Institute for Security & Global Affairs
Leiden University – Faculty of Governance & Global Affairs Master Thesis Crisis and Security Management
Grid expansion in Germany after 2011: Do strategic interests of involved actors cause delay of grid expansion?
Program: Master Crisis & Security Management Student: Christian Klink
Student number: s1928694
Word count: 20.800 words (Excluding references) 24.005 words (Including references)
Thesis Supervisor: Dr. L.D. Cabane, Assistant Professor at Leiden University Second Reader: Dr. W.G. Broekema; Assistant Professor at Leiden University
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Abstract
Power grid expansion is an essential part of the Energiewende in Germany. It is necessary to expand the grid in order to incorporate the increasing share of renewable energy sources. However, the grid expansion and development does not progress rapidly enough. This threatens climate targets and the security of energy supply in Germany. Therefore, the goal of the thesis is to explore why grid expansion is delayed. The focus is on examining the impact of interests and strategies of involved actors since 2011. In grid expansion and development in Germany, four actors are mainly involved. On the one hand, actors who are responsible for grid projects and, on the other hand, those who are affected by the projects. These four actors are the transmission system operators who are responsible for constructing and operating power grids; the power utilities who produce electricity and feed it into the grids; and the German government that passes laws to regulate operational responsibilities, to ensure secure investment conditions and to provide an overall well-functioning interaction. The fourth actor differs in the fact that it is not directly involved in grid construction, but grid expansion mainly affects this actor. This actor group are the German citizens. Each of the actors listed pursues different interests and pursues these by using strategic actions. The interests and strategic actions were identified through document analysis. The conclusion shows how various strategic actions affect the expansion of the power grid.
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Content
Chapter 1: Introduction ...1
1.1 Societal relevance ...5
1.2 Academic relevance ...6
Chapter 2: Theoretical framework ...8
2.1: A Literature review on grid development and expansion ...8
2.2: Strategic action field theory ... 13
2.2.1: Strategic action fields... 13
2.2.2: Incumbents, challengers, and governance units ... 14
2.2.3: Social skill ... 14
2.2.4: Broader field environment ... 14
2.2.5: Exogenous shocks and field ruptures ... 14
2.2.6: Episodes of contention ... 15
2.2.7: Settlement ... 15
Chapter 3: Methodology ... 16
3.1: Research design: Grid development and expansion ... 16
3.2: Unit of observation & unit of analysis ... 16
3.3. Operationalisation of the concepts of the strategic action field theory ... 17
3.4: Who are the four strategic action field actors involved in grid development and expansion? ... 20
3.4.1: Governance units ... 20
3.4.2: Incumbents - transmission system operators: ... 22
3.4.3: Incumbents - power utilities ... 24
3.4.4: Challenger groups ... 25
3.5: Data collection ... 26
3.6: Data analysis ... 26
3.7 Reliability & Validity ... 27
Chapter 4: An analysis of the impact of strategic actors on grid expansion ... 29
4.1 The Energiewende context: Not an easy starting point for grid expansion ... 29
4.2: Analysis: The impact of strategic actions on grid development in Germany ... 32
4.2.1 The foundation of grid expansion ... 32
4.2.2 Investing conditions, incentives and consequences ... 33
4.2.3 Issues of power utilities and transmission system operators regarding investments 36 4.2.4 Citizens – a crucial factor ... 38
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4.2.6 Activism of citizens due to a lack of trust in political representatives ... 46
4.2.7 The latest developments – Efforts, deceleration and threats caused by involved actors ... 48
4.2.8 Grid expansion – the findings of the analysis reveal a deep-seated problem ... 51
Chapter 5: Conclusion ... 52
IV
List of figures
1 Share of energy sources in gross German power production in 2018 ...1
2 LOLE: Security of supply: Hours per year without coverage through capacity and imports..2
3 Planned routes of the three major grid projects...4
4 Google Trends – Energiewende ...8
5 Previous explanations of grid expansion delay ... 12
6 Operationalisation of the concepts of the strategic action field theory ... 19
7 Parties and coalitions from 2011 until 2019 ... 21
8 Map of responsible areas of TSOs... 22
9 Composition of average power prices in ct/kWh for a German household ... 30
10 Share of taxes and levies paid by household consumers for the electricity ... 31
11 Share of taxes and levies paid by non-household consumers for the electricity ... 31
12 Development of the EEG surcharge and the remuneration payments ... 35
13 CapEx of German TSOs (in EURm) ... 37
14 Free cash flow of TSOs (in EURm) ... 38
15 The coal commission initially matches "business as usual" ... 50
List of abbreviations
NIMBY ... Not in my backyard TSO ... Transmission system operator
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Chapter 1: Introduction
The Energiewende is a multi-decade effort to transform German society into a low-carbon, renewables-based economy. The government strives to increase the share of renewable energies to 35% of gross electricity consumption by 2020, 50% by 2030, 65% by 2040 and a minimum of 80% by 2050 (BMWi, 2012). The share of renewable energies already experienced growth of 12.000% in the last 20 years (AGEE-Stat, 2018). In 2019, the share of renewable energies is 34,9%, as displayed in the pie chart (figure 1).
It looks impressive that renewable energies already contribute nearly 40% of the energy mix in Germany, but the pie chart shows only an average throughout the whole year. It is not possible to expand renewable energy sources by a factor of X to cover the remaining energy needs of the country. It can always come to days on which the wind and solar power production are very low due to unfavourable weather conditions. Renewable energies can make up a small share of 20% on the one day, while renewable energies can also make up around 60% another day. This means in turn that the energy production on “bad weather days” needs support from thermal generation and/ or imports from neighbouring countries.
1 Share of energy sources in gross German power production in 2018
2 According to Sattich (2014), the transition process is on track, while the increase of wind and solar energy production has pushed the grid to its capacity limits. Further pursuing the goal to expand renewable energies and reduce conventional energy production poses a challenge due to grid expansion delay. Grid expansion ensures the possibility to feed a high share of renewable energies into the grid and ensures security of energy supply at the same time. One challenge is to keep the grid in balance with supply and demand in order to ensure security of energy supply. The increasing number of challenges increasingly endangers security of energy supply. The likelihood of power outages is already increasing. The expected decline in conventional power plants will reduce the capacity of these power plants from 150 GW to 55 GW from 2016 to 2030 (BDEW, 2018). Neighbouring countries expect a similar development regarding conventional power plants and renewable energies. Existing overcapacities of assured performance dwindle.
