New German coalition agreement to massively expand renewable energies

• Germany

• Energy and infrastructure - Clean energy

25-11-2021

"We are making it our common mission to drastically accelerate the expansion of renewable energies and remove all hurdles and obstacles.” - Coalition Agreement

On 24 November 2021, the Social-Democrats (SPD), the Greens and the Liberals (FDP) announced the completion of coalition talks two months after the parliamentary elections. The parties emphasized that climate protection is a guiding principle for the Government and inter alia agreed on a massive expansion of renewables in Germany.

The coalition agreement still has to be approved by the party congresses of the SPD and FDP and, in the case of the Greens, by a member referendum. In the week beginning 6 December, Olaf Scholz (SPD) is to be elected as Germany's new chancellor, after which he will appoint the ministers who will form the new federal Government with him.

Expansion of renewables

The new Government is gearing the renewables target towards a higher gross electricity demand of 680-750 TWh in 2030. Eighty percent of this is to come from renewables (in 2020, only 19.3 % of Germany's final energy consumption was covered by renewable energies). Hence, the annual bidding volumes under the Renewable Energy Act (EEG) are to be dynamically adjusted to the expected higher gross electricity demand. From 2023, the promotion of renewables will no longer be financed via electricity prices, but directly via the federal budget.

In addition, the coalition parties want to promote instruments for subsidy-free expansion of renewables, such as long-term power purchase agreements (PPAs) and strengthen Europe-wide trading in guarantees of origin.

The coalition partners also intend to strengthen the decentralized expansion of renewables and thus generate electricity closer to the consumer.

Wind power

With regard to onshore wind energy, two percent of the land of the Federal States is to be designated for wind power. The Federal Building Code is going to be amended accordingly.

Offshore wind energy capacity shall be increased to at least 30 GW in 2030, 40 GW in 2035, and 70 GW in 2045 (currently 20 GW in 2030 and 40 GW in 2040). To this end, appropriate areas in the exclusive economic zone will be will be secured. Offshore facilities (i.e. OWP, offshore cables) are to be given priority over other forms of use.

Solar power

While so far only a few federal states and municipalities have made it mandatory to use roof surfaces for solar installations, the coalition parties agreed that all suitable roof surfaces are to be used for solar energy in the future. This is to become mandatory for new commercial buildings and the default for new private buildings. The target for the expansion of solar power is approx. 200 GW by 2030.

Administrative procedures

The coalition intends to significantly speed up planning and approval procedures. When weighing up protected interests, authorities shall give priority to renewables in planning and approval processes. This shall apply until climate neutrality is achieved. In addition, the evaluation methods for the species protection assessment of wind energy projects shall be regulated uniformly throughout Germany.

The implementation deadlines for permits shall be clarified. While authorities shall be able to get external support in permitting processes.

E-mobility and charging infrastructure

The coalition agreement refers to the EU phase-out date of 2035 for the ban on new registrations of combustion engines. At the same time, this means that e-mobility is to be expanded in Germany. At least 15 million fully electric passenger cars shall be on the road by 2030.

The expansion of the charging infrastructure should precede the demand. The Government therefore wants to accelerate and de-bureaucratise the expansion of the charging point infrastructure with the goal of one million publicly accessible charging points by 2030, with a focus on fast charging infrastructure. To this end, the coalition wants to mobilise private investment and take regulatory action where competitive solutions are not effective.

Phasing out coal

While the former German Government decided not to phase out coal until 2038, the coalition parties have agreed now to “ideally” phase out coal by the year 2030. To ensure security of supply, the new Federal Government is relying on gas-fired power plants that are also designed so that they may run on hydrogen in the future.

The coalition agreement also contains further commitments on the expansion of hydrogen concepts, accelerated grid expansion and socially just energy prices