Renewable business for the German energy transition

Transcription

1 Faculty of Earth and Life Sciences, VU University Renewable business for the German energy transition A Repertory Grid analysis of lobbying strategies Kathrin Sühlsen Student No.: July 24, ERM Research Project (18 ects) 1. Supervisor: Dr. M. Hisschemöller, IVM 2. Superivsor: Dr. E. Vasileiadou, IVM External Supervisor: R. Schultz, Schultz Projekt Consult

2 1 Faculty of Earth and Life Sciences VU University Amsterdam IVM-ERM (Room A-503) De Boelelaan HV Amsterdam The Netherlands T: +31 (0) E: Copyright 2012, Institute for Environmental Studies All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photo-copying, recording or otherwise without the prior written permission of the copyright holder.

3 2 Abstract Germany s decision in 2011 to phase out nuclear power and thus to transform the energy system was a political will. Next to political decision-making, however, it is corporate business of renewable and traditional energy that shapes the energy transition. This thesis examines the influence of companies on the decision-making process by unfolding their diverse lobby activities. Using a bottom-up approach and applying the Repertory Grid Technique, the expertise of twenty interview partners is analyzed in a qualitative and quantitative manner leading to the following conclusions: First, although companies of renewable energy have developed from a niche into important players of the energy system, the big four electric utilities operating on the German energy market still possess wide influence. Second, interests of the renewable energy sector are mainly directed at the legislative framework, particularly on the Renewable Energy Sources Act and the feed-in-system. Third, these interests are enforced by means of various lobby strategies. Experts identified 36 different lobby activities; the most effective ones are: Regular and personal maintenance of contact to politicians, Lobbying within association, Knowledge development with correct information and Top-down contacting of most powerful politicians. Furthermore, companies invest in public relations campaigns, offer external expertise and technical solutions or organize political events. Fourth, the statistical analysis reveals clear distinctions between companies with regards to their lobby strategies which are evaluated differently by stakeholders. Finally, the thesis concludes that companies have a strong influence on political-decision making and together with governmental actors form a policy network that strongly shapes the German energy transition.

4 3 Acknowledgements This thesis is the result of my research project generated as part of the Master s programme Environment and Resource Management at the Vrije Universiteit Amsterdam. I was able to carry out this research due to the support of several people. I would like to thank Schultz Projekt Consult for offering me an internship position and agreeing to collaborate on quite short notice. I am particularly grateful to Mr. Reinhard Schultz who established contacts to interview partners and supported the research with valuable expertise and insights in German energy policy. Likewise, I thank Ms. Janet Hochi for guiding me through the work process by providing information, facilitating the access to contact people and giving feedback. The collaboration with Schultz Projekt Consult would not have been possible without the recommendation of Peter Breithaupt to whom I also would like to express my gratitude. Furthermore, I would like to thank all interview partners for their willingness and time to participate in this research. I was lucky to being supported by an enthusiastic and motivating supervisor who encouraged me to apply a rather unconventional methodology. Thus, my sincere gratitude goes to Dr. Matthijs Hisschemöller who guided me with valuable comments and feedback throughout the research. I also would like to thank Dr. Eleftheria Vasileiadou and Dr. Eefje Cuppen for providing me with in-depth information on SPSS and taking the time and effort to answer my short-term requests. My special thanks go to Alex Léguedé and my friends who not only helped me to stay concentrated to complete this thesis, but, from time to time, also directed my attention to other valuable things. Finally, I am deeply grateful to my family for all their support throughout my studies in the last years. Thank you for your love and encouragement and for guiding me through life to help me accomplish another stage of this journey.

5 4 Contents List of figures and tables... 6 List of acronyms INTRODUCTION Problem description Objectives and research approach Research questions Structure of the thesis THEORETICAL FRAMEWORK Regime transitions and paradigms of governance Literature findings on lobbying Definition of lobbying Lobbying in Germany Patterns of lobbying BACKGROUND The German energy transition German energy system Support policies for renewables until Support policies for renewables since 1998 and the EEG Energiewende since The renewable energy sector Status of renewable energy in Germany Renewable energy market Key business stakeholders METHODOLOGY Personal Construct Theory Repertory Grid Technique Methodological approach in the thesis Identification of companies for analysis Selection of interviewees Interview set-up QUALITATIVE ANALYSIS Perceptions of lobbying Interests of the renewable energy sector Patterns of lobby activities Overview of constructs Knowing who... 42

6 Knowing how Knowing what Knowing in what way Continuously keeping contact to politicians Knowledge development Lobbying within an association Representative offices & political events Mobilizing the public Political landscape management Deep lobbying Holistic view of the system STATISTICAL ANALYSIS Most effective lobby strategies Analysis and interpretation of the grid Left side of the plot Right side of the plot Summing up of the plot DISCUSSION Discussion of the results Implications for the energy transition Reflections on research RECOMMENDATIONS CONCLUSION & OUTLOOK REFERENCES ANNEX... 77

7 6 List of figures and tables Figure 1: Research Approach... 9 Figure 2: Energy mix Germany, Figure 3: Electricity mix Germany, Figure 4: Transmission Grid Germany Figure 5: Newly installed solar photovoltaic capacity Figure 6: Development of electricity generation from renewables since Figure 7: Structure of renewables-based electricity supply in Germany, Figure 8: Structure of renewables-based heat supply in Germany, Figure 9: Investments in construction of renewable energy installations in Germany, Figure 10: Shares of manufacturers of wind turbines on newly installed capacity, Figure 11: Saturation of constructs Figure 12: Advertisement of German Nuclear Panel Figure 13: Slogan of RWE and advertisement of SolarWorld Figure 14: Most effective lobby strategies Figure 15: Companies 1 to 13 plotted in a two-dimensional figure Figure 16: Characterization of the plot Figure 17: Final lobbying scheme Table 1: Renewable Energy Sources Act Table 2: Third amendment of the EEG Table 3: Companies included in the analysis Table 4: Interview partners Table 5: Overview of all constructs Table 6: Overview of associations of traditional and renewable energy Table 7: Answers to research questions... 69

8 7 List of acronyms BMU BMWi Bundesnetzagentur Bundestag Bundesverband EEG EU MP MWh TWh NGO RES US StrEG Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit (Federal Ministry for the Environment, Nature Conservation and Nuclear Safety) Bundesministerium für Wirtschaft und Technologie (Federal Ministry of Economics and Technology)00 Federal Network Agency (FNA) The German Parliament Federal Association Erneuerbare Energien Gesetz (Renewable Energy Sources Act) European Union Member of Parliament Megawatt hour Terawatt hour Non-governmental organization Renewable energy sources United States Stromeinspeisungsgesetz (Act on Supplying Electricity from Renewables) Political parties: Bündnis 90/Die Grünen CDU DIE LINKE FDP SPD Alliance 90/The Greens Christlich Demokratische Union Deutschlands (Christian Democratic Union of Germany) The Left Freie Demokratische Partei (Free Democratic Party) Sozialdemokratische Partei Deutschlands (Social Democratic Party of Germany)

9 8 1 Introduction 1.1 Problem description The energy transition is a great task; you can say a Herculean task that we are committed to (Spiegel Online, 2012). With this statement - following a meeting of the German government with representatives of the federal states on May 22, Chancellor Angela Merkel emphasized the importance of the German energy transition. Since the adoption of the Energy Concept in 2010 and the decision in 2011 to definitely phase out nuclear power until 2022, the transition of the energy system is a central issue in German politics, business and public discourse. Currently, the expansion of renewable energy sources, the adjustment of feed-in tariffs and the upgrade of grid infrastructure, notably the expansion of the grid, is much debated. Consequently, achieving the so called Energiewende is one of the major issues in German political decisionmaking which aims at generating 35% of electricity supply from renewables until 2020 and 80% until Despite the development of the last two years, Germany has been a forerunner and internationally one of the pioneering countries in the development and application of renewable energy sources (RES) for decades. It has become a world leader in installing renewable energy technologies and is one of the dominant countries in providing them for export (Laird & Stefes, 2009). Germany s support policies for RES have received a lot of positive attention worldwide the feed-in tariff model, determined by the Renewable Energy Sources Act (EEG) of 2000, has been adopted by more than two thirds of EU member states (Laird & Stefes, 2009). As a result of government support, renewable energy technologies continuously increased their share in the German energy mix. In 2011, renewables contributed 12% to final energy supply and 20% to final electricity supply. In the latter, wind and hydropower have the largest share, followed by biomass and solar photovoltaic. As a manufacturer, developer and operator of renewable energy technologies, corporate business plays a central role in the progress of the energy transition. Although the sector of solar PV has received highest rates of feed-in tariffs and private investments over the last years, solar business is struggling nowadays. This is mainly a result of the competition of Chinese products which due to lower manufacturing costs and high subsidies of the Chinese government are sold below German market value. Also, feed-in tariffs for solar photovoltaic are gradually reduced which has, according to many companies, a further negative effect on the development of renewable energy from solar PV. German producers of solar modules such as Solon SE, Q.Cells SE and Sovello GmbH already went into insolvency. At the same time, companies operating in the field of traditional energy support the current trend of reducing tariffs for solar PV whereas corporate business of other renewable energy sources such as wind or biogas demand adequate tariffs for their sectors as well. It is apparent that an efficient energy transition can only be implemented by an interplay of political decision-making and the activities of corporate business. In Germany, it is not only companies of renewable energy sources which have a stake in the issue but also the four main electric utilities which control close to 90% of the electricity market.

10 9 1.2 Objectives and research approach This thesis aims at examining lobby strategies of the renewable energy sector in Germany. Much research has been done on lobbying in general on a national level, as well as on a supranational level such as the influence of interests groups on the European Union (Gullberg, 2008a). Also, lobbying activities of traditional oil and coal utilities have been researched and are regularly perceived by the public through news reports and public debates. However, corporate business on renewable energy and its interplay with the political system has not yet been investigated significantly. Thus, this thesis aims at making an attempt of studying the diverse activities of renewable energy companies to influence political decisionmaking. Various types of lobby strategies shall be identified and compared to each other in order to detect the most effective ones in terms of their influence on German energy policy. It is expected to allocate specific lobby strategies to selected companies operating on the German market of renewable energy. For that purpose, information provided by the involved stakeholders is crucial as it is them who possess a deeper insight in the activities of public affairs of corporate business. Taking into account the rather limited information on lobbying strategies of renewable energy companies being available in scientific literature and other publications, for this thesis an empirical research method has been chosen (see fig 1). Starting with a problem definition and research questions, a literature survey will lead to first implications. The methodological part is based on interviews with economic and political stakeholders using the Repertory Grid Technique. Assuming that people use their implicit theory or certain constructs to judge events, this method is a way of exploring the structure and content of such implicit theories (Fransella et al, 2004). Through the Repertory Grid Method, it is expected that the interviewed stakeholders themselves identify different constructs of lobby strategies. Though originally developed in psychological science, the technique has proven to be a suitable tool in other research areas, especially policy analysis. The outcome of the interviews will then be analyzed in a qualitative and statistical manner. These results will finally lead to implications and solutions for the problem stated in the beginning. Figure 1: Research Approach

11 Research questions Following the objectives mentioned above, this thesis aims at answering the main research question: To what extent do lobby strategies of renewable energy companies influence political decision-making related to the German energy transition? In addition, five sub questions have been developed. They will be answered throughout the theoretical and analytical part of the thesis, leading to implications of the results and an answer to the question presented above. 1. What are the characteristics of the German energy transition? 2. How does the renewable energy sector perceive its interests? 3. What patterns of lobby activities can be identified and how are they evaluated by those involved? 4. Which lobby strategies are most effective? 5. How do companies differ in their lobby activities? 1.4 Structure of the thesis According to the objectives and the research questions, the thesis is structured the following way: Chapter 2 and 3 form the foundation for the analysis: Chapter 2 accounts for the theoretical framework, outlining regime transitions, four paradigms of governance as well as literature findings on lobbying. The first part of chapter 3 explains the characteristics of the German energy transition and system. The second part gives an overview of the development of renewable energy in general and the activities of corporate business of sustainable energy. Chapter 4 explains the methodology used in the analysis by providing background information on Personal Construct Theory and Repertory Grid Technique by George A. Kelly. Afterwards, the application of the method in the research and the building up of the interviews is explained. The analytical parts of the thesis can be found in the following two chapters. Chapter 5 analyzes qualitative results, particularly different patterns of lobby activities identified by the interview partners. Chapter 6 presents the quantitative results gathered with SPSS. Afterwards the results will be discussed in chapter 7 which will also illustrate implications for the German energy transition. Finally, the researcher provides recommendations in chapter 8, followed by the conclusion and future outlook in chapter 9.

12 11 2 Theoretical Framework 2.1 Regime transitions and paradigms of governance Energy transition is often associated with a change in socio-technical regimes. Smith, Stirling and Berkhout (2005) define these as relatively stable configurations of institutions, techniques and artefacts, as well as rules, practices and networks that determine the normal development and use of technologies. In order to arrive at a sustainable energy system, Smith et al. argue for a change within regimes, including changes in broad political economic landscapes or wider socio-cultural attitudes. Renewable energy in Germany has been supported for decades, but the Energiewende of 2011 can be seen as a cornerstone for such a regime shift. Not only in the field of renewable energy but in various technological areas, regime shifts are inevitable for integrating a new technology as a competitive alternative in the system. Scientists such as René Kemp (1994; 1998) have been concerned with the issue of technological regime shifts since the early 1990s. Kemp et al. (1998) list seven barriers to more sustainable technologies: Technological factors, Government Policy and Regulatory Framework, Cultural and Psychological Factors, Demand Factors, Production Factors, Infrastructure and Maintenance and Undesirable Societal and Environmental Effects of New Technologies. These barriers need to be overcome in order to arrive at a sustainable energy system; for this purpose Kemp et al. suggest a so called Strategic Niche Management which includes the creation, development and controlled phase-out of protected spaces for the development and use of promising technologies by means of experimentation (Kemp et al., 1998, p.186). According to the authors, the importance of policy and business in the process of Strategic Niche Management is high: Political actors play a crucial role in designing a transition as it is them who determine the regulatory framework. At the same time economic actors such as entrepreneurs and technological inventors lay the foundation for technological development. As chapter 3.1 will show, the development of solar PV in Germany by means of financial support refers to that of a niche. Following up energy transition and strategic niche management, political theory is also of relevance for this thesis. Hisschemöller, Bode and van de Kerkhof (2006) unfolded four paradigms of governance with respect to the transition to a sustainable energy system. Paradigms serve as fundamental concepts of viewing the dynamics of society and the way in which governments and/or governance can or cannot give direction to those dynamics (Hisschemöller et al., 2006). The assumptions made by the authors concern governance by policy networking, governance by government, governance by corporate business and governance by challenge. Governance by policy networking claims that is not the state alone, but a network of governmental actors and civil society, especially business communities and environmental and consumer NGOs, who jointly work towards a transition. Moreover, the paradigm emphasizes collaboration between different stakeholders and different levels of governance (Hisschemöller et al, 2006).