Regarding high-load situations, high-load situations often exist simultaneously in Central and Western Europe. The simultaneous effect usually occurs due to large-scale weather conditions. As a result, the mutual availability of secured capacity from abroad is relatively low. Therefore, Germany can only rely to a limited extent on deliveries from abroad in scarcity situations. The graphic below (figure 2) shows the ‘loss of load expectation’ (LOLE). LOLE is an indicator of security of supply level. It indicates in how many hours a year neither power generation capacities nor the electricity imports from abroad cover the load electricity demand (BDEW, 2018). The graphic indicates that the LOLE will rise in most neighbouring countries. The forecast supply level decreases accordingly.
2 LOLE: Security of supply: Hours per year without coverage through capacity and imports
3 Germany’s forecast level of supply will also decrease. One cause is the imbalance between the supply and demand areas. The increasing share of renewable energies (e.g. offshore windmills) causes a surplus of energy in the North while there is a shortage of power in the South of Germany (Sattich, 2014). Consequently, the grids transmit the electricity from the North to the South of Germany; however, the grid does not meet the actual demand due to lack of high voltage grids. As a result, an uninterrupted flow of electricity through Germany is not possible due to the missing grid development (Fürsch et al., 2013). The often better-developed power grid of Poland and the Czech Republic receive the excess electricity involuntarily (Boldiš, 2013). The received energy flows then to the South of Germany. Power utilities call this unscheduled happening ‘loop flows’. This circumstance leads to an imbalance in the grids of the neighbouring countries and can cause blackouts (Beck et al., 2003). It becomes clear that grid development in Germany is not only an issue within Germany, but also affects neighbouring countries (Mišík, 2015). Due to the involvement of neighbouring countries, cooperation between the countries and a European solution is necessary. (Ćwiek-Karpowicz et al., 2013). According to various researchers, power grid expansion and development is necessary to restore the balance between existing produced renewable energy and the power grid. Researchers also argue that renewables would contribute to Germany’s security of power supply with a view on the uncertain future of conventional energy sources. Fundamentally, security of power supply means that one has an uninterrupted supply of energy without significant disturbances (Winzer, 2012). The objectives of the grid development suppose a new construction of 4,650 kilometres and a refurbishing of 3,050 kilometres. Only 1,800, however, have received planning permission and TSOs have built 1,050 kilometres so far (BNetzA, 2019). These figures indicate slow progress in terms of grid expansion (Weston, 2018). For instance, the following figure (figure 3) shows the planned routes of SuedLink, SüdOstLink and Ultranet. The lengths of the three power line projects make up the majority of the planned power lines. These projects will manage and transmit electricity on a nationwide and flexible basis. However, the envisaged date of completion is in 2025. It means that the completion will be three years after the complete phase-out of nuclear energy. The electricity from nuclear power plants will then no longer be available, and thus other energy sources must compensate the energy; preferably by renewable energy sources. The demand for the completion of nationwide power grids is thus increasing.
4 Society depends on energy, but underdeveloped grids and insufficient expansion are causing problems. Problems do also arise on international dimensions regarding unscheduled loop flows. Society depends on energy because large-scale and long-lasting power outages would have serious social consequences. Freight traffic would come to a halt, and the population cannot count on uninterrupted food supply anymore. This circumstance would endanger human life (Petermann, 2011). With regards to the possible effects, the question arises: How can we explain grid expansion delay?
It is necessary to look at the role of actors and their actions within the field of grid expansion to understand the field of grid expansion. A strategic action field is an area of activity in which an interaction between involved actors happens. Involved actors try to vie for advantages. In the field of grid expansion, there are four main actors. They express their opinions within discussions and pursue their interests through strategic actions. These actions can be visible from the beginning on or become visible after a reaction of one of the other actors. This thesis examines the strategies of actors in grid expansion. Grid expansion is a field of action in which strategic actors try to pursue their interests in a way from which they benefit
3 Planned routes of the three major grid projects
5 the most. Pursuing individual interests lead to carry out actions which can accelerate or slow down the process of grid expansion. The field around the Energiewende comprises a large variety of engaged actors, and these differ in their interests and underlying worldviews. Their interests lead them to carry out actions that have an impact on grid development and expansion and influence accordingly the development of the field of action. It exists three groups of key actors. The first group consists of actors who have a disproportionate influence within the field. These actors are incumbents, such as transmission system operators and power utilities. Governance units, such as political parties or individual politicians, are often in favour of these actors due to the lobbying activism. Governance units oversee the whole field of action and try to provide a smooth interaction between actors through regulating and passing laws. Challenger groups are the third type of actors. These actors are usually protesting groups who are in opposition to grid expansion. These actors have portrayed their interests through actions since the Energiewende became more concrete since 2011. The Energiewende has regained some of the limelight in the public eye. The main objective of this thesis is to examine how the interests and subsequently strategic actions of the involved actors affect the grid development in Germany.
It gives rise to the following research question:
How did the interests of actors in the field of grid development and expansion affect the process of grid development and expansion in Germany since 2011?
1.1 Societal relevance
From a societal perspective, the Energiewende affects everyone’s life. 89% of the German population support the expansion of renewable energies, and 86% of the population also supports the expansion of the power grid and regard it as necessary (AEE, 2019). The population usually perceive the objectives of the energy transition as possible positive outcomes, but they call implementations and strategies of actors often into question. One purpose of the Energiewende is to increase the share of renewable energy sources. Due to lack of transmission capacity, because most of the renewable energy sources are in the North of Germany while the South of Germany consumes most of the energy. This circumstance reinforces the need for grid expansion in Germany, as the further expansion of renewable energies would otherwise be questionable due to not being able to transmit and use the generated energy. The transition to renewable energies would be a way to increase the security
6 of supply in Germany as it would decrease the import dependency of Germany. Nevertheless, missing grid expansion endangers the further development of renewable energy sources and security of supply in Germany as well. In case supply and demand are not balanced in the grid, blackouts can occur (BMWI, 2018). Until today, power blackouts continue to be a problem of extreme weather conditions; however, one should not disregard the increasing number of encroachments on the grid due to the feed-in of renewable energy sources and the resulting increase in risk potential (Eriksen & Wettengel, 2019). Blackouts can lead to severe consequences in society; depending on the duration of the blackout and the preparedness of the population (Greilich, 2018). Therefore, the significance of grid expansion and development for Germany becomes clear from energy technology and a security perspective. Nonetheless, people are struggling with accepting grid expansion when it comes from only talking about energy transition to the actual process of building grids and modifying landscapes because grid projects affect citizens. Citizens worry about unbeautiful landscape interventions, health risks due to electric radiation of high-voltage lines or land degradation due to waste heat of underground cables. Society should become aware that the energy transition has advantages; however, these advantages come along with modification, implementations, and especially grid expansions.
