Germany

Index rank 13

Balance Score

BBB

Energy Trilemma Index Rankings and Balance Score

 2013  2014  2015  Trend Score
Energy Performance  10  14  19   
Energy Security  31  27  25  B
Energy Equity  11  42  46  B
Environmental Sustainability  30  27  44  B
         
Contextual Performance  13  12  13   
Political Strength  16  16  15   
Societal Strength  18  11  14   
Economic Strength  24  14  16   
         
Overall Rank  11  11  13  BBB
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Fossil Fuel Reserves

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Key Metrics

Industrial sector (% of GDP) 30.8
TPEP / TPEC  (net energy importer) 0.35
Emission intensity (kg CO2 per USD) 0.27
Energy affordability (USD per kWh) 0.39
GDP / capita (PPP, USD); GDP Group 44,697 (I)
Energy intensity (million BTU per USD) 0.11
CO2 emissions (metric tons CO2 per capita) 9.43
Population Access to Electricity (%) 100.0
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Index Commentary

Germany drops two places in this year�s Index but continues to balance the three facets of the energy trilemma very well. Given the sharp policy shift determined by the �Energiewende�, the country has been put on watch as a deterioration of energy security and energy equity is to be expected in the following years. Performance on energy security and energy equity remain stable. Environmental sustainability dropped from 2011 to 2013 as emissions and energy intensity increased in light of the shutdown of several nuclear power plants and the increased usage of lignite. However, for a country with a large industrial sector environmental sustainability performance is still very good. Germany�s performance on contextual indicators continues to be very strong.

Trends and Outlook

The most recent policy development in Germany, initiated before 2010, is the German Energy Transition. The goal of the policy is sustainability, focusing on a strong increase in power generation from renewable sources, a reduction of primary energy usage and CO2 emissions. The 2011 decision to phase out nuclear by 2022 constitutes a challenge to Germany�s energy mix. Eight out of 17 facilities were closed immediately, one was closed in 2015, and the remaining eight nuclear power plants will be phased out gradually over the next seven years. Due to low wholesale prices and regulatory uncertainty, investors are reluctant to invest in new conventional power plants, which will still be needed to secure energy demand.

To achieve the increase in power generation from renewable sources, the Renewable Energy Law (EEG) guarantees a fixed price independent of demand and supply for renewable power plants. The law first came into effect in 2000 with revisions in 2006, 2008, 2012 and 2014. Even though there are visible successes as shown by the significantly increased share of renewable energy, the law is disabling market mechanisms allowing the sector to rely on subsidies rather than encouraging competition for innovative, efficient and inexpensive technologies.

Subsidies for renewable energy and investments in grid infrastructure to integrate the increasing amounts of volatile renewable energy into the system have led and will continue to lead to higher electricity prices. Policymakers must set the right framework towards a free and efficient European electricity market to limit the burden.