Market framework for a successful energy turnaround: opportunities for growth and innovation in Germany and Europe

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The German energy turnaround holds considerable potential for innovation and growth.
However, it will only succeed if Germany as a leading industrial nation at the heart of
Europe continues to have a clean, secure and affordable energy supply.

The promotion of renewables by the Renewable Energies Act (Erneuerbare Energien Gesetz;
EEG) has led to a strong increase in photovoltaic and wind energy generation capacity.
However, the scale of the expansion has far exceeded what had been envisaged politically.
The great success in the development of renewable energies increasingly poses huge
challenges for the German economy as well as its European neighbours. Conventional
power generation, which continues to be necessary to balance intermittent renewables,
can no longer be operated in an economically efficient manner. In addition, the intermittency
of many renewables puts a sustained strain on the present grid, with a major increase in
the number of critical situations in grid operation.

Given energy policy changes around the world, the German energy turnaround must ensure
a competitive future energy supply. It is essential that the evident deficits in the process are
quickly resolved after the Bundestag elections (September 2013) to avoid putting too much
strain on the economy and losing public acceptance for the turnaround. With about 23%
share of German electricity, renewables have ceased being a niche technology and have
mostly completed the difficult phase of market entry.

To continue to ensure security of supply, the framework conditions the economy needs and
to deliver climate-policy goals, the market requires some urgent adjustments. The focus
should be a fundamental reform of the EEG that links renewables with conventional power
plant capacities and grid development. Targets for the expansion of renewables, as planned
by the Federal Government for 2030, are sensible and should be maintained.

Alstom has one of the most comprehensive portfolios of power generation technologies from
renewable to fossil generation along with expertise in power transmission and grid technology.
We've developed and proven globally our know-how in integrating different generation
types into an ecologically, economically and technically sound overall system.
As a global company with a strong and long-standing presence in Germany, we therefore
feel committed to actively contribute our expertise to the policy debate on the German
energy turnaround.

Alstom Deutschland wants to contribute constructively to strengthening Germany's
economic base with a sustainable turnaround in energy policy and offers the following
recommendations for the forthcoming legislature of 2013 to 2017.