Climate Protection “Made in Germany”

Germany’s high level of innovation, large domestic market and rapidly growing renewable energy capacity are attracting international cleantech businesses. Solar parks, wind farms and hydrogen plants are popping up all over the country, accompanied by an electromobility boom.

November 2022

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Much of what needs to be done for Germany and Europe to reach their energy goals is known, but a lot still needs to be discovered. This is where cleantech comes in. Take the Swedish company Svea Solar, which recently expanded its operations across Europe, including to Cologne. It connects its customers to a grid that is shared, efficient and 100 percent renewable. “We are exploding in our various markets, and we will be growing 100 percent this year,” Erik Martinson, cofounder and CEO, told EME Outlook. “In order to make a positive impact on the climate we need this growth, and alongside this, ensuring our positive customer experience and bringing in the most talented people in the space are all paramount.”

FDI PERSPECTIVE: Swedish Company Shines Brightly in Solar

Svea Solar, founded in Stockholm in 2014, is one of the largest solar solution providers in Europe. In 2020, the Swedish company expanded into other European countries, including Germany, Belgium, Spain and the Netherlands.
Decisive factors for the German location included the high local demand for solar solutions, as well as falling prices of photovoltaic systems and increasing awareness of climate change. What distinguished Germany from other European locations, says David Gibson, managing director of Svea Solar’s German office, was the large number of funding opportunities. “In particular, transfer initiatives that ensure innovative technologies succeed in entering the market, that link science and industry, and that are supported with public funds.” Another advantage was the tightened regulatory environment for climate protection, which clearly benefits cleantech companies.

Germany is a natural fit not only because of its huge market and eco-conscious society, but for its repository of scientific and research excellence. This May, the Fraunhofer Institute for Solar Energy Systems achieved a major breakthrough, engineering a solar cell with a record 47.6 percent efficiency. “In our research, we aim to make concentrating photovoltaics even more efficient and competitive, as we believe that this is the most sustainable form of renewable electricity,” says head of department Frank Dimroth. This combination of entrepreneurial ambition and technological acumen is driving growth in this exciting new sector.

The Bottom Line

Cleantech is taking off big-time in Germany, as innovative companies, large and small, are flocking to the heart of Europe.

A quantum leap

The market for German environmental technology and resource efficiency was around EUR 400 billion in 2020. But the total volume is predicted to more than double by 2030, reaching EUR 856 billion. “Germany has a pioneering role: A huge market for sustainable technologies is emerging here,” says Thomas Grigoleit. The rise of German cleantech means that investments in innovative technologies are in demand here earlier than in some other countries. “The demand for green hydrogen for industrial applications, for example, is already very acute in Germany,” says Manfred Fischedick, scientific director of the sustainability think tank Wuppertal Institute. Technologies such as “direct air capture,” the direct extraction of CO2 from the atmosphere, are also in great demand, he adds.

This is one of the reasons why the Swiss company Climeworks, which specializes in this innovative technology, has also come to Cologne. “Germany has been a pacesetter when it comes to renewable fuels and materials made from CO2, which is known as Power-to-X,” says Jan Wurzbacher, joint CEO of Climeworks. “We plan to establish ourselves as key partners and suppliers of CO2 from air for the emerging Power-to-X sector.” The company has raised almost USD 784 million for its pilot projects.

German cleantech market to double in a decade

Market volume of einvironmental technology and resource efficiency in Germany

392 billion

2020

856 billion

2030

Sun, wind and mobility

A strong argument for Germany as a cleantech location is the easy availability of renewably generated electricity, in particular solar and wind. Renewable energy sources play a key role in any cleantech company’s choice of location. “The more domestic renewables produce cheap and clean electricity, as well as heat and hydrogen, the more attractive Germany becomes for companies that already make green energy a prerequisite for their location decision,” explains Simone Peter, president of the German Renewable Energy Federation.

This helps explain the boom in innovative, electromobility companies in the northeastern state of Brandenburg: US carmaker Tesla with its first European gigafactory; German–Canadian cleantech company Rock Tech Lithium with the world’s first closed-loop lithium hydroxide production site; and German chemical giant BASF with a factory for battery parts and a pilot plant for advanced battery recycling.

Brandenburg is seeing a boom in gigantic solar parks. In late 2020, power company EnBW began operating the Weesow-Will­mersdorf Solar Park, at the time the largest (187 MW) such facility in Germany. And in March 2022, it completed another XXL (150 MW) park in Gottesgabe. Further north, Schleswig-Holstein is attracting companies with its powerful winds – the region fed a total of 24.4 terawatt hours of wind electricity into the power grid in 2020. That attracted Sweden’s Northvolt, which manufactures environmentally friendly battery cells, to the town of Heide. “Our philosophy is that new energy-intensive industries like battery manufacturing should be located in close geographic proximity to where the clean energy is generated,” explains Peter Carlsson, cofounder and CEO of Northvolt.

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