REBUILDING WITHOUT RESTRUCTURING THE ENERGY SYSTEM IN EAST-GERMANY

The east German energy system is in a process of being completely rebu ilt. Unfortunately, the huge investments are not used for implementing a technical and institutional restructuring, which is needed in order to achieve energy efficiency. The energy system will, among others, m aintain its inefficient structure with separate production of heat and power, The ongoing changes are limited to improvements of power plant efficiency in combination with a change from a system based on brown coal for both heat and power into a system in which the electricity pr oduction is still based on brown coal and heating is produced on oil a nd natural gas. This rebuilding will bring the CO2-emission down from 20 t/inhabitant in 1989 to 13 t/inhabitant in year 2010, which is stil l much higher than the EU average on 8 t/inhabitant, This article desc ribes how a restructuring could bring the figure below 7 t/inhabitant. The lack of ability to implement this restructuring of the energy sys tem is, among others, due to an ownership structure, where networks of companies own the entire production and distribution chain from oil a nd coal to electricity. In this ownership structure, energy restructur ing strategies which decrease the consumption of oil and coal will red uce the profits. At the same time the potential regulator, the parliam entary system, is politically and economically interlinked with and de pendent upon the established energy companies. Consequently, it is dif ficult to establish the regulation reforms which are necessary for res tructuring of the energy sector. There is still a lot to be gained fro m a restructuring of the east German energy sector. This restructuring requires institutional reforms, where the public regulation processes become independent of the industry which should be regulated. (C) 199 8 Elsevier Science Ltd. All rights reserved.