“The context of today’s event has, however, changed entirely”, emphasised BBH partner Prof. Dr. Ines Zenke, who moderated the evening with more than 150 guests attending the event. We might fail to meet our climate targets, there is the risk of a gas shortage, and the struggle for energy sovereignty poses new challenges to us. “What can and what must we do to maintain coherence within our energy system in the next few years and decades, thus reconciling the objectives of security of supply and climate neutrality?” asked Prof. Dr. Ines Zenke in her welcoming speech.

“At the latest since the Russian aggression against Ukraine, it should be clear to all parties affected thereby that a sound climate policy aims at ensuring the safety and modernisation of the German industry,” added Member of the Bundestag Bernd Westphal (SPD) under whose auspices the parliamentary evening was held at the Great Hall (Kaisersaal) of the German Parliamentary Society. This would include the creation of stable framework conditions so that businesses can make the right investment decisions. Andreas Kuhlmann, CEO of the German Energy Agency dena, also emphasised how important stable political framework conditions are. There would be diversions in the future, he stated, which made a clear political line all the more important. With respect to the generation landscape, he said: “We will still need natural gas for quite a while.” He could not imagine a scenario without natural gas prior to 2030. However, as the CEO of Onyx Power, Dr. Peter Feldhaus, pointed out: The switch to LNG will lead to higher gas prices, which, in turn, means that companies will have to review their business cases.

What should the future energy market design thus look like? Dr. Peter Feldhausen stated: “We must not waste anything!” Which means that we would have to explore all options available to us for the ambitious path to a climate neutral generation landscape. According to Dr. Feldhaus this also includes biomass. Even though it already accounted for approx. 20% of renewable energy sources, biomass was an issue of controversy.

Wrongly so, he said. This is because, based on the cascade principle, only damaged and dead wood that cannot be used by either the building or the paper industry is used as biomass. Precisely this functioning cascade principle, he said, is being put into question by the EU in the course of discussions about the revision of the Renewable Energy Directive (RED III). Based on the Onyx site in Wilhelmshaven, Dr. Peter Feldhaus illustrated that biomass has the potential to play a major role in the energy system as a means of controllable electricity generation: Any site where there is still a coal-fired power plant could be quickly converted into a sustainable and carbon neutral biomass site without technical risks.

Member of the Bundestag Katrin Uhlig (Bündnis 90/Die Grünen) emphasised how important it is to accelerate the expansion of renewable energy sources. She said that the “traffic light” coalition also intends to launch a biomass strategy. “Photovoltaics and wind alone do not make an energy transition”, Member of the Bundestag Mark Helfrich also emphasised. However, statements of intent will not help the industry when it comes to investment decisions worth millions. While some things were initiated by the Easter Package and others announced with a view to the Summer Package, there is not yet a holistic approach for the transformation process towards climate neutrality.

Fundamental questions, such as the role of gas grid operators in the dawning age of hydrogen, still remain unanswered. When asked about this issue, the Members of the Bundestag Bernd Westphal and Mark Helfrich clearly supported a joint regulation of gas and hydrogen grids. However, the discussion in Brussels is currently heading in the other direction: Ownership unbundling would prevent the joint operation of natural gas and hydrogen grids – and slow down the development of the hydrogen market.

Be it grids or generation installations: Investments and retrofits must be made now for a climate neutral energy supply. Due to slow approval procedures, uncertainties, or a wait-and-see approach, we are already leaving enormous potential for a carbon-neutral electricity generation untapped. Can we afford this – in view of the current developments? No. Neither can we afford to leave the other components of the system undeveloped in the meantime – that includes the grid, controllable means of electricity generation and the sector coupling potential. And this was the conclusion of the BBH event.

The BBH group is a leading provider of advisory services for energy and infrastructure companies and their customers. Energy and supply companies, particularly public utilities, municipalities and local authorities, industrial companies and international groups are among its core clients. The BBH group advises these and many other companies and organisations in all legal matters and also assists them with business and strategic advice.

Contact:

Prof. Dr. Ines Zenke                                                     
Rechtsanwältin/Lawyer, Partner                        
Phone +49 (0)30 611 28 40 - 179                                    
ines.zenke@bbh-online.de                                      

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