Germany’s Clean Energy Transition – “A Question of Must, not Whether”

When it took office late last year, the new German government promised to introduce wide-ranging legislation by Easter to accelerate the transition to clean energy. The so-called “Easter Package” delivers on that pledge. Rob Compton, Germany Trade & Invest Senior Manager for Energy, Construction and Environmental Technologies breaks down the legislation.

Can Germany achieve the targets as laid out in the Easter Package?

Absolutely. And the German government has made clear its ambition to do so. Both the geopolitical situation and the latest Intergovernmental Panel on