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‘Energiewende’ boosts German renewable sector but change in policy leads to growth deceleration

Germany has set some of the most ambitious green energy targets for itself, not only in Europe but also the world. This decision has come about due to strong public opinion in favor of green energy in the country, especially as an increasing percentage of the population becomes aware of the negative consequences of global warming on the planet. Liberal feed-tariff rates have subsequently pushed Germany to become one of the largest producers of renewable energy in the world, with the country ranking third globally with regards to total cumulative installed capacity as of 2016. Renewable sources of energy have hence become the largest source for electricity being generated in the country since 2014. Meanwhile nuclear energy is gradually being phased out, with the Germans targeting 2022 as the year by which all nuclear power plants cease operations.

However, despite the huge strides green energy has made in Germany in the past 16 years, signs are emerging now that the speed with which renewable energy consumption is growing in the country may decelerate in the coming years. Feed-in tariff rates were first decreased consistently on an annual basis, and subsequently have been removed altogether for the installation of wind turbines and solar panels generating more than 750 kW in an amendment to Germany’s Renewable Energy Sources Act. The installation of new larger turbines and solar farms in the country have as a consequence taken a hit, and the number of new PV installations in Germany between 2013 and 2016 was deemed to have declined by “over 80%”. The installation of new larger turbines and solar farms now take place through an auction process, which may very well result in the speed of growth in the sector continuing to decrease. All in all Germany’s target of consuming all or most of its energy from renewable sources by 2050 is ambitious, and whilst the country is likely to continue moving towards green energy, it is unlikely that it will come close to satisfying its full energy demand using renewable sources.