shutdown of nuclear reactors, and the transition has not led to the construction of new coal plants.
• Current 'energy-only' electricity markets are insufficient for inducing the construction of plants needed to balance wind and solar variability; the author proposes 'flexibility markets' that pay operators for the ability to ramp generation quickly.
• German utilities are facing a financial crisis as carbon standards, efficiency gains, and the nuclear phase-out threaten legacy investments, leading to plummeting stock prices and profit losses in conventional power generation.

APA

HARVEY, H. (2013). A TALE OF TWO COUNTRIES: RENEWABLE ENERGY IN GERMANY. Energy Innovation. https://energyinnovation.org/wp-content/uploads/A-Tale-of-Two-Countries.pdf

Chicago

HARVEY, HAL. A TALE OF TWO COUNTRIES: RENEWABLE ENERGY IN GERMANY. Energy Innovation, 2013. https://energyinnovation.org/wp-content/uploads/A-Tale-of-Two-Countries.pdf.

Wikipedia

{{cite report |last1=HARVEY |first1=HAL |title=A TALE OF TWO COUNTRIES: RENEWABLE ENERGY IN GERMANY |publisher=Energy Innovation |date=September 2013 |url=https://energyinnovation.org/wp-content/uploads/A-Tale-of-Two-Countries.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{harvey2013tale, author = {HARVEY, HAL}, title = {{A TALE OF TWO COUNTRIES: RENEWABLE ENERGY IN GERMANY}}, institution = {Energy Innovation}, year = {2013}, month = sep, url = {https://energyinnovation.org/wp-content/uploads/A-Tale-of-Two-Countries.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }