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Supply security - how to design energy policy

Christa Thoben, Rainer Frank Elsässer, Dieter Oesterwind, Peter Hennicke
ifo Institut für Wirtschaftsforschung, München, 2006

ifo Schnelldienst, 2006, 59, Nr. 03, 03-18

The network failures in Münsterland, the dispute over natural gas between Russia and the Ukraine, as well as the restarted discussion in Germany about the use of nuclear energy are putting the question of reliable energy supply on the agenda. For Christa Thoben, economics minister of Northrhine Westphalia, the biggest possible degree of supply security can only be achieved by an energy mix that encompasses all available sources of energy - including nuclear energy. Rainer Frank Elsässer, E.ON AG, puts the major blame for a potential deterioration of supply security on political intervention: "Supply security and economic efficiency start ailing, while environmental protection is exaggerated as top priority. Time has come therefore for an energy concept that is based on reality. It is the task of energy policy to create a stable framework. This framework must leave enough scope for the market actors to provide reliable, efficient and environmentally friendly energy supply." For him, too, nuclear energy plays a key role. Dieter Oesterwind, Senior Technical College Düsseldorf, sees problems primarily in the exogenous factors: For Germany, exogenous factors are said to be the supply of primary energy and electricity imports from the EU or beyond, whereas the entire domestic infrastructure (generation, network, storage, operation, trade, coordination) can be considered endogenous. Although the endogenous technological quality characteristics are on a high level compared to other countries, the exogenous factors must be assessed more critically And should be the focus of energy policy." Peter Hennicke, Wuppertal Institute for Climate, Environment, Energy, considers the increase in energy efficiency and the substitution by renewable energy sufficient to secure the supply of energy services in Germany at low risk, socially agreeable and - in the medium to long term - also efficiently, while treating climate and resources with care.

JEL Classification: Q400

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ifo Institut für Wirtschaftsforschung, München, 2006