Germany

Germany is pursuing several ambitious objectives in its energy policy, notably cutting greenhouse gas emissions and fully liberalising the electricity and gas markets, while phasing out nuclear power. The government has offered no prescription as to how nuclear power might be replaced, preferring to place reliance on the market to find solutions. By contrast, continuing subsidies to the coal industry are justified by reference to long term energy security needs, in conflict with a market-based approach. Germany has achieved dramatic reductions in its greenhouse gas emissions over the past decade and accounts for a major part of the reductions needed to reach the EU targets for the period of 2008-2012. Measures used include minimum feed-in tariffs for renewables and co-generation, the "eco-tax" and regulation to encourage energy efficiency. The potential benefits of these policies are counterbalanced by the burden they put on taxpayers and consumers. Their application should be made flexible and should be adapted to market circumstances. Germany was one of the first IEA countries to liberalise its electricity and gas markets. Competition has developed, particularly in the electricity market. But new entrants have experienced access problems and electricity network access tariffs remain high and dispersed. The report proposes measures to further reinforce competition.