1.2 Academic relevance
Since 2011, researchers have examined the energy in a national and international context extensively. Many contributions to the academic field deal with renewable energy sources and challenges of the transition process (e.g. Steinbach, 2013; Menges & Beyer, 2014; Neukirch, 2016). The grid expansion was addressed from different perspectives to bring some explanations of grid delay to light. According to Moss, Becker & Neumann (2015), affected residents begin to join forces in order to show that other solutions, besides grid expansion, exist. These residents, for instance, mention the development of decentralized energy provision. Steinbach (2013) focuses his research on causes of the delay of grid expansion and states that the delay is due to the insufficiency and inappropriateness of the rules in force, long-lasting administrative practices and deliberate delays. Other scholars, in turn, already recognize that the energy transition inspires a wide range of actors (e.g. Bertsch, 2016; Delicado et al., 2016). These actors' primary objectives are to derive benefits and to avoid harm to themselves through their actions. Actors who have a self-interest in a specific topic are usually intelligent and rational decision-makers. The social skills of these actors enable them to read people and environments (Fligstein & McAdam, 2011). These skills help them to work in a strategically
7 way from which they expect the desired outcome. Actors who engage in grid development evaluate the costs and benefits of their different options in order to benefit themselves the most (Zey, 2001). A literature review helps to examine the interests of the involved actors in grid expansion and how these interests lead to actions that may affect the progress of grid expansion. The analysis of the impact of various interests thus closes a knowledge gap. The analysis has the potential to reveal the degree of influence the German government, transmission system operators, power utilities and local resistances have regarding grid expansion.
This thesis has five parts. The introduction explained the focus and relevance of it. Then, the second chapter presents the theoretical framework within this research. The literature review seeks to clarify what scholars already found out about influences on grid expansion. This chapter also presents the theory of strategic action fields. The theory sets the frame in which strategic action field actors operate and helps to understand the influence of interests of actors in the field of grid expansion. Additionally, the chapter addresses the concepts. The third chapter operationalize the introduced concepts and outlines the research design, the methods, the unit of analysis and the reliability and validity. After that, the fourth chapter provides an empirical analysis of the case of grid expansion in Germany. Finally, the fifth chapter builds a conclusion and answers the research question. Furthermore, it includes a critical discussion of some limitations to this study and gives recommendations for further research.
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Chapter 2: Theoretical framework
This chapter focuses on the theoretical framework. It explores the current state of knowledge of grid expansion in order to examine the research in this field. This chapter discusses the emerging problems of grid expansion delay and the causes of the delay identified in the literature. Then, the chapter presents the theory of ‘strategic action fields’ developed by Fligstein & McAdam and suggests how it can help understanding grid expansion delays.
2.1: A Literature review on grid development and expansion
Exogenous shocks and windows of opportunity (Birkland, 1998) have brought the term ‘Energiewende’ to more considerable attention among the public since 2011 (Google Trends, 2019). Exogenous shocks are economic trends or unexpected incidents that affect an economy either positively or negatively. Think-tanks and governments usually have a solution at hand, which they present when a window of opportunity occurs. A window of opportunity occurs when the ‘problem stream’, ‘political stream’ and ‘policy stream’ interact (Kingdon’s model in Howlett et al., 2009: 103). For instance, the incident of Fukushima was an exogenous shock that led to a window of opportunity. Engaged actors used this opportunity to introduce the nuclear phase-out. The need for a climate-relevant policy, however, has long been in the minds of people and the individual demand for climate protection increased since Fukushima (Gallier, Löschel & Sturm, 2014).
The increase in the popularity of the term Energiewende, as shown in the graph (figure 4) above (Google Trends, 2019). It is the result of the Fukushima crisis as an exogenous shock. The graph shows that the term ‘Energiewende’ generated an increasing number of search queries since 2011. The Fukushima crisis caused the decision by the German government to phase-out nuclear energy rapidly. It was an exogenous shock that caused the problem, political and policy
4 Google Trends – Energiewende
9 stream interacted and brought about a change. These exogenous shocks have an impact on strategic action fields.
Grid expansion even becomes more relevance due to the promotion of renewable energies and the increase in energy sources. Winkler et al. (2016) point out that governance units frequently use support schemes to support renewable energies due to the expected benefits from renewable energy sources. A well-known support scheme is the renewable energy surcharge act. Hake et al.’s (2015) description of the history of the Energiewende leads through an acceleration of integration of renewable energy sources until the status quo of today. German government, industry and the public face several challenges while dealing with the Energiewende, especially regarding grid expansion. Quitzow et al. (2016) focus on challenges of technical, economic and societal manner regarding the Energiewende. A few of the main technical challenges are the reorganisation of energy distribution networks, development of energy storage technologies and construction delays. Involved actors within the field of grid expansion, which deal with grid construction and usage, face an uncertain environment for local political and economic practice as economic challenges, while a few German citizens face the construction of grid with very personal fears, as in the case of NIMBYism. Affected citizen make often use of citizen initiatives and protests to demonstrate their resentment and frustration. These are societal challenges actors must face while dealing with grid expansion. Therefore, a simple technological approach will not be sufficient to make the Energiewende a success (Quitzow et al., 2016). Additionally, other researchers point out the necessity of substantial changes and countless innovations to meet the goals set by the German government (Bruninx et al., 2013). The long-term goal of the German government is to achieve a share of annual renewable power consumption of 80% by 2050 (BMWi, 2014). Nevertheless, a few challenges of the Energiewende are challenging to solve in a fast way because involved actors have different perceptions of the actual issues. Involved actors value goals and challenges differently (Quitzow et al., 2016).
The overarching goal is to increase the share of renewable energy sources, but at the same time, another goal is to maintain the security of supply at an affordable price. Johansson (2013) focuses on the relationship between energy and security highlighting that "it is possible to sustain energy supply over the long-term as long as the renewable resources are utilised in a sustainable way (Johansson, 2013: 601)." It requires the full use of generated renewable energies. A sustainable way needs grids that can transmit the generated energy to the consumption areas (Johansson, 2013).
10 According to Battaglini et al. (2012), the existing grid is subject to congestion due to the big feed-in of intermittent renewable energies. Battaglini et al. (2012) conducted interviews with stakeholders to identify barriers for grid expansion, mentioning grid development has a “chicken and egg” character. Additionally, the thesis highlights that “the grid needs to be in place for increased renewables generation capacity, but the generation capacity has to be in place to provide the incentive for the grid development projects (Battaglini et al., 2012: 258).” Nevertheless, German transmission system operators already have plans where to build grids to connect the North of Germany with the South of Germany. However, the building is going on very slowly as the number of kilometres of finished grids shows compared to the completed kilometres of the planned grid (BNetzA, 2019).
