In security, but also in energy policy, everything is under scrutiny these days. Rightly so, because Russia’s war of aggression against Ukraine is forcing Germany and the European Union to fundamentally reposition themselves in the shortest possible time.
In terms of energy policy, there is currently a threat that Moscow could turn off the gas supply to the EU member states at any time. The challenge is to ensure our supply in the coming winter one way or the other – regardless of whether there is a delivery stop or not. Because that’s not in our hands.
Against the background of the turning point initiated by Russia’s President Vladimir Putin, it is important in the medium and long term to accelerate the transformation to climate neutrality again significantly. This is the only way we can become independent of fossil fuels and thus of Putin’s business model.
However, we will only reap the benefits of a faster expansion of renewable energies and the ramp-up of the hydrogen economy in the coming years. With this alone we cannot guarantee our energy supply security in the winter of 2022/23. So what else needs to be done now?
There are three options for action: First, we must examine all possibilities of developing energy reserves outside of Russia. The EU Commission and the Federal Government are already doing this with great determination. Secondly, wherever possible in the short term, we must replace gas with other energy sources. For example, through the reactivation and more extensive use of coal-fired power plants or through rapid production conversions in industry. And third, we must use all forms of energy efficiency.
We must finally raise the potential for energy efficiency
In the case of the latter, however, things get complicated: Long overdue progress in efficiency has always been difficult to achieve simply because of the large number of actors and different framework conditions. The increase in final energy productivity by an average of 2.1 percent per year, which was aimed for in the federal government’s energy concept, was clearly missed in the period from 2008 to 2019 with a value of 1.3 percent.
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Unfortunately, numerous suggestions by the independent commission for monitoring the energy transition as to how higher productivity could be achieved could do nothing to change that.
Nonetheless, the potential is enormous. The currently ever increasing energy prices should increase awareness of the topic and motivate the various actors to cooperate. If that works, in conjunction with other measures, it should be possible to get through the coming winter without any noticeable rationing of gas consumers – even if Moscow were to turn off the gas tap.
Raising the efficiency potential is also indispensable if the climate goals are to be achieved. That was the case before Russia attacked Ukraine, but now energy efficiency needs to be even more of a focus. All five major system studies of the past year agree: Germany’s primary energy needs must fall dramatically by 2030. For example, the dena lead study “The start of climate neutrality” determines a necessary reduction from around 3,650 terawatt hours today to 2,450 terawatt hours in 2030.
We need regulatory law and the market
By far the biggest driver is energy efficiency. According to estimates by the federal government, by the beginning of the next decade 60 percent of the savings potential can be achieved by eliminating fossil and nuclear power plant capacities in power generation, which are replaced by renewable technologies. In addition, extensive savings in private households, in the service sector, in manufacturing and in the transport sector are to reduce primary energy consumption.
Many of the necessary measures are of a long-term nature, but there is also significant potential for energy savings in the short term – from switching off the heating in buildings, quickly replacing old boilers and the digital control of systems in industry, to alternative mobility offers and much more. The problem is the complexity and small-scale nature of saving energy, coupled with carelessness in setting political priorities and poor communication.
There is no question that energy efficiency can and must sometimes be achieved with regulatory law or support measures, but progress can also be achieved through prices and markets that change people’s behavior. In addition, existing legal regulations on energy saving are often not followed at all – either because they are hardly known or because compliance is not checked. In view of today’s flood of information, topics relating to energy efficiency simply have not been sufficiently penetrated.
The boom in energy prices is exerting strong pressure
In view of the high energy prices and the urgency of savings, however, this could soon change. After all, thousands of companies and millions of households are already having to think about how they can cope with the high energy prices, how best to prepare for the coming winter, what efficiency measures they should probably prioritize and whether there are other sources of heat and fuel for them.
The boom in energy prices is exerting considerable pressure on large parts of German industry, especially medium-sized companies. The companies have to fight their way through the subsidy jungle and get a quick overview of technology options. They should quickly signal to politicians where there is a need for change – in terms of regulations, bureaucratic brakes and funding programs. Politicians, in turn, should be able to react quickly to these signals, from the federal government through the states to the municipalities.
With a strong campaign and action plan tailored to the needs of private households and businesses, there is an opportunity to give immediate impetus to energy efficiency efforts and thus raise awareness of the many options. That promises a double dividend: Firstly, it is urgently needed in view of the coming winter. Against the current geopolitical background and the climate crisis, we simply can no longer afford to let savings potential go unused.
Secondly, such a campaign can also initiate many other measures that will bring us closer to independence from Russia and the climate goals in the medium to long term. There is no question: all activities require advance planning and coordination. However, the current development of raw material prices shows that every week that we let pass unused is one week too many.
The authors: Veronika Grimm is a professor of economic theory at the Friedrich-Alexander University in Erlangen-Nuremberg and a member of the Advisory Council for the Assessment of Overall Economic Development.
Andreas Kuhlmann is Chairman of the Managing Directors of the German Energy Agency (dena) and a member of the Executive Committee of the World Energy Council Germany.
More: How Russia’s war is throwing energy markets into chaos.