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Lessons Learned from Germany’s Energiewende: The Political, Governance, Economic, Grid Reliability, and Grid Optimization Bedrock for a Transition to Renewables

Peter Sopher

The German example is rife with lessons – pertaining to politics, governance, economics, grid reliability, and grid optimization – for other countries, such as the United States, to internalize as intermittent renewables become more prevalent in their generation mixes. The German example reveals that, while aligning politics and governance structure for an energy sector transition is a heavy lift reliant on sustained popular sentiment among the public, implementation can occur quickly once these pieces are in place. Economic lessons are nuanced. Macroeconomic costs of Energiewende have placed substantial burdens both on energy-intensive industries and on residential consumers. Associating as an Energiewende proponent requires belief that macroeconomics benefits – such as large employment gains and the establishment of significant market share in an already large industry that’s poised to boom – as well as microeconomic indicators, such as rapidly declining prices for renewables, justify such high short-term costs. Regarding reliability, the German example shows that a grid that derives over a quarter of its power from renewables can become a global leader in supply security given ample reserve capacities and well-developed interconnections with neighbouring grids. However, extensive and expensive transmission and distribution (T&D) infrastructure must be built to minimize renewables-induced grid congestion that threatens grid reliability both domestically and for neighbours.

Peter Sopher is a Policy Analyst for the Environmental Defense Fund’s Clean Energy Program in Austin, Texas.


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