Climate neutrality depends on sustainable infrastructure and energy efficiency

The German Federal Cabinet passed new climate protection legislation in May 2021, under which emissions in Germany will be reduced by at least 65 per cent by 2030 compared to 1990 levels. Different targets will be applied to individual sectors. Overall, the goal is to achieve climate neutrality by 2045, an undertaking EWE supports. It will require significant efforts, including in the building sector.

By 2030 emissions in this sector will fall 68 per cent compared to 1990, from 209 million tonnes to 67 million tonnes of CO2 equivalents. Federal policy is focused on continuing the development of standards for new buildings, renovation plans for existing buildings and the gradual move away from fossil-fuel based heating systems.

Together with our partners in associations such as the German Association of Energy and Water Industries and the German Association of Local Utilities we are developing solution proposals for a climate-neutral energy supply for policymakers, business and society, and energy service providers like EWE are playing an active role in this process.

EWE is driving forward the supply of renewable and climate-neutral heating and cooling. The energy revolution, however, is complex. Climate and economic policies must considered in combination if we want the economic stabilisation during and after the coronavirus crisis to be done properly and to be a lasting success.

Electricity network and flexibility – regulatory recognition of ongoing network development

Electricity networks will continue to grow in importance, as we can assume that electric mobility will increase, especially among private households, and this will lead to a change in the decentralised demand for electricity. Locally, the increasing number of home charging points is increasing individual demand for electricity, making it almost impossible to plan precisely.

Flexible capacities in terms of load-shifting potentials should therefore be used and the expansion of the electricity grid optimally designed from an economic point of view, and the use and further development of flexibility instruments must also be anchored in law for very small plants.

Consequently, EWE urges that the investment costs necessary to make the networks more flexible be recognised in the regulatory framework.

Facilitate the use of climate-neutral gases

The increasing electrification of the economy, the heating market, transport and the simultaneous shutdown of large nuclear and fossil-fuelled power plants mean that generation and load increasingly take place in the distribution grids or have to be brought together. Gas, which will be climate-neutral in the future, will play an essential role in this context.

To achieve the climate targets that have been set, the gas network, which up to now has largely been delivering fossil fuels, will have to be capable of gradually accommodating completely climate-neutral gases by no later than 2045. In this way, wind power that finds no consumers in the electricity grid can be used as climate-neutral hydrogen in gas distribution via electrolysis.

In a future energy supply system based on renewable energies, electricity, gas and storage infrastructures must be closely coordinated. Green hydrogen as an energy carrier offers a link between the electricity and gas markets.  That is why the transformation of the existing gas network for the distribution of climate-neutral gases is vital from a macroeconomic point of view.

EWE therefore calls for a legal reorganisation of the necessary parts of the gas network infrastructure towards a transport and distribution system of climate-neutral gases.

Subsidy measures to avoid rebound effects

The decrease in energy demand will play a key role alongside the use of renewable energies. To achieve this, measures relating to building efficiency and energy-efficient renovations must be adopted.

Efficiency measures in particular often lead to rebound effects. Accordingly, the use of more efficient products and services minimises energy consumption while simultaneously reducing costs. The rebound effect occurs when more energy-efficient products are used more frequently due to the money saved (direct rebound) or additional products and services are purchased (indirect rebound).

To prevent these effects, EWE is calling for only those efficiency measures to be promoted that actually demonstrate CO2 reductions.

Mandatory use of eco-power in subsidy measures

Eligible heat and hot water production that requires electricity should use only renewable electricity. EWE proposes in particular the mandatory use of eco-power, which is no longer subsidised under the Renewable Energy Act (EEG).

CO2 reduction must become a benchmark

But in advance of this, the framework conditions for heat and hot water generation should first be examined. It is not possible to operate every technology efficiently and in a climate-friendly manner everywhere. Flat-rate subsidies should be avoided.

The objective should always be to achieve an economic and environmental optimum. Appropriate climate and construction criteria need to be established for both existing and new buildings, as well as for local and district heating networks, with the aim of achieving an optimum carbon footprint. The subsidies should be higher for heat generated from a renewable energy source.

Similarly, a two-stage subsidy model could be used to initially subsidise acquisition costs and, if the real CO2 values can be verified, additional costs as well.

Significant increase in energy-efficiency renovation of existing building stock required
Achieving climate targets will require making buildings more energy efficient, less carbon intensive and more sustainable throughout their life cycle. As a result, a significant increase in the energy-efficiency renovations of existing building stock is urgently needed. Housing and commercial units that are more energy and resource efficient will reduce energy costs and help achieve climate protection goals.

Mandatory inclusion of renewables in energy renovations

As part of the wave of renovations planned throughout Europe, renewable energies must be further integrated into building systems. EWE is therefore calling for the installation of decentralised renewable energy generation, such as photovoltaics or electricity storage, to be made mandatory in the course of energy-efficient building renovations.

GHG reduction quota needed in the heating sector

A greenhouse gas reduction quota in the heating sector will also support this. Crediting green and climate-neutral gases, for example, within the framework of the German Conservation Ordinance for existing buildings, should be aimed for. This will pave the way for a sustainable infrastructure of gas-based energy sources.

Combined heat and power as a future solution for a decarbonised heat supply

Although the electrification of energy applications is extremely important, it will not be possible to meet the full demand for electricity, especially in the industrial sector, even if consumption is significantly reduced. There is ample evidence that demand for gas energy sources will continue to be high.

These will make a contribution to the climate if they are climate-neutral or biogenic. In this context, combined heat and power (CHP), which generates electricity, heat and cooling in parallel, can help to reduce CO2 emissions.  EWE therefore calls for the CHP expansion target in the German Combined Heat and Power Act (KWKG) to be increased from the current figure of 120 TWh of CHP electricity to 200 TWh in 2025.

To achieve this goal, the framework conditions for CHP must be restructured. These framework conditions for the use of green primary energy carriers must be coordinated to ensure an optimum of CO2 avoidance costs.

CO2 avoidance should be invoked as a guiding principle for the use of green technologies. Climate neutrality can be achieved through the use of climate-neutral gases such as biomethane or hydrogen. In addition, the role of CHP in small building networks, for example, should become part of an efficient overall strategy for the heating sector.

Making municipal heat management plans standard

In the future, new renewable energy potentials that can feed into the existing heating systems must be identified in the heating sector. Accordingly, EWE is calling for municipal heat management plans to be used and applied in accordance with a uniform nationwide standard.

At the same time, flexibility options such as power-to-heat or large-scale heat pumps need to be integrated into local and district heating systems. The use of waste heat potentials presents additional opportunities to increase the effectiveness of the existing heating infrastructure.

Facilitate climate protection measures in state aid law

State aid law is an essential component of European competition law. State aid control and approval is mainly handled by the European Commission. EWE calls for any national laws and subsidy schemes that focus on climate protection and the energy revolution to be granted relief under state aid law.

In the context of climate change, the German government should lobby the EU Commission for a level playing field for such measures relating to energy efficiency, renewables and infrastructure. The main focus here is on each project and its contribution to climate change, not on the company carrying out the project. This would make climate protection measures, the legal framework and subsidy conditions accessible to a broad target group.

You want further information? get in touch
Your Contact Aiko Holstein
Representative Speaker – Berlin

Tel: +49 30 221726122



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