Local availability of renewable power could shift Germany‘s industrial centre of gravity further north

The local availability of renewable power sources could increasingly become a boon for northern German states and could shift the country’s industrial centre of gravity away from the south, Nele Höfler writes for the WirtschaftsWoche. Nearby production of electricity with wind turbines, solar panels or biogas plants is increasingly becoming a decisive factor for companies that decide on finding new production locations in the country, particularly if they operate in sectors where clean energy is crucial for the brand, like e-mobility. States in northern Germany on average boast a much higher renewable power production capacity than those in the south, which in turn are so far home to most of the country’s large industrial companies. But the opening of the new Tesla gigafactory near Berlin, in Brandenburg, investments by software company Intel in eastern Saxony-Anhalt, or by Swedish startup Northvolt in coastal state Schleswig-Holstein are signs of shifting priorities, as economic powerhouse states like Bavaria and Baden-Wurttemberg grapple with accelerating their roll-out of renewable power installations, Höfler writes.

The slow buildout of wind power, potentially Germany’s most important source of energy, is causing uncertainty among prospective investors for southern states, energy economist Claudia Kemfert said. “The North is ahead of the South,” Kemfert said, arguing that greater concertation in renewables expansion among the states is needed to maximise output. This includes  making solar panels mandatory on rooftops and reserving at least two percent of each state’s land area for wind power installations. If southern states don’t manage to increase their own wind power capacity, they will become dependent on deliveries from their northern neighbours, which makes electricity more expensive due to transport costs through the grid. “We need a decentralised energy transition,” Kemfert said, adding that each region should maximise the use of its own regional production potentials.