“Need hydrogen imports”
Habeck wants to convert green electricity funding
2/9/2022, 8:14 p.m
At least since the dispute over Nord Stream 2, the security of energy supply in Germany has been a major issue. While France is still relying on nuclear power, Federal Economics Minister Habeck wants to promote renewable energies. However, energy imports cannot be dispensed with.
Robert Habeck wants to reform the green electricity subsidy and agree repayments with investors in the event of high profits. In the future, he wants to make sure that there are no more overfundings, said the Green politician at a business conference in Berlin. In addition, the Economics Minister assumes that Germany will have to import hydrogen in the long term in order to secure the energy supply. However, Habeck does not see the French method of keeping nuclear power plants running as an alternative for securing the energy supply in Germany.
The planned reforms of green electricity subsidies are aimed at contracts for difference. The so-called contracts for difference provide that an industry is subsidized to a certain extent, but if it works economically, subsidies flow back to the state. The reforms should also apply to the field of renewable energies. “In contrast to the previous funding method, at least for large energy parks, we will introduce exactly such contracts for difference,” said Habeck.
“Here speaks the market economy,” said Habeck about the plans that he wants to present by the summer at the latest. So far, green electricity investors have mostly received purchase prices for electricity that are guaranteed for 20 years. This is intended to trigger and secure the investments. However, if the operators achieve even more on the market, for example with very high prices on the electricity exchange, they have an extra profit. This could, for example, flow back in the future via contracts for difference.
“We’ll meet in 2030”
In addition, Habeck has criticized France’s energy policy with its focus on nuclear power as backwards. “What France is doing at the moment is a very planned, capped energy supply for an old-fashioned industry,” said Habeck. France has to renovate its numerous old nuclear power plants at a cost of around two billion euros per plant. But old reactors would become more and more prone to failure.
Investing in new ones didn’t pay off either: “If you build new ones, it all takes four times longer and the costs are huge.” He is certain that nuclear energy will not give the neighbors a competitive advantage. “We meet in 2030,” he said, referring to France. Germany, on the other hand, relies on renewable energy: “It will be a locational advantage for the German economy to go this route.”
Against the resistance of Germany and other states, France had pushed through in the EU that nuclear power should be labeled as sustainable energy in the so-called taxonomy. This makes it easier to attract private investment in this technology. About 70 percent of the French power supply, based around the state-dominated EDF group, comes from nuclear energy. The state repeatedly intervenes in pricing policy.
Hydrogen has to be imported
According to Habeck, in order to secure the energy supply, Germany will have to import hydrogen in the long term. “If we don’t want to fill 5 or 10 percent of the country’s area with wind turbines – I also think that’s absurd – we need hydrogen imports,” said Habeck at the event.
Germany will no longer use fossil gas to generate energy forever, said Habeck. He referred to the taxonomy of the EU. Accordingly, investments in new gas-fired power plants should be considered sustainable by 2030 if they replace dirtier power plants and are operated entirely with more climate-friendly gases such as hydrogen by 2035. “We need gas for these 13 years,” said Habeck. The federal government sees gas as a bridging technology after the nuclear and coal phase-out on the way to more climate-friendly energy production.
After that, the Federal Republic will have to import part of the hydrogen that is supposed to partially replace gas in energy production, said Habeck. But that is not a problem. “Why shouldn’t Germany trade with other countries, also about energy?” It is only important to obtain more energy than before from different sources. Germany is currently very dependent on Russian gas imports. A similarly one-sided dependency should not arise with hydrogen, said Habeck. “Of course, Russia would be a welcome partner to also supply us with hydrogen or renewable energy, but not the only country.”
According to Habeck, fossil fuels are often extracted in monopolistic structures in the countries of origin, which are susceptible to corruption or abuse of power. A switch to the production of renewable energies could be an opportunity to promote changes here. In the future, hydrogen could possibly be imported from the Arab world, North African countries or other regions of the world. However, investment security presupposes the rule of law.