Interview with Jan-Oliver Heidrich – What will 2022 bring?

The development of the energy industry with a view to the plans of the new federal government – an interview with Jan-Oliver Heidrich, Areva Managing Director and Chairman of the Energy Committee at the German Trade Association (HDE)

In his opening statement, the Federal Minister for Economics and Climate Protection Robert Habeck announced a new era in energy and climate protection policy and an “immediate climate protection programme”. Are renewable energy producers now in the golden age?

Jan Oliver Heidrich: Certainly not, even if the conditions for renewable energies are generally improving. The expansion of renewables should be carried out by companies for whom these investments must be worthwhile. However, the electricity market design, i.e. the regulatory framework, is still unclear. There are many imponderables. For example, will the excess energy continue to be remunerated? It is also important to integrate the new systems into the grid expansion that is due.

Incidentally, there is a widespread misjudgment on the part of politicians as far as the investment opportunities for commercial enterprises are concerned. Just “because it pays off”, for example, will not automatically invest money in the expansion of renewable energies. There is a lot that pays off, right down to bitcoins. However, the high investments for competitive market protection in one’s own core business always have priority.

Will all renewable energies benefit equally from the new political situation?

Jan Oliver Heidrich: Above all, photovoltaics will benefit from the changed situation. This is reflected in the currently rising prices for PV systems. Converting sunlight into energy is a lot easier in this country than using wind power. The wind turbines are known to be much more difficult to implement in terms of planning and construction. In many rural areas, residents are defending themselves with lawsuits against new wind turbines, and offshore projects are very demanding.

The coalition agreement plans to completely abolish the EEG surcharge by January 1, 2023. Why is this a step in the right direction?

Jan Oliver Heidrich: We now have 50 percent renewable energies in the system, so the systems should prove themselves on the market and no longer be subsidized by watering can. In any case, the EEG surcharge is currently de facto zero because the market prices are higher than the subsidy prices. The instrument has been causing many injustices for years, state infrastructure should not be financed through pay-as-you-go systems, but through taxes. The HDE already represented this view in a position paper in 2016 – the long drilling of thick boards…

The EU Commission wants to declare investments in nuclear and gas power plants to be sustainable and therefore eligible for funding. In your opinion, how sustainable are these technologies?

Jan Oliver Heidrich: Of course, nuclear power and gas power are not sustainable technologies. Nevertheless, as part of the so-called EU taxonomy, the law is a pragmatic solution. On the way to a climate-neutral energy supply, we urgently need bridging technologies. While France, for example, has opted for nuclear energy and cannot do otherwise at the moment, Germany is relying on gas-fired power plants to cushion the consequences of the nuclear and coal phase-out. And the operators of these gas piles need an incentive for their investments, because the plants are not profitable as mere stopgap in the event of supply bottlenecks in renewables. And here we come back to the design of the electricity market – that is an essential to-do for the new federal government!