Germany’s Energiewende

Germany’s Energiewende Lesson’s Learned for U.S. Utilities – Drawn from First-Person Fact-Finding

Public Utilities Fortnightly – November 2014 Magazine

The German Energiewende (energy transformation) has been discussed in many academic and trade publications, all heralding either the transformational, unparalleled successes of the program, or else the dismal failure and shortsighted focus of politicians and policy makers in designing and executing the transition.

On one hand, the Energiewende has successfully brought on substantial levels of solar and wind energy in Germany. However, rising electricity rates for residential consumers, coupled with the huge losses in market capitalization for the incumbent Germany utilities, have raised significant questions on how successful the policy has been and whether it will be sustainable over the long term. The result is much confusion about the true nature of the Energiewende and, more importantly, what lessons learned can be applied in the U.S.

To learn first-hand from Germany experts on what really has occurred and how it can be applied to the U.S., the Solar Electric Power Association (SEPA) and its partner ScottMadden, Inc., led a fact-finding mission for a group of U.S. utility executives, solar developers, and other key stakeholders to Dusseldorf, Germany. The group facilitated discussions with German utilities, government officials, and solar developers to shed new light for American executives on the why’s and how’s behind Energiewende. They laid a foundation for how these lessons learned can be applied proactively at utilities back home. Four specific impact areas were identified and highlighted in the various discussions held among participants: Utility Business Models; Operations; Customers and Pricing; and Policy and Regulation.

While the underlying sentiments that drove the policy decisions in German are not as strong in the U.S., Germany’s Energiewende provides a real and measurable road map against which to base the future of the U.S. utility construct and energy transaction. Taking these lessons learned and applying them now will allow the U.S. utility industry to successfully transition through the energy transformation that has begun in the U.S.

This article highlights the key lesson’s learned for U.S. utilities, drawn from first-person fact finding.

Additional Contributing Authors: John Sterling, Bob Gibson

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