Transitioning to Renewable Energy - Pathway to a more sustainable and safer world

From left to right: Grisha Alroi, CEO, German-Israeli Chamber of Commerce, Dr. Michael Federmann, Chairman, German-Israeli Chamber of Commerce, Environment Minister Amir Peretz, Prime Minister Winfried Kretschmann und Marc Berthold, Director, Heinrich Boell Foundation Israel. Photo: AHK Israel

June 26, 2013

Speech by Germany's first Green State Prime Minister, Winfried Kretschmann, at the public event "Economic Powerhouse meets Start-Up Nation", jointly hosted by the Heinrich Böll Foundation Israel and the German-Israeli Chamber of Commerce on June 25, 2013


Ladies and Gentlemen!

Dear Minister Peretz!

Let me first thank you for the kind reception. I have come to Israel gladly to speak to you about sustainable economies and the future of energy supply.

This is, among other things, due to Israel's excellent reputation as a high-tech location. Israel is among the leading players in green technologies such as water management (irrigation, wastewater treatment, desalination) and has one of the most dynamic, innovative start-up scenes in the world. In addition, the modernization of energy supply plays a pivotal role in both our countries.

After all, energy supply constitutes the backbone of any powerful economy. I know this only all too well from my own federal state. Baden-Württemberg has 10 million inhabitants and is one of Europe's most competitive regions with an unemployment rate of about only 4 percent. We have a cutting-edge car industry, as well as groundbreaking metal productions and mechanical engineering industries exporting to international markets all over the globe. And it is our intention to boost this economic strength even more – through the reorganization of our energy supply.

Germany has broken new ground. The energy transition means that we turn our back on fossil fuels and nuclear energy in favor of renewable energies and increased energy efficiency.

We would like to share the experience we have with you and exchange ideas about possible cooperation between Israel and Germany.

Nuclear Phase-Out

Germany's so called Energiewende, the energy transition, is being determined by a new perception of nuclear energy. Until the mid 1980s Germany's 19 operating nuclear power plants, which produced up to 30 percent of national electricity consumption, were perceived to be secure. The nuclear disasters of Harrisburg (USA, in 1979) and even more so of Chernobyl (Ukraine, in 1986) completely changed this perception. People no longer argued about building new nuclear plants, but rather about if and how fast Germany should abandon nuclear power.

In the year 2000, we achieved our first breakthrough: The German government – which was run by Social Democrats and Greens in those years – reached an agreement with the energy utilities to gradually phase out nuclear power by 2023.

However, this decision did not last long. In 2010, a change of government extended the operation of existing nuclear plants by another 12 years.

The catastrophe of Fukushima brought it all back home, to the Chancellor Angela Merkel as well, who until then was among the supporters of nuclear energy, that the risks of nuclear power cannot be controlled. Within a few months after Fukushima all parties of the German parliament decided to ultimately abandon nuclear energy by 2022.

Of course, the issue of nuclear energy will continue to occupy us much longer. Nuclear waste will radiate for even hundreds and thousands of years. Therefore, we are now striving to reach a nationwide consensus in our search for a secure radioactive waste depository in Germany.

We do not exclude any location and look all over Germany. Every possible location is being scrutinized according to severe scientific criteria and undergoes a process of multistage testing. We will decide upon a location with maximum security. That is the only way to gain the trust and acceptance of the German population for such a far-reaching decision. That is the only way to secure a national consensus.

Renewable Energy Phase-In    

The German energy transition is, of course, much more than a mere nuclear phase-out. It concurrently means a phase-in of renewable energies.

Germany has ambitious plans and aims high. By the year of 2050 we strive to:
·     reduce total energy consumption by half;
·     generate at least 80 percent of our electricity from renewable energies;
·     reduce greenhouse gas emissions by at least 80 percent.

These are the objectives of Germany's current government, but supported by all parties. The opposition promotes an even faster growth of renewable energies. But in the end all political parties are convinced that the 21st century is the age of renewable energies.

Already 20 years ago, we took our first step towards renewable energies. Interestingly enough it was a conservative government which mandated the big energy suppliers to legally commit themselves to purchase electricity from hydro-electric power plants and a number of wind turbines.

 A second step followed in the year 2000 when Germany adopted the Renewable Energy Sources Act (Erneuerbare Energien Gesetz, EEG) with the following main principles:
·     Network operators commit themselves to connect renewable energies to the grid and to purchase the electricity ;
·     The electricity produced by renewable energies is preferential to conventionally generated energy fed into the grid. This means that in the case of an electricity surplus nuclear and coal power plants are being curbed and not renewable energies;    
·    The owners of renewable energy installations receive guaranteed payments for their generated electricity. These payments are governed by law and fixed for a period of 20 years. Constant        lowering of rates of remuneration for new plants is meant as an incentive for innovations.

The Renewable Energy Sources Act grants high investment certainty as well as maximum planning security and therefore raises much private capital. Banks and investors know that their projects are a secure investment of their money. Thus a market which has been dominated by nuclear power and coal plants now allows for the development of numerous innovative technologies.

The reason for the steep rise of renewable energy is not exorbitant subsidies but rather a high investment security. While the share of renewable energies in 2000 was less than 5 percent of Germany's total energy consumption it rose to 23 percent in 2012.