13 12 Governance by government, however, ascribes a higher importance to the government which should do what citizens or private actors cannot, which, is to safeguard the public interest (Hisschemöller et al, 2006). According to the concept, private actors will not voluntarily adjust their behavior as to realize a public good, hence a strong role of the state is needed. Furthermore, as people tend to a behavior of free-riding which causes social dilemmas, it is the government which acts, takes the initiative, experiments and, through trial and error and with the help of science and technology, works to realize an improvement of society (Hisschemöller et al, 2006). Governance by corporate business claims that the private sector, especially corporate business and entrepreneurs, has the power, the knowledge and the ability to make the transition happen (Hisschemöller et al, 2006). Through the private sector new actors enter and try to influence the arena of energy transition. Thus, corporate business takes a crucial position by not only developing technologies but also by acting upon political decision-makers, e.g. through lobbying. Governance by challenge, as a fourth paradigm, claims that government should address rules, regulations and privileges that may stand in the way of innovation (Hisschemöller et al, 2006). This includes enabling knowledge from the outside to access a regime which can lead nonincremental innovations and eventually to new technological concepts and new applications. Also, competition between existing and new options of energy supply is improved. However, the guiding principle for this paradigm is to remove privileges that vested interests may use to resist innovation. Most of the time, these privileges are found in the rules, regulations and institutions maintained by government itself (Hisschemöller et al, 2006). By illustrating four different concepts of how an energy transition can be achieved, the complexity and challenges become apparent. The analysis will investigate how corporate business of renewable energy tries to influence the transformation of the German energy system, particularly through lobby activities. Thus, in the discussion, it shall be clarified if it is governance of corporate business that shapes the energy transition or if some of the other paradigms can be applied to the German case as well. 2.2 Literature findings on lobbying Definition of lobbying The various activities of lobbying and its impacts on different policy fields have often been researched. Thus, a multitude of definitions can be found in the existing literature. The definition of the encyclopedia Britannica seems most straightforward which defines lobbying as any attempt by individuals or private interest groups to influence the decisions of government (Encyclopedia Britannica, 2012). The American encyclopedia Merriam-Webster gives a more precise explanation of the intransitive verb to lobby : to conduct activities aimed at influencing public officials and especially members of a legislative body on legislation (Merriam-Webster, 2012). A coherent definition offers the International Encyclopedia of the Social Sciences (2008):

14 13 Lobbying is the process by which an organized interest communicates its concerns and preferences to governmental policy makers in order to influence a policy decision All definitions describe the process of the lobbying activity; it should be emphasized here that lobbying can be directed on the executive, legislative and judiciary branch of the government, always aimed at influencing political decision-makers. However, legislative lobbying gains the most attention and, with regard to Germany, lobbying activities mainly occur in the legislative body represented by the parliament, and the interplay with the members of parliament (Bülow, 2010). A peculiarity of the German system is that relations between government and political actors on the one hand and different kinds of private actors on the other hand are almost never described as of lobbying. Ronit and Schneider (1998) point out that lobbying has always been and still is considered a foreign word with strong connotations of secretive policy processes where illegitimate influence is sought. Although this view has diminished over the years, private stakeholders of lobbying rather define their work a representation of interest, Public Affairs or Government Relations Lobbying in Germany Once activities of private business correlate with politics, some sort of regulation is introduced in order to control lobbying of private stakeholders. Being the motherland of lobbying, the United States have strict regulations governing the activities of lobbying and their interaction with lawmakers; the most prominent example is the Lobbying Disclosure Act of Also, with approximately 15,000 lobbyists and 2,500 lobbying organizations in Brussels, the European Union has developed a system for working with interest groups (EU Insight, 2008). Whereas the European Commission keeps a voluntary register of lobbyists, accredited interest representatives to the European Parliament need to subscribe to a specific Code of Conduct. The German system of lobbying is far less regulated than the one in the US. Some attempts have been made in the 1970s to regulate and formalize lobbying activities but the existing laws do not reach the level of complexity of the US. However, the German parliament ( Bundestag ) is the only house of parliament in the EU with specific regulations of lobbying (House of Commons, 2009). Over the years, three areas have become regulated in more detail (Ronit et al, 1998). First, members of parliament (MPs) are obliged to report their involvement in extraparliamentary activities, including their salary, which may be of relevance for their parliamentary work. Regulated within the General Rules of Procedure of the Bundestag and the Rules of Conduct for the Member of the Bundestag, MPs are required to disclose their perks once they exceed the amount of 10,000 per year (Deutscher Bundestag, 2012). Secondly, all interest groups and associations wishing to gain a hearing status to defend their interest before the Bundestag or Federal Government must be entered on a register which is updated annually. In the official version of recognized associations from May 2, 2011, some 2,110 interest groups were registered (Bundesanzeiger, 2011). Since the beginning of the creation of the list in the early 1970s, the register has indeed brought more transparency to

15 14 the development of lobbying. However, critics refer to the content of information of the list is almost zero as it lacks any legal force. For instance, if invited by MPs, non-registered groups and individuals may still appear at committees (Ronit et al, 1998; House of Commons, 2009). Third, committees and working groups have been attached to federal ministries where associations and lobbyists can present their interests in public and non-public hearings. This pattern will be explained in more detail in the next part. Lobbyists can strongly influence political actors and their behavior. However, they are not directly involved in political decision-making and do not have a democratic mandate. Consequently, Leif and Speth (2006) characterize lobbyists as a power without legitimation. Generally, two main groups of lobbyists can be distinguished: private interest groups such as companies and large business associations and public interest groups representing nongovernmental groups or political and social associations. The latter, for instance, campaign for the environment, worker s rights or pensioners. Gullberg (2008b) points out that these two groups notably differ in their budget spent on lobbying. Whereas private stakeholders often have a lot of financial resources at their disposal, public interest groups are much more restricted by budget constraints. According to the German transparency NGO LobbyControl approximately 5,000 lobbyists work in the political center of Berlin, partly registered within the official list of interest groups, partly not registered at all (LobbyControl e.v., 2011). Lobbyists come directly from companies, business groups or associations, but also from external Public Relations agencies representing the interests of one or more private stakeholders (Leif & Speth, 2006) Patterns of lobbying Examining literature on lobbying, the variety of publications becomes apparent quite soon. In order to derive patterns of different lobby activities one needs to study not only scientific journals but also publications and books which approach the issue from a more practical point of view. An extensive literature review revealed that one part of the publications focuses on the institutionalization of lobbying actors and their interplay with the political sphere (such as Kleinfeld et al, 2008; Leif and Speth, 2006). They target a scientific audience who wants to investigate lobbying as an important part of the political system. Another part of the literature which is dominated by American and British authors offers practical guides and applied strategies of lobbying, mainly in the area of Public Affairs (such as Thomson and John, 2007; Souza, 1998). Their target group is professionals working in the area and wanting to gain a deeper insight in the various forms of lobbying. This chapter gives a brief overview of the most common patterns of lobby strategies found in the publications mentioned above. With regards to the target group, lobbying in Germany focuses mostly on the executive and legislative branch of the political system. Lobbyists try to influence and establish contacts with politicians in the government and the ministries as well as in the parliament (Bülow, 2010). Another distinction needs to be made when it comes to political actors and their partisan

16 15 background: Gullberg (2008a) claims that interest groups either lobby their friends, decisionmakers with positions similar to their own, or they lobby their foes, decision-makers with positions opposed to their own. Having this in mind, lobby strategies may vary significantly according to the target group. Lobbying a friend implies exceeding the already favorable position of a politician, for instance by giving favorable information. On the other hand, lobbying a foe aims at changing a certain position of a politician which differs from the one of the interest group (Gullberg, 2008a). Before starting the lobbying process itself, lobbyists first monitor the political system, including past and current decision-making on the lobbied issue. Information is central for lobbying; Thomson and John (2007) claim: Monitoring provides the raw materials upon which a successful lobbying strategy campaign is based. After this initial step, the interest party typically defines its objectives and the following lobbying strategy. This may include a variety of activities and patterns which is implemented stepwise or simultaneously. As it has been mentioned before, a popular strategy arises in the form of committees and working groups which are related to ministries and where companies are allowed to participate. Besides taking part in ministry hearings that are mainly held in the context of legislative drafting, here, private actors can take the role of experts and are invited to participate in the investigation of issues and negotiation about solution (Ronit and Schneider, 1998). Contacting politicians on a more individual level, companies try to enforce their interest by either acting individually, aligning with others within an umbrella organization or combining the two (Leif and Speth, 2003). Especially for small companies with limited financial resources, it seems convenient to look for support by an overarching organization. Another factor is the geographical proximity of companies to political decision makers. Next to their headquarters and production sites, many firms establish representative offices in Berlin to be closer to the political process and its actors (Escher, 2003). Furthermore, companies create public affairs or government relations department within their corporate structure which directly implement the lobby activities. Others hire external public affairs consultancies that design and apply a company s lobby strategy (Leif und Speth, 1998; House of Commons, 2009). In order to personally contact politicians, lobbyists choose various forms: sending briefing papers, making telephone calls, organizing dinner with groups of parliamentarians and trying to establish contact on a parliamentary reception or exhibition (Thomson and John, 2007). Often, this is aimed at getting a personal appointment with a politician and to discuss an issue in a private and non-public meeting. Bülow (2010) points out that lobbyists usually target governmental politicians and important decision-makers which are directly involved in drafting a new law; ordinary parliamentarians with less influence are lobbied less. Another strategy is to lobby and establish close contacts with the media. A regular placement of an advertisement in a newspaper or journal can be regarded as lobbying as well because large advertisers gain influence on the media which again influences public opinion.

17 A widespread phenomenon but with little public perception is the direct influence private actors have on the law-making process. Due to their expertise and limited financial resources of ministries to recruit experts on every political issue, ministries hire employees from external companies who work on drafting a new law. These experts either come from agencies and law firms or from particular companies working in the field of the processed topic (Lobbycontrol, 2011; Leif and Speth, 2003). Although this is a standard procedure in many governments, it remains a very sensitive issue as private actors and possibly lobbyists directly participate in drafting a law. 16

18 17 3 Background 3.1 The German energy transition German energy system Regarding the number of different energy sources, Germany s energy mix is quite diversified but based primarily on fossil energy. Petroleum contributes one third to the energy consumption, followed by natural gas, hard coal and lignite. Renewable energy sources have a share of 11%, nuclear energy contributes 9% (see fig. 2). The high share of petroleum is consumed by the energy intensive transport sector. Renewable energy 11% Nuclear energy 9% Other 2% Petroleum 34% Brown coal 12% Hard coal 12% Natural gas 20% Figure 2: Energy mix Germany, 2011 Source of data: AGEB, 2012 When only considering electricity supply and consumption one gets a different impression: 25% of electricity is generated from domestically mined brown coal, a traditional and still very important energy source in Germany. Due to the fast development of renewable energy in the last few years renewables contributed 20% to the electricity supply in The other 55% is coming from hard coal, nuclear energy, natural gas and other sources such as fuel and pump storages (fig. 3). Security of energy supply has always been one of the main pillars of German energy policy the electricity mix of 2011 shows: Over 80% of German electricity is generated domestically (coal, renewables, nuclear). With the decision of phasing out nuclear energy until 2022, the more rapid expansion of renewables and the commitment to reduce CO 2 emissions (which are mainly caused by the combustion of brown coal), Germany s electricity supply will and has to transform fundamentally in the future.

19 18 Natural gas 14% Other 4% Brown coal 25% Nuclear energy 18% Hard coal 19% Renewable energy 20% Figure 3: Electricity mix Germany, 2011 Source of data: BDEW, 2011 Germany s electricity market is dominated by four large electricity suppliers, so called Verbundunternehmen. They control close to 90% of the German electricity market and are referred to as the Big Four, representing an energy oligopoly (OECD, 2006 and Laird & Stefes, 2009). These electric utilities are: E.ON SE RWE AG EnBW Energie Baden-Württemberg AG Vattenfall Europe AG The distribution network is locally fragmented, consisting of more than 950 small mostly municipality owned local utilities, so called Stadtwerke. This is considerably more than in any other European country (OECD, 2006). However, the Big Four have acquired and continue acquiring shares in the Stadtwerke. Until the middle of the 2000s, these four companies also served as transmission system operators until they had to sell their shares due to a transformation of the German energy system: Ownership of transmission network was separated from ownership of energy generation (OECD, 2006). Nowadays, Germany has four transmission system operators responsible for balancing electricity feeding and take-off in their respective service territories: Tennet TSO GmbH (subsidiary of E.ON); 50Hertz Transmission GmbH (fomer Vattenfall Europe Transmission); Amprion GmbH (belongs to RWE AG) and TransnetBW GmbH (subsidiary of EnBW). The transmission grid and its four control areas are depicted in figure 4.

20 19 Figure 4: Transmission Grid Germany Source: Netzentwicklungsplan Strom, 2012 In 2005, new legislation setting the rules for the regulation of network access in the electricity and gas industries was introduced, followed by the creation of the Federal Network Agency ( Bundesnetzagentur, FNA) in The FNA is in charge of regulating the terms of access to most of the electricity and gas network grids, with regulation of small, local networks assigned to state authorities (OECD, 2006) Support policies for renewables until 1998 Germany is regarded as a pioneer in the development of a regulatory framework to support renewable energy sources (RES), following a comprehensive promotion approach for almost 40 years. Legislation on sustainable energy has already begun in the 1970s, paving the way for the respected and often copied Renewable Energy Sources Act ( Erneuerbare-Energien- Gesetz, EEG) in Support policies for renewables can be divided into four sub-phases. Renewable energy first caught the attention of policy makers in the wake of the 1973 oil and energy crisis which produced major rethinking in Germany as in many other countries. The result was a significant increase of research and development (R&D) for domestic energy sources, including renewables (Laird & Stefes, 2009). 1 During the 1970s and 80s it was the wind sector which benefited most when many R&D projects were granted to industrial firms and academic organizations for the development or testing of small to medium-sized wind turbines (Jacobsson & Lauber, 2006). Much the same applied also to R&D in solar cells and the 1 Between 1974 and 1982, annual public expenditures for renewable R&D grew from 20 million to over 300 million Deutsche Mark (Laird & Stefes, 2009).

21 20 development of the solar sector. Though large sums were raised for the support of RES, the bulk of subsidies was still spent on nuclear and coal. Furthermore, renewable energy in Germany at that time still suffered from a hostile political-economic electricity supply system and conservative opposition. The latter resulted in a cut of R&D spendings by almost half when the conservative-liberal government of Helmut Kohl came into power in 1982 (Laird & Stefes, 2009). The nuclear accident in Chernobyl in 1986 marked a turning-point for German energy policy and the beginning of phase 2. Nuclear energy became discredited among German population and electricity production of brown coal was criticized for its enormous government subsidies and its impacts on global warming. These developments together can be regarded as a window of opportunity for renewable energy leading to a gradual change of energy policies. Two subsidy programs for photovoltaic and wind energy were passed: Launched in 1989, a 100 MW wind program guaranteed investors a payment of 0.03 /kwh; from 1991 to 1995 the 1,000-roof program sponsored the installation of solar panels on private houses and public facilities (Laird & Stefes, 2009). In the following months, a series of proposals for institutional change were formulated, finally leading to the Electricity Feed-in Law ( Stromeinspeisungsgesetz, StrEG) which came into force in The Feed-in Law required utilities to connect generators of electricity from renewable energy technology to the grid and to buy the electricity at a rate which for wind and solar cells amounted to 90% of the average tariff for final customers, i.e. about DM 0.17 (Jacobsson & Lauber, 2006, p.264). The StrEG gave large financial incentives to investors. As it excluded facilities bigger than 5 MW or those that were owned by large utilities, the law mainly benefited 3,500 owners of small hydropower plants and modest-sized wind turbine operators. Especially for wind energy, the Electricity Feed-in Law was the most important promotion instrument during the 1990s (Becheberger & Reiche, 2004). This development shows that renewable energy in Germany was able to grow rapidly with proper financial support Support policies for renewables since 1998 and the EEG The third phase of the development of support policies for RES was heralded by the liberalization of the German energy market and the change of government in The new Social Democratic/Green coalition committed itself to an energy transition. The Feed-in Law was incorporated in the Act on the Reform of the Energy Sector and a second market incentive program for solar PV was launched: the 100,000-roof program which came into force in With its ambitious goals of realizing the installation of 100,000 new photovoltaic plants with a capacity of 3 kw p each, it was one of the biggest promotion programs in this area worldwide (Bechberger & Reiche, 2004). At the same time, the government decided to phase out nuclear energy in the future. Finally, in 2000, the Renewable Energy Sources Act (EEG) replaced the StrEG and became the main legislative instrument of renewable energy in Germany (see table 1 below). While

22 21 tremendously increasing the remuneration of RES, in particular for solar PV which received a raise in tariffs from 8.2 to ct/kwh, the law also guaranteed fixed rates for investors for 20 years. They could expect a decent return on their investments and long-term planning reliability (Laird & Stefes, 2009). Consequently, the installation of solar PV increased enormously over the next few years so that the target of 300 MW p newly installed PV capacity was reached much earlier than expected (see fig.5). Whereas in in the year 2000 only 45 MW p of solar PV capacity was newly installed, the number raised to 1,270 MW p in 2007 and 7,400 MW p in Figure 5: Newly installed solar photovoltaic capacity Source: BSW-Solar, 2012 While the StrEG was successful promoting wind energy, the EEG dramatically increased the importance of other renewable energy sources. The sector generating solar energy became the biggest beneficiary of the EEG: while producing only 1 GWh electricity in 1990 and 64 GWh in the year 2000, by 2005 it was already 1,282 GWh which increased 9-fold up to 11,683 GWh in 2010 (BSW-Solar, 2012). In the following years, three amendments of the EEG have been made, supported by several other policy decisions favoring renewable energy such as the Act on Combined Heat and Power Generation and the transferring of RES authority from the Federal Ministry of Economics and Technology (BMWi) to the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) in However, after initial enthusiasm for the strong support of renewables, opposition has grown steadily, marking the beginning of the fourth phase. In particular large (fossil-fuel) electric utilities strongly oppose political-decision making which favors renewables arguing that subsidies represent a burden for government s budget and an increase in electricity rates for consumers. Within the sector of RES, many criticize the unequally favoring of solar industry by the EEG and lobby for higher rates for other sectors of renewables. With the change of government in 2009 and the installation of a conservative-liberal coalition a slight shift away from a strong support of renewables can be observed. Feed-in tariff rates for solar PV were constantly lowered, and in 2010, another amendment of the Atomic Energy

23 22 Act was adopted in order to extent operating lives of nuclear power plants, thus reversing the decision of a nuclear phase-out in Year Version of EEG 2000 Renewable Energy Sources Act (EEG) Continuation of the Electricity Feed-in Law (StrEG) Different fixed tariffs, depending on the source of energy as well as the size and location of the renewable energy plant (e.g. slight increase for wind power; biggest increase for solar PV) Purchase guarantee and feed-in tariffs are fixed for 20 years after commencement of operations of any new plant (investment protection) Regressive element: falling remuneration over the next years Remuneration system is uncoupled form the average utility revenue per kwh sold and replaced by fixed, regressive and temporarily limited feedin tariffs for the whole amount of generated electricity from renewables Introduction of a priority purchase obligation for RES power to be met by the nearest grid operator Every 4 years the EEG will be revised to reflect newest technological developments Amendment EEG A variety of detailed regulations, o e.g. for the purpose of improving transparency, reporting requirements to the Federal Network Agency are expanded (such as location and capacity of a RES plant) For solar PV, introduction of a gliding digression: with higher additional capacity and thus higher tariffs, the guaranteed tariff per kwh will be decreased faster in the following year Further regulations for wind, hydro, geo and biomass 2. Amendment EEG 2009 Direct marketing: Operator of a plant needs to determine for every month if he/she wants to receive the feed-in tariff for the generated electricity or if he/she wants to directly merchandise it A variety of detailed regulations for, particularly concerning fixed tariffs for solar PV, wind power, hydro power, biomass and geothermal Table 1: Renewable Energy Sources Act Source: EEG, 2000 / EEG, 2004/ EEG, 2009/ Bechberger & Reiche, 2004 / Laird & Stefes, Energiewende since 2010 Although the concept of energy transition is being used in the relevant literature for quite some time, it did not appear officially in German politics until the year 2010/2011. Since then, the so called Energiewende has become a constantly repeated term in political decisionmaking with high public reception. By extending the operating lives of nuclear power plants in 2010, Germany s future energy mix would again include the use of nuclear energy. At the same time, the support of renewable energies should be continued in an efficient and economical way. Consequently, the government published the so called Energy Concept which aims at designing and implementing a long-term overall strategy for the period up to the year It formulates guidelines for an environmentally sound, reliable and affordable energy supply in nine key areas: Renewable energies, Energy efficiency, Nuclear power and fossil-fuel power plants, Grid infrastructure for electricity & integration of renewables, Energy-efficiency of buildings,

24 23 Mobility, Energy research towards innovation and new technologies, Energy supply in the European and international context and Transparency and acceptance (BMWi, 2010). Focus points are the expansion of renewable energy and the increase in energy efficiency while energy from nuclear and fossil-fuels still play in important role in the strategy. With the Fukushima Daiichi nuclear disaster in Japan in March 2011, following a previous earthquake and tsunami, German energy policy again turned decisively: after a public outcry about the safety of nuclear power in general and German nuclear power plants in particular, the conservative-liberal government reversed its previous decision on extending the operating lives of nuclear power plants. On quite short notice, a nuclear power phase-out was decided upon in June 2011, marking another significant change of German nuclear and energy policy. Though targets of the Energy Concept of 2010 remain valid, the Concept itself was updated excluding the use of nuclear power and setting an even stronger emphasis on renewable energy. The accelerating implementation measures illustrate the new direction of German energy policy which aims to finally realize the Energiewende. These measures are (BMWi, 2011 and BMU, 2012a): Accelerated nuclear phase out & restructuring of the fossil power plant park Faster expansion of renewable energies Integration of renewable energies into the overall energy system Central component: wind energy & measures for biomass, solar PV and geothermal Cost efficiency Expansion of the electricity grids Smart grids and storage facilities Energy efficient buildings New incentives for combined heat and power Expansion of electric vehicles Efficient procurement The Energiewende is accompanied by several laws such as the amendment of the Atomic Energy Act, the Act on Measures for the acceleration of electricity network expansion and the third amendment of the Renewable Energy Sources Act (see table 2). Similar to the adoption of the first EEG in the year 2000 and the first nuclear phase-out in 2002, the German Energiewende of 2011 is a unique project worldwide. With ambitious targets and continuous political decision-making German politics wants to pave the way for a sustainable energy future. The EEG continues to be the main instrument which determines the highly competitive structure of feed-in tariffs. A legislative overview of energy support policies can be found in annex 1.

25 Amendment EEG Targets of expansion of renewable energy: Share of renewables in electricity consumption shall be 35% in 2020, 50% in 2030, 65% in 2040 and 80% in 2050 Integration of market, grid and system, e.g. through an optimal market premium, flexibility premium, integration of solar PV into feed-inmanagement New regulations and tariffs concerning all RES: Expansion of off-shore wind power, simplified feed-in structure for biomass, continuing reduction of tariffs for solar PV, increase of tariffs for geothermal energy Special compensation scheme and industrial consumption Table 2: Third amendment of the EEG 3.2 The renewable energy sector Status of renewable energy in Germany The previous chapters outlined the governmental support of renewable energy sources. Thus, it is unquestionable that the expansion of renewables in Germany since the 1990s is not only a result of technological development and investment but essentially an achievement of a favorable legislative framework. Figure 6 depicts the development of electricity generation from renewable energies during twenty years time: Having generated around 18 TWh in 1990, renewables contributed over 100 TWh to electricity generation in the year 2010.The most important boom started after the adoption of the Renewable Energy Sources Act in 2000 when RES doubled their share within only six years. The increase of renewables comes directly along with an increase of fees under the EEG: in 2000 around 1,000 million Euros were paid, rising to ca. 5,900 million Euros in 2006 and almost 13,000 million Euros in 2010 (BMU, 2011b). Figure 6: Development of electricity generation from renewables since 1990 Source: BMU, 2011b, p.17

26 25 In the end of 2011, renewable energy sources are an important factor in Germany s energy supply though still representing a minority compared to fossil energy sources such as oil, coal and nuclear. The shares of renewables are (BMU, 2012b): 12.2 % of total energy consumption 20.0 % of total electricity consumption 10.4 % of total heat supply 5.6 % of total fuel consumption The relatively small proportion of fuel consumption is dominated by the use of biodiesel, followed by bioethanol and a marginal share of vegetable oil (BMU, 2011b). A different structure of renewables-based energy supply can be observed for electricity and heat supply: Looking at the contribution of renewables to the electricity supply, wind energy clearly dominates with 36.5%, followed by hydropower with approx. 20% and biogas with approx. 13%. Biogenic solid fuels and solar photovoltaic contribute each around 11% (see fig. 7). These figures naturally decrease when relating them individually to the electricity consumption: In total, wind power has a share of 6.2% while solar PV still has a small share of 1.9% (BMU, 2011b). Although the installation of solar PV massively increased over the last few years, it still does not have a significantly high proportion in Germany s electricity consumption. Certainly, Germany s physical characteristics allow better conditions for wind power than solar PV. Figure 7: Structure of renewables-based electricity supply in Germany, 2010 Source: BMU, 2011b, p. 15 In contrast, the structure of renewables-based heat supply (fig. 8) is clearly dominated by biogenic solid fuels (53.4% used by households; 15% used by industry). Biogenic solids can be either residues or energy plants which are woodlike, strawlike, grass or garbage. Except for small shares of solar thermal systems (3.8%) and geothermal energy (4.1%) it is biomass and biogas which contribute most to the renewable-based heat supply.

27 26 Figure 8: Structure of renewables-based heat supply in Germany, 2010 Source: BMU, 2011b, p Renewable energy market Although wind energy, hydropower and biogas contribute more to the German electricity supply, it is the sector of solar photovoltaic which received not only the highest amount of tariffs over the last years but also biggest public attention. Lately, fees paid for photovoltaic electricity fed into the grid were gradually reduced, but the sector continued to grow strongly. In 2010, over 70% of all investments in the construction of renewables - representing 19,500 million EUR - were spent on solar photovoltaic (see fig. 9). Wind energy received 9.4% and biomass electricity around 6% of total investments. It is also worth noting that over 88% of the investment was due to power generation installations eligible for assistance under the Renewable Energy Sources Act (BMU, 2011b, p.34). Thus, it is apparent that investors strongly connect their capital expenditures to the feed-in tariffs being paid which have been highest for the sector of solar photovoltaic. Figure 9: Investments in construction of renewable energy installations in Germany, 2010 Source: BMU, 2011b, p.34

28 27 Renewable energy sources continuously increased their importance as an economic factor in Germany. Next to rising investments in installations and production capacity, the sector also increased employment rates. According to the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, a total of more than 367,000 jobs in German can be attributed to the field of renewable energies in 2010 (BMU, 2011b). Compared to 2004, the number of positions doubled within six years. Regarding the increase of installations, investments and employment in the sector of renewable energy sources in Germany, its importance becomes apparent. In order to reach the ambitious goals of the EEG and to manage the German energy transition, a close linkage of political decision-making and corporate business of renewables is indispensable. Though still lacking influence compared to the Big Four of traditional energy, companies of RES are seeking to gain importance and to make an active contribution to the Energiewende Key business stakeholders With regards to renewable energy, three main groups of companies can be distinguished: 1. Manufacturers of technology = Companies that build the technology. Examples are: wind vanes, propeller anemometers, solar modules, turbines and turbine regulators for hydro power generation or power plants, heating plants utilizing biogas and bio-waste technology. 2. Project engineers and developer = Companies which plan, develop and (sometimes) finance operating systems for the use of renewable energies. 3. Operators = Companies which finance and operate the existing power plant or technology application. Within the German solar industry, there are currently around 15,000 companies operating on the market, most of them in the field of solar photovoltaic (10,000) which has experienced strong growth in recent years (BSW-Solar, 2012). The share of manufacturers of solar cells, modules and other components, however, is rather small with around 350 producing companies. By having ca. 150,000 employees, the solar industry provides many job positions; only the sector of biomass employs slightly more people (BMU, 2011b). Nowadays, American and Chinese manufacturers dominate the worldwide production of solar cells and PV modules, the biggest being in 2011 Suntech Power (CN), First Solar (USA), JA Solar (CN), Yingli Green Energy (CN), Trina Solar (CN) and Trina Solar (TW). Q.Cells SE (position 13) and SolarWorld AG (position 20) are the biggest German producers worldwide (Photon, 2012). Regarding the German market of solar PV, various companies divide the shares among themselves, such as First Solar, Q.Cells, SolarWorld AG, Solon SE, Siemens Solar Solution,

29 28 Schott Solar AG or Bosch Solar. However, due to a decline in prices which can be mainly ascribed to Chinese dumping techniques, many German solar manufactures are struggling, leading to the insolvency of some such as Solon SE in 2011 and Q.Cells SE in The majority of installed capacity of solar photovoltaic is concentrated in the southern parts of Germany: By 2010, 8,067 MW was installed in the state of Bavaria, followed by Baden- Württemberg (3,581 MW) and North Rhine-Westphalia (2,812 MW). The northern and eastern states of Lower Saxony and Brandenburg as well as Hesse and Rhineland-Palatinate in the west-southern part also show significant capacity of solar PV (SolarServer, 2012). With regards to the additional installed capacity worldwide, Germany leads by far, having installed an additional 7,437 MW of solar PV in the year 2010 and leaving Italy, (1,587 MW), the United States (910 MW) and Czech Republic behind. However, looking at the total amount of installed capacity, Germany comes third after China which possesses almost half of the world wide s installed solar PV, and Taiwan. German wind energy shows a total installed capacity of 29,060,040 MW in 2011, generated by approx. 22,300 wind turbines (BWE, 2012). The additional capacity installed over the last years did not show a high increase such as the solar sector but rater stabilized between 800 and 1,000 additional windmill-powered plants per year. The sector of wind energy employs around 96,000 people, making it the third biggest renewable employment market after biomass and solar energy (BMU, 2011b). Looking at the installed wind capacity worldwide in 2010, China is leading followed by the United States, Germany, Spain and India (WWEC, 2011). The German market of manufacturers of wind turbines is clearly dominated by the German Enercon GmbH with a share of almost 60% on new installed capacity in The Danish manufacturer Vestas Wind Systems A/S contributes around 21%, REpower Systems around 10% and Nordex ca. 4% (see fig.10). Figure 10: Shares of manufacturers of wind turbines on newly installed capacity, 2011 Source: DEWI, 2012

30 29 Hydroelectric power is the oldest electricity generation technology. Power plants are especially suited to locations with reliable, serviceable water sources and good options for connection to the grid (DENA, 2011). Thus, due to its geographical conditions, the generation of hydro power in Germany takes place almost entirely in the southern states: in 2010, 3,536 hydroelectric plants were installed in Bavaria generating 2,506 MW. Baden-Württemberg has 1,492 plants generating 906 MW (BDEW, 2012). The vast majority of power plants (more than 7,000) are small plants (<1 MW) which produce around 8-10% of hydro power. Hence, up to 90% is generated from medium-sized to big plants of which there are ca. 350 (BMU, 2012c). They are predominantly in the possession of the big four electric utilities whereas small hydroelectric power plants belong to many different companies or the so called Stadtwerke. The sector of bioenergy is much diversified and covers the generation of electricity, heat and fuels: biogas plants produce electricity and heat; biodiesel from rape and vegetable oil is used as fuel and heating of wood pellets or wood chips can replace oil or gas heating. By far the most important source of bioenergy in Germany is wood provided mainly by the sector of forestry. In addition, agriculture also plays an important role in producing biomass. Most prominent are rape seed as crop for biodiesel production, the provision of substrates for biogas production and the cultivation of plants for bioethanol production (BMU, 2012c). Representing such a diverse field of economic activity, the bioenergy related sector employed approx. 122,000 people in 2010 most of them working in agricultural and forestry raw material production and the industry producing biomass fuels such as pellets, wood chips or biogas (BMU, 2012c). Similar to the sector of hydropower, many different-sized companies are operating in the field of bio-energy. Examples are M+W Group, Viessmann GmbH & Co.KG, EnviTec Biogas AG, agri.capital GmbH or KTG Agar AG. In addition, the Big Four also operate on the market of bioenergy, mainly through their subsidiaries of renewable energy.

31 30 4 Methodology 4.1 Personal Construct Theory Having outlined the theoretical framework and presented an overview of German energy policy and renewable energy, it is the analysis which will finally lead to an answer to the main research question. In terms of methodology, this research has applied a bottom-up technique which is mainly based on information gathered from interviews. Besides a qualitative analysis of the results, answers of interview partners will also be evaluated quantitatively. Both is accomplished by using the Repertory Grid Technique which harks back to the Personal Construct Theory. The Theory of Personal Constructs was developed in the 1950s and 1960s by the psychologist George A. Kelly, supported by its main publications The psychology of personal constructs (1955) and A theory of personality. The psychology of personal constructs (1963). While back in that time, Kelly took a pioneering and out-of-the-mainstream way of psychological science, nowadays much of his outlook is shared. His Repertory Grid Technique gained international importance in revealing the nature of individual and cultural differences and similarities (Diamond, 1982). Besides psychology, the method has also been applied in other scientific fields such as artificial intelligence, education, human learning and, more recently, in the field of policy analysis (van de Kerkhof et al, 2009). Kelly s basic assumption is that people look at the world through transparent patterns, so called constructs, which they create and then attempt to fit over the realities of which the world is composed. Thus, constructs are ways of construing the world (Kelly, 1963). In other words: Every person creates and re-creates a theoretical framework which is his or her personal construct system. Thus, everyone lives, anticipates events and determines his/her behavior in terms of this construct system. Constructs are made of specific characteristics. According to Kelly A construct is a way in which some things are construed as being alike and yet different from others. [ ] A construct is a single formulation of likeness and a difference. (Kelly, 1963, p. 105 and 133) Consequently, a construct usually is dichotomous and has an inherent bipolar nature, having one affirmative and one negative pole. It is a way in which two or more things are alike and thereby different from a third or more things. Kelly s argument is that people never affirm anything without simultaneously denying something. Examples of bipolar constructs are: black vs. white, cheerful vs. sad or broad-minded vs. narrow-minded. Diamond (1982) interprets Kelly s work and argues that a construct is not a category but a contrived reference axis against which any behavioral observation may be plotted. The Theory of Personal Constructs can also be used to explain culture. People belong to the same cultural group not merely because they behave alike but especially because they construe their experiences in similar ways (Diamond, 1982).

32 Repertory Grid Technique Kelly s best known suggestion for eliciting constructs from some person or group with a view to better understanding them is the Repertory Grid Method. According to Fransella et al (2004) Kelly saw the grid as no more and no less than another way of stating his theory of personal constructs. It is personal construct theory in action. The technique refers to Kelly s assumption that people always seek to improve their constructs by increasing their repertory, by altering them to provide better fits (Kelly, 1963). An explanation of the method is given by Fransella et al (2004): Behind each single act of judgment that a person makes lies his or her implicit theory about the realm of events within which he or she is making those judgments. Repertory Grid technique is [ ] a way of exploring the structure and content of such implicit theories (Fransella et al, 2004, p.3) Originally, Repertory Grid has been used psychology, particularly in clinical settings to increase the psychologist s understanding of how a patient views the world. In the field of policy analysis which is applied in this research, the technique is a useful tool to unfold people s implicit perceptions of reality and specific events. Repertory Grid includes two main components, elements and constructs (van de Kerkhof et al, 2009): Elements: Constructs: are usually subjects or objects that people face in the world around them and that they recognize as more or less relevant for them according to the explanation above, constructs reflect the distinctions that people make to distinguish elements and relate them to their personal, individual world The basic building blocks of the Repertory Grid are therefore elements presented as columns and constructs presented as rows. In this analysis, fourteen different companies from the renewable and traditional energy sector serve as elements whereas constructs are different lobby activities that stakeholders use to distinguish between the companies. One can regard the grid as a particular form of structured interview, because the usual way of exploring another person s construct system is by conversation. Interviewees select or are confronted with a triad of elements (whose names are usually written on cards) and are then asked to specify the way in which two of the elements are similar and different from the third. The grid formalizes this process and assigns mathematical values to the relationships between a person s constructs (Fransella et al, 2004). It is the bipolarity of the constructs that makes the designing of grids possible. Once the respondent mentions no new constructs anymore, in the next step, some of the bipolar constructs are presented on a scale (e.g. a ten-point-scale, with one pole of the construct at score 0 and the other pole at score 10). The interviewee is then asked to rate the elements on that scale and to indicate thereby which elements perform best (or worst) within the particular construct.

33 Methodological approach in the thesis Identification of companies for analysis For the Repertory Grid analysis fourteen companies have been identified which serve as elements : the four main electric utilities operating in Germany (EnBW AG, E.ON SE, RWE AG and Vattenfall Europe AG) as well as ten players from the renewable energy sector. A key assumption for this study is that the sector of renewables and its influence on policy-making cannot be regarded exclusively without the Big Four. They need to be considered as they do not only have been lobbying for decades, but traditionally possess large fossil-fuel and nuclear power plants and thus possess great economic and political power in Germany. Furthermore, they also have been entering the market of renewables with subsidiaries or branches of renewable energy. The companies of renewable energy have been identified in three consecutive steps: First, an internet research was conducted in order to get a general idea about the market of renewable energy in Germany and its most prominent companies. The initiative renewables Made in Germany of the German Energy Agency (dena) and the Federal Ministry of Economics and Technology served as a basis for the research (Dena, 2011). Here, the biggest companies of wind, solar, hydro, biomass and geothermal energy are listed and characterized according to their corporate profiles. Next to these firms, international companies operating on the German market were considered by the researcher as well. Second, the most successful companies in terms of total revenue per year and number of employees were selected. Compared to companies of hydropower, biomass and geothermal energy, companies of wind power and solar photovoltaic are overrepresented in the selection. This is due to the fact that wind and particularly solar companies have benefited most from the EEG over the last years and traditionally have a strong interest in influencing policy-making. Furthermore, they are usually most known among politicians and economic stakeholders, whereas companies of hydro or bioenergy are less familiar. In a third step, a pre-selection of 25 companies was performed (see annex 2) and then presented to knowledgeable experts 2. They were asked to identify the 10 most innovative and influential ones on German energy policy. This step guarantees the inclusion of innovation and power as parameters next to the economic factors mentioned before. Consequently, the following fourteen companies are included in the analysis (table 3): 2 Scientific advisers and consultants of Schultz Projekt Consult and Biogasrat e.v. served as experts due to their years of experience and daily work in the field of corporate business of energy.

34 33 Company Description Total revenue (2011) 1 E.ON SE Investor-owned electric utility billion 2 RWE AG German electric utility billion No. of employees (2011) 83,097 74,919 3 EnBW AG 4 Vattenfall Europe AG Publicly traded German electric utility Electric utility (principal shareholder: Swedish holding company Vattenfall) billion 22, billion 20,500 5 Viessmann Werke GmbH & Co. KG Manufacturer of heating systems, PV & solar thermal systems, biomass and biogas systems 6 SolarWorld AG Full-line provider of PV modules billion billion 9,400 2,622 7 Q.Cells SE Development, manufacturing and marketing of PV cells. Filed for insolvency in April, billion > 2,000 8 juwi Holding AG Project engineer & developer, service and maintenance in the sectors of solar, wind, bio and hydro energy billion (expected) 1,000 9 Vestas Deutschland GmbH 10 SCHOTT Solar AG Danish manufacturer, seller, installer and servicer of wind turbines Manufacturer of PV modules and solar thermal power plants 963,960 million (2010) 482,000 million (2008) 1,050 1,318 (2008) 11 Enercon GmbH Manufacturer of wind turbines 432,000 million 2, First Solar Manufacturing GmbH American manufacturer of thin film PV modules & project developer of PV power plants. Decision of ceasing production in Germany in ,170 million (2010) Andritz Hydro GmbH 14 agri.capital GmbH Full-line provider of hydroelectric power plants 78,000 million 400 Development, planning and operating of biogas plants 53,000 million 143 Table 3: Companies included in the analysis Source: Data from Hoppenstedt Firmendatenbank, 2012

35 Selection of interviewees As mentioned before, a bottom-up methodology was used implying that main information for the analysis was generated by the interview partners. In total, 20 interviews were conducted in a period of six weeks. This number can be regarded sufficiently with regards to the range of different business sectors, representation of all political parties and the acquired data for the statistical analysis. The interviewed experts are primarily economic and political stakeholders; two people represent external organizations (see table 4). Thus, it can be ensured that people whose main activity is lobbying and people who are being lobbied equally contributed to the outcome of the analysis. In order to obtain information from economic stakeholders, two groups of experts were interviewed: Representatives of companies, mainly those involved in Public Affairs and Corporate Communication, and representatives of business associations which serve as a common voice of the industry by focusing interests of different companies from one sector. Economic stakeholders were all chosen from companies operating in the field of renewable energy in Germany, either as manufacturers, project engineers and developer or operators. They do not only possess a general overview of the market but are also involved in designing and implementing various lobby strategies. Political stakeholders are mainly Energy spokesmen or their respective scientific assistants of parliamentary groups in the German parliament. Here, politicians from all five parties that are currently present in the Bundestag were interviewed: CDU and FDP as the governing coalition and the opposition of SPD, Bündnis 90/Die Grüne and Die Linke. In addition, representatives of the Federal Ministry of Economics and Technology, the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety and the Federal Network Agency were asked to give information. Political stakeholders can be described as the ones being lobbied, therefore knowing about different lobby activities of the renewable energy sector and being able to evaluate their effectiveness. Furthermore, two interview partners were chosen from other organizations than mentioned above who contributed with specific external knowledge to the analysis. Interviewees Number ECONOMIC STAKEHOLDERS Companies 6 Associations 3 POLITICAL STAKEHOLDERS Members of parliament 6 Ministries + federal agencies 3 OTHER ORGANIZATIONS; NGOS 2 TOTAL 20 Table 4: Interview partners

36 Interview set-up The 20 interviews with stakeholders and experts represent the main source of information for the analysis. Due to the utilization of the Repertory Grid Technique the interviews were structured with open questions. They were structured in that sense that the interviews followed the rather clear outline of the method. Open questions with no predefined answers to choose were asked in the beginning and in the end of the interview. In order to encourage interviewees to give more precise and elaborate answers, the researcher used interposed questions when necessary. The names of the companies identified in chapter were printed on cards which were used in the interviews for applying the Repertory Grid Technique. Each interview took approximately 60 minutes - in around half of the cases even longer - and was structured the following way (the complete questionnaire of the interviews can be found in annex 4): 1. Part: Short presentation of the research project by the researcher and presentation of work area by the interviewee 2. Part: Interests of the renewable energy sector 3. Part: Repertory Grid of lobby strategies a) Identifying constructs of lobby activities by picking three cards in different rounds b) Identifying three most effective lobby activities c) Ranking companies on a scale of effectiveness for each of the three strategies 4. Part: Role of renewable energy sector within energy transition 5. Part: Concluding remarks As the analysis covers the entire business sector of renewable energy, the first question aimed at identifying the various interests that companies pursue within the process of energy transition. Having clarified for which objectives companies lobby, the Repertory Grid Technique started. In various rounds (between 5 and 7) interviewees were asked to pick three cards and answer the question: In what respect are two companies similar or different to a third company with regards to their lobby strategy? By distinguishing two companies from a third one, the experts were able to identify different constructs of lobbying activities. Some of them are clearly bipolar whereas others are described as a lobby activity which a company either applies or not (yes or no). Once the interviewees did not come up with any new constructs, the researcher asked them to identify the three most effective lobbying strategies companies can use to enforce their interests in political decision-making. In the third part of the Repertory Grid Technique, experts then ranked the companies according to their ability to effectively apply each of the three strategies. A scale of effectiveness was used; while 0 represents a very low ability of a company to apply a specific lobby activity, 10 imputes a very high ability of a company to make use of a lobby activity.

37 36 The last question of the interview aimed at leading to an answer to the main research question. Interviewees were asked to state their opinion on the role the renewable energy sector needs to play in order to make the energy transition happen. An important aspect of getting honest and credible statements was to assure anonymity to all interviewees. Therefore, the interview list has been codified to not connect statements to a certain person. In case information could be ascribed undoubtedly to an interview partner even without direct referencing, the exact source will be left out. The analysis, however, is fully based on the information gathered by the interviews unless stated otherwise.

38 37 5 Qualitative Analysis 5.1 Perceptions of lobbying As it was mentioned in the theoretical framework, lobbying is perceived very differently according to the country where it occurs or according to the person being asked about his or her opinion about lobby activities. The vast majority of interviewed experts consider lobbying as positive (only two interviewees argued against an organized form of influencing political decision making). Whereas companies which are actively involved in this process of exerting influence naturally present their activities as legitimate and part of a company s strategy, politicians as the ones being lobbied - might think differently. However, except one political stakeholder, all members of parliament and representatives from ministries described lobbying as a common part of the political process. Often, the lobby activities of interest groups were described as right and important and good and necessary (Int. 2; 9) 3 for political decision-making. Generally, two types of lobby activities can be distinguished: 1. Company representatives approach politicians for a meeting in order to talk about general topics related to energy policy and to have an exchange of ideas and points of views. 2. Company representatives approach politicians for a meeting in order to discuss a particular concern or present a specific request of the company. Usually, these concerns refer to the current development of the energy system and the political decisions that are being made. Examples are the amendment of the Renewable Energy Sources Act, the decrease of feed-in tariffs for a certain RES sector or the introduction of new incentives programs for renewables. Once company representatives talk to political stakeholders (either in bilateral conversations, within parliamentary committees or in the context of a political event) it is about an exchange of specific knowledge and ideas. Many experts pointed out that this process cannot be seen negatively as long as the lobbied person responsibly handles the information he or she receives. Thus, specific data or facts (presented by the company) might be checked up afterwards - usually by scientific assistants of the members of parliament - and, more importantly, many different economic stakeholders are being heard. Depending on the time and willingness of the politician, a member of parliament welcomes up to five representatives of companies or associations per week. By having different sources of information political actors ideally form their own opinion about certain issues. Very often it was pointed out by the experts that the information politicians get from economic stakeholders are essential for their ability to make a political decision. Especially members of parliament are concerned with many different topics on which they do not (and often cannot) have sufficient knowledge. Once it comes to very specific issues such as the digression rate of the feed-in tariffs, new legislation on combined heat and power or efficiency 3 As it was mentioned before, the sources of interviews in this and the following chapters refer to the codified list of interview partners and therefore do not correspond with the interview list in annex 3. It is only the researcher who knows the decryption.

39 38 data of biogas plants, politicians rely on external expertise. Though the ministries (BMU and BMWi) employ specialists and experts in the field of energy policy, they do not present themselves as omniscient. We don t know everything better and need information from different sources, for example companies, scientific institutions and external experts (Int. 7). Consequently, it can be noted that lobbying activities of companies are perceived quite positively by political stakeholders and are not only a common way of expressing one s interests but also indispensable for the political process. Some experts, however, emphasized that more transparency is needed within lobbying activities, in particular when it comes to the identity and employers of lobbyists. Many NGOs, but also representatives of political parties demand a higher clarity so that ordinary citizens are informed about the activities of every single lobbyist. LobbyControl e.v., for instance, advocates a lobby register where every economic stakeholder who is engaged in lobbying shall be listed and being traced back to the company he or she works for. One expert perceives lobbying as harmful for the political process, saying that politicians shall rather gain information from independent scientific institutions than from companies that are only pursuing their own interests (Int. 18). Once the articulation of interests is combined with financial expenses for a certain political stakeholder, this cannot be regarded as lobbying anymore but rather as bribery or corruption. However, when it comes to lobbying of the renewable energy sector, this does not occur, according to the experts. Party donations can be considered more critically and will be discussed in chapter Interests of the renewable energy sector Through its lobbying activities, the sector of renewable energy tries to pursue certain interests. All companies large or small share the common interest of profit maximization. Nowadays, the sector developed out of a niche into a serious alternative to companies that are traditionally focused on fossil fuel energy. Thus, renewable business does not solely engage in the market out of sustainable conviction but with the aim of having a profitable market share. As one interviewee points out: No one invests in something that does not have a profitable yield (Int. 16). Besides the quest for profit maximization, companies pursue other interests that can be divided into three groups: First, it is apparent that all companies included in the analysis (and assumable most of all other companies operating on the renewable energy market) direct their lobby activities at the EEG and the feed-in tariffs. As the EEG as well as the rate of the tariffs for each renewable energy source is being amended almost every year, each company aims at receiving the most optimal feed-in tariffs for its sector. Thus, the distribution of fees is highly important for every sector. Though it is not the companies themselves receiving the tariffs but their final customers that buy and install an RES system, companies do aim for the highest tariff possible. They consider marginal costs, meaning the higher the tariffs, the more likely customers would be willing to pay more for a renewable energy technology. Consequently, companies can adjust their prices due to the demand. Almost all interview partners agreed on the fact that companies main interest is to influence political decision-making related to the amendments of the Renewable

40 39 Energy Sources Act. A few companies direct their lobbying activities at other laws such as the Act on Combined Heat and Power Generation. Representatives of companies and business associations mentioned a second type of interest: Some companies lobby for general conditions, in particular the political framework and market structures that are most favorable for them. Many are interested in the reliability of the feedin system and do not want frequent changes within the EEG. Others stress the importance of a long term time horizon of the feed-in tariffs: Companies want to maintain the fees guaranteed for 20 years in order to have a planning and investment reliability. One economic stakeholder emphasized this interest by saying The EEG is our business model. The general framework also includes the distribution of shares of each RES in the final energy and electricity supply. Each sector (wind, hydro, biomass, solar, geothermal) is interested in having the highest share and therefore wants to improve its own position. Though most of the experts are of the opinion that the sector of renewable energy still clings together, this might change in the future if conflicts between different sectors increase. In 2012, the sector of solar PV is partly criticized by the wind and biomass sector for receiving very high tariffs. Thirdly, a few companies are interested in long term market competitiveness without the support of the EEG. Although all companies direct their lobby activities at the EEG, some are aware of the fact that the subsidy system will and cannot last forever. In particular, experts referred to juwi Holding and Schott Solar that try to lobby for becoming independent of the feed-in tariffs. Companies pursuing this interest want to overcome the EEG in the future and being able to operate in a fully liberalized market without subsidies. Some economic experts are of the opinion that, if companies solely rely on the EEG, they will ultimately harm themselves: First, companies cannot be sure whether the 20 years guaranteed payment will still be installed in a few years. Second, fees for renewable energy sources will decrease over time and therefore companies will need to become market competitive without government support. Although many experts agreed on this interest being the most important one and shall be pursued by the whole sector, only a few companies actively follow this aim. Two political stakeholders from legislative and executive bodies stated that no company included in the analysis has lobbied so far for market independence and the end of subsidies (Int. 1 and 11). Also, the market incentives program for renewable energy that was launched in 2011 has not yet been fully accepted by the companies. The majority still prefers the system of feed-in tariffs and is afraid of losing them in the future.

41 Cumulative number of unique constructs Patterns of lobby activities Overview of constructs In total, the interview partners identified 36 different constructs of lobbying activities. Figure 11 depicts the cumulative number of unique constructs Interviewed experts Figure 11: Saturation of constructs The Repertory Grid technique claims to elicit the full range of relevant concepts, in this case the highest possible number of different constructs of lobbying activities. In the graph, the line of cumulative constructs per interviewed expert should flatten out, as after a certain number of participants no new constructs will be added to the list (van de Kerkhof et al, 2008). Figure 11 depicts that this is the case in the research. The first interview was conducted via telephone as the expert was not able to find time for a personal conversation. The researcher considered the expert a political stakeholder who was mainly responsible for the creation of the Renewable Energy Sources Act in 2000 as important for the research, thus he was included in the analysis as well. However, as the expert did not participate in the Repertory Grid, he did not identify constructs of lobbying activities, but added valuable information. Until expert no. 7 new constructs were continuously mentioned with every interviewee, afterwards the line starts flattening out. From interview 10 until 14, again new constructs were added until the line flattens out again. It can be concluded that the Repertory Grid exercise elicited all constructs the group of economic and political stakeholders apply to lobbying activities of renewable energy companies. These constructs can be seen in table 5 and will be analyzed in detail in the following sub chapters. For this purpose, the most important constructs were allocated to four different groups of lobbying activities: Knowing who, knowing how, knowing what and knowing in what way.

42 41 N C Construct side 1 Construct side 2 N a 1. Regular & personal maintenance of contact to politicians Unsteady contact to politicians Lobbying within association Lobbying individually Top-down: contacting the most powerful decisionmakers 4. Public relations campaigns to mobilize public Political landscape management (close links to parties, party donations, strategic HR etc.) Knowledge development with correct information, e.g. technical expertise Geographically close to Berlin/Bonn (representative office) Having a concrete topic/request to talk about; clarifying interests Bottom-up: contacts only with MPs & working level of ministries No public relations campaigns, focus only on political actors No political landscape management 13 Little knowledge development, wrong information 11 Far away from Berlin/Bonn (using external PA agencies) General & too many topics/requests; unclear interests 9. Visiting & organizing of political events No visiting & organizing of political events Offering external expertise, technical solutions Only presentation of company s interests Deep lobbying : using think tanks, publishing studies, contacts to journalist etc. Having a holistic view of the energy system & situation Having high financial resources (many lobbyists, big PR departments) Not using deep lobbying 8 Not seeing complexity of problems; only pursuing company s own interests Having low financial resources Contacting technical level, specific committees General contacting & many different MPs Drafting & offering exact formulation of a new law Not drafting & offering exact formulation of a new law 16. Inviting politicians to visit/see company Not inviting politicians to visit/see company Knowing the right people to contact Not knowing the right people to contact Friendly, constructive & down to earth appearance Arrogant & discriminating appearance Deliberate distinction of traditional energy companies No clear distinction of traditional energy companies Tackling staff & assistants of MPs Not tackling staff & assistants of MPs Convincing opponents Weakening opponents Specific branch/topic lobbying Ongoing lobbying EU- and international perspective National perspective Location bound, e.g. local or regional level Not location bound Envision of disaster scenarios No envision of disaster scenarios Tackling diversified interests (e.g. local citizens, associations) Not tackling diversified interests Technical experts with know-how; technical thinking All-rounder, generalists; professional lobbyists Hiring of ex-ministry/mp employees Not hiring of ex-ministry/mp employees

43 Ability of self-criticism No ability of self-criticism Organizing demonstrations against political decisions No organization of demonstrations Astroturphing No astroturphing Present company s interest as public/general interest No presentation of company s interest as public/general interest 33. Trying to impose decisions Not trying to impose decisions Focus on various topics Focus on topic 100% renewable High credibility of company within energy transition Low credibility of company within energy transition Knowing the right time to contact Not knowing the right time to contact 1 Table 5: Overview of all constructs N a = number of people who mentioned the construct N C = number of construct Knowing who This category analyzes constructs 3, 14, 17, 20 and 21. Companies need to know at which type of political decision-makers they direct their lobby activities. As the experts pointed out this can be done either top-down, bottom-up or in a combination of both. Top-down lobbying refers to tackling the most powerful decision-makers, i.e. the chancellor and the responsible ministers (in this case it is the minister of environment and the minister of economics) as well as the chairs of parliamentary groups. Companies look for establishing contacts with people at the highest level of the executive bodies because they are the ones taking the final decisions. Only a few companies are able to use these channels of communication due to their longtime importance on the German energy market. It is particular the Big Four, E.ON, RWE, EnBW and Vattenfall, which play a crucial role as electric utilities and were therefore always incorporated in important decisions concerning the energy market. These four companies, in particular their CEOs, have a personal relation to the chancellor and are capable of using it at the right moment. If the government organizes an energy summit to discuss important issues concerning the energy system or, more recently, the energy transition, the Big Four are always important participants. Next to the chancellor, companies try to establish personal contacts with ministers and Heads of Division within ministries. Also on this level the Big Four are the dominant companies trying to influence executive decision-makers. One expert points out that at least once a month there one of the Big Four sends a representative to the ministry of economics (BMWi) or the ministry of environment (BMU). Next to the four electric utilities, SolarWorld is the only player of the renewable energy sector which has established close links to the ministries as well. This is mainly an effect of their geographical proximity to the BMU in Bonn and the very strong public and political presence of its CEO. Interviewed experts confirmed that he has a direct contact to the ministers of environment and is also able to strongly influence them (Int. 7, 9). Often

44 43 ministers do not possess a specific expertise in the responsible areas of their ministries but were appointed out of political reasons and change their positions usually every four years or less. Ministry employees, however, are concerned with certain topics for years and can be regarded as experts. Some companies use the fact that the minister is not an expert and confront him/her with specific information the company wants to transfer. In the past it did appear that ministers tended to prefer information provided by companies over information provided by his/her own ministry. Many experts agreed that it is SolarWorld which has been particularly successful in influencing ministers. Companies that are not able or do not want to establish close relations to the chancellor or ministers rather follow the bottom-up approach in their lobbying strategy. They place their interests at the level of MPs or the working level of ministries. Here, tackling as many politicians as possible has been regarded as effective by many experts. MPs are then able to take a certain issue or request of a sector to the executive boards of their parties. However, it is not particularly effective to tackle every possible MP but only the ones being concerned with the issues a company wants to talk about. Regarding issues of renewable energy, it is most effective to contact energy spokespersons or energy coordinators of each party as well as the ones working in committees concerned with energy related topics. Furthermore, it is particularly useful for companies to contact scientific assistants and employees of politicians. They are the ones preparing the MP for committee meetings, writing speeches and are the responsible contact person if the MP does not have time. Assistants take a key position and only forward requests and information of companies which seems relevant and might interest the MP. Thus, some companies are aware of the decisive role of employees of politicians and try to establish good relations with them. One interview expert said: Once you have the assistant, you have the MP (Int. 20). Some interviewed experts pointed out that it is relevant to know the right people to contact and also to know how to deal with opponents. Traditionally, SPD and Grüne are most supportive to renewable energy, however, this has changed with the energy transition in 2010 so that nowadays all parties can be regarded as proponents of RES. Nevertheless, differences between preferences of each party towards certain renewable energy technologies are still visible, with SPD and Grüne having a higher affinity for solar PV as their politicians predominantly come from municipal areas, whereas many politicians from the CDU come from agrarian areas and particularly support biomass and biogas. Although nowadays almost all politicians are in favor of the support of renewable energy, every company pursues different interests and therefore is confronted with people who do not support the company s interests. Thus, it is also important to know how to deal with opponents: Experts agreed that it is highly important for a company to keep a close and continuous contact with the ones supporting the ideas of a company. People being neutral towards the company which is generally a big majority - shall be provided regularly with information and be finally convinced to support the issues of a company. Interview experts referred to different strategies how to deal with opponents. On the one hand, companies should work to convince them through knowledge transfer and turn their opinions as well. On the other hand, if the first strategy does not turn out to be effective, opponents can be either completely ignored or weakened through public campaigns, tackle personal weaknesses of politicians etc. However, weakening an opponent is also regarded critical by many experts and

45 44 can be even dangerous for a company. As the political process is constantly changing, companies and politicians always see each other twice (Int. 9). Thus, if a company chooses to discredit a certain politician who might be in more powerful position later on, it will turn into a negative outcome for the company Knowing how This category analyzes constructs 18, 19, 27 and 35. Companies need to know how they present themselves while lobbying. First of all, lobbyists can have different types of characteristics. Some are technical experts with a competent knowledge in specific energy related issues. Whereas some experts described this characteristic as positive because knowledge transfer can be ensured, other stakeholders referred to the downside of this attitude as this type of lobbyists might think too technically and does not fully understand the political process. Other lobbyists, however, can be characterized as all-rounders and generalists who do not possess a specific technical understanding but are professional lobbyists knowing how to influence and pursue people. When needed, they add an internal technical expert to a conversation with a member of parliament or a ministry employee, but still guide the discussion. Such a highly professional form of lobbying is being conducted by the Big Four according to experts. Within the sector of renewable energy many experts also referred to the manner of appearance of companies as an important factor. Two distinct ways of lobbying can be distinguished: having an aggressive and partly arrogant attitude or being friendly, constructive and down-to-earth. Most of the political stakeholders interviewed for this research pay attention to the way a company presents itself and interacts with others. Although SolarWorld might have a high public perception, it is not seen completely positive by all politicians. The company choses an aggressive way of lobbing including controversial public campaigns and personal attacks on politicians who do not support the interests of the company; in the case of SolarWorld, more slowly decrease of tariffs for solar PV. According to experts, the company personally attacked politicians who do not follow the requests of SolarWorld as climate killers and not having a sustainable thinking. One interview partner described the way of lobbying of SolarWorld as a Bactrian camel (Int. 11), another as overbearing (Int. 9). Despite a high public perception, SolarWorld does not help the sector of renewables as its attitude appears to be repellent to many politicians. In this context, the Big Four and particularly RWE and E.ON have also been mentioned as having an arrogant attitude and being a know-it-all. Political stakeholders emphasized that they need the information provided by companies but do not appreciate an arrogant behavior indicating that the sector knows better than politics which laws should be adopted. On the other hand, most of the companies included in the analysis are being described as pursuing a constructive way of lobbying, appearing friendly and serious. They get easily in contact with politicians and have a relaxed, but also intensive personal relation to MPs.

46 45 Companies are more reserved in that sense that they try to present the interests of the whole sector and do not come strongly to the fore as a company. Furthermore, they are capable of accepting advices and hints from politicians regarding energy related issues. Enercon, juwi, Q.Cells and Schott Solar have been described by the experts as firms pursuing this kind of attitude. Interview partners also mentioned the construct of a deliberate distinction to the Big Four. In the past, almost the whole sector of renewable energy tried to strongly distinguish itself from the four big electric utilities that mainly provide fossil fuel energy. Renewable business regularly presented itself as the good ones that care about the environment whereas the Big Four were presented as unsustainable and only interested in profit maximization. Nowadays this distinction still takes place publicly, also to mobilize the public and increase public acceptance. However, some experts pointed out that during internal discussion the positions of the renewable energy sector and the Big Four are closer than in the past. Since the political declaration of the energy transition in 2010/2011, all companies operating on the energy market face similar problems which they have to manage together (Int. 16) Knowing what This category analyzes constructs 8, 23, 25 and 34. Companies need to know about what exactly they want to talk with a politician once they approach him/her. This could either be a specific issue or general subjects with no clear message. Almost all of the political stakeholders interviewed for this research preferred talking to a company that has a concrete topic or request and wants to discuss it with an MP or a ministry representative. In particular the members of parliament have a very limited time schedule and thus prefer discussions about concrete topics. For instance, a company illustrates the current development of German energy policy and points out the negative implications for its business. Furthermore, companies should clarify their interests and make clear why they approach a politician. One expert said MPs need to know what they can do for the company (Int. 1) and how are they able to help. If the interest or request of a company is too vague and inexplicit, the politician does not receive a clear message and, consequently, cannot take into account the interests of the company it his/her decision-making. Companies that formulate concrete topics and requests according to interview partners - are Viessmann, juwi, SolarWorld, E.ON and RWE. Experts also referred to companies that envision disaster scenarios in order to have a stronger influence on politicians. In general, these threats are not well perceived by the lobbied people as, first, they feel pressured and, second, the amplified scenarios often turn out to be false. The solar sector and the Big Four are named as the ones envisioning disaster scenarios. Examples given by the experts are: Your government will not achieve its goal of 80% renewables in 2050, if you do not implement a certain measure (company of RES) If the tariffs for solar PV are further decreased, the whole sector of solar PV will collapse. (company of RES)

47 46 If you don t introduce a capacity market model 4, traditional power plants won t be profitable anymore. Consequently, we will have to shut down power plants which will lead to a blackout. (Big Four) If you don t increase subsidies for off-shore wind, we will not extend out activities in offshore. (Big Four) Once a company discusses an issue with a politician it can also take an EU and international perspective or only focus on the national level of energy policy. Some experts stressed that targeting a topic with an EU/international perspective is advantageous because many national decisions taken in the energy sector strongly depend on European Union decision-making. Thus, a company should be aware and take a greater perspective into account Knowing in what way Continuously keeping contact to politicians What was most frequently mentioned by the experts and was also identified as one of the most effective strategies is a continuous keeping of contacts to political decision-makers (c. 1). This includes all the activities lobbyists carry out in order to be known personally by MPs or ministry representatives. For instance, companies regularly arrange appointments with politicians or participate in political events to meet MPs. For political stakeholders it is important to have a relationship of confidence (Int. 2) with a lobbyist who is a person of integrity and honesty. One expert called this lobby activity quiet diplomacy indicating that lobbyists should present themselves as diplomats of their companies with an appropriate behavior. While keeping contact, lobbyists should be trustworthy and enable a constructive exchange of ideas and opinions with politicians. Establishing personal contacts is very important, also because politicians do not want to feel lobbied (Int. 1). Being positively known by politicians forms the basis for further discussions pursuing of interests. Experts pointed out that creating a personal network of contact people is highly important to achieve the company s goals of lobbying. Traditionally, the big four electric utilities possess a very extensive network and easily get appointments with members of parliament. Companies of the renewable energy sector heavily engage in keeping personal contact as well; juwi, Enercon and Vestas are being mentioned several times by the interviewees. Being seen in a positive way by politicians is important in the sense that it evidentially has an influence on decision-making. A political expert referred to the example of an amendment of the EEG that was reconsidered after a company expressed its concerns on a specific issue. According to the interviewee this did only happen because the company has established good and serious relations with the involved decision-makers. On the other hand, companies that do not establish regular contacts with politicians but only approach decision-makers if they want to push an urgent issue will not be successful. It is not 4 Electricity generation from renewable energy is more fluctuating and still less reliable than conventional electricity generation plants. Thus, it is debated if capacity mechanisms are needed to complement or even substitute the current energy market model (particularly compensate operators of traditional energy generation plants due to the preference of renewables to be fed into the grid).

48 47 effective to contact politicians sporadically or reducing the contact to writing letters or sending information material. In order to have an influence in political decisions, relations to politicians need to be regularly and personal Knowledge development As it has been mentioned before politicians also want to gain something once they talk to companies (c. 6). Members of parliament but also ministry representatives cannot know all technical details of certain issues in the field of renewable energy. Therefore, they are reliant on external information that is often provided by companies working in the field of action. All political experts emphasized that they are not interested in a purely promotion of the company (Int. 1) but want to be informed about unclear and unknown topics. By talking to many different companies political stakeholders get a general idea about a certain issue and are able to form an opinion. Furthermore, it is crucial that the information provided by the company is correct on which politicians can rely. Contrary to public opinion on lobbyism, the correctness of the information forms the basis of every discussion between a politician and a company. By providing false information a company will harm itself significantly. Political experts described if finding out a company did not tell the truth with regards to data and facts, it will later on have a reputation of a liar (Int. 13). Also, politicians become skeptical and mistrustful towards the company and will not be as open-minded to its requests and interests as before. Knowledge development also includes offering of external expertise or technical solutions by companies. Providing politicians with valuable and credible facts helps them in the process of decision-making but also contributes to their personal distinction among other colleagues. One company expert described it as very effective to provide a politician with exclusive and new information that no one knows so far. That way a political stakeholder gets the feeling of having an advanced knowledge. Moreover, companies should not only lobby for their own interests but offer their services, products and advice to solve problems, for instance on the extension of grid infrastructure. Politicians also expect companies to ask what the current problems are and how they can contribute to avoid or solve them (Int. 7). When providing information, some companies present a written draft law or the exact formulation of a law to politicians which they can directly adopt. Also, official statements are being sent out which are professionally formulated and could also serve as a draft law. Some political experts said if the company is trustworthy and the content of the formulated law is right, it is indeed helpful and might be forwarded to the next level of decision-making. However, experts criticized the fact that companies actively write a law in cooperation with a ministry. It was described as problematic if companies directly profited from this law (Int. 7 and 18); others were strictly against this method indicating that ministries should be able to draft a law alone (Int. 2, 6 and 18).

49 Lobbying within an association The most common way of representing business interests is the organizing of companies within an industry association (c. 2). By the majority of experts this form of lobbying was mentioned as important and effective in order to influence politics. Table 6 gives an overview of the most influential associations in the field of traditional and renewable energy. Usually, associations so called Verbände follow internal democratic structures. They collect and coordinate the various interests of their member companies until publishing official statements and recommendations and making them available to the public and political stakeholders. Often this process can be described as finding the least common denominator as all companies need to agree on a certain common interest. Associations are perceived very differently by the interviewed experts. On the one hand, politicians point out their importance as they represent a whole business sector and not only the interests of a single company. Thus, companies possess a higher influence when lobbying together as a group. Members of parliament also referred to the role of associations as a mediator between companies and politics and that they must act as a reliable partner for politics providing useful information (Int. 17). Politicians are more credible when basing their decisions on the interests of a whole sector when many different players are affected. On the other hand, it is apparent that associations cannot provide concrete and specific information than a company could. Also, by only representing the least common denominator of interests, individual concerns of economic stakeholders become less visible. Consequently, many political stakeholders prefer talking to associations and many different company representatives at the same time in order to get the whole picture. Furthermore, the various associations of renewable energy have been critically evaluated by the interviewees. Whereas the BDEW (Bundesverband der Energie- und Wasserwirtschaft) is a strong and big organization representing mainly the interests of the traditional energy sector, the BEE (Bundesverband Erneuerbare Energie) is perceived much less influential. Many companies prefer lobbying within a specific association of their sector (e.g. solar, wind, biogas) than organizing themselves in the umbrella organization BEE. Hence, being less supported by companies, the BEE lost much of its influence in politics. The BSW representing solar industry pursues high-pressure lobbying which is not always perceived positively by politicians. Experts criticized its attitude and sometimes aggressive way of lobbying as unprofessional, highly dismissive and ineffective (Int. 5 and 9) and referred to diverging interests of member companies. The BWE representing wind industry enjoys a better reputation as being better organized and representing common interest. The biomass sector was criticized by some experts as being too fragmented having too many different associations. Representative organizations of hydro and geothermal energy do not have a strong influence on politics.

50 49 Name Sector No. of members Bundesverband der Energie- und Wasserwirtschaft (BDEW) Energy and Water 1,800 companies Verband kommunaler Unternehmen (VKU) Energy, Water, Disposal 1,400 companies Bundesverband Neuer Energieanbieter e.v. Energy providers (bne) without own grid 16 companies Bundesverband Erneuerbare Energie e.v. (BEE) 25 federations with Renewable Energy 30,000 individual members & companies Bundesverband Solarwirtschaft e.v. (BSW- Solar) Solar energy 800 companies Bundesverband WindEnergie ev. (BWE) Wind energy 20,000 companies 158 Bundesverband Bioenergie e.v. (BBE) (24 federations, 127 Bio-energy companies & research facilities) Fachverband Biogas e.v. Biogas 4,400 companies Biogasrat e.v. Biogas 45 companies Bundesverband Pflanzenöle e.v Vegetable oils No information Bundesverband Deutscher Wasserkraftwerke e.v. (BDW) Hydro power 8 regional federations Bundesverband Geothermie e.v. Geothermal energy 900 companies 18 regional federations Deutscher Bauernverband (DBV) and 45 associated Agriculture (umbrella organization) federations & institutions Table 6: Overview of associations of traditional and renewable energy Representative offices & political events Many of the companies that lobby for their interests have a representative office in Berlin where most of political decision-making takes place (c. 7). Experts emphasized networking demands having contact people who monitor the current developments of energy policy and are close to political stakeholders. Though having an office with employees in the capital it is not regarded by experts as a necessity to lobby effectively. What is crucial is having at least one contact person of a company who continuously approaches politicians. Most of the companies included in the analysis keep a representative office in Berlin. SolarWorld as a big player on the market of solar PV is not represented in Berlin, but operates in Bonn the former capital and still seat of some ministries, amongst others the ministry of environment which is responsible for the EEG. Thus being geographically close to Bonn and the BMU is an advantage, too. Some companies that do not have financial resources to keep a representative office in Berlin but want to engage in the lobbying process nevertheless, hire external public affairs agencies that represent the interests of a company (c. 13).

51 50 An important part of networking is to visit and organize political events where members of parliament, ministry representatives and other political stakeholders meet representatives of companies and associations (c. 9). These events are often arranged along a certain topic which reflects current developments of the energy system and are usually organized by a company or a business association. Experts and members of parliament are invited to speak and after and to have a public discussion afterwards. Within a week of parliamentary session, up to ten different events per week can take place, usually so called Parliamentary evenings, Energy policy breakfast or big garden parties in summer (normally organized by one of the Big Four). According to political experts, two factors play a role in their decision to attend such an event. First, a specific and interesting topic must be discussed that has not yet been debated in other events in the same period of time. Second, as politicians attend events to meet important stakeholders, the size of the event and the selection of guests are important. If the event is too small it is less interesting for politicians. For this reason, often companies align with each other to organize an event. Even if a company does not organize an event itself, it is important that its representatives visit political events to get in contact with members of parliament and other companies Mobilizing the public Some of the companies included in the analysis try to mobilize the public by big and small public relations campaigns (c. 4). Advertisements in newspapers and magazines, television spots or banner ads in football stadiums are some of the means companies use. The intention of public relation is twofold: First, public acceptance of renewable energy projects shall be increased in order to prevent a NIMBY effect ( Not in my backyard ). Within the energy transition large infrastructure projects to extend the grid in particular might be disapproved by citizens. Second, many of the experts confirmed that political decision-makers are very susceptible for and highly influenced by the voters will (Int. 3, 19, 20) indicating that they are dependent on public acceptance for their decision to be re-elected. Thus, public relations campaigns also try to indirectly influence political decisions by directing public s attention to certain issues. Not only with the decision of phasing-out nuclear energy in 2011 but well ahead, traditional energy companies, in particular the Big Four, try to improve their negative public image by large-scale advertising campaigns. However, once this leads to a form of greenwashing the result might be negative: The German Atomic panel (Deutsches Atomforum e.v.) published an advertisement in 2010 showing a nuclear power plant and wind mills on a greenfield (fig. 12). By entitling it with Climate protectors among themselves. Nuclear power plant Brokdorf and wind power: CO 2 emissions = 0 nuclear power shall be associated with clean energy. However, this campaign was received rather negative resulting in a complaint of the wind mill manufacturer Enercon which refused to be linked with nuclear power.

52 51 Figure 12: Advertisement of German Nuclear Panel Companies of renewable energy still refer to fossil fuel energy to publicly distinguish themselves from unsustainable and dirty forms of energy generation. SolarWorld highly invests in public relations campaigns to increase public and political acceptance of solar PV. Next to many other forms of advertisements it reformulated the slogan of RWE in order to incorporate it in its own ad (fig. 14). VoRWEg gehen means going ahead and shall refer to the innovative ability of RWE. However, when omitting the first three letters, going ahead becomes going away which SolarWorld used in it slogan: Going away and producing your own energy at home!. Although the use of the poster has been enjoined later (following a complaint of RWE), the campaign illustrates the public relations strategy of SolarWorld: Advertising campaigns of the solar company are often polarizing and emphasize positive characteristics of solar energy compared to fossil fuel energy. Figure 13: Slogan of RWE and advertisement of SolarWorld Interviewed experts evaluate public relations campaigns differently: Whereas some acknowledge their positive effects on people which increase public acceptance and eventually influence political decision-making, others refer to possible negative impacts. It is the solar sector in particular that is able to mobilize many people who then might attack politics for certain decisions, e.g. the reduction of tariffs for solar PV. However, when political decisionmakers are convinced of decisions as being the right ones but at the same time are being

53 52 attacked disproportionally it comes back negatively at the companies involved in the campaign. Another form of artificially mobilizing the public is Astroturphing (c. 31). Here, companies hire external public relations firms to create group of citizens or experts which publicly promote the interests of a company. Thus, it is pretended that grass-roots movements have developed in order to support a certain issue. By creating these movements, companies can highly benefit: The use of such 'front groups' enables corporations to take part in public debates and government hearings behind a cover of community concern. These front groups lobby governments to legislate in the corporate interest, to oppose environmental regulations, and to introduce policies that enhance corporate profitability (Beder, 1998) Political landscape management Political landscape management (c. 5) includes all activities of a company to establish and maintain close relations to political parties and their decision-makers. The most common form is party donations that can be given continuously or to support election campaigns of parties or single politicians. In Germany, party donations above 50,000 need to be reported immediately to the President of the parliament and be published subsequently; party donations above 10,000 but under 50,000 need to be published in statements of accounts of parties. Experts confirmed that party donations from companies operating in the field of renewable energy occur regularly but are not as publicly discussed as donations from other industry or banking companies. While in the past, most donations have been given to SPD and Grüne which were very supportive of renewable energy, this has changed over the years as nowadays all parties officially support renewables. Experts and internet research indicate that it is the solar sector in particular that financially supported parties over the last years. For instance, SolarWorld donated 25,000 each in 2007, 2008 and 2009 to the SPD in Bonn, First Solar donated 15,000 in 2009 to the same recipient. 5 In 2009, other solar companies supported the CSU, the Bavarian sister party of CDU. IBC Solar donated 45,000 and Phoenix Solar AG around 21,000 ; the Green Party was supported by SolarWorld (15,000 ) and Lichtblick, a company of sustainable energy (10,000 ) 6. Although party donations are a common way of influencing political decision-making, experts did not accredit a very high influence to it. They are only effective when accompanied by other lobbying strategies mentioned above, such as continuous personal contacts of companies to politicians. Also, as governments change regularly, financial support should not be focused on specific parties but include all. Other interviewees expressed their concerns about party donations indicating that they can be even problematic for a company when too high and receiving a negative public perception. Two experts highly criticized the use of party donations, even referring to it as bribery in some cases (Int. 20)

54 53 Another aspect of political landscape management is the fact that companies invite politicians to visit their production sites in order to inform them about the production process and connect political decision-makers with the board of management (c. 16). This again has a reciprocal effect: Political stakeholders gain more detailed information and companies usually receive positive media attention when a politician visits their production plants. Companies also try to connect with the political system by hiring former politicians, scientific assistants or ministry employees (c. 28). With the help of a smart staffing policy companies acquire highly qualified personnel that have an in-depth understanding of the political process and know how to effectively influence decision-making Deep lobbying Deep lobbing (c. 11) can be described as a process that shapes the intellectual atmosphere around decision-makers and politicized topics which are based on a political and economic agenda (Wallace-Wells, 2003). Very often, think tanks try to influence politics through publications or subliminal messages. Deep lobbying can either occur in the form of (semi-) scientific publications which are published in order to support a certain issue. Usually, it is the associations collaborating with scientific institutions in order to publish results. Experts confirmed that especially the big four electric utilities make use of this method and regularly commission studies. Though the scientific correctness can hardly be denied, these studies still represent a subjective point of view which often favors the interests of a business sector. For instance, studies commissioned by the Big Four often emphasize the high costs of solar PV while studies commissioned by the wind, solar or biomass sector highlight the benefits of each RES source. Some interview partners agreed on the fact that scientific publications have an influence on political stakeholders and can even be cited in political statements. Another form of deep lobbying is to establish close relations to journalists and the media. Economic experts confirmed that some companies regularly provide journalist with specific information and try to activate them in order to report positively on renewable energy and specific RES in particular. Though economic experts defend the influencing of journalists as common practice, others criticized this approach of lobbying arguing that journalists lose their critical control function in a democracy Holistic view of the system Finally, companies are more effective in their lobby activities when they take up a holistic view of the energy system (c. 12). Many experts considered companies more credible if they not only fight for their own company s interests but also regard current and future challenges of the system, for instance system integration of renewables, grid extension or other specific problems of the transformation of the energy system. Political stakeholders expect from the business sector to look beyond the borders of their own sectors and also develop solutions for the energy transition.

55 However, as the majority of companies still direct their lobby activities to the Renewable Energy Sources Act and its amendments, they are mainly interested in feed-in tariffs and focus their lobbying on what is best for the company. In order to have a greater influence and actively contribute to the success of the energy transition companies should question current developments of energy policy and lobby activities of companies and offer their expertise to transform the system. 54

56 55 6 Statistical Analysis 6.1 Most effective lobby strategies After having identified various constructs of lobby activities, interview partners were asked to name the three most effective strategies of how a company can influence political decisionmaking. From all the lobby activities mentioned in chapter 5, experts recognized 21 strategies as being most important. Mentioned by 13 out of 20 interview partners, having a regular and personal contact to politicians is considered to be most effective for a company. Seven experts also named knowledge development with correct information as being very important. The complete range of most effective lobby strategies can be seen in figure 14. Except the two most frequently mentioned activities, experts had rather different perceptions of what the most effective ways of influencing politics are. For instance, ten of the most effective strategies were only mentioned by one interviewee. Regular & personal contact to politicians Knowledge development with correct information Lobbying within association Top-down: contacting the most powerful decision- Contacting technical level, specific committees Public relations campaigns to mobilize public Offering external expertise, technical solutions Visiting & organizing of events Knowing the right people to contact Holistic view of the energy system Concrete topic/request; clarify interests Political landscape management Ability of self-criticism Drafting exact formulation of a new law Inviting politicians to visit company EU- and international perspective Deep lobbying Not trying to impose decisions High credibility within energy transition Knowing the right time to contact Weakening opponents Figure 14: Most effective lobby strategies 6.2 Analysis and interpretation of the grid The statistical analysis was carried out with SPSS (Statistical Package of the Social Sciences) by inserting elements, constructs and ranking values of companies in the data matrix. Here, the companies (= elements) served as cases, whereas a combination of interviewee and lobby strategy served as variables, for instance I1S1 (interviewee 1 + strategy 1) or I5S14 (interviewee 5 + strategy 14). In total, the analysis included 50 variables and 13 cases. Due to the fact that the company Andritz Hydro was unknown to almost all interview partners, it has not been ranked and consequently was excluded from the analysis. Thus, the number of cases is 13 and not as expected 14.

57 56 The purpose of the statistical analysis is to detect differences and similarities between companies with regards to their lobby activities. Therefore, a Multiple Correspondence Analysis was conducted which quantifies nominal (categorical) data by assigning numerical values to the cases (objects) and categories so that objects within the same category are close together and objects in different categories are far apart. (Meulmann et al, 2010) The analysis generated a two-dimensional figure that plots the 13 companies (fig. 15). The output of the SPSS analysis can be found in annex 6. 1 E.ON 8 juwi 2 RWE 9 Schott Solar 3 EnBW 10 Vestas 4 Vattenfall 11 Enercon 5 Viessmann 12 First Solar 6 SolarWorld 13 agri.capital 7 Q.Cells Figure 15: Companies 1 to 13 plotted in a two-dimensional figure

58 57 Looking at the figure, it is apparent that the companies of the Big Four (E.ON, RWE, EnBW and Vattenfall) form a clear cluster of companies pursuing the same interests and using similar lobby strategies. Thus, the left side of the y-axis and in particular the quadrant top left depicts companies that allocate high financial resources to their lobby activities, having traditional strong ties with political decision-makers and generally lobby on a high pressure level. This side of the axis certainly shows how the big four electric utilities pursue their interests on the German energy market. On the contrary, the right side of the y-axis depicts all companies of the renewable energy sector. More precisely, companies in the top right quadrant pursue the most common way of lobbying with regards to renewable energy. However, the lower companies are situated in the bottom right quadrant, the more unknown they are and the less they dedicate time and money to extensive lobby activities. In the following, the spatial arrangement indicating similarities and differences between companies will be further analyzed Left side of the plot As expected, the big four electric utilities are arranged closely together in the top left corner of the plot. As they are not companies focusing on the renewable energy market but being energy providers, they are concerned with an overall development of the energy system, thus pursuing different interests than the companies on the right side. Clearly, the left side of the plot depicts the most powerful companies, also in terms of profit and number of employees, as well as the typical regime parties that traditionally dominated the energy system. The Big Four all score high on the ranking on having regular and personal contacts to politicians due to their longtime lobby activities on the energy market. Traditionally, they possess the right channels into politics and know exactly whom, when and how to contact. Interviewed experts also referred to the fact that it is only the Big Four who spend very high financial sums on lobbying that allows them to have large representative offices in Berlin, employ many lobbyists and organize well attended political events. Furthermore, these companies are the only ones being able to personally contact the most powerful decisionmakers such as the chancellor or ministers. An exception of the renewable sector is SolarWorld which is also able to directly contact responsible ministers. Furthermore, experts referred to the Big Four as having a holistic view of the energy system due to their high responsibility as electric utilities. However, they also tend to envision disaster scenarios to increase pressure on politics. Analyzing more precisely the relationship between the Big Four, it is apparent that E.ON (1) is located farthest to the left. It indicates the outstanding position of the company generating the highest profit and having the biggest number of employees of all companies included in the analysis. With regards to having regular and personal contacts to politicians, knowledge development and top-down contacting it scores slightly better than the other three. Experts

59 58 referred to the highly professionalized way of lobbying (Int. 1) of E.ON which is, however, occasionally not as relaxed and personal as of companies of renewable energy. EnBW (3) is located slightly more above which indicates, due to its regional bonds with the state of Baden- Württemberg, that the company is regarded a bit more down-to earth (Int. 7) and more positively perceived by the public. RWE (2) follows the same approach as E.ON and possesses longtime contacts to MPs and ministries. Its CEO Jürgen Großmann, however, often receives negative public attention and is being regarded by some experts as arrogant and unappealing. Vattenfall (4) is positioned lowest from all of the four companies. Though following the same lobby approach as E.ON, EnBW and RWE, and operating on the German energy market for ten years, Vattenfall is still considered as a the Swedish enterprise with a little less influence than the three German electric utilities. Furthermore, particularly in the northern part of Germany Vattenfall has a very negative public image mainly due to its nuclear power activities Right side of the plot The right side of the y-axis depicts all companies from the renewable energy sector. Particularly noticeable are the positions of SolarWorld (6) and First Solar (12) that are positioned highest in the top right quadrant as well as of agri.capital (13) and Viessmann (5) that are located in the lower part of the bottom right corner. The remaining five Q.Cells, juwi, Schott Solar, Vestas and Enercon form a cluster of companies pursuing a similar lobby approach. Regarding the top right quadrant, SolarWorld and First Solar are most far away from the majority of the companies due to their strong and prominent role as representatives of the sector of solar PV. They are most visible and recognizable on the market of renewable. According to experts, both have in common a rather aggressive way of lobbying, working within the solar association BSW-Solar and only focusing on the company s interests. They strongly demand a continuation of feed-in tariffs for solar PV and oppose a higher reduction of fees. After balancing reasons about whether continuing to operate on the German market with falling tariffs and Asian markets with lower production costs, First Solar even decided to cease manufacturing in Germany in Thus, lobby activities were almost solely directed at the EEG and the feed-in-system. With regards to having a regular and personal contact to politicians, First Solar received different scores from experts, ranging from medium to higher values. Contrary to the expectations of the researcher, SolarWorld did not take a more outstanding position within the plot but is close to First Solar. Although many experts perceived and characterized SolarWorld very differently from all other companies, it received similar scores as First Solar in the ranking. SolarWorld pursues high pressure lobbying by making use of media and public relations campaigns as well as having close connections to the environment ministry in Bonn and regional decision-makers. Personal contacts to members of parliament or representatives from the economic ministry are far weaker than of other companies. Moreover, SolarWorld nowadays being the biggest producer of solar cells in Germany does not have a representative office in Berlin but prefers to conduct its lobby activities mainly

60 59 through the work of its CEO and a few lobbyists. Regarding his appearance, some experts compared the CEO of SolarWorld, Frank Asbeck, to the CEO of RWE, Jürgen Großmann, both heavily promoting their companies interests. Some interview partners criticized the aggressive way of lobbying by SolarWorld which also includes personal discrimination of politicians (Int. 9). However, politicians who support the interests of SolarWorld are being supported by the company, mainly through financial donations in election campaigns. Whereas some interview partners regard high and regular party donations as legitimate, in the case of SolarWorld, one expert referred to them as bribery (Int. 20). Another reason why SolarWorld is located on top of the quadrant is its rather opportunistic attitude which rarely looks for agreements with other companies from the solar sector (Int. 4). Nevertheless, SolarWorld and First Solar received quite high scores on the ranking of working within an association. The other companies representing the sector of solar Q.Cells (7) and Schott Solar (9) are different to the two companies mentioned above and similar the other three representatives of renewable energy located in the middle of the right side. Q.Cells and Schott Solar focus more on lobbying within the association and try to profit from frequent and personal contacts to political decision-making, especially local politicians. They do not spend as many financial resources on lobbying as the Big Four and SolarWorld and can be described as more reserved. Experts referred to Schott Solar as having a respectful behavior towards politicians and lobbying for the interests of the whole solar industry (Int. 9). Enercon (11) and Vestas (10) - being the biggest manufacturer of wind turbines in Germany - are located in the middle of the right side of the plot, close to the x-axis. Juwi (8) as a project engineer and developer combines all sectors of renewable energy in its portfolio and is similar to companies 7, 9, 10 and 11. It is assumed that the far left positions (within the top right quadrant) of juwi and Enercon is a result of their high market share and company size which automatically leads to higher possibilities of influencing politics. Moreover, they can be regarded as least controversial indicating that most stakeholders can get along with them. Vestas, Enercon and juwi are being described by the experts as having a positive and friendly attitude and following a so called quiet diplomacy approach: Looking for valuable partners in politics, engage in regular networking (in particular through organizing and visiting political events) and offering their expertise and exclusive information to political stakeholders. They are also aware of the importance of scientific assistants of MPs and thus frequently address them as well. Moreover, similar to Schott Solar, they do not look for high media attention nor do they invest strongly in public relations campaigns. In general, experts regard these companies with favor, and prefer this way of lobbying. Hence, just as the Big Four constitute a cluster of energy companies representing the traditional regime parties, on the right side, the cluster of companies 7, 8, 9, 10 and 11 form a cluster of renewable energy companies that pursue the most common ( mainstream ) way of lobbying. The bottom right quadrant depicts another form of lobbying which is less visible than lobby activities from companies positioned above. Located very far away from the others and thus pursuing a different lobby strategy are the two companies representing the biomass sector: While agri.capital (13) develops and operates biogas plants, Viessmann (5) is traditionally a manufacturer of heating systems, including next to condensing technology oil and gas systems solar thermal and photovoltaic systems as well as biomass heating systems and

61 60 biogas systems. Its business areas which are quite different from the other companies explain the outside position of Viessmann. It also follows a distinct lobby approach by focusing on specific branch or topic lobbying; it concentrates its activities on few but concrete issues that are relevant for the company. Moreover, Viessmann does not operate aggressively but rather reserved and conservative and establishes a strategic network of political partners (Int. 9). However, compared to other companies included in the analysis, Viessmann is quite unknown for the public and consumers and thus least visible. Agri.capital (13) is located slightly closer to the other companies of renewable energy but is also publicly unknown. It cannot exert high influence within its association as the sector of biomass does not have one strong association, but several ones pursuing different interests. Also, agri.capital received low to medium scores when it comes to having regular and personal contact to politicians. However, it has to be noted that the ranking of agri.capital has many missing values due to the fact that many experts were not able to evaluate the lobby activities of the company. Out of 50 possible values, agri.capital only received 22 which certainly influences the analysis and its position in the plot. Nevertheless, it is apparent that the only two companies representing the biomass sector are clearly separated from the other companies included in the analysis. Their lobby strategy is far more reserved and quiet and does not attract much attention Summing up of the plot The plot which was developed through a statistical analysis of SPSS depicts the diverse lobby strategies of companies and the differences between them. Combined with the qualitative analysis it can be concluded that the plot graphically illustrates the various forms of lobbying on the market of traditional and renewable energy. Regarding the position of companies in the plot and the values they received in the data matrix, an explanation of the axes can be derived. The x-axis represents the characteristics and the role of companies being included in the analysis. Thus, traditional regime players, i.e. companies that mainly operate on the market of fossil energy are located left whereas companies of the sector of renewable energy are depicted on the right side. The y-axis represents the way companies pursue their lobby activities. The more located on the top, the more aggressively companies lobby and the more visible and recognizable they are for political stakeholders and the public. However, the more located at the bottom, companies are less visible and pursue a rather reserved strategy of lobbying. The plot also gives information about the mainstream form of lobbying, i.e. the most common way companies pursue their interests: all companies following a similar approach of lobbying within their category (either traditional or renewable energy players) are located above the x-axis in the center. Figure 16 illustrates the plot with additional labeling of the axis.

62 61 LOUD & VISIBLE TRADITIONAL REGIME PLAYERS RENEWABLE PLAYERS QUIET & LESS VISIBLE Figure 16: Characterization of the plot

63 62 7 Discussion 7.1 Discussion of the results The analysis has shown that corporate business of renewable energy strongly influences political decision-making related to the German energy transition. It is apparent that, for making the energy transition happen, technological developments of the business sector are needed. Thus although members of parliament shall make decisions impartially politicians are highly influenced by the interests of economic stakeholders. Political experts yet pointed out the need for lobbying in order to gain more information and incorporate interests of affected stakeholders in their decisions. The great majority of interviewed experts perceived lobby activities as positive and essential for democracy, if companies do not resort to dishonesty. Only the political party The Left and an anti-lobby NGO explicitly criticized the way lobbying occurs in the German political system. They demand more transparency about lobbyists and their activities. The selection of interview partners proved to be useful as both economic and political stakeholders were able to inform about various types of lobby activities and evaluate their effectiveness. As it was elucidated in chapter 5.3 and 6.1, experts identified many different constructs of lobby activities (36 in total) and considered 21 of them as most effective. By comparing lobby strategies that are most frequently applied by companies and at the same time being also quite effective, a final scheme has been developed (see fig. 17). Companies which effectively influence political decision-making usually make use of the strategies depicted in the scheme below. It has to be noted, however, that it is not an either or decision of which strategy to apply but rather implementing a combination of various lobby activities simultaneously. Having a regular and personal contact with political stakeholders is most essential on which all other lobby strategies are based. INTERESTS LOBBYING INFLUENCE Profit maximization EEG + feed-in tariffs General market conditions Long-term market competitiveness Regular & personal maintenance of contact to politicians Lobbying within association Knowledge development with correct information Top-down contacting Public relations campaigns Offering external expertise, technical solutions Visiting & organizing of political events Knowing the right people to contact Concrete topic/request Holistic view of energy system Companies' interests are represented in political decisionmaking Figure 17: Final lobbying scheme

64 63 Though lobby activities discussed in the analysis are considered to be most effective by all experts, current and past developments of the renewable energy sector are noticeable: The big four electric utilities E.ON, RWE, EnBW and Vattenfall by far invest most financial resources to lobby activities, including the employment of a high number of lobbyists who cultivate longtime relations to politicians or the organization of big political events. Despite this form of high-pressure lobbying, however, the Big Four were most disadvantaged by the 2011 s decision to transform the German energy system. Traditionally focused on energy generation by lignite, hard coal and nuclear, the companies portfolio of the Big Four will ultimately not fit in a future energy supply system. Thus, although beginning to enter the market of renewables, the Big Four are trying to delay the energy transition in order to minimize their financial losses as much as possible. At the same time, companies representing the sector of sustainable energy are trying to increase the speed of the energy transition. Two factors seem crucial for the diminishing influence of the Big Four: 1. Since the beginning of the 2000s, renewable energy has received tremendous political support in terms of the Renewable Energy Sources Act and its regular amendments. This can be ascribed to a political will of the government coalition of SPD and Grüne ( ) and increasing lobby activities of the renewable energy sector. Though geographically Germany might not be an ideal location to generate electricity out of sunlight, highest rates of capacity expansion have been recorded for solar PV. Thus, by supporting solar PV, political decision-making strongly took into account the interests of related companies. 2. The decision in 2011 to phase-out nuclear power was primarily a decision in favor of the voters will. By following the interests of a great public majority which fought against the use of nuclear power for decades, the German government gave top priority to maintaining its political power than incorporating the interests of the Big Four into decision-making. It becomes apparent that lobbying can influence politics, but only up to a certain extent. Usually, when decision-makers see their political power waning, they try to preserve it while companies interests become less important and influential. Hence, despite high pressure lobbying, E.ON, RWE, EnBW and Vattenfall were not able to influence the decision of the German energy transition. The example of SolarWorld is also worth noticing: many experts criticized the way how SolarWorld is trying to influence political decision-making. Their lobby strategy was often described as aggressive, arrogant and overbearing. Nevertheless, when being ranked on the scale of effectiveness, SolarWorld did not receive low, but medium to high values indicating that its lobby activities are quite effective. Consequently, it can be noted that attitude and manner of appearance leave a mark at politicians but do not affect the effectiveness of a lobby strategy. The success of SolarWorld, contrary to many other manufacturers of solar cells, is based on various factors: Take the right business decisions, e.g. expand to other markets and do not solely rely on subsidies Get involved with politics (CEO Frank Asbeck is a co-founder of the green party)

65 64 Effectively address consumers and increase acceptance Effectively influence political decision-making: top-down contacting, financial support of political parties and politicians, contact the right people Nevertheless, it remains to be seen if SolarWorld will be able to maintain its high political influence in the future. Decisions to further decrease tariffs for solar PV and raising the importance of other renewable energy sources indicate a shift in political priorities. Companies such as juwi, Enercon and Vestas demonstrate that lobby activities without attracting high attention can be effective and successful as well. 7.2 Implications for the energy transition As the analysis has shown lobby activities of the business sector have a strong influence on political decision-making related to the German energy transition. However, as companies mainly pursue individual interests, their influence on politics does not necessarily imply continuous progress towards a sustainable energy system. What role politics and the sector of renewable energy will have to play in the future can be interpreted differently. On the one hand it can be argued that governance by government is needed: it is primarily politics that is responsible for the success of the energy transition by setting a favorable conditional framework for all stakeholders involved. Companies need to be enabled to unfold their full potential in order to effectively contribute to the energy transition, e.g. by developing technology and overcoming the valley of death. It was particularly economic stakeholders who stressed the importance of politics to create a reliable market environment, ensure planning security for investments and adopt indiscriminative policies. These imply laws and regulations that do not favor a certain renewable energy source nor indicate the exact distribution of RES shares in the future energy system. In that sense many experts criticized the disproportional support of solar PV in the past and demand equal conditions for all renewable energy sources. Moreover, the government shall set a strong conditional framework that will be applied by all companies involved (fossil fuel and renewable). As it is politics which has set ambitious targets of having a share of renewables in the electricity supply of 30% in 2020 and 80% in 2050, many economic stakeholders expect the political system to make it work. Politics has to provide a concept of how to achieve the energy transition that economically motivates companies. However, experts also referred to the fact that politics entered into a commitment by stating very concrete goals. This commitment might be used by companies of the renewable energy sector to demand more support in terms of subsidies and favorable amendments of the EEG. Nevertheless, although politics is dependent on corporate business to further promote technologies of renewable energy, energy efficiency and grid infrastructure it must refuse to be blackmailed by the sector. As the energy transition is a complex project which requires not only high investments but also public acceptance, particularly when it comes to the extension of the grid, three interview partners deny that a free market economy is able to finally lead to a sustainable energy supply. They believe that a centrally planned economy is more helpful where the political system determines demand and supply and does not discuss about every single issue in order to

66 65 achieve 100% acceptance (Int. 13). Though all of the experts (including the three mentioned) prefer a liberalized market, these statements emphasize the high challenges and problems related to the energy transition. On the other hand one might argue for a governance by corporate business approach: it is the business sector which is mainly responsible for the process of transforming the energy system. Some interview partners explained that companies must not expect politics to make the transition happen but need to actively contribute themselves. Political stakeholders demand companies to take a greater responsibility and to not follow an approach of produce it and forget it (Int. 12). In detail, companies being technical experts and having specific knowledge - shall bring in ideas and solutions for current and future problems of the energy system and support political decision-makers. By doing so, companies will also have a greater influence on the design of energy policy. However, as the energy transition 2011 was mainly a political will, it still requires governmental guidance to coordinate companies activities. It is apparent that experts demand the application of two approaches: governance by government and governance by corporate business. However, regarding the outcomes of the analysis and the characteristics of the energy system and energy policy, the paradigm governance by policy networking seems to prevail in reality. Governmental actors collaborate with civil society, especially the business sector of traditional and renewable energy. Lobbying of economic stakeholders plays a crucial role in political decision-making; politicians are dependent on external information provided by companies and associations. Nevertheless, two features of the approach might be criticized: First, while policy networking focuses on collaboration, it also lacks competition. As politicians prefer having a regular rather than a sporadic contact to economic stakeholders, companies that do not engage in lobby activities cannot enter the policy network, thus being often disregarded. Second, Hisschemöller et al. also criticize that governance by policy networking yields conservatism rather than innovation: The networks to be governed become part and parcel of the governance setting itself, in other words; they become institutionalized and resistant to innovative views and actors (Hisschemöller et al, 2006). One can find this characteristic of policy networking in the German energy system as companies of renewable energy focus their lobby activities on the legislative framework than on innovative developments. The ones being part of the network are considered by political stakeholders, however, small innovative companies that are still outside network and representing a niche are often ignored. The current and future challenges of the energy transition, particularly the extension of the grid and the increase of energy efficiency, highly demand the inclusion of all companies capable of innovation. Though ministries try to stimulate innovation by concluding contracts of innovative projects to the business sector, companies being in the network automatically receive preferential treatment due to their higher financial resources and lobby activities.