This circumstance also creates issues in neighbouring countries (Huppmann & Egerer, 2015). The initial idea is that renewable energy sources from the North of Germany produce enough energy to provide sufficient energy for the South as well. The share of renewable energies does not have reached their goal of 2050 or even 2030, but renewables already produce more energy than the German grid can transmit to the South. As a result, the energy flows through Poland and the Czech Republic to the South of Germany. This flow happens due to a specific characteristic of electricity (Janda, Malek & Recka, 2017). Electricity always takes the line with the lowest resistance. Korab & Owczarek (2016) examined this problem with regards to loop flows. Loop flows are unscheduled power flows which can cause critical operational situations and cause a threat in the form of blackouts within the energy grid of Poland and the Czech Republic. Critical operational situations occur because energy must always be in balance, more precisely, the amount of energy generated must be in balance with the power demanded. It is almost impossible for Poland's transmission systems operators and utilities to calculate the demand and supply when loop flows occur. Korab & Owzarek (2016) studied the effect of phase-shifting transformer on cross-border flows and found out that these would contribute to Polish secure operations. These circumstances show that the delay of German grid expansion does not only cause issues within Germany but also within neighbouring countries.
Since grids are already working at their limits due to the rapid expansion of electricity from renewable energies, the focus is on the causes of the delay of grid development. Battaglini et al. (2012) assessed barriers to grid expansion by examining seven prominent studies which dealt with renewable energy infrastructure and conducting a stakeholder survey. The results of the survey show that the main barriers of grid expansion are not of technological or financial issues. The most mentioned barriers were public acceptance of grid building, the length of
11 administrative processes (e.g. planning and processing of grid projects) and lack of comprehensive and stable regulations (Battaglini et al. 2012).
Conflicts and negotiation processes also influence the length of administrative processes as Kühne & Weber researched. Kühne and Weber (2018) mention that the "development of renewable energies has become the centrepiece of political activity, and the reorganisation and expansion of the existing power grid are widely considered a necessary consequence (Kühne & Weber, 2018: 529).” Not everyone, however, regards grid expansion as a necessary consequence. It depends on the individual actor in the field of grid expansion and the pursued strategic actions. While advocates, such as industry and politics, justify grid expansion based on power transportation needs from North to South of Germany, residents see it often from a different angle (Kühne & Weber, 2018). Therefore, different actors interact with each other regarding the issues of grid development and expansion in Germany and try to convince the opponent of their interests.
Schaber, Steinke & Hamacher (2012) analysed and discussed the effects of transmission grid expansions with regards to price dynamics. Their findings are in accordance with Huppmann & Egerer’s (2015) findings in terms of investing in grid expansion. These authors highlight that grid expansion is a process of strategic investment which leads involved actors to action from which they generate an economic profit and benefit. Becker, Blanchet & Kunze (2016) mention, besides transmission system operators and power utilities, citizens as another actor. The energy transition in Germany consists of a growing involvement and engagement of citizens. Becker et al. (2016) analysed the context, strategy, and outcome of social movements in two German cities and concluded that energy projects must deal with more complex settings. Quitzow et al. (2016) supports this conclusion and identifies a broad public consensus that still backs the Energiewende in general. However, conflicts arise as soon as the implementation processes, such as grid construction, reach a local level. Public acceptance decreases with decreasing abstraction (Hauff et al., 2011). Zoellner et al. (2008) use case studies in Germany to determine public acceptance. The result is that individuals regard economic considerations as necessary. However, Battaglini et al. (2012) and Steinbach (2013) find out that this acceptance level decrease in terms of grid expansion because a grid expansion is a significant intervention in the landscape.
Conflicts, negotiations and the progress of negotiations depend on how involved actors value specific goals because actors act strategically and pursue the goals which they value the most and "believe that [other] goals can be best achieved in the slipstream of these goals (Joas et al., 2016:44)." Furthermore, Joas el al. (2016) found with the help of interviews with
12 politicians, civil servants, lobbyists and scientific policy advisors out that the ambiguity of interests is often helpful. It often contributes to finding a compromise between groups with conflicting interests. Sonnberger & Ruddat (2016) surveyed the public and found out that people who do find specific solutions unacceptable will not change their opinion in the future. Fischer (1995), in turn, states that goals in society can change due to changing knowledge and how problems are perceived. Fischer's statement is therefore in accordance with the findings of Leibenath et al. (2016), who identified that building trust, disseminating information, making procedures transparent and explain the overall ratio is crucial.
Germany will be able to cope with these challenges posed by the Energiewende better when the discussion involves more open- and reform-minded actors (Fischer et al., 2016). Nevertheless, it is worth mentioning that even when government officials pursue specific goals, private interest groups are always involved, because these groups use private channels in order to lobby the German government (Sühlsen & Hisschemöller, 2014).
The current scientific investigations reveal the following explanations (figure 5) for the delay of grid expansion:
The literature reveals that the Energiewende and grid expansion is a much-debated topic. It identifies actors who have interests in either pushing grid expansion forward or challenging the planned grid expansion. Each of them tries to get the most benefit through their strategic actions; however, each action demands a reaction from another actor. Involved actors shape a strategic action field by interaction. Since the influence of interests of strategic action field actors on grid development and expansion is an insufficiently researched topic, it is necessary to look at the impact of these actions and interaction grid expansion delay.
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2.2: Strategic action field theory
The literature on grid development and expansion in Germany revealed that the Energiewende and its grid expansion has several challenges to face. Actors interact in this field to shape it as well as possible to their interest. The theory of strategic action fields explains the behaviour of the involved actors. The theory of strategic action fields developed by sociologists Neil Fligstein and Doug McAdam (2011) is helpful to examine how involved actors drive their interests forward, how they interact with other actors in the action field environment and what the results of these interactions are. This theory is relevant to analyse the field dynamics and to determine if grid expansion is a strategic action field. The theory helps to determine the key actors are and how the field changes due to their interests and actions.
Neil Fligstein and Doug McAdam have realised that scholars in modern societies have a great interest in making sense of collective strategic action. Scholars are fundamentally interested in the efforts of collective actors who vie for strategic advantage through interaction with other groups. Fligstein and McAdams’ objective was to form a theory that explains the underlying structure, change and stability in institutional life. Their theory of fields seeks to understand how stability and change occur amongst actors. The theory consists of seven key components: 1) Strategic action fields
2) Incumbents, challengers, and governance units 3) Social skill
4) The broader field environment
5) Exogenous shocks, field ruptures, and the onset of contention 6) Episodes of contention
7) settlement
2.2.1: Strategic action fields
Fligstein and McAdam (2011) determine strategic action fields as being an interaction between actors "with knowledge of one another under a set of common understandings about the purposes of the field, the relationship in the field (including who has power and why), and the field's rules (Fligstein & McAdam, 2011:3).” Strategic action fields are social domains within actors "with varying resource endowments vie for advantage (Fligstein & McAdam, 2011:3)." Actors who engage in strategic action fields have different levels of power; depending on their position. However, tactics are possible and legitimate and can strengthen the position of actors with less power.
