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Promoting climate protection, strengthening economic prosperity

To support the political discussion about further developing energy reform and sustainable economic development during the coronavirus pandemic, the Expert Commission for the Monitoring Process ‘Energy of the Future’ of the Federal Government has made a statement detailing central fields of action for the German energy reform in a European context. Friedrich-Alexander-Universität Erlangen-Nürnberg is represented in the Expert Commission by Prof. Dr. Veronika Grimm, Chair of Economic Theory.

The Commission focuses on the further development of renewable energies, the transformation of industry towards zero emissions technology and products and the future role of hydrogen and synthetic energy carriers. The focus of their recommendations is a reform of energy pricing based on CO2, that aims to reduce the surcharges and charges for electricity prices in conjunction with ambitious CO2 pricing. This will create the right long-term conditions, lessen the burden on households and companies and will push forward the transformation of industry. In addition, a range of tools is required to accompany the process in order to address issues such as market imperfection as part of the expansion of infrastructure relevant to energy reform and the promotion of future technologies.

The transformation into a sustainable economic system requires the development of strategically significant and climate neutral value chains, the prevention of critical dependencies through diversification and the strengthening of domestic markets. Regenerative hydrogen and synthetic energy carriers play a key role here as they are highly versatile. Applications include the transport sector, electricity storage, industry and heating.

Further action is needed in the field of renewable energies, as the implementation of long-term climate targets and the EU Commission’s suggestion for a European Green Deal require considerable increases in development goals. European solutions must be strengthened during the implementation in order to better supplement national activities, particularly those for the development of renewable energies.

The Expert Commission recommends a CO2-based reform of energy pricing as the main instrument. On a national level, this comprises implementing an ambitious CO2 price path, which also involves a minimum price for CO2 as well as comprehensive realignment of the current complex system of fees, taxes, charges and surcharges to reflect actual external effects. Greater ambitions in terms of climate protection on a European level demand further specification of CO² pricing in the EU ETS in addition to reforms to the EU Energy Tax Directive and, if necessary, the introduction of compensation across borders.

Infrastructure must be adjusted and expanded to cope with the transportation, distribution and storage of hydrogen and synthetic energy sources. In addition, storage facilities of various volumes will be required to facilitate independence in the time between production and consumption, especially when it comes to electricity supply.

Public funds for investment and financing can and should only form the basis for implementing the Green Deal. Further measures for strengthening green finance must be implemented in order to activate the required capital from private investors, for example, the expansion of companies’ and financial market participants’ obligation to report in the context of the planned EU taxonomy for sustainable finance. An improved framework and uniform standards for certification provide an important basis for decision making.

Crisis management during the coronavirus pandemic takes precedence over all measures recommended by the Expert Commission. Despite this fact, some of the measures can be easily implemented and are all the more urgently required during the pandemic. These include, for example, energy pricing reform and measures for the transformation of industry towards zero emissions, which support the economy, increase the resilience of the system as a whole and contribute to protecting vulnerable groups. We must make use of these scopes of action that will facilitate low energy prices during the coronavirus pandemic.

Expert Commission members:

  • Prof. Dr. Andreas Löschel (Chairperson), University of Münster
  • Prof. Dr. Veronika Grimm, Friedrich-Alexander-Universität Erlangen-Nürnberg
  • Prof. Dr. Barbara Lenz, German Aerospace Center (DLR)
  • Prof. Dr. Frithjof Staiß, Center for Solar Energy and Hydrogen Research Baden-Wuerttemberg, (ZSW)

The Expert Commission for the Monitoring Process ‘Energy of the Future’:

The independent commission of experts supports the monitoring process set up by the German Federal Government in 2011 called ‘Energy of the Future’. Using an academic approach, the Commission makes statements about the monitoring and progress reports of the Federal Government about the energy reform and supports the Federal Government with drawing up joint solutions and strategies for the central fields of action of the energy reform. To provide support during the upcoming political discussions about the further development of the energy reform and for the sustainable development of the economy, the Expert Commission provides recommendations for important measures and framework conditions.

Further information:

Prof. Dr. Andreas Löschel (Chairperson)
University of Münster
Phone: +49 176 8520773
loeschel@uni-muenster.de

Prof. Dr. Veronika Grimm
FAU
Phone: + 49 911 5302-224
veronika.grimm@fau.de

Prof. Dr. Barbara Lenz
DLR
Phone: + 49 30 67055-206
barbara.lenz@dlr.de

Prof. Dr. Frithjof Staiß
ZSW
Phone: + 49 711 7870 210
frithjof.staiss@zsw-bw.de