Policy mixes for net-zero energy transitions: Insights from energy sector integration in Germany

Abstract

Energy sector integration is one key strategy in the German net-zero energy transition to decarbonise the energy-consuming sectors mobility, heating and industry. Energy sector integration describes connecting power, heat, mobility and industrial processes as well as their infrastructure through either the use of renewable power (direct electrification) or the use of low carbon hydrogen and its derivates (indirect electrification).

In this contribution, we evaluate the comprehensiveness of the German policy mix for energy sector integration using the policy intervention points framework. To do so, we mapped the policy mix and discussed it with experts in energy policy and energy sector integration.

We show that next to diffusing low-carbon technologies, taking an overarching system perspective across the sectors and addressing systemic problems in the emerging system are major challenges. Furthermore, the policy mix should be better coordinated as, due to the current sectoral silo thinking, it is often unclear how sectoral and energy carrier-specific policy elements relate to each other. As well, mistrust in the credibility of the policy mix leads to uncertainty, fear of sunk investments and planning insecurity.

Based on the empirical analysis, we propose to add system building as additional policy intervention point. System building aims to take an overarching system perspective on the new and contested system configuration, which allows to coordinate transition processes with regard to a systemic goal like the net-zero goal and to identify and address systemic problems that emerge during the transition.