Consistent climate policies could greatly reduce German energy imports – report
Clean Energy Wire
A consistent policy mix promoting decarbonisation and climate neutrality can significantly reduce energy imports and electricity costs for Germany in the next years, found a report by the Agora think tanks. They project a reduction of energy imports by 85 percent over a quarter of a decade, from 2,745 TWh in 2019 to 391 TWh in 2045.
The cost per kilowatt hour of electricity (generation, transport and distribution) would remain largely constant at 16 cents until 2030 and then fall to 13 cents by 2045, the year Germany plans to be climate neutral, according to the report. Due to European emissions trading and low construction costs, the annual output of renewable energy sources will grow fivefold between 2023 and 2045, from 219 to 1,087 terawatt hours (TWh), the researchers forecast.
“Electricity will not become more expensive in our scenario, even if consumption is going to strongly increase,” said Agora Energiewende head Simon Müller.
Annual investments amounting to roughly 11 percent of the country’s GDP will be necessary to maintain, modernise, or replace existing infrastructure for transport, industrial production, and housing, the think tank said. Steering funds away from fossil fuel technologies towards climate neutral alternatives could cover about three quarters of the investments needed to achieve Germany’s target of net zero greenhouse gas emissions by 2045. Companies that invest in electric mobility, renewable energy sources, and climate neutral industrial production “will secure themselves a long-term advantage on global growth markets,” Agora said.
Industry could especially benefit by consistently replacing gas-based procedures with electrified alternatives. Doing so would allow the country to do without the bulk of gas needed for industrial purposes by 2035 and almost eradicating the need for gas by 2040, leading to a simultaneous “massive” increase in efficiency, the think tanks argued.
“What we are currently seeing is a crisis of conventional business models,” said Frank Peter, head of Agora Industrie, with a view to Germany’s economic stagnation in many industrial sectors. “If we set up the right foundation now, Germany’s economy will be well placed to compete in many important markets of the future,” Peter said.
The think tanks added that the German auto industry and its customers would benefit from a clear path towards climate neutral vehicles, which should also involve cooperation with Chinese suppliers.
Agora proposed four main fields of action to address the required changes: price-based policies, such as carbon pricing, to make climate neutral alternatives relatively cheaper; market regulation to curb the impact of climate damaging technologies directly; financial support schemes to ease the transition for households and companies competing on international markets; and expanding and updating infrastructure for energy and transport to prepare the ground for climate neutral alternatives.
Germany aims to be climate neutral by 2045. Germany’s trademark “Energiewende” – the country’s transition to climate neutral and nuclear-free energy supply – has broad public backing. However, as all sectors must be made more climate friendly, the transition has become an endeavour for the whole of society.
