The Energiewende Framework

Abstract

The deregulation of the electricity industry in Germany and Europe was similar in many ways to deregulation of energy access and breaking the natural monopolies formed by electricity grids in the US (Hirsh in Technology and transformation in the American electric industry, Cambridge: Cambridge University Press, 1989. Hirsh in Power loss: the origins of deregulation and restructuring in the American electric utility system, Cambridge, London: MIT Press, 1999). Similarly, the EU Emission Trading System (ETS) has much in common with the US acid-rain program described by Ellermann (Markets for clean air: The US acid rain program, Cambridge: Cambridge University Press, 2000). However, Germany’s policies to rapidly phase out its nuclear facilities in the wake of the Fukushima accident while simultaneously aiming for a zero-carbon economy remain unique worldwide. This chapter explores the unique patterns of the Energiewende framework. I describe in it the overarching quantitative and qualitative goals of the Energiewende and explain the strategies that were adopted to meet these goals. Then, I highlight the hierarchical structure of Energiewende targets, describe the various the levels at which interventions are required to steer change, and show how long-term political goals are divided in intermediate strategic and sectoral sub-targets. Next, I analyze the most important laws and regulations (henceforth, “rules”) that were implemented to accomplish overarching goals and subordinate targets. Finally, I describe the outcomes that these rules were intended to achieve, and how they relate one to another and to the European rules.