67 Reflections on research Summing up, the research has been satisfactory and the applied method was well chosen. Repertory Grid proved to be a suitable technique to investigate the problem and to unfold stakeholders perceptions of lobbying and the activities of the renewable energy sector in Germany. None of the interview partners knew the interview technique before but all were curious to become acquainted with it and perceived it positively in the end. The game with the cards and comparing different companies allowed experts to identify many different constructs. Due to their longtime expertise and involvement in the sector of renewable energy, interviewees were able to illustrate concrete examples of companies behavior and lobby activities. With few exceptions, experts were also able to distinguish companies and allocate different values on the ranking. Nevertheless, the research was also accompanied by a few challenges: In the beginning the researcher faced difficulties in finding interview partners. Though political stakeholders in general were willing to provide information, their time schedules hardly allowed an interview of one hour. Thanks to the external placement company and permanent contact requests the desired number of politicians could finally be interviewed. The majority of economic stakeholders, on the contrary, was very hesitant to being available for an interview and often denied the researcher s requests. In general, companies do not want to reveal their lobby activities and the way they influence politics. Here, it was the external supervisor in particular who used his broad network of contacts and enabled interviews with company representatives. The delay of interviews also led to a delay of the research of two weeks. In the end, three more possible interviews could have been conducted which have been postponed by the interview partners several times. However, due to time constraints the researcher decided to forgo these additional interviews knowing that no new constructs had been identified by the last interviewed experts. In the process of the interviews, it turned out that the big majority of experts did not know the company Andritz Hydro which consequently could not be included in the analysis. While identifying companies, the researcher faced difficulties to identify one prominent company operating in the field of hydro power due to a strong fragmentation of the hydro power sector. Though being aware of the risk of including a rather unknown company, the researcher wanted to have one company of hydro power to be present in the analysis. Furthermore, when being asked about differences in lobby activities between companies, experts first described their different business areas ( they operate in the field of solar PV, these in the field of wind power ) and diverging interests. Often, the researcher then asked the interviewees to specify their answer with regard to the differences in lobbying. Three experts were not able to rank companies on a scale: one interview was conducted via telephone and two stakeholders referred to not having concrete knowledge about the differences between companies lobby activities.

68 67 8 Recommendations Following the discussion of the results, recommendations will be given for both economic and political stakeholders. For companies: In order to work towards a successful energy transition, companies of renewable energy might consider a few guidelines. These allow corporate business to play an important role in a future energy system while at the same time achieving its goals. Companies should apply an effective lobby strategy that targets the right people and ensures the inclusion of corporate interests in political decision-making. The scheme developed in chapter 7.1 gives an indication of what to include in a company s lobby activities. In order to exert strong influence, companies should compare their work to competitors and evaluate their lobby strategies in terms of effectiveness. While in the past companies of renewable energy held together and commonly fought against the Big Four, nowadays an increasing fragmentation of interests can be observed. Lately, the sector of solar PV receives criticism not only from fossil fuel companies, but from other sectors of renewable energy as well. This, however, implies a risk for the influence of the whole renewable sector because political decisionmakers prefer to be addressed by a common voice of renewable energy. In particular, experts point out the importance of a strong organization of the renewable sector and a clear presentation of interests. Due to diverging interests the main association of renewable energy, the Bundesverband Erneuerbare Energie e.v. (BEE), has lost much of its influence as companies prefer to use the channel of specific associations of wind, solar or biomass. Although companies want to pursue their own sector s interests, they should simultaneously try to promote the whole sector and re-strengthen their umbrella association. While interacting with political stakeholders, it is important that companies show a holistic view of the energy system. It is not sufficient to solely concentrate on company s interests but the sector needs to effectively address challenges of the energy transition. Politicians are dependent on technical expertise and specific knowledge of the sector and thus highly appreciate if companies bring in ideas and solutions. These shall address issues such as How can the energy system be transformed? How can the grid infrastructure be extended? How can politics sustainably support renewable energy apart from the EEG? It is essential that companies do not solely rely on the system of feed-in-tariffs nor exclusively direct their lobby activities towards it. Although the share of renewables shall be increased significantly over the next years, it can be anticipated that politics will not endlessly continue the system of subsidies. Every company of renewable energy should operate towards market competitiveness and becoming autonomous from subsidies. This includes the design of alternative business and lobby strategies.

69 68 For political decision-makers: Though politicians are dependent on external information provided by companies, they should preserve their political neutral stands. Many different and diverging interests are being directed at decision-makers of which some might be more, others less significant for the success of the energy transition. However, politics should follow an undiscriminating way of supporting renewable energy, i.e. no RES shall be favored or disadvantaged towards another. The potential and technological developments of each renewable energy source must be analyzed and evaluated in terms of its contribution to a future German energy system. Politicians shall take decisions based on this analysis and not primarily on companies courtesy or (financial) support. Regarding the findings in chapter 7.2, political stakeholders should be aware of policy networks that automatically favor certain companies and discriminate others. It must be questioned why establishing regular and personal contacts is most effective and most important to politicians. Usually, only companies with high financial resources can ensure these contacts. Innovative companies, however, which might contribute to the energy transition with technological developments and business ideas, but at the same time refuse to invest in lobby activities, will most likely not be considered by politicians. Political decisions are taken within policy networks that might ultimately lead to conservatism and impair innovation. Therefore, political stakeholders must think outside the box: Open up the policy network and include companies that foster innovation even though they are still unknown; do not only rely on being contacted by the sector but address new stakeholders oneself and strengthen the paradigm of governance by corporate business. The energy transition will be accompanied by challenges of public acceptance. First, the NIMBY effect might have an influence on the extension of grid infrastructure when citizens demonstrate against transmission lines close to their houses. Second, the public might criticize the high financial support of renewables due to rising electricity costs. Here, politics need to strengthen communication towards citizens and illustrate the necessity of a sustainable energy system and its benefits. Though the transition must include high public participation it should not be fully dependent on it. Consequently, politics need to enforce decisions albeit the resentment of certain stakeholders.

70 69 9 Conclusion & Outlook The decision of 2011 to fundamentally transform the German energy system was a political will. Although it is politics that took main responsibility for the success of the energy transition, electric utilities and corporate business of renewable energy need to implement it. Thus, they play a crucial role in the process, providing technological developments on the one hand while pursuing their individual interests on the other hand. The aim of the thesis was to examine lobby strategies of the German renewable energy sector. This has been done by selecting a bottom-up research approach and applying the Repertory Grid Technique that gathered information by political and economic stakeholders. As a result, all research questions that have been posed in the beginning, were sufficiently answered (see table 7). Research question Answer To what extent do lobby strategies of renewable energy companies influence political decision-making related to the Ch. 5, 6, 7 and 8 German energy transition? 1. What are the characteristics of the German energy transition? Ch How does the renewable energy sector perceive its interests? Ch. 3.2 and What patterns of lobby activities can be identified and how are they evaluated by those involved? Ch Which lobby strategies are most effective? Ch How do companies differ in their lobby activities? Ch. 6.2 Table 7: Answers to research questions First, the theoretical framework has been outlined by embedding the research in theories of regime change, niche management and paradigms of governance. Taking into account the background information provided in chapter 3, the researcher concludes that the special governmental support of solar PV can be regarded as a form of a strategic niche management. However, after twelve years of a highly supportive feed-in-system, the sector is still not market competitive and faces difficulties to compete with Chinese products which are sold at dumping prices. After having explained the methodology of Personal Construct Theory and Repertory Grid Technique, the analysis was carried out by conducting 20 interviews in total. These were analyzed qualitatively and statistically which allowed the identification of different lobby strategies. Afterwards these were evaluated in terms of effectiveness and allocated to 14 selected companies By identifying 36 different constructs of lobby activities, interviewed experts were able to elicit the full range of relevant concepts. More than half of these strategies were characterized as being effective for the purpose of influencing political decision-making. By far most important is the activity establishing regular and personal contact to politicians, which is followed by Knowledge development with correct information, Lobbying within an

71 70 association and Top-down contacting of most powerful decision-makers. The statistical analysis revealed differences between companies and their lobby activities. In particular, the big four electric utilities E.ON, RWE, EnBW and Vattenfall show a similar behavior of how to influence politics. Companies from the renewable energy sector pursue a different lobby approach, where the activities of SolarWorld stick out in particular. The discussion of the results and the recommendations for economic and political stakeholders clarified the significance of two paradigms of governance. Many experts demand an approach of governance by corporate business so that companies influence more strongly the process of energy transition. At the same time as the decision to transform the German energy system was a political one governance by government still plays an important role. It is the government which has set highly ambitious goals and is responsible for creating a business environment that allows companies to implement the energy transition. Furthermore, the government is in charge of the main legislative instrument (Renewable Energy Sources Act) which determines the progress of renewable energy. Despite the estimation of experts, the researcher concludes that policy networks dominate current decision-making in the field of energy policy. These networks, however, might impede innovation and the inclusion of all relevant stakeholders in the future. This thesis has demonstrated that companies of renewable energy highly influence decisionmaking related to the German energy transition. However, it remains open how the sector of renewables, in particular solar PV, will develop in the future and if it will eventually be able to operate without the feed-in-system. Moreover, it will be crucial how politics and the business sector handle main challenges such as grid extension, NIMBY effects or higher electricity costs. To make the energy transition happen, political and economic actors need to cooperate and work together. If they will succeed, Germany can again become a pioneer - after the development of the EEG - in shaping an effective and efficient energy transition and thus become a role model for other countries.

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78 77 Annex Annex 1: Development of energy support policies YEAR (entry into force) LAW/POLICY German Energy Act ( Energiewirtschaftsgesetz ); Last modification MW wind program ,000 roof program to support solar PV 1991 Act on Supplying Electricity from Renewables ( Stromeinspeisungsgesetz ) 1998 Act on the Reform of the Energy Sector (Liberalization of German energy market) ,000 roof program to support solar PV 2000 Renewable Energy Sources Act ( Erneuerbare-Energien- Gesetz, EEG) 2002 Amendment of Atomic Energy Act (nuclear phase-out) 2002 Act on Combined Heat and Power Generation 2004 EEG 1. Amendement 2009 EEG 2. Amendment 2009 Act on the Promotion of Renewable Energies in the Heat Sector 2010 Amendment of Atomic Energy Act (extension of operating lives of nuclear power plants) (drawback) 2011 Amendment of Atomic Energy Act (nuclear phase-out) 2012 EEG - 3. Amendment 2012 Change of 3. Amendment of EEG (reduction of solar remuneration)

79 78 Annex 2: List of company pre-selection No. Company Sector 1 E.ON SE Electric utility 2 RWE AG Electric utility 3 EnBW AG Electric utility 4 Vattenfall Europe AG Electric utility 5 Enercon GmbH Wind 6 juwi Holding AG Wind, solar etc. 7 Nordex SE Wind 8 REPower Systems AG Wind 9 Siemens Wind Power Wind 10 Vestas Central Europe Wind 11 agri.capital GmbH Biomass 12 EnviTec Biogas AG Biomass 13 KTG Agrar AG Biomass 14 Viessmann GmbH & Co. KG Biomass etc. 15 Weltec Biopower Biomass 16 Andritz Hydro GmbH Hydro 17 OSSBERGER GmbH & Co. KG Hydro 18 Wasserkraft Volk AG Hydro 19 Bosch Solar Energy Solar 20 First Solar GmbH Solar 21 IBC Solar Solar 22 Q.Cells SE Solar 23 Schott Solar AG Solar 24 Siemens Solar Solutions Solar 25 SolarWorld Solar

80 79 Annex 3: List of interview partners Dirk Becker May 10, 2012 MP and Deputy Energy spokesman Parliamentary Group of SPD Lars Becker May 10, 2012 Research Assistant of Dr. Maria Flachsbarth MP and Representative of Renewable Energies Parliamentary Group of CDU Dr. Torsten Bischoff May 31, 2012 Head of Division Hydropower, Wind Energy and Grid Integration of Renewable Energies Federal Ministry for the Environment, Nature Conservation and Nuclear Safety Klaus Breil and Boris Greifeneder May 23 and 31, 2012 MP and Energy spokesman / Research Assistant Parliamentary Group of FDP Dr. Steffen Dagger June 7, 2012 Managing director of Mittelständische Energiewirtschaft Deutschland e.v. Hans-Josef Fell May 4, 2012 MP and Energy spokesman (telephone interview) Parliamentary Group of Alliance 90/The Greens Holger Gassner June 11, 2012 Head of Markets and Political Affairs / Corporate Responsibility RWE Innogy Dr. Jan Grundmann June 1, 2012 Chief Representative Mid-scale Solutions, Heat Distribution & Sales Vattenfall Europe New Energy GmbH Stefanie Hidde May 11, 2012 Public Affairs juwi Holding AG Timo Lange May 15, 2012 LobbyControl, Non-governmental organization Dorothée Menzner May 24, 2012 MP and Energy spokesman Parliamentary Group of DIE LINKE

81 80 Jörg Polzer May 31, 2012 Head of Division Renewable Energies German Energy Agency Christina Rettig June 6, 2012 PR Manager, Corporate Public Relations Schott AG / Schott Solar Josef Schützeichel May 14, 2012 Research Assistant of Thomas Bareiß, MP and Energy Coordinator Parliamentary Group of CDU Reinhard Schultz May 14, 2012 Managing director of Biogasrat e.v. and Managing partner of Schultz Projekt Consult Markus Staudt May 22, 2012 Head of Berlin Office Viessmann Werke GmbH & Co. KG Dr. Anke Tuschek May 30, 2012 Member of General Executive Management German Association of Energy and Water Industries (BDEW) Dr. Gerrit Volk June 6, 2012 Head of Division Access to gas distributor networks Federal Network Agency Christina Wittek and Claus Bueren May 9, 2012 Head of Division Renewable Energies / Division III C4, Renewable Energies Federal Ministry of Economics and Technology David Wortmann May 29, 2012 Vice President Public Affairs EU First Solar Inc.

82 81 Annex 4: Interview questionnaire Interviewee No.: [add] Interviewee Name: [add] Company / Institution: [add] Date: [add] 1. Presentation of myself and the research project. 2. First of all, I would like to know a little about your work at [add company]. Could you tell me what the business areas of your company are and what you do in your position? 3. If you think of the renewable energy sector in Germany and the interests it pursues: Is there a difference between companies of solar energy, wind energy, hydro energy and bio-energy? 4. Start of Repertory Grid: 1. Now, I would like you to identify the most common lobby activities of 14 different companies. To do so, we are going to use these cards. You can see 14 cards, each having the name of a renewable energy company on it. These cards will help to identify different constructs of lobbying strategies. In various rounds you will pick different cards and say something about lobby activities of the companies. In total, this will take around 30 minutes. 2. Please pick three cards randomly. [interviewee picks cards] 3. In what respect are two companies similar or different to a third company with regards to their lobby strategy? [interviewee identifies clusters of lobbying strategies & gives explanation] Repeat this procedure several times until interviewee stops coming up with new constructs You just identified these constructs of lobbying strategies: [show constructs] In your opinion, which are the three most relevant/important constructs? 2. Please rank all the cards/companies according to this scale [show scale visually] 6. In your opinion, what will be the role of the business sector of renewable energy in order to make the energy transition happen? 7. End of interview

83 82 Annex 5: Examples of companies rankings by interview partners

84 83 Annex 6: Output SPSS Analysis 1. Multiple Correspondence Credit Multiple Correspondence Version 1.0 by Data Theory Scaling System Group (DTSS) Faculty of Social and Behavioral Sciences Leiden University, The Netherlands Case Processing Summary Valid Active Cases 0 Active Cases with Missing Values 13 Supplementary Cases 0 Total 13 Cases Used in Analysis 13 Iteration Number Iteration History Variance Accounted For Total Increase Loss 66 a 31,404273, , a. The iteration process stopped because the convergence test value was reached. Model Summary Variance Accounted For Dimension Cronbach's Alpha Total (Eigenvalue) Inertia 1,991 34,807,696 2,984 28,001,560 Total 62,809 1,256 Mean,988 a 31,404,628 a. Mean Cronbach's Alpha is based on the mean Eigenvalue.

85 84 Discrimination Measures Discrimination Measures Dimension 1 2 Mean I1C1,529,796,663 I1C2,974,986,980 I1C3,759,657,708 I2C4 1,132,381,756 I2C3 1,068,778,923 I2C5 1,058,615,837 I3C6,733,047,390 I3C2,551,331,441 I3C3,407,689,548 I4C3,804,368,586 I4C7,214,248,231 I4C4,449,661,555 I5C2,255,141,198 I5C8,368,285,326 I5C9,592,454,523 I6C3,915,771,843 I6C2,530,577,554 I6C1,863,753,808 I7C10,668,188,428 I7C11,758,657,708 I7C12,700,452,576 I8C13,507 1,250,879 I8C3,714,244,479 I8C2 1,068,946 1,007 I9C12,152,716,434 I9C14,979,782,881 I9C3,924,695,810 I10C3,255,141,198 I10C2,368,285,326 I10C15,592,454,523 I11C3,873,726,799 I11C8,650 1,125,887 I11C11,746,685,715 I12C3,873,376,625 I12C16 1,028,208,618 I12C4 1,028,208,618 I13C3,590 1,172,881 I13C17 1,022,923,973 I13C7,958,288,623 I14C12,312,524,418 I14C3,331,526,428 I15C12 1,026,825,925 I15C18 1,019,675,847 I15C19,326,541,433 I16C3,741,223,482

86 85 I16C2,803,359,581 I16C20,714,354,534 I17C10,425,780,602 I17C17 1,005,729,867 I17C21,453,407,430 Active Total 34,807 28,001 31,404