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Glossary · Energy industry & energy transition

Renewable energy

Glossary Energy energy transition electricity generation Climate wind energy solar energy security of supply

Renewable energy refers to energy sources that continually renew themselves on human timescales or are, from a human perspective, practically inexhaustible. In the power system, this mainly means wind energy, photovoltaics, hydropower, biomass and geothermal energy. Outside the power sector, it also includes solar thermal energy, ambient heat for heat pumps and fuels made from biomass. The term therefore does not designate a single technology. It groups together very different energy sources that differ markedly in technology, cost and possible uses.

The most important common distinction concerns fuel. Coal, natural gas, crude oil and uranium are extracted from finite deposits. Renewable energy, by contrast, uses ongoing energy flows such as wind, solar radiation, flowing water, plant growth or geothermal heat. This does not mean that the installations require no raw materials, land or interventions in nature. Wind turbines, solar modules, power lines, storage facilities and substations must be built, maintained and, at the end of their life, replaced or recycled. What is renewable is the energy source used, not automatically every material prerequisite for using it.

Legal definitions in Germany and the EU

In Germany, the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, EEG 2023) defines the term in section 3 number 21. This covers hydropower, including wave, tidal, salinity gradient and current energy, wind energy, solar radiation energy and geothermal energy. It also covers energy from biomass, including biogas, biomethane, landfill gas and sewage gas, as well as the biodegradable fraction of waste from households and industry. This definition applies to the EEG, that is, primarily to the generation and support of electricity. Although the EEG treats mine gas similarly to renewable energy in many places, mine gas is not counted among renewable energy. Electricity from a storage facility counts as electricity from an EEG installation only if the stored energy comes exclusively from renewable energy or mine gas.

At EU level, the term is governed by the Renewable Energy Directive (EU) 2018/2001, in the consolidated version of 2024. It defines renewable energy as energy from renewable non-fossil sources. In addition to wind, solar (solar thermal and photovoltaic), geothermal, hydropower and biomass, it expressly lists ambient energy, salinity gradient energy, ocean energy, as well as landfill gas, sewage treatment plant gas and biogas. Because the EU definition also includes ambient energy, heat that heat pumps extract from air, water or the ground can count as renewable in EU statistics. Which definition is decisive therefore depends on the legal framework: the German definition applies to support entitlements under the EEG, while the Directive applies to EU targets and reporting.

Energy and capacity: what is measured

Renewable electricity is usually measured in kilowatt-hours, and at national level in terawatt-hours. A kilowatt-hour is a quantity of energy. This must be distinguished from installed capacity in kilowatts, megawatts or gigawatts. Under the EEG, this means the electrical active power that an installation can technically deliver continuously in regular operation. A photovoltaic installation with high installed capacity still produces no electricity at night. A wind turbine delivers varying amounts depending on the wind. Installed capacity therefore says little about how much electricity an installation generates in a year and when it is available. To assess renewable energy, one must consider generation volume, time profile, location, grid connection and impact on the overall system together.

Current key figures for Germany

According to the Working Group on Renewable Energy Statistics (AGEE-Stat) at the German Environment Agency (Umweltbundesamt), around 290 terawatt-hours of electricity from renewable energy were generated in Germany in 2025, about one percent more than in the previous year. The increase came mainly from new solar installations. Wind and hydropower generated less than in the previous year owing to unfavourable weather. The share of renewable energy in gross electricity consumption rose from 54.4 to 55.1 percent.

Outside the power sector, the shares are considerably lower. In the heating sector, the renewable share was 19.0 percent in 2025, and in transport 8.0 percent. Renewable energy accounted for 23.8 percent of total gross final energy consumption. The EEG stipulates that the share of renewable electricity in gross electricity consumption in Germany is to rise to at least 80 percent by 2030. Important for understanding: a share of gross electricity consumption is a calculated annual balance. It says nothing about what the share is in a given hour.

Different renewable sources, different system roles

Wind energy and photovoltaics are shaping the transformation of the power system because they can be expanded in large quantities and at comparatively low cost. Their running costs are low because no fuel has to be purchased. However, their generation depends on weather, time of day and season. This fluctuation is not a malfunction but a technical characteristic. Planning, market rules and grid operation must take it into account.

Hydropower has different characteristics. Run-of-river plants generate relatively steadily but fluctuate with river flow, for example in dry years. Storage hydropower plants can collect the natural inflow and use it specifically when electricity is needed. Pumped-storage plants, by contrast, shift electricity that has already been generated over time. They are primarily storage and not an independent renewable source. Biomass can be stored and, in principle, deployed as needed. However, it competes for land, with food production, nature conservation and material use. Where geological conditions are suitable, geothermal energy can supply heat or electricity continuously. The collective term “renewable” easily obscures these differences. For security of supply, what matters is not the label of an installation but when, where and how controllably it provides energy.

“Renewable” and “emission-free” are likewise not the same. Wind power, photovoltaics and hydropower cause only very low greenhouse gas emissions in operation. Over the entire life cycle, however, emissions arise from manufacturing, transport, construction and decommissioning. With biomass, cultivation, harvesting, processing and changed land use can cause considerable emissions and significantly reduce the climate benefit. Overall, the climate benefit of renewable energy is high. However, it emerges only from a complete balance of energy and material flows, not from the term alone.

