Abstract
Due to the pressing need for industrialisation and urbanisation and the escalating energy needs, many countries have started to develop renewable energy as part of the energy mix. However, the existing power generation is not diversified enough to fulfil the increasing energy demands. Malaysia has introduced specific laws on renewable energy, yet its contribution is insignificant. In comparison, Germany has set ambitious law policies for maximising renewable energy in the energy mix and increasing it up to 100% towards 2050. This chapter demonstrates German initiatives to transition from both legal and economic perspectives to achieve this ambition. The most significant measures for achieving renewable transition are also discussed for Malaysia to learn from. A PESTLE analysis is provided in this chapter focusing the political (P), economic (E), social (S), technological (T), legal (L), and environmental (E) factors that contribute to renewable energy development in Germany.
TopIntroduction
Access to electricity and energy for all is becoming sine qua non for developing and developed countries, including Malaysia and other countries in Southeast Asia. The slogan for the Sustainable Energy for All initiative launched in 2011 was “Energy powers opportunity. It transforms lives, economies, & our planet”. However, one-fifth of the world’s population lacks access to electricity (United Nations, n.d.), which means that energy security falls short for them. The Sustainable Energy for All initiative focuses not only on enabling energy access to all, but also improving world energy efficiency and increasing the utilisation of renewable energy (RE). Renewable energy sources have a huge potential to supplement the existing energy sources that are now mainly based in many courtiers on fossil fuels and some developed courtiers, including China, India, Pakistan and a few others of fossil fuels and nuclear energy. Carbon reduction in the atmosphere could also be achieved through maximum exploitation of RE. Access to energy and electricity is becoming the world’s prime agenda, but access to clean energy is pressingly necessary to safeguard the ecosystem, including the naturally required climatic conditions.
Despite a range of efforts by the Malaysian government, the country's energy sector is predominantly based on fossil fuels. The dependency on these must be changed, and there is a need to diversify to environmentally friendly means of energy generation, i.e. RE sources. Towards this end, the paper reviews Germany's renewable energy strategy as it has the best strategies for shifting towards RE. The country aims for a net 100% renewable energy share over one year from 2050 and beyond. Furthermore, the paper discusses the limiting factors of the suggested scenarios. Based on the prevailing energy situation, a PESTLE analysis is provided in this paper outlining novel thinking for addressing the political (P), economic (E), social (S), technological (T), legal (L), and environmental (E) factors that contribute to renewable energy development in Germany. The rationale of assessing Germany’s renewable energy development is that Malaysia has made special reference to Germany's Renewable Energy Act (EEG Act) Act for implementing feed-in tariff to promote renewable energy development and the main driver for the Malaysian Renewable Energy Act 2011. The main sources of information will be researched and review articles, renewable energy technologies, and countries' technical reports and support infrastructure. Although PESTLE analysis is commonly used in marketing (Achinas et al., 2019), some studies have adopted a similar approach to examine these external influences on the renewable energy industry (Zalengera et al., 2014; Igliński, 2016; Islam & Mamun, 2017; Achinas et al., 2019).
Key Terms in this Chapter
Renewable Energy: Energy produced from natural sources that is replenished at a faster rate than it is consumed, i.e., sunlight and wind.
Energy Security: A sustainable and affordable supply of energy that is linked to national security and the availability of natural resources for energy consumption.
Climate Change: Long-term changes in temperature and weather patterns which was caused by human activity such as combustion of fossil fuels (such as coal, oil, and gas), which creates heat-trapping gases.
RE Auction Scheme: Referred as demand auctions or reverse auctions or procurement auctions. The government launches an auction or releases a call for tenders to install a particular capacity of RE power from a certain technology or a range of eligible technologies. A PPA is signed with the preferred bidder (the bidder with the lowest price if the assessment is based only on price, or the bidder with the highest score if the evaluation is based on numerous factors with given weights). This contract offers renewable generators with a fixed price for a certain number of years and a guaranteed purchase for all generation, which may be used to finance the project.
Alternative Energy: Energy that is not derived from fossil fuels and emits little to no greenhouse emissions such as carbon dioxide (CO2). Alternative energy should not be mistaken with renewable energy, even if many renewable energy sources might be termed alternative. Hydroelectric energy, solar energy, geothermal energy, wind energy, nuclear energy, and biomass energy are all examples of alternative energy.
Feed-in Tariff: A type of policy that encourages investment in renewable energy sources. This generally entails giving small-scale energy providers, such as solar or wind energy, a price over market for what they contribute to the grid.
Sustainable Development: A guiding philosophy that attempts to achieve human development goals while also allowing natural systems to provide humanity with essential natural resources and ecosystem services.