Low investment volumes leave 600-billion-euro gap for Germany’s energy transition – report

Germany requires investments of around 600 billion euros to achieve its 2030 energy transition targets, while current investment volumes remain too low, according to a joint progress report by the German Association of Energy and Water Industries (BDEW) and consultancy EY. “The results show: the climate targets cannot be achieved at the current pace,” BDEW head Kerstin Andreae said. One of the greatest obstacles to achieving the country’s targets is a “much too slow” expansion of renewable energies, which alone will require around 351 billion euros of funding, according to the authors. This is followed by electricity grid expansion (126 billion euros), the development of generation capacities for climate-neutral gases (12 billion euros), and the targeted electrification of the transport sector, which includes the expansion of public electric charging infrastructure (9 billion euros). “In order to reach the 2030 targets, installed capacity would have to be more than doubled for photovoltaics and even more than tripled for onshore wind. It is highly unlikely that this will be achieved at the current rate of expansion,” EY partner Metin Fidan said.

Reasons for the “sluggish progress” in achieving Germany’s energy transition targets include an alarming shortage of skilled workers in all relevant sectors, the lack of land availability, lengthy and costly approval and construction procedures, and bottlenecks in the supply of various important raw materials, according to the report. As not enough progress is being made in the relevant sectors, the economic effect hoped for through investment in the energy transition has not been felt, the authors conclude. Germany aims to become greenhouse gas neutral by 2045. It has set the preliminary targets of cutting emissions by at least 65 percent by 2030, compared to 1990 levels.