The International Energy Agency (IEA) said Friday Germany had to be careful not to let consumers foot too much of the bill resulting from the country’s ambitious switch from nuclear power and fossil fuels towards renewable energy.
Addressing Germany’s energy transition in its latest regular review, the IEA called on the government in Berlin to take further steps to maintain a balance between sustainability, affordability and competitiveness.
The agency pointed to a political debate in the country about discounts given to parts of industry which had in no small way been financed by higher power bills for consumers and a tax surcharge.
“The costs and benefits need to be allocated in a fair and transparent way among all market participants, especially households,” the report urged.
Bumpy road ahead
The IEA said Germany should make greater use of natural gas to soften the transition and reduce the use of coal to meet its carbon reduction targets and to combat climate change. It added gas plants offered a greater flexibility in terms of quickly evening out troughs in the supply of weather-dependent renewables.
“The strategic role of natural gas in Germany’s energy shift needs further clarification,” the report said. “Greater thought should be given to its use and place in the electricity supply mix of the future.”
The IEA said it was aware of Germany’s plans to massively expand its electricity transmission and distribution networks, adding it was a costly process accompanied by local opposition to the new power infrastructure.
“To date, Germany’s record with regard to the construction of new grid infrastructure is patchy and planning and consenting procedures present a major stumbling block,” the agency maintained.