Can co-ops help Germany tackle the challenges of Energiewende?

Dr Andreas Wieg, of the German Cooperative and Raiffeisen Confederation, assesses the state of the national energy transition

The German Bundestag set new climate targets in June. Germany wants to reduce its greenhouse gas emissions by 65% by 2030 and become carbon neutral by 2045. The increased targets followed a ground-breaking decision by the Constitutional Court earlier this year that ruled that the government’s climate legislation is insufficient.

In addition, the government has introduced new legislation and programmes, such as the Climate Action Law and the Climate Action Programme 2030. But, in contrast, a recent government report shows a significant gap between the estimated emission reductions and the targets over the 20 years to come.

One of the cornerstones to close this gap is the energy sector. The current CO2 emission of 280m tonnes must drop to 108m tonnes by 2030. Besides issues like energy efficiency activities, investments in transmission lines or new storage technology, the main task is a faster roll-out of renewable energy plants. In this respect, the recent amendment of the German energy law EEG contains higher tender amounts for rooftop and ground-mounted solar energy in 2022.

However, the challenge of speeding up the energy transition is linked with other challenges, such as opposition by residents to renewable energy plants in their neighbourhoods, especially to wind turbines. The vast majority of German inhabitants favour the Energiewende, but if asked directly, most of them would say, “please, not in my backyard”.

Despite this, in recent years, hundreds of thousands of people came together in numerous citizens’ groups, local councils and regional businesses to establish joint renewable energy projects, especially renewable energy co-operatives. As a result, almost 900 energy co-operatives have been set up in the last 15 years.

Citizen’s involvement is one of the reasons why the Energiewende is still popular among Germans, but the motivation is not just to earn money. They want to be a part of the whole development. This possibility is not just confined to wealthy investors; so energy co-operatives organised by citizens, farmers and enterprises play an essential role in increasing acceptance.

The main reason behind this community energy development was the Renewable Energy Sources Act EEG, more precisely, establishing a feed-in tariff and priority access to the grid for renewables. However, this framework changed over the last years into a tender system which reduced the opportunities for energy co-operatives and other small community energy projects.

The 2021 energy co-operative survey by the German Cooperative and Raiffeisen Confederation (DGRV) underlines this problem. It found that a third have no new projects planned for this year. Last year, 54% of the co-ops planned solar projects, but this rate fell to 38% in 2021. 

So there is another gap to close by the new coalition in Berlin in the coming years: The social acceptance, or nimbyism, gap. Therefore, we need community energy which will prevent energy transition from being dominated by the business of big entities. It is like keeping bike lanes beside roads.

There is a need for a more ambitious renewables expansion path, which can create more opportunities for all investors in green energy. Moreover, there is a need for a supportive scheme that enables stable investments in renewables, unless the market price is high enough to sell directly on the electricity market. This is followed by the need for high renewable tender thresholds. Finally, we need a regulation that enables energy communities to produce energy and share it with their members.

The European Commission calls this Energy Sharing. Article 22 (2b) of the EU’s Renewable Energy Directive prescribes that “Member States shall ensure that renewable energy communities are entitled to … share, within the renewable energy community, renewable energy that is produced by the production units owned by that renewable energy community.”

Unfortunately, the German government didn’t release any regulation on Energy Sharing to date. Given the important role of energy co-operatives and community energy in strengthening social acceptance for the energy transition, this is one of the most critical issues in the new legislative period.