Utilities’ decarbonisation plans not enough to reach German climate targets – report

The plans by large and small utilities to decarbonise their businesses are not enough for Germany to reach its climate targets, writes WirtschaftsWoche about a report published by consultancy Oliver Wyman and the Technical University of Munich (TUM). The good news: “Everyone now has a strategy for becoming climate-neutral in the long term,” said Thomas Fritz, energy market expert and COO at Wyman Germany, “that wasn't the case, say, five years ago.” However, these plans are not yet enough to reach the targets laid out by the German government, he added. Above all, the expansion of the companies’ own green power generation capacities is lagging behind, and while making plans is one thing, implementing the transformation is another, harder, task, said Fritz. The report assesses 24 energy suppliers: five large ones, such as E.ON or RWE, are further ahead in their transformations than the eight regional suppliers and 11 local utilities. Decarbonising heating is of special importance, said Fritz, as around half of the energy suppliers' carbon dioxide emissions come from the sector.

After years of hesitation, German utilities have embarked on the transition to climate neutrality. Especially larger companies had been shaken to the core by the country’s energy transition, and scrambled for new business models. While digital technologies disrupt the power market, the incumbents hope the pending electrification of transport and heating will offer new growth opportunities in the Energiewende’s next phase.