Navigating the energy system transformation

Professor Knodt, in your research you are analysing political challenges posed by the energy system transformation. You have been part of the Executive Committee of the Kopernikus ENavi Project that recently has been completed successfully. Why do we need a navigation system for the transformation?

We need a navigation system because many aspects of the transformation process are challenging. In Germany we are doing quite well when it comes to the expansion of renewable energies. What is not currently working well is cutting down on C02 emissions, especially in the energy, housing and transport sectors. We are also lagging behind in terms of energy efficiency.

What do you think is the reason for this?

The energy transformation cuts across many areas, from electricity to mobility to housing. To manage this, policymakers must take action in two dimensions: in a horizontal dimension, a large number of ministries need to be coordinated; in a vertical dimension, various governance levels from the EU to the federal states need to be integrated. Now, both dimensions are lacking effective coordination.

What is the situation in Germany?

Just to illustrate the challenges of horizontal coordination, in Germany, six federal ministries, including the Chancellery, are involved. For example, the Federal Ministry of Economic Affairs and Energy is responsible for energy policy and the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety is responsible for climate policy. In the Ministry of Economic Affairs alone, 34 divisions in four directorates are dealing with the energy system transformation. If you extrapolate that, you can imagine how many people you need to bring together. The German government applies the principle of negative coordination, which means that one of the ministries takes the lead and submits a proposal, which then circulates through the other departments. All ministries have their own resources, seek to defend their various areas of competence and are led by different political parties in the coalition government. It was easy to see where this mixture of departmental particularism and party politics was leading during the struggle to agree on the climate plan proposed by the Ministry of the Environment in 2016 namely to the lowest common denominator.

What would you suggest?

We recommend positive coordination, i.e. an interministerial working group should develop common perspectives and then draw up proposals with which decision-makers can identify across ministerial and party boundaries. This usually breeds better results. The more opportunities such bodies have to work together, the greater their esprit de corps. For example, this positive effect has been observable within the EU in the long-standing cooperation of core executives within the financial sector.

But there has been a climate cabinet in Germany established in 2019 in which all those responsible sit around one table. Isn‘t that a step in the right direction?

In principle, yes! But even the name shows that the set-up is inappropriate. The heads of the various fractions meet and negotiate about the proposals of a particular ministry, which are, first and foremost, about political issues that are currently highly controversial. This cannot work because it is mainly driven by party ideologies and competitive orientations. It is evident that people are dissatisfied with the results. The response to the CO2 levy was devastating. We would advocate establishing policy formulation by continuous interministerial cooperation at a lower, rather specialist level. It‘s all about coming up with a joint plan.

Let’s talk about the Energy Union, which is supposed to ensure that European energy and climate objectives are implemented at European level and within the Member States, but which seems to lack the proper instruments to do so.

The Energy Union is facing a dilemma: on the one hand, it is supposed to guarantee a secure, sustainable and competitive energy supply, whilst on the other it has to refrain from interfering in the energy policies of the Member States. It has no competences to intervene into national energy matters. The Energy Union was launched in 2014 under critical conditions: without the right to impose sanctions, with no voluntary commitments by the Member States, but burdened by conflicts between East and West. The 2018 Governance Regulation has changed little in this respect.

Why?

Because it still only allows for soft governance. Without hierarchies and competences, the EU can only propose guidelines, review their implementation by Member States, and recommend improvements. The Member States are expected to follow the recommendations, but the EU cannot oblige them to do so.

How could the Energy Union become more assertive?

Energy policy would have to be linked to a policy field with greater enforcement and sanction powers, i.e. the structural funds policy. Although the structural funds were originally initiated to support the weaker EU regions, all Member States now benefit from them. Energy transformation and climate change are already priorities and are being promoted in this context. This would need to be further developed and linked more closely to the provisions of the Energy Governance Regulation. This would not only allow for the inclusion and accentuation of more substantive specifications but would also make it possible to couple the award and payment of subsidies to the implementation of EU recommendations concerning Member State energy policies.

You also see a great need for action in terms of citizen participation. How could people be better integrated into the transformation?

Currently we are seeing a paradox in Germany: a majority of citizens supports the energy transition in general. But when it comes to implementation, many people suddenly take a different view, for example when a wind turbine is to be built on their own doorstep. One of the reasons for resistance is that citizens are generally involved at too late a stage in the decision-making process. Institutionalized participation opportunities are only implemented in the context of regional planning. Citizens are not involved in discussions at the federal level around values relating to the overriding objectives of the energy transition or on the definition of impositions, i.e. the development of the major criteria. We need participation right from the start at local, regional and national levels. Any consensus reached at these levels must be incorporated into the decision-making process of the representative system. In this way, the red lines will be revealed at an early stage, and ultimately it will be possible to increase acceptance of the energy transition.