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Home/Power market impacts of the German Climate Cabinet’s recent climate package

Power market impacts of the German Climate Cabinet’s recent climate package

On 20 September 2019, Germany’s “Climate Cabinet” – a committee of ministers with climate-relevant portfolios – agreed on a compromise which aims to get Germany back on track for its 2030 climate target. The ruling parties agreed on the introduction of a national carbon pricing system in the transport and building sectors and strengthened their commitment to achieve 65% renewables in power demand by 2030.

With regard to the power sector, the Climate Cabinet intends to raise the 2030 target for offshore wind from 15 to 20 GW. Further, the 52 GW subsidy cap for solar PV is set to be abolished. However, onshore wind buildout will face additional obstacles from new minimum distance regulations, which will significantly limit the available space for wind farms.

Aurora analyses show that the proposed measures will not be sufficient to raise the renewables share beyond 52% in 2030. Consequently, the power sector will not be able to meet its 2030 emission reduction target. The climate cabinet’s proposals therefore need to be accompanied by additional measures for both solar PV and onshore wind if the 65% renewables target is to be met.

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