On sunny and windy days, the ratio of renewable energies constitutes 50 percent of the national electricity consumption at midday. Who could have imagined this only a few years ago? These figures are even more surprising since Germany is not exactly known to be very windy or extremely sunny country – especially not in comparison to Israel.

The developments during the last ten years in Germany are followed by a new third phase:

Renewable energies will now become the main pillar of Germany's overall energy supply. The whole supply system has to adapt to a new situation, without repercussions on safe supply and price developments.

A nearly complete transition to renewable energies will only succeed if we simultaneously use existing energies more efficiently or even not at all. We not only need megawatt but also negawatt. Since in the end, the energy which has not been used is the cheapest.  

Civic Participation

This restructuring of energy supply was made possible because we involved our citizens:

On the one hand, they participate economically. Hundreds of thousands of citizens installed solar cells on the roofs of their homes and mounted wind turbines on their property. Many farmers, teachers and doctors chose to invest their money in renewable energies, instead of putting it in a bank account or buying stocks. They did so on their own or through energy cooperatives. They know that their investments would render decent returns and serve a good purpose on top of it. Even small amounts are welcome. Energy consumers turned into energy producers. Average citizens become business people. A production, which had been in the hands of very few, turned into the production of many. More than half of the investments in renewable energies are made by citizens and small investors.

I have heard that cooperatives and associations boom in Israel as well. Our experience has taught us that the state should provide a regulatory framework which creates a solid footing for such activities.

But not only economic participation is needed. A comprehensive energy transition also needs political backing. We therefore involve our citizens in governmental planning and decision-making processes: We do not issue orders from top to bottom, but rather rely on dialog and direct participation. One such example is the planning of Europe's biggest pumped storage power station. We put all the facts on the table and openly discussed its implementation.

However, I admit, even comprehensive civic participation as in the case of energy transition does not solve all problems. But one thing is safe to say: Our policy of listening to our citizens creates trust and increases the support for the energy transition.

Let me underline this with facts and numbers: In regularly conducted opinion polls an unchanged number of 70 to 90 percent of the respondents are in favor of the energy transition!

Economic Success – an Example

Approval rating for the energy transition is high since its economic advantages are more than evident. Today more than 380.000 people are employed by the sector of renewable energies (Source: Federal Environment Ministry). This is half the number of people who work for all of Germany's car industry and its sub-suppliers.

But its true potential is even higher: wind turbines, solar plants and energy storages need design, production, installation and maintenance. New and intelligent grids are to be developed and placed all over the country. Production processes must be improved with power savings. Buildings have to be insulated. Utility management, technical devices and energy meters have to be modernized and should be connected to the energy internet of the future.

New jobs are being generated not only within renewable energy industries but throughout Germany's economy – in mechanical engineering, steel, glass and chemical industries, in skilled crafts and trades, in the building and construction industry and engineering firms.

We are presently witnessing no less than the beginning of a green industrial revolution based on energy transition.

Many German entrepreneurs have recognized this potential long ago and seized upon the opportunities. Already today our car and mechanical engineering industries have successfully presented low resource and energy efficient products to the international market. Green ideas are in the black.

Renewable Energies and Reliable Energy Supply

But we also should consider another economic aspect which is highly relevant to security matters:

Currently 70 percent of Germany's energy consumption is imported. (In Israel figures are even higher; imports reach 81 percent). Last year Germany spent about 100 billion EURO net for the import of fossil fuel (source: Energy Comment: oil 67.2 billion EURO, natural gas 30.1 billion EURO, coal 2.5 billion EURO). All this amounts to no less than 4 percent of Germany's GDP.

The development of renewable energies, energy efficiency and energy savings will lead to a gradual reduction of import expenses which then can mostly be channeled to the domestic economy. After all, the sun does not issue any bills. On the other hand international demand for renewable energies continues to rise. Instead of importing yesterday's energy, we export tomorrow's energy – through technologies and know-how.

At the same time we gradually become independent of oil, natural gas, uranium and coal. This also means that we become more independent of the skyrocketing prices for these goods. We also become independent of unstable countries and regions.

These issues are highly relevant to Israel as well. Reliable energy supply as part of national security is of high priority in Israel too. At present Israel is still very dependent on the import of fossil energy. The latest discovery of natural gas fields along the Israeli shore might somewhat change the situation. Used wisely, these natural gas fields are an opportunity to improve Israel's economic and social situation. If used sustainable, natural gas might pave the way towards renewable energies and Israel's solar future.

It is in the vital interest of both our countries to decrease import dependency and gain a reliable energy supply. This means that the disposability of energy is determined by us and not by others from outside. This also means freedom and independence from external constraints.

True, during the period of transition we cannot do without fossil energy. But in the long run we will reach our goals only through the use of renewable energies and reduced energy consumption.


Ladies and Gentlemen!

Energy transition is an ecological success. It offers us a secure, environmentally -friendly and sustainable energy supply. It is our contribution to contain climate change within tolerable limits.

The energy transition to renewables and energy efficiency is an economic success story. In order to remain among the internationally leading economies, one will have to join it sooner or later and inevitably take this path. Especially highly innovative technology nations such as Israel and Germany are predestined and capable to do so.

And one final remark: In the long run the energy transition is the only way to achieve increased energy autonomy and safe energy supply which also means a more secure and safe world.

While modernizing our energy supply, both our countries should learn from one another. They should cooperate and advance together.

Thank you for your attention.

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