RWE CEO Urges Stronger EU Action On Green Energy

While Germany aims to go green by 2050, many countries have been slow to follow. Peter Terium, CEO of German utility giant RWE, tells DW in Davos that Europe must do more to meet the challenges ahead.

In the wake of the 2011 Fukushima nuclear disaster, the German Chancellor Angela Merkel announced a bold energy vision - known as the "Energiewende," or "Energy Transition" - meant to radically reshape the country's energy production landscape. The government's ambitious goal is to produce 60 percent of Germany's electricity from renewables by 2050, while cutting greenhouse gas emissions by at least 80 percent. To achieve this, all nuclear reactors will be taken off the grid by 2022. The plan is posing a huge - and costly - challenge for traditional energy suppliers, who are scrambling to meet the policy goals.



While at the World Economic Forum in Davos, DW's head of business, Manuela Kasper-Claridge, sat down with Peter Terium, CEO of German utility giant RWE, to discuss climate change, green energy and the challenges ahead.



DW: Germany stands pretty much alone in its green energy policy - both in Europe and globally. Do you think this is the right way forward?



Peter Terium: No, this is very strange. Germany is not an island, it never has been and, specifically in terms of energy policy, we have a European energy market, we have European directives and we can see that a solution on a German-alone basis will not work in a European context.



So, what should be done from your point of view?



Well, we should look at a policy which is European. For instance, CO2 reduction should be achieved via the European trading scheme, rather than a stand-alone German-only reduction plan. If we only reduce in Germany, we will have more CO2 certificates in other countries and that won't be enough to change the overall European picture. So, we need a European solution for reduction, but also for security of supply.



At the end of the decade, we'll see a clear shortage of power generation across Europe. On the one hand, we see countries like the UK and France that have already implemented capacity markets; on the other hand, we see Germany lagging behind and being very hesitant to take similar steps. But I think this is necessary, otherwise we will have to rely on energy developed by French power plants to secure demand on the German market, and I don't think that's sustainable in the long run.



So what do you expect from the German government at this moment?



We have a Green Paper, which basically leaves all options open - this was always the intent of the Green Paper. We're now moving on to a white paper, which is a preparation for legislation. We need to reach concrete solutions, which will help us set up a framework for the next five to six years in the area of security of supply and power generation.



Do you still think that Germany can play a leading role in pushing green power?



Yes, it already does. Germany has the highest percentage of renewable energy compared with any other industrialized country. I think we can continue that role. Germany has brought renewables to a more marketable cost base, and other countries can take advantage of that.



Climate change is high on the agenda in Davos. At the end of this year, there will be a big climate conference in Paris. What do you expect from this?



I think, in the run-up to Paris, Europe needs to set an example. We have already secured the heads of government, who have committed to a 40-percent reduction of CO2 by 2030. This amount needs to be embedded in law, and I think this must be done quickly. Then there's a second element, called a market stabilization mechanism, which also needs to be implemented. The original idea was to do that by 2022, but I think that's too late - I think we need to do that earlier, as soon as possible, in order to allow the CO2 price to send a clear signal to reduce emissions.



What year do you consider possible?



2017.



That's very soon.



Yes.



Do you expect a major breakthrough in Paris?



I'm not sure yet, because there are a lot of countries in Europe that are not really in favor of a strong EU emissions trading system and CO2 reduction regime. So it will be up to the European Commission to find out how they can use their power with the member countries and with the European Parliament to push through the implementation of this legislation.



Thank you very much, Mr. Terium!