Power partnership über alles – Financial Occasions


By Christian Hirte

The governments of India and Germany are meeting in New Delhi today to deepen the two countries’ strategic partnership. One central aspect of this cooperation has long been the question of how the energy sector in our countries can be transformed in a socially acceptable way into a modern, sustainable and highly efficient system.

The Indo-German Energy Forum (IGEF) was set up in 2006 to progress the energy transition in both countries and to learn from each other. IGEF offers a platform for a close energy policy dialogue between equals and for joint innovative projects. It was the first one that Germany agreed on with another country, and it has become a true model of successful bilateral cooperation.

At today’s 4th Indo-German Energy Forum, we look back with pride on the benefits generated by our cooperation in terms of renewable energy, energy efficiency and the expansion of the power grid.

When IGEF started, renewable energy accounted for 12% of Germany’s electricity mix. Today, it stands at a record 47%. The country’s entire energy system is gradually being shifted to renewables without putting the energy supply at risk.

Germany still has a long way to go. Without a successful energy transition, it won’t be able to meet its commitments under the Paris Climate Agreement. Therefore, in addition to a nuclear phase-out until 2022, Germany will totally phase out coal-fired electricity generation — which still covers 40% of the country’s needs — by 2038.

Alongside the introduction of a carbon tax and the promotion of electric mobility, this is one of the most important measures that Germany has taken in its recent climate package. The structural change in the affected coal-mining areas in Germany offers a great opportunity to build up viable energy and economic structures and to make the areas more attractive for people and businesses. We will demonstrate that our efforts to combat climate change guarantee jobs and prosperity and create fresh prospects.

To counterbalance these phase-outs, Germany will further increase the installed capacity of renewables. This will provide challenges. Power generation from wind and solar energy is subject to fluctuations. So, we need flexible options to balance this volatility. Demand response, integrated storage solutions, sector coupling and power-to-X technologies are key elements for this.

At the same time, grid expansion in Germany needs to be pushed ahead. For example, wind energy is mainly produced in the north and east of Germany, while the energy-hungry industrial centres are located in the south and west.

Like Germany, India is regarded as one of the world’s pioneers in the expansion of sustainable energy. In 2006, the installed capacity of renewable energy (excluding large-scale hydropower) amounted to a mere 6 GW here. Today, with 83 GW, India ranks fourth in the world. This is a breathtaking success story. Prime Minister Narendra Modi’s announcement to add a total of 450 GW of renewable energy to the system impressively underscores the role that renewables will play in India’s energy system.

A powerful future

Today, wind and solar power are some of the cheapest energy sources both in India and Germany. This economic viability of renewable energy and the rapid technological advances in the fields of storage and grid stability can mean that in India, as elsewhere, new coal-fired power plants will not need to be built.

Last year, more coal-fired power plants were closed down than approved. They are increasingly turning into a significant risk for financial investors, and run the risk of becoming stranded assets if they can no longer cover their costs when they are not being fully operated.

To jointly help each other in making our energy systems more sustainable, India and Germany have initiated important cooperation programmes in the last 13 years. These include the Green Energy Corridor and the Indo-German Solar Energy Partnership.

Making India’s coal-fired power plants more flexible is another major project. It will help them adapt to fluctuating inputs of renewable energy.

The writer is parliamentary state secretary, federal ministry for economic affairs and energy, German government

DISCLAIMER : Views expressed above are the author’s own.





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