Distinction from green electricity, decentralisation and self-sufficiency

Renewable energy is often equated with “green electricity”. In the physical power grid, however, it is not possible to trace which electricity comes from which installation. Green electricity products and guarantees of origin allocate generation volumes only on paper. Under the EEG, a guarantee of origin is an electronic document that, within the framework of electricity labelling, proves to final consumers that a certain share or quantity of electricity comes from renewable energy. The EU Directive also requires that the same unit of renewable energy be counted only once. Such certificates can be useful, but they do not replace the construction of real installations and grids. A tariff with guarantees of origin changes the power plant fleet only if it leads to additional investment, reliable revenues or effective demand for new installations.

Equating renewable with decentralised is equally imprecise. Many photovoltaic installations are located on rooftops and feed in close to consumers. Offshore wind farms, large ground-mounted installations, hydropower plants or biomass power plants, by contrast, are often connected centrally to the power grid. Decentralisation describes where and how an installation is integrated into the grid, not the origin of its energy. A small fossil-fuelled combined heat and power unit is decentralised but not renewable. An offshore wind farm is renewable but not local in the sense of a neighbourhood grid.

Self-sufficiency also means something different. A household with a solar installation can, on paper, generate part of its annual electricity consumption itself. However, it usually remains dependent on the grid because generation and consumption occur at different times. The power grid is not merely an emergency line. It balances generation and consumption between locations, points in time and different consumption patterns. Anyone who confuses renewable energy with self-sufficiency underestimates the role of grids, markets and shared reserves.

Why renewable energy changes electricity supply

Conventional power plants used to be operated predominantly so that their output followed demand. Wind and solar power, by contrast, are largely produced when the weather allows. This changes the task of the power system. It has to bring less fuel to power plants and must instead align generation and consumption more strongly in time and space. Grids, storage and flexible installations are involved in this.

This affects the electricity market. Wind and solar installations have low marginal costs: an additional kilowatt-hour costs them hardly anything. When they generate electricity, they therefore often push power plants with higher fuel costs out of the merit order. This can lower wholesale electricity prices, even below zero in hours with very high feed-in. Low prices in individual hours do not mean, however, that the overall system becomes free of charge. Investments in installations, grids, storage, reserve capacity, digitalisation and secure operation have to be paid for. Costs shift from fuel expenditure towards capital and infrastructure costs.

Grid operation also changes. Renewable installations are often located where the wind blows or land is available, and not necessarily where large consumers are located. This creates transport needs in the transmission grid, and bottlenecks arise in the distribution grid. Grid connections, redispatch, voltage control, reactive power and short-circuit power gain in importance. Many of these tasks were previously performed by large power plants with rotating generators directly coupled to the grid. Wind and solar installations, by contrast, are connected to the grid via power electronics. Ancillary services must therefore be provided in technically different ways and clearly regulated.

A central variable is the residual load. It describes the demand that remains after subtracting feed-in from wind and sun. In hours with a lot of renewable generation, it can be very low. During Dunkelflauten, that is, periods with little wind and little sun, it remains high. This creates a need for flexibility. Dispatchable power plants, storage, load shifting, heat pumps with buffer storage, electrolysers, flexible industrial processes and cross-border electricity trading can help balance generation and consumption.

Typical oversimplifications in debates

  • Annual volumes are not an hourly balance: if a country generates as much renewable electricity over the year as it consumes, this does not mean that sufficient capacity, grid capacity and controllability are available in every hour. Annual balances are important for climate targets and energy imports. For the operation of the power system, quarter-hourly values, load profiles, forecast errors and regional bottlenecks also matter.

  • Land and material requirements: renewable energy does not simply replace old power plants with new ones playing the same role in the system. Generation is spread more widely across the country and affects landscapes, municipal planning, nature conservation and grid infrastructure. These conflicts cannot be settled by pointing to climate protection. They must be resolved in terms of planning, law and economics, for example through clear land targets, participation models, species protection standards and faster permitting.

  • Low operating costs do not automatically mean market viability: many installations are expensive to acquire but cheap to operate. Whether they can be financed depends on whether their revenues are predictable over many years. Support instruments such as EEG tenders, long-term power purchase agreements, rules on grid connection and market design therefore strongly influence expansion. What is decisive is how investment and price risks and responsibility for the grid are distributed.

  • Rising electricity consumption is not a contradiction: if transport, heating and industry increasingly use electricity, electricity consumption can rise while the consumption of fossil energy falls. Higher electricity demand is then part of the shift from combustion to electric applications. For planning and costs, however, what matters is when this additional demand arises and whether it can be flexibly controlled.

Conclusion

Renewable energy is a group of energy sources whose significance only fully emerges in interaction with the grid, the market, consumption and legal rules. The term is precise when it describes the origin of the energy, and legally clearly delimited when the applicable definition from the EEG or the EU Directive is used as a basis. It becomes imprecise when it is also meant to assert a good climate balance, controllability, proximity, security of supply or low system costs. For the power system, it matters not only whether energy is obtained from renewable sources. Equally decisive is which temporal, spatial and technical role an installation plays in balancing the overall system.

Sources

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Edited by eCMS on 11.11.2026 19:47

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