Germany's energy transition off track – McKinsey

Germany is off track regarding many areas of its famed energy transition, with several indicators either "unrealistic" or at risk, consultancy firm McKinsey found in its biannual "Energy Transition Index". The outlook for the transport sector improved slightly with nearly 2 million electric cars on the country's roads in April - but the figure should be more than double that if the country is to achieve its 15-million target by 2030. Renewable energy in the heating and cooling sectors also increased in 2022 but still by too little to achieve climate ambitions. Greenhouse gas emissions fell by 14 megatons (Mt) of CO2 equivalents in 2022 on the previous year, but McKinsey emphasised that they are not dropping quickly enough and need to fall by 44 Mt per year. Still, the firm said that, according to the 15 indicators it uses for tracking Germany's energy transition progress, the country is on target in some sectors, with the amount of renewable energy in gross electricity consumption surpassing yearly goals, for example. But this was due to a decline in electricity consumption amid the energy crisis rather than renewables expansion, added McKinsey.

McKinsey also said that reserve capacity had worsened when Germany's last nuclear plants went offline in April, and that reserve margins would deteriorate "drastically" in 2024 as coal plants are phased out. In an earlier "Energy Transition Index" published in March, McKinsey said Germany would have to build new gas-fired power plants and introduce additional measures to avoid electricity supply shortages during peak demand periods as the country weans itself off nuclear power and fossil fuels. Last year the firm dubbed Germany's renewable capacity build-up a "herculean task”, adding that it would likely have to burn coal and gas beyond 2030.