A new era of transformation

Germany is aiming to be climate neutral by 2045 – five years earlier than the European Union. In order to meet this ambitious target, the energy supply has to be fundamentally transformed: after all, this is where most greenhouse gas emissions occur. A lot has to happen at all levels in a relatively short time: fossil fuels such as coal, oil and natural gas – still the most widespread energy sources – have to be replaced with renewable energies, cars powered by combustion engines have to be replaced with electric vehicles, and boilers and gas heaters have to be replaced with heat pumps and other sustainable heating systems. And there’s still a lot to be done in terms of energy efficiency, i.e. the economical use of electricity and heat.

The impact of the Russian war of aggression on Ukraine is confronting the energy transformation project with particularly significant challenges. “This was the dominant issue in 2022 in terms of energy,” says a recent analysis by the energy transformation think-tank Agora Energiewende. Security of supply was the order of the day. Decommissioned coal-fired power plants were reactivated to make up for a possible shortage of gas, while many industrial companies increasingly used oil to replace the expensive natural gas. This enabled Germany to successfully overcome the energy crisis. But it also meant that additional climate gases were produced, because coal and oil cause more emissions than gas.

Consumption at its lowest level since 1990

So the overall picture is mixed. On the positive side: households and industry saved a lot of energy. Total consumption fell by around five percent, dropping to the lowest level since German reunification. According to the Federal Network Agency, there was also a significant drop of 14 percent in gas consumption. However, the return of coal and oil has now made Germany’s climate targets even more ambitious. Five million tonnes more CO₂ was emitted in 2022 than actually planned, just missing the reduction target of 40 percent compared to 1990. The target for 2030 is 65 percent.

2022 saw a record in the area of renewable energies: they accounted for 48 percent of Germany’s electricity consumption, i.e. almost half. However, the main reason for this record was very favourable weather: there was a lot of wind, and more hours of sunshine than ever before. “We have to massively increase the pace of expansion of renewables,” says energy economist Claudia Kemfert of the German Institute for Economic Research. Kemfert firmly believes that the current energy crisis caused by the war in Ukraine could even lead to “a real energy transformation booster”. After all, green energies not only reduce dependence on fossil energy supplies and help save greenhouse gases – they also have the effect of curbing prices. Without renewables, electricity prices would have been even higher in 2022.

Two percent of national territory to be dedicated to wind energy

In order to speed up the energy transformation, the Federal Government adopted new legal provisions in 2022. The most important strategic decision here was that the use of renewables in the future has now been declared to be “in the overriding public interest and serves public safety”. This paves the way for an accelerated procedure in the planning and approval of projects, as has long been the case in road construction and open-cast coal mining. In addition, an average of two percent of the national territory must be dedicated to wind energy projects in future.

At the same time, the expansion targets for wind and solar power have been raised substantially. By 2030, at least 80 percent of electricity in Germany is to be renewable. The previous target was 65 percent. The increase is highly ambitious: electricity consumption is expected to increase by a third if – as planned – at least 15 million e-cars are on the roads and six million heat pumps are installed by the end of the decade.

Coal phase-out to be brought forward

The coal phase-out is also to be accelerated. In the coalfields of the Rhineland, it will be brought forward to 2030 according to an agreement with the energy company RWE, which means it is now due to happen eight years earlier than previously planned. Meanwhile the phase-out of nuclear energy was postponed until spring 2023 in order to secure the supply of electricity. In actual fact the last power plants should be shut down as early as 2022.

As such, the current energy crisis can potentially offer opportunities for the energy transformation. There are already signs of this happening. For example, demand for solar systems, e-cars and heat pumps is currently booming, while interest in energy transformation technologies has risen sharply among both businesses and the general public. Having plummeted 15 years ago, the number of jobs in the renewable sector has recovered, too, now standing at around 350,000. For this reason, Agora Energiewende is able to draw a positive overall conclusion: “The year 2022 has ushered in a new era for the transformation to climate neutrality.”

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