Energy Transition – A Project for Generations

The energy transition is being driven forward as a high priority in Germany. The core elements are improving energy efficiency and expanding renewables as quickly as possible.

Instead of generating electricity from oil, coal, gas or nuclear power, in future Germany will get its power from the wind, sun, water and biomass. By 2030 at least 80% of the electricity used in Germany is to be produced from renewable sources. This fundamental shift in energy supplies is a key precondition for Germany to transform itself into a climate-neutral industrial nation by 2045. An additional challenge arises from the fact that expanding renewables must cover expected increases in demand, such as from the greater use of electric mobility.

In response to security and economic policy Economic policy In line with the federal system, structuring and coordinating economic and financial policy is the joint task of central government, the federal states and munici­palities. They cooperate in various committees. Furthermore, the Federal Government seeks the advice of independent economists. Every… Read more › concerns, Germany intends at the same time to end its dependency on oil and gas imports as soon as possible. The Federal Republic has few natural resources of its own, so it has had to import the majority of its fossil fuels from other countries. The rapid transition to renewables thus aims also to reduce - and ultimately eliminate - such dependencies. The energy transition is the defining project for this generation, and will guarantee energy supplies that are cleaner, cheaper and safer in future.

Germany started phasing out nuclear and coal-fired electricity generation at an early stage. In 2000 the then Federal Government Federal Government The Federal Government and cabinet is made up of the Federal Chancellor and the Federal Ministers. While the Chancellor holds the power to issue directives, the ministers have departmental powers, meaning that they independently run their respective ministries in the framework of those directives… Read more › made an agreement with German energy companies to phase out nuclear power. After the disaster at the Fukushima nuclear power plant in Japan in 2011, the decision was taken to cease all nuclear power generation by the end of 2022. The last nuclear power stations went offline in 2023.

A law passed in 2020 also requires Germany to phase out all coal-fired electricity generation by 2038 at the latest. The coal-producing regions in Germany that are affected by the change are being given assistance with the necessary structural transformation. The Federal Government that took office at the end of 2021 is striving to phase out coal earlier, ideally by 2030.

Germany first began promoting regenerative energy sources in the 1990s and passed the Renewable Energy Sources Act Renewable Energy Sources Act The Renewable Energy Sources Act (EEG) regulates the preferential feed-in of electricity from renewable energy into the national gird and guarantees producers compensation at fixed rates. It has proved very successful in promoting the expansion of renewable energies and many other states worldwide… Read more › (EEG) in 2000. The law included what was known as the EEG levy, which passed the increased cost of expanding environmentally friendly generation onto consumers on a proportional basis. The Federal Government Federal Government The Federal Government and cabinet is made up of the Federal Chancellor and the Federal Ministers. While the Chancellor holds the power to issue directives, the ministers have departmental powers, meaning that they independently run their respective ministries in the framework of those directives… Read more › scrapped the levy in 2022 in order to reduce the burden on consumers created by the sharp rises in the cost of energy.

Partly thanks to government funding, a significant proportion of Germany’s electricity now comes from renewable sources. This amounted to around 49% in the first six months of 2022. The Federal Government intends to hugely accelerate the expansion of renewables in the 2020s. In concrete terms this will mean creating new wind farms - both onshore and, above all, offshore. All suitable roof areas are to be used to generate solar energy, and there are plans for more solar farms in agricultural areas.

However, the energy transition not only requires new generating facilities – a suitable electricity grid is also needed. Hundreds of kilometres of new high voltage transmission lines will have to be built, above all to carry electricity generated from wind power in northern Germany to the large industrial complexes in the south of the country. The Federal Ministry for Economic Affairs and Climate Action describes the expansion of the national grid and local distribution networks as “critical to the success of the energy transition”.

The use of green hydrogen (hydrogen produced using electricity from renewable sources) is considered vital to the success of the energy transition. This is particularly important to make industrial activity sustainable. For example, green hydrogen can be used in applications where electrification currently appears impractical or impossible, such as in the steel and chemical industries, as well as in aviation and shipping.

Germany's hydrogen strategy places a strong emphasis on international partnerships. This is due to the need to import large quantities of green hydrogen, which is easiest to produce in areas where there are adequate sources of renewable solar or wind energy. One way the Federal Government Federal Government The Federal Government and cabinet is made up of the Federal Chancellor and the Federal Ministers. While the Chancellor holds the power to issue directives, the ministers have departmental powers, meaning that they independently run their respective ministries in the framework of those directives… Read more › is meeting this need is by establishing strategic partnerships, such as with countries in the Middle East and North Africa (the MENA region), with South Africa and West Africa, and with Australia. At the same time Germany is promoting research and development in green hydrogen with the goal of creating modern and future-oriented climate protection technologies to become a leader on the international stage.

Germany not only needs to produce more green energy. It also needs to use energy more efficiently and sparingly. After all, as the saying goes: “the cleanest and cheapest energy is the energy you don't even use.” Primary energy consumption has already dropped considerably. In 2023, energy use was down by a good 25% compared to 2008, and the aim is to achieve a 50% reduction by 2050.

There is clear potential to make savings in buildings and homes. These account for around 35% of Germany’s total consumption, such as for heating and hot water. Ger­many is providing government funding to help members of the public renovate their homes in an energy-efficient way. Since 2000, over five million property owners have carried out renovation of this kind, such as replacing old heating systems or installing energy-saving windows.

Digitalisation is also helping make the energy transition a success by introducing intelligent metering systems, for example. Analogue electricity meters are increasingly being replaced by “smart meters”. One advantage is that the meter shows the actual electricity consumption as well as the times when the electricity was actually used. This can make it easier for consumers to identify the best way for them to save energy.

Intelligent metering systems also help achieve the right balance between electricity generation and usage on the grid. For example, if in future more and more people charge their electric cars at the same time during the night, these meters can help ensure there is enough electricity available.