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Options for a sustainable energy supply

Martin Faulstich, Michael Weber, Christian Hey, Matthias Herms
ifo Institut, München, 2011

ifo Schnelldienst, 2011, 64, Nr. 18, 05-13

Electricity, as a particularly CO2-intensive form of energy, plays a prominent role in climate protection. In 2009, electricity production was responsible for almost half of Germany’s CO2 emissions in the energy sector. Energy production in all areas is still based mainly on the use of fossil fuels, and in the electricity sector in Germany mainly on coal. Technological alternatives for the energy sector are already available or are in advanced stages of development. Martin Faulstich, Michael Weber, Christian Hey, German Advisory Council on the Environment, and Matthias Herms, Technical University of Munich, present two solutions that are considered possible by the Advisory Council on the Environment to achieve a decarbonised electricity production: increasing energy efficiency and expanding renewable energy sources. The reduction in electricity demand via increased efficiency is a crucial first condition for the transformation of power generation. In addition, many ways of saving energy are also relatively inexpensive and easy to implement. On the other hand, the use of renewable sources of energy is the only sustainable form of electricity generation. However, the one-hundred-percent conversion that needs to be achieved is of such a fundamentally structural nature that its implementation requires government intervention in the energy market.

JEL Classification: Q200,Q300,Q400

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ifo Institut, München, 2011
in: ifo Schnelldienst, 2011, 64, Nr. 18