Criticism & Recommendations on the Energy Transition

Alarming findings on the energy transition

The German Federal Court of Audit (Bundesrechnungshof) assesses the progress of key measures of the energy transition. Its report (German) of 28.08.2024 serves as the basis for parliamentary deliberations on Germany’s 2025 federal budget. The report is available for download here. The Federal Court of Audit’s clear statements are revealing and mercilessly expose existing shortcomings.

What is the Federal Court of Audit?

The Federal Court of Audit is a supreme federal authority in Germany and, as an independent body of financial control, is subject only to the law. Its position, the judicial independence of its members and its central tasks are laid down in Art. 114(2) of the German Basic Law. On its website (German), the Federal Court of Audit describes its tasks as follows:

“We audit the entire budget and financial management of the federal government. In other words: we look closely at what happens to taxpayers’ money, make problems transparent and make recommendations.”

Criticism of the power plant strategy and the capacity market

On the power plant strategy, the Federal Court of Audit criticises its content, calls for public consultation and expresses doubts about whether it can be implemented by 2030. Here is the wording:

Electricity generation from renewables is volatile and depends on the weather and the time of day. It must be secured by adding controllable capacity in the form of backup power plants. At the beginning of February 2024, the federal government agreed key points for a power plant strategy. It is to be implemented on the basis of a new Power Plant Security Act. On 6 July 2024, the BMWK announced that, in anticipation of a capacity mechanism, a total of 12.5 GW of power plant capacity would be put out to tender in two “pillars”: in the first pillar, aimed at decarbonising the power plant fleet, 7 GW of H2-ready power plants are to be tendered promptly. In a second pillar to safeguard security of supply in view of the planned coal phase-out, 5 GW of gas-fired power plants are to be tendered in future. Details of the tender design, the concrete timetable and the costs remain open. It is also open how the power plant capacities now to be tendered can be transferred into the planned capacity market. With this second pillar, the federal government admits for the first time that restructuring the energy system poses risks to security of supply. The public consultations on the two pillars of the power plant strategy, the legislative procedure for the new Power Plant Security Act and state aid approval by the EU Commission are still pending. … In view of the large number of points still unresolved in implementing the power plant strategy and capacity mechanism, the Federal Court of Audit continues to doubt that sufficient new backup power plants can be put into operation by 2030.”

Doubts about timely grid expansion

In response to earlier criticism from the Federal Court of Audit about grid construction, the BMWK justified itself as follows:

“After the publication of the Federal Court of Audit’s special report, the BMWK stressed at the end of April 2024 that four times as many route kilometres had been approved in 2023 as in 2021. The number of route kilometres on which construction began had doubled over the same period. For 2024, the BMWK expects around 1,500 km.”

The German Federal Court of Audit counters this as follows:

“This contrasts with a decline in the line kilometres actually completed from 525 km in 2022 to 363 km in 2023. More approvals do not yet guarantee a swift start of construction and completion of routes on schedule. Building more and faster also brings new challenges, for example material shortages.”

And concludes:

“For the new onshore high-voltage direct current transmission projects, underground cabling takes priority over overhead lines. This makes planning and building the lines more complex, more laborious and more expensive. There is as yet no experience in Germany of building such lines. The Federal Court of Audit continues to doubt that the ambitious grid expansion targets will be achieved on time.”

A “CO2-price-based energy price reform” for affordable electricity

As early as the energy crisis, the Federal Court of Audit had pointed out that the affordability of electricity supply was in question and that the share of households affected by energy poverty had risen. These high prices pose risks for Germany as a business location and for public acceptance of the energy transition. In this context it refers to the monitoring report of the expert commission on energy transition monitoring (June 2024), which welcomes measures to reduce electricity prices, such as abolishing the EEG levy, while recommending “a CO2-price-based energy price reform”. This is to serve as a central instrument for achieving the long-term energy transition and climate protection goals.

Grid fees will rise “considerably”

The Federal Court of Audit states what the federal government has so far not clearly said:

“Grid fees are among the state-regulated components of the electricity price. They are likely to rise considerably in future. The Federal Court of Audit has pointed out that more than 460 billion euros must be invested in grid expansion in the period 2024 to 2045. According to preliminary estimates by the BNetzA, a good 150 billion euros of this would be for expanding the distribution grids.”

It criticises the fact that, despite a request, the federal government has not yet confirmed the grid expansion costs reported by the grid operators:

“By 30 April 2024, distribution grid operators had to submit their grid expansion plans with the projects needed to achieve climate neutrality by 2045. According to press reports from mid-May 2024, the distribution grid operators estimated the costs on this basis at over 200 billion euros. The BMWK did not comply with the Federal Court of Audit’s request to confirm these figures.”

In addition, the amortisation concept announced by the BMWK is still missing:

“At the end of April 2024, the BMWK announced that it was working intensively on a model of an amortisation account to finance grid expansion, in order to distribute the costs more evenly between current and future users. Details are not yet known.”

All in all, the assessment of the federal government’s key energy transition measures turns out pretty poor. Feel free to give it a school grade yourself.

Original article on rgc-news.de (German)

👉 Alarming findings on the energy transition from the Federal Court of Audit ⚠️ The latest report of the German Federal Court of Audit on the energy transition once again reveals critical deficits:

Herbert Saurugg Energy expert

Herbert Saurugg on LinkedIn

Decentralised vs. centralised

We need energy at the point of consumption

Expanding and renovating the power grid is an enormous organisational effort, because the grid is currently our only Achilles’ heel of electricity supply. The Federal Court of Audit’s account reads as if it is increasingly hanging by a thread. More decentralised energy generation could bring relief – but only if it is controllable and baseload-capable.

The power grid is undoubtedly the backbone of our modern society. It ensures the energy supply for millions of people and businesses. A comprehensive modernisation of the grid is therefore essential. Expansion and conversion are also necessary because of the growing decentralised feed-in of renewable energy, since the existing grid was not designed for such demands. In northern Germany, for example, a considerable amount of wind energy is generated that has to be transported over long distances to the centres of consumption. The same applies to the numerous small and medium-sized feed-in points from photovoltaic systems in regions without sufficient line capacity to carry the power away. These technologies therefore also place an additional burden on the power grid.

In our view, baseload-capable, controllable renewable energy sources are therefore an important pillar for a sustainable electricity supply. One of these technologies is Neutrinovoltaic®, because, unlike weather-dependent technologies, it can generate energy continuously where it is consumed, independently of wind, sun and time of day. It is obvious that many advantages follow from this. We have been following this topic intensively for some time and look forward to starting a field test with units of around 5 kW per hour with end users in Austria as soon as possible, as a service provider to the Neutrino® Energy Group from Germany. We are convinced that the first contact of Neutrinovoltaic® with real conditions in off-grid operation has the potential to play a major part in shaping the energy transition.

Neutrinovoltaic® is able to convert invisible types of radiation and the energy from the motion of neutrinos continuously into usable electricity. This technology is based above all on the special properties of graphene, a two-dimensional form of graphite, the material familiar from pencils, for example. Further information and numerous articles on this topic can be found on our information page.

Neutrinovoltaics information page

We regard the expansion of decentralised energy supply as one of the most important measures to avert the looming danger of a collapse of the central power grid. The effort required for grid regulation is rising continuously and at the same time driving up energy prices.

Local energy generation at the point of consumption offers, among many other advantages, above all relief, and so helps stabilise the central structures. At a global level, decentralised energy production is even a key answer to numerous future challenges.