Rethinking Regulation

5 questions for Dr Franziska Lietz, lawyer at the law firm Ritter Gent Collegen! With her expertise in the areas of corporate compliance, renewable energies and digital legal advice, she is committed to a more efficient and sustainable future. Find out in our latest interview on how to rethink energy law.

Dr. Franziska Lietz leads the environmental law team at the law firm Rechtsanwaltskanzlei Ritter Gent Collegen and has been advising on energy law for many years. Her focus areas include corporate compliance, such as legal waste management, chemical law issues, and plant-related emissions protection law. In energy law, her work encompasses the design of supply concepts with renewable energies, legal issues of electromobility, electricity storage (especially Power-to-Gas), the development of hydrogen infrastructures, and sector coupling. Additionally, she contributes to the development of the firm's digital legal consulting products and supports startups in the renewable energy and hydrogen sectors.

 

1. Dear Franziska, energy efficiency has recently played a dominant role in energy law. In which laws does it appear, and is there an official definition that clearly specifies what the legislator means by energy efficiency?

Exciting question! The term energy efficiency appears in many places in German law. However, there is no general definition, making it somewhat difficult to precisely define this term.

Let’s start with the Energy Efficiency Act, which provides a brief and concise definition: Energy efficiency is the ratio of the output of performance, services, goods, or energy to energy input. Therefore, an increase in energy efficiency would mean increasing this output concerning the use of a certain amount of energy.

The Federal Immission Control Act also requires operators of all licensed facilities (often in the industry) to use energy sparingly and efficiently as a basic obligation. However, this is not further specified.

Finally, the entitlement to certain privileges for energy-intensive companies is always linked to energy efficiency or energy efficiency measures as a consideration. This primarily concerns measures identified within the framework of an energy management system.

Thus, while all three topics relate to something similar and ultimately aim to reduce energy use for a specific output, the approaches or terms are by no means identical.

2. Energy efficiency improvements are used to approve funding measures. Which grants are tied to the implementation of efficiency measures?

Yes, this is indeed a new "trend" in legislation, granting privileges only in exchange for consideration, a concept pushed by the EU Commission, which only wants to grant aid to high-energy-consuming companies under this premise. This currently affects the EnFG, Energy Financing Act electricity price compensation, and BECV. Ordinance on Measures to Prevent Carbon Leakage through National Fuel Emissions Trading (BEHG Carbon Leakage Ordinance - BECV).

3. Energy efficiency can also be thought of systemically (i.e., integrating renewable generation through flexibility). Do systemic efficiency efforts also count as ecological measures that can enable companies to receive grants?

No, in fact, the energy efficiency measures in the context of privileges as well as the requirements of the Energy Efficiency Act or the very broadly formulated requirement of the Federal Immission Control Act always refer to the company itself, meaning everything behind the network connection point within the company's own installation. The term energy efficiency is not extended to the power grid, a national perspective, or the integration of renewable energies, even though the latter, in conjunction with flexibility, would naturally be an important concern.

4. From your personal perspective, would it be desirable to promote not only operational efficiency but also systemic efficiency? And if so, how could that be implemented?

It is certainly desirable. From the perspective of policymakers or legislators, however, it seems that the expansion of the grids always takes precedence over flexibility. Although recent efforts have been seen to strengthen flexibility, as evidenced by § 14a EnWG, which aims to relieve low-voltage grids and mainly addresses more flexible applications such as charging points and heat pumps. Nevertheless, flexibility – even though it is often argued that it can significantly reduce grid expansion – often seems like a "stepchild" of the energy transition.

However, with the increasing expansion of (mostly intermittently generating) renewables, this topic is becoming more important. For example, it plays a role in PPAs or renewable self-generation, where the generation and consumption profiles often do not match well. I would like to take this opportunity to highlight the EE Industry Initiative, significantly driven by our firm's founder Kai Gent. Here, a group of energy-intensive companies is trying not only to jointly build renewable power generation but also to distribute the load in a way that best matches the generation profile, e.g., through Power-to-Heat. In my view, it is a pity that industrial companies have to take this into their own hands, with little support from the legislature.

5. Thank you for your time and interesting insights. Finally, we would like to ask you a "wish question": How would you design a law that supports companies in aligning their processes more closely with renewable generation?

That is not easy. I think it would require a whole set of instruments. To highlight a few points I consider important, I would first suggest making the conditions for PPAs so easy that companies can agree on PPAs as easily as a simple electricity supply contract, e.g., by removing difficulties regarding balancing. Additionally, it should be easier for industrial companies to electrify more, as high construction cost contributions for the potentially necessary expansion of the grid connection and the generally rising network charges are currently hindering effects. But as I said: The most important thing is actually a consistent overall system that thoughtfully integrates generation and consumption, but also flexibility and constancy (e.g., baseload, inflexible processes).  

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