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2.2.2: Incumbents, challengers, and governance units
Strategic action fields comprise of the following types of actors: incumbents, challengers, and sometimes, governance units. The structure of the field often gives an advantage to incumbents and the field rules favour their interests. Hence, incumbents usually try to preserve the settlement that was the source of their advantaged position while challengers take the opportunity to transform the field. Although they have disproportionate influence within a field, they must defend their position against challengers who usually articulate an alternative vision of the field (Fettke & Fuchs, 2017). The third actor group are formal governance units whose responsibility is to oversee the overall functioning of the system. Nevertheless, coalitions between incumbent groups and challenger groups can exist when these consist of roughly equal size and power.
2.2.3: Social skill
Social skill is fundamentally a highly developed cognitive capacity for "reading people and environments, framing lines of action, and mobilising people (Fligstein & McAdam, 2011:7)." This social skill means that people who are acting and interacting with other groups are always working strategically. Strategic incumbent actors aim to produce or reproduce a status quo. This skill helps individuals and groups to mobilise support from groups with a shared worldview to strengthen their position (Fligstein & McAdam, 2011).
2.2.4: Broader field environment
Each strategic action field is a broader complex web of other fields. Action fields that do not have direct ties with the strategic action field can still influence the stability of the actual action field. (Fligstein & McAdam, 2011). A change in one action field can passively influence another action field.
2.2.5: Exogenous shocks and field ruptures
Exogenous shocks and changes influence incumbents and challengers to a different degree. When strategic action fields are subject to change incumbents are "generally well-positioned and fortified to withstand these change pressures (Fligstein & McAdam, 2011:9)” and have “significant resource advantages (Fligstein & McAdam, 2011:9).” over challengers (Fligstein & McAdam, 2011). Exogenous shocks can have advantages or disadvantages for actors involved in grid development. Exogenous shocks can open a window of opportunity. These
15 windows of opportunity can enable actors to introduce their ideas and ways of action more quickly.
2.2.6: Episodes of contention
It is a period of conflict during which emergent contention begins to sustain itself. Interactions between actors in a field lead to new approaches and new actions (Fligstein & McAdam, 2011). As the literature revealed, further participation of the public and making procedures transparent leads to more open-minded actors, who can find compromises and new approaches through discussions.
2.2.7: Settlement
The challengers, who often take the opposition role, lead either to a re-establishment of an existing field or to establishing a new field. The re-establishing of a status quo usually reinforces the structure of rules and norms (Fligstein & McAdam, 2011).
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Chapter 3: Methodology
The theoretical framework showed the current state of knowledge regarding grid expansion and introduced the theory of ‘strategic action fields’. The theory also showed multiple concepts of strategic action fields. The thesis researches how the interests of actors in grid development affected the process of grid expansion since 2011. This chapter focusses on the methodological aspects. It presents the method for data collection and the operationalization of the previously presented concepts. The chapter concludes with the presentation of the reliability of the present thesis.
3.1: Research design: Grid development and expansion
Grid expansion is a much-debated topic in Germany. Different actors have a specific interest in grid development and expansion. It ensures that enough data is publicly available to analyse the interests and actions of governance units, incumbents and challengers. Since the planned grid development and expansion is far from achieving their set dates, this thesis enlightens how the interests of different actors are responsible for the delay. Therefore, the thesis aims to identify whether a relationship between the delay of grid expansion and the interest of strategic action field actors exists in Germany. The focus lies on examining the period from 2011 until today (2019). The year 2011 displays the beginning of the period because the German government has set its primary goals for the Energiewende in this year and thus draw more attention to the topic. This target setting is also crucial for grid development because a sufficient grid ensures a higher share of renewable energies in Germany.
3.2: Unit of observation & unit of analysis
The first criterion for the case selection was to ensure that enough open data sources were available to examine. The unit of observation is the grid expansion in Germany. The research has shown that researcher, citizens, power utilities, transmission system operators and the German government addressed the topic of grid expansion in recent years. Since the actors contribute to grid expansion through their actions, the unit of analysis is each of the actors mentioned above who contribute to the grid expansion process in Germany. The selected documents reflect these interests and actions.
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3.3. Operationalisation of the concepts of the strategic action field theory
The concepts established in the strategic action field theory complement the present research design. All actors contribute within the scope of their possibilities and their knowledge to the action field. Since all actors have a certain amount of knowledge about grid expansion, grid expansion is a strategic field of action. Each actor influences the strategic action field of grid expansion through their contributions. These contributions can be statements, speeches, arguments which lead to discussions or protests against a contribution from another actor.
The strategic action field of grid expansion has four groups of actors. The first actor is the German federal government as governance unit. It oversees the smooth functioning of the action field and introduces laws to ensure the further functioning of the field. Incumbents have an established position within an action field. Transmission system operators and power utilities are the incumbent actors in Germany. TSOs are responsible for constructing grids, and power utilities produce the electricity.
Every actor has an interest in pursuing his own goals. An objective is a state which the actor wants to achieve to gain progress or even an advantage for himself. Opinions and discussions by and between actors reveal their interests. Strategic actions of actors are expressions of opinions or direct actions. Both variants influence the course of action of other actors within the field. The objective of strategic actions is always to pursue the actor’s interests. Social skills help actors to conduct strategic actions in the best possible way. The introduced German federal government and the regional governments, transmission system operators, power utilities and challengers use their social skills to act and interact. Social skills, also known as soft skills, enable individuals to communicate effectively with their communication partners and the environment. Social skills are essential to build and maintain relationships with other actors of grid expansion. These can help to work together towards a shared goal. Since disagreements can arise in any discussion, conflict resolution as social skill enables the actor to communicate effectively with his communication partner in order to find a workable solution together. Other social skills are activism, expertise.
The field of grid development and expansion is one of many action fields within the broader field environment of the Energiewende. Changes in other action fields can have an impact on the circumstances that are the basis for discussion within the field of grid development. Further action fields are storage, conventional power plants or large-scale renewables. For instance, the German government passes a law that promotes the increase of renewable energies. It does not happen in the direct field of grid development, but it influences the pressure on grid expansion.
