feed-in-tariff support scheme); problems with the functioning of the electricity
market (renewable energy has no fuel costs and therefore does not fit a spot market
sales scheme); and some resistance to the alternative electricity grid infrastructure
from civil society—led to a new and critical phase that required legislative changes.
Actors with vested interests in the fossil energy system inevitably used this
strategically. When the government changed to a conservative party coalition with a
very industry-friendly liberal party in 2009, a window of opportunity to open the
Renewable Energy Act and terminate the agreements to phase out nuclear power
plants emerged. This in turn boosted the revenues and stock values of the incumbent energy players. These had entered the renewables production and lobbied for
electricity market regulation that would favor big suppliers over small ones and
compensate conventional energy plant owners for being fall-back providers in
periods when renewables could not deliver.
Although the flipflop on the long-standing nuclear exit encountered much public
and political resistance in 2010, it was the Japanese nuclear catastrophe in
Fukushima in March 2011 (a shock from the landscape level) that caused the
conservative Chancellor Merkel not just to return to the nuclear-exit strategy but
also to go even further by fostering a cross-party consensus on an energy transition
roadmap. This consensus foresees tackling issues in electricity markets, compensation injustices and electricity provision infrastructure that are all in line with the
goal of a renewable energy system. Yet, at the same time, the former plan for rapid
transformation was also watered down when the priority to get as much renewable
energy as possible was replaced by a target of 45 % by 2020.
Its proponents argue that this is due to safety of supply and better cost management, but it is clearly also less disruptive to the incumbent business models,
whose champions get public money to dismantle the previously lucrative nuclear
power stations. Nevertheless, these providers have been hard-hit by a plunge in
stock market value and revenues. So the German example clearly shows that each
transformation involves changes in who is winning and who is losing—and that
incumbents will not easily give up on status quo solutions.
So it is no surprise that Germany is still grappling with putting the energy
transition commitment into practice and will be for decades to come. It seems that
the radical vision of a renewable energy system will not be reversed: its purpose has
been changed from ‘as much energy as possible at lowest costs’ to ‘climate-friendly
and long-term secure energy.’ The cost effects are often used and misused in
arguments against the transition but its sociocultural anchoring is still firm and
broadly based. But the regime restabilization actually required to achieve this goal
is far from complete: intense struggles are taking place in the social, economic,
cultural, technological and political dimensions of the energy system. Who is
paying how much for which type of electricity? Which business models receive
which type of financial support? Where can wind turbines and solar panels be
located so that they fit the landscape? Which storage capacities will be available to
smoothly provide irregularly harvested renewable energy? Which party coalition is
supporting which business sector and how do Germany’s European neighbors react
to a transition that also impacts their energy grids?
28
2 What Political Economy Adds to Transformation Research
market (renewable energy has no fuel costs and therefore does not fit a spot market
sales scheme); and some resistance to the alternative electricity grid infrastructure
from civil society—led to a new and critical phase that required legislative changes.
Actors with vested interests in the fossil energy system inevitably used this
strategically. When the government changed to a conservative party coalition with a
very industry-friendly liberal party in 2009, a window of opportunity to open the
Renewable Energy Act and terminate the agreements to phase out nuclear power
plants emerged. This in turn boosted the revenues and stock values of the incumbent energy players. These had entered the renewables production and lobbied for
electricity market regulation that would favor big suppliers over small ones and
compensate conventional energy plant owners for being fall-back providers in
periods when renewables could not deliver.
Although the flipflop on the long-standing nuclear exit encountered much public
and political resistance in 2010, it was the Japanese nuclear catastrophe in
Fukushima in March 2011 (a shock from the landscape level) that caused the
conservative Chancellor Merkel not just to return to the nuclear-exit strategy but
also to go even further by fostering a cross-party consensus on an energy transition
roadmap. This consensus foresees tackling issues in electricity markets, compensation injustices and electricity provision infrastructure that are all in line with the
goal of a renewable energy system. Yet, at the same time, the former plan for rapid
transformation was also watered down when the priority to get as much renewable
energy as possible was replaced by a target of 45 % by 2020.
Its proponents argue that this is due to safety of supply and better cost management, but it is clearly also less disruptive to the incumbent business models,
whose champions get public money to dismantle the previously lucrative nuclear
power stations. Nevertheless, these providers have been hard-hit by a plunge in
stock market value and revenues. So the German example clearly shows that each
transformation involves changes in who is winning and who is losing—and that
incumbents will not easily give up on status quo solutions.
So it is no surprise that Germany is still grappling with putting the energy
transition commitment into practice and will be for decades to come. It seems that
the radical vision of a renewable energy system will not be reversed: its purpose has
been changed from ‘as much energy as possible at lowest costs’ to ‘climate-friendly
and long-term secure energy.’ The cost effects are often used and misused in
arguments against the transition but its sociocultural anchoring is still firm and
broadly based. But the regime restabilization actually required to achieve this goal
is far from complete: intense struggles are taking place in the social, economic,
cultural, technological and political dimensions of the energy system. Who is
paying how much for which type of electricity? Which business models receive
which type of financial support? Where can wind turbines and solar panels be
located so that they fit the landscape? Which storage capacities will be available to
smoothly provide irregularly harvested renewable energy? Which party coalition is
supporting which business sector and how do Germany’s European neighbors react
to a transition that also impacts their energy grids?
28
2 What Political Economy Adds to Transformation Research