18 Exogenous shocks can cause changes within action fields. Exogenous shocks are happenings that do not have a direct connection with the action field of grid expansion but changes the characteristics of the field. For instance, the Fukushima incident opened a window of opportunity. It pushed the nuclear phase-out forward. Therefore, actors had to adjust their strategic actions with regards to grid expansion because the amount of available energy in the South of Germany decreased. Electricity from nuclear power plants will not be available anymore after the phase-out. Renewable energies should replace this amount of electricity. Therefore, incumbents will ensure to transmit electricity, preferably from renewable energy sources, to these areas to substitute the electricity from nuclear power plants. The transmitting of more energy from the North to the South forces transmission system operators, to plan new grids that can transmit the energy needed.
New grid projects can cause contention between involved actors because of diverging interests. People may not agree on the courses of new grids. TSOs will usually support the expansion of a power line by bringing up positive arguments while protest groups challenge the expansion by using arguments against the expansion. Each actor tries to convince the counterpart in order to resolve the contention and find a settlement. A settlement on grid development and expansion usually happens when involved actors find a common way. Every interests of actors on grid expansion can lead to interaction, contention and settlement. The interests of the actors in a field of action inevitable lead to interaction. Pure interaction can develop into contention. Further interaction and social skills can help to find a settlement.
19 The following table (figure 6) shows the operationalisation of the concepts of the strategic action field theory. The left side of the table shows the concept and the right side shows the operationalisation of the concept. These operationalisations are important for the analysis part in order to make theoretical constructs (concepts) observable and measurable within the specific context of the present thesis, more precisely within the field of the Energiewende and grid expansion.
Concept Operationalization
Strategic action field The action field of grid expansion
Incumbents Transmission system operator
Challenger Citizen initiatives
Governance unit The German federal government
Social skills Soft skills, activism, expertise
Broader field environment Action fields of the Energiewende (e.g. storage, conventional power plants, large scale renewables)
Exogenous shocks and field ruptures Happenings that change the characteristics of the action field of grid expansion
Episodes of contention Contention caused due to diverging interests
Settlement At least two actors solve their
contention by finding a common way
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3.4: Who are the four strategic action field actors involved in grid development and expansion?
The grid expansion is a strategic action field that includes governance units, incumbents and challenger groups in order to function. This part expands the research design and introduces each strategic action field actor of grid expansion.
3.4.1: Governance units
The German federal government has targets in place for the share of renewable energies among the final electricity consumption in the coming years in order to reduce dependency on fossil fuels. The German federal government has brought Germany into a pioneer position in the energy transition and thus promoting the Energiewende should still be high on the agenda of the government. The German government shapes the Energiewende and thus influence the strategic action field of grid expansion. Nevertheless, ministries and state governments have their interests These actors can facilitate, or block decisions made by the federal government. The grids will get more insufficient due to the expected increase of renewable energies in the coming years. Especially the intermittent characteristics of renewable energy sources pose a challenge to the grid. Therefore, the responsibility of the German federal government is to find a solution that drives the grid development and expansion forward.
This thesis considers all parties that have at least one seat in the German Bundestag as the German parliament. The German parliament represents the discussions and interests of the German federal government and other parties because it consists of the president of the Bundestag, the federal council of Germany, chancellor, ministers and the parliamentarians. Noteworthy is that only those parties may move into the Bundestag, who have received at least five percent of the votes in the federal election. The federal government introduces most of the laws, but the German Bundestag passes the laws. It also means that ministers may make decisions on behalf of the people in Germany. They determine the laws in Germany. Politicians, which sit in the German Bundestag present statements and speeches. Speeches can lead to discussions between parties. The advantage of looking at the German parliament is that the interests of the parties become visible and the interaction and discussion between the parties demonstrate which discrepancies regarding interests are already present between individuals, which form one actor together. Besides, politicians involved in the German Bundestag give interviews and statements in newspaper articles, so that the inclusion of newspaper articles in addition to the documents of the German Bundestag complement the analysis. The focus of the analysis is the German parliament and not on specific ministries in order to cover a broader
21 spectrum of interests regarding grid development and expansion. This specification is important, because not only the ministries, who are directly in touch with grid expansion due to their responsibilities, influence it. Politicians from other ministries can also influence grid expansion through actions regarding other goals of the Energiewende, which in turn could change the viewpoint on grid expansion. As introduced afore, the broader field environment can influence an action field.
The parties and coalitions have changed from 2011 until 2019. The following table (figure 7) shows the parties and coalitions from 2011 until 2019.
Time period German government German parliament
2009 - 2013 CDU/ CSU/ FDP CDU/ CSU/ FDP/ SPD/ Bündnis90/ Die Grünen/ Die Linke
2013 - 2017 CDU/ CSU/ SPD CDU/ CSU/ SPD/ Bündnis90/ Die Grünen/ Die Linke
2017 - today CDU/ CSU/ SPD CDU/ CSU/ SPD/ FDP/ AFD/
Bündnis90/ Die Grünen/ Die Linke
7 Parties and coalitions from 2011 until 2019
The analysis focusses on parliamentary speeches, interviews, reports and online newspaper articles. The documents published on the website of the German Bundestag (www.bundestag.de) ensures that the documents reflect the interests of the analysed politician. The main criterion for online newspaper articles is credibility and political neutrality. This is important to ensure that newspaper sources have not changed the meaning of a politician's statement. These are, for instance, SpiegelOnline, RP-Online, DieWelt. Another important newspaper online source is ‘cleanenergywire.org’. It is a website run by journalists who primarily focus on topics concerning the energy transition.
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3.4.2: Incumbents - transmission system operators:
The second actor is a group of four entities who are in charge of constructing power grids and transmitting electricity on a national or regional level by using fixed infrastructure. These four TSOs are namely ‘50Hertz", "TenneT”, “Amprion" and "Transnet BW" and build one actor in the analysis part. Each of the four TSOs is responsible for a different geographic area, but the fundamental interests are the same. The main task of each TSO is to finance and build grid projects in an amount that is enough to transmit the needed power. Therefore, the four TSOs build one group of actors in the analysis. The following map (figure 8) shows which TSO is responsible for which area.
TSO Operating in these Lander
Amprion: Northrhine-Westphalia, Rhineland Palatinate, Saarland, a part of Bayern
Tennet Schleswig-Holstein, Bremen, Lower Saxony, Hesse, Bavaria 50Hertz Mecklenburg, Western Pomerania, Hamburg, Berlin, Brandenburg,
Saxony, Saxony-Anhalt, Thuringia Transnet BW Baden-Weurttemberg
8 Map of responsible areas of TSOs
23 Their responsibility is to plan and maintain the German grid and regulate grid operations. The Renewable Energy Sources Act (Section 12.b.I.2) calls for the German transmission systems operators (TSOs) to work together. Their task is to draw up a grid development plan annually (Schroeder et al., 2013). This collaboration of expertise and experience shall ensure the secure expansion of the grid while it also maintains and ensures the security and stability of the German power supply system. It also implies the constant exchange of electricity across all regions and the responsibility to ensure that generation and consumption levels are always balanced which in turn gets more challenging due to intermittent renewable energy sources. Establishing an energy supply infrastructure for Germany that fits the needs of the future turns out to be the main task for transmission system operators in the coming decades. Therefore, TSOs are vital players in integrating electricity from renewable energy sources.
Transmission system operators have one of the essential positions in grid development and expansion in Germany because they have planned main grid expansion projects in Germany. Therefore, their interest is to push the development of the grid forward. Each of the TSO’s is involved in planning grids (e.g. Suedlink, SuedOstlink, Ultranet) that connect the North of Germany with the South of Germany. These are all projects which are still mainly in the planning or approval phase. A significantly smaller proportion is in the construction phase, and finished grid projects even make up a smaller part. Transmission system operators earn their money through constructing grids and connecting (renewable) energy sources with the grids. The end consumer pays the cost of using the grids to transmit electricity. The financing is also a challenge for each TSO because the many planned kilometres of grid lead to more considerable expenses. However, as long as a TSO has capital available, the TSO also has an interest in building and operating grids. Therefore, examining the interests and interaction of transmission system operators helps to determine which influence the TSOs have on grid expansion as one actor.
The analysis focusses on documents, articles and posts obtainable from websites powered by the TSOs. Each TSO has its own website on which the transmission system operator publishes relevant information and updates regarding grid expansion and development. Furthermore, the website ‘www.netzentwicklungsplan.de’ provides relevant information regarding grid development plans. The four introduced transmission system operators of Germany have a website (www.netzentwicklungsplan.de) on which they publish the grid development plans. Additionally, the analysis includes the same online newspaper as for governance units and the other actors to ensure the same standard of information . Concerning the TSOs, the two main criteria are also credibility and political neutrality to select relevant
24 online news articles. This is important to ensure neutral reporting of interests and actions of TSOs. These articles provide an insight into the viewpoint of TSOs and their interests on grid expansion.
3.4.3: Incumbents - power utilities
The big four suppliers in Germany, namely RWE, EnBW, E.ON, and Vattenfall have combined a 67 per cent share of the current power market in Germany and Austria (Appunn & Russel, 2015). Their core business of production and distribution of energy from fossil fuels and nuclear energy faces challenges because the German government objective is to shift away from mainly using fossil fuels to renewables; however, German utilities continue to lag in this sector.
Utilities have the primary objective to earn money from selling produced energy. In the case of decreasing earnings, utilities would act in a strategic way to take actions to increase their earnings again or to maintain them at least. In case of substantial changes in costs of producing energy in Germany, utilities could decide to invest primarily abroad. If German power utilities invest primarily abroad, the needed amount of grid in Germany will change. Therefore, pursuing their interests could interfere with grid development and expansion in Germany. The four listed electricity providers are the largest supraregional electricity providers and share the electricity market in Germany. These four suppliers build one actor in the analysis, however, the focus is on RWE and E.ON, because these both suppliers are the most visible companies in the media when it comes to green energy, coal mining and green energy. One the one hand, these both suppliers have the most significant annual revenue regarding electricity suppliers in Germany and on the other hand, both companies were increasingly in the media during the last years due to their split-ups of their companies (Amelang & Bieler, 2018) (Blechner, 2019). Both companies split the fossil fuel assets from their renewable energy assets and created two new companies (Uniper and Innogy).
The analysis focusses on documents, articles and posts obtainable from websites powered by RWE and E.ON. Both power utilities have their own website (www.group.rwe.com, www.eon.de) Furthermore, both companies and individuals working for the companies make statements regularly. Online newspapers regularly publish these statements in their articles. The analysis includes the same online newspaper as for governance units, transmission system operators and the other actors to ensure the same standard of information. The two main criteria for choosing online newspaper as sources are credibility and political neutrality. It is crucial to ensure that the quoted statements of companies and individuals reflect the original message.
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3.4.4: Challenger groups
Besides the governance units and incumbent actors, there is a third actor. The action field of grid expansion affects everyone. Everyone can become a challenger of grid expansion. Challengers are not in favour of grid expansion per se or with specific circumstances of grid expansion, for instance, the planned route. Challengers often pursue specific self-interests. Anyone who acquires a challenging stance on network expansion is a challenger in the context of this thesis.
Grid development and expansion in Germany provokes different mindsets with regards to construction. Challengers usually have a different viewpoint than the government, transmission system operators or the power utilities. Regarding grid development and expansion, challenger groups usually consist of residents, local organisations or interest groups who perceive grid expansion as a threat to themselves or their lived values. For instance, the active alliance "Aktionsbündnis gegen die Süd-Ost-Passage" have the website "Stromautobahn.de", where the group regularly publishes information and news articles, which are against the construction of power grids and strengthen their interests. Their motif is ‘for a decentralized energy transition without oversized grid expansion’, and their code of conduct is ‘Preventing grids, not relocating!’ (Stromautobahn, 2019).
Another example is the citizen initiative “Pro-Erdkabel” which collects information regarding the whole Energiewende and makes it available on the website (Pro-Erdkabel, 2019). Furthermore, she is in favour of grid expansion but demands new technologies and calls each action of TSOs and power utilities into question. Suggestions as a problem-solving approach are not available on the website. Another citizen initiative is the “Bürgerinitiative Meerbusch - gegen Konverter” who runs a Facebook page as an information page. This citizen initiative is against the construction of a converter in the regional area of Meerbusch/ Osterrath (Bürgerinitiative Meerbusch – gegen Konverter, 2019). Converters are necessary elements for grid expansion and development. Converter systems connect DC grid cables with AC grid cables. A converter converts alternating current into direct current and vice versa (Bundesnetzagentur, 2019a). The citizen initiative acts for almost nine years.
Furthermore, grid projects that are close to residential areas cause displeasure among residents who see their house prices decreasing or worry about possible health effects due to magnetic fields of the grids (Pro-Erdkabel, 2019). Actors in favour of a centralized Energiewende are also in favour of grid expansion. This fact causes that interest groups, which are in favour of a decentralized Energiewende, join forces to protest against undesired grid projects.
26 The analysis focusses on two kinds of sources. Websites from citizen initiatives, which protest the Energiewende, grid expansion or projects in connection with grid expansion are the first source. These websites display the direct communications of citizen initiatives. The second source are online newspapers, which have the same credibility and political neutrality as the online newspaper chosen as sources for the governance units and incumbent actors. These newspapers publish the actions and statements from citizen initiatives as well. Citizen initiatives are an actor within the field of action of grid expansion and have an influence on the development.
3.5: Data collection
The focus is on examining documents and online newspaper articles that focus on the grid development and expansion in Germany which reveal the interests of involved actors. The Energiewende and the associated network expansion has increasingly come into focus since 2011. Therefore, the analysis focuses on documents from 2011 onwards. The number of documents and online newspaper articles on the Energiewende and grid expansion is enormous. Therefore, the analysis incorporates only articles which include at least one of the four actors and evidence of the interests/ actions of that actor. Primary literature does not provide all aspects. A secondary type of data, namely scholarly articles and journal articles provide insight on the topic of the Energiewende and grid development from an academic viewpoint. This type of data is especially important to collate findings with results from scholars who already have dealt with one of the concerned actors. For instance, scholarly articles about the acceptance of landscape change (e.g. because of grid expansion) or the behaviour of challenger groups can support findings.
3.6: Data analysis
The focus is on analysing how the interests of the actors have changed and developed since 2011. The interests of actors lead to specific actions which can thus affect grid expansion. The collected data consists of statements and announced actions by actors which represent the viewpoints and interests of the actor. Over the years, actors have often stated their opinion, plans and strategies regarding the Energiewende and its grid development and expansion. The analysis will also reveal the relationship with which the different actors face the expansion of the power grid. Furthermore, identified interests in connection with actions carried out by the actor provide information about the impact on the delay of grid expansion. In terms of strategic action field theory, document analysis helps to assess the different parts of the theory.
27 Regarding the concepts of the theory, each document provides at least one strategic action field actor. Each actor provides a degree of social skill because the actor wants to convey his point of view. Furthermore, a document contains information regarding grid expansion or information of the broader field environment which affects the field of grid expansion. The topics discussed in a document deliver ground for discussion between actors. Arisen disputes lead to dialogues between these actors and can lead to a settlement.
The analysis assesses the documents systemically. While assessing the mentioned types of documents, the researcher goes through the following questions:
1) Which relevance has the article with regards to grid expansion? 2) How does the topic of the article affect grid expansion?
3) What is the main problem, according to the article?
4) Does the stated opinion in the article cause contention between certain actors? 5) Does the document mention exogenous shocks that altered the field?
6) Does the document attribute responsibility to a specific actor?
7) Does the actor announce any needed action with regards to grid expansion? 8) Does the document victimize a specific actor?
9) Does the document provide any recommendations for further action?
3.7 Reliability & Validity
Reliability means consistency and dependability. Research is reliable if the same outcome recurs under the same or at least very similar conditions (Lawrence, 2014). In the European context, the Energiewende is constantly present. The incorporation of an increasing share of renewable energies demands the cooperation of actors who are either responsible for driving gird projects forward or are affected by those grid projects. These circumstances provide a strategic action field in other European countries as well. The names or descriptions of involved actors may vary, but the attitude to pursue interests remains. The theory of strategic action fields will also produce in other countries a result of how the power relations are present and which impact strategic actions have on grid development. It comes along with external validity. The results of this thesis are only generalizable to other European countries that fulfil the same criteria regarding influences of politics, companies and citizens. Furthermore, stability reliability refers to the fact that results remain consistent at different points of time (Lawrence, 2014). This fact is true for the results of demonstrating the strategic action field with its power relations and its impact on grid expansion because the thesis focusses on a specific time frame
28 of the past. Arguments submitted, and examples may change considering a different time horizon. However, the results will remain the same, as long as no significant changes within the government occur, which would alter power relations within a country.
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Chapter 4: An analysis of the impact of strategic actors on grid expansion
The goal of the following analysis is to examine what impact strategic action field actors have on the action field of grid expansion. The focus is on the interests and associated actions of the four actor groups since 2011. This chapter provides a brief introduction of some characteristics of the Energiewende which explain why the topic of grid development and expansion are tense. These characteristics can influence the effect of the actors' actions. Then, the analysis outlines the interests and actions of the four actors, including the interactions and results shown in chronological order from 2011 until 2019. This part also examines the issues the actors had to deal with during the mentioned period. Additionally, the analysis points out how the interests and actions of the four actors display the concepts described in the theory of strategic action fields.4.1 The Energiewende context: Not an easy starting point for grid expansion
The Energiewende requires sophisticated measures and investments in different action fields to achieve the goals set and thus to be successful in Germany. Investing sustainably in grid expansion requires an on-going assessment of progress and associated adjustments of plans and actions on a regular basis as well as keeping up to date with current developments to drive grid expansion forward. Such processes require elevated costs. High expenses on projects, however, in relation to the energy transition create little understanding among the German population, as people see their electricity bills rise from year to year, especially the components related to the energy transition. This circumstance makes it difficult for the Energiewende in Germany to gain acceptance among the people. Additionally, it worsens the bargaining position of the German government, transmission system operators and power utilities regarding further expenditures. The price of electricity has risen steadily, as shown in the bar chart (figure 9) for almost 15 years. It also shows the average power price in cent per kilowatt. The price has risen steadily for a German household since 2006. Levies have increased in recent years, but energy-intensive industries do not have to pay the levies. The wholesale price has declined since 2008 and therefore reduced the cost of power for these large industrial companies. The total amount including surcharges, taxes, and fees, however, did not decline due to the renewable energy surcharge (the renewable energy surcharge is blue in the bar chart). According to Buchan (2012), increasing volume of renewable energies coming into the system is the main reason for the rising surcharge. The surcharge corresponds to the difference between the wholesale price and the fixed price for green energy.
30 The law guarantees a fixed price to producers of renewable energy for twenty years (Kleinknecht 2015). At the same time, industries that consume less power, and especially citizens who consume very little energy compared to large energy-intensive industries must pay the levies. German households are liable to pay 8.2 billion € out of the total 22.7 billion euros renewable surcharges. Private customers and small industries pay more than a third of the country’s power bill but only account for less than a quarter of the consumption (Thalman & Wehrmann, 2019). As a result, the power bill of these consumers has risen. To highlight this, the following two bar charts (figure 10 & figure 11) show the electricity price and the taxes as well as the levies in a European comparison. The first chart (figure 10) illustrates the share of taxes and levies for households, whereas the second chart (figure 11) shows the taxes and levies for non-household customers (Eurostat, 2019b). Non-household consumers are in this case industrial companies. In a European comparison, Germany has the third most expensive electricity price for household consumers. Taxes account for slightly more than 50% of the total amount for households in Germany and just under 50% for non-household customers. Even though, non-household customers pay almost 50% taxes, not all non-household customers must pay the renewable energy surcharge. In the industry it depends on the electricity consumption
9 Composition of average power prices in ct/kWh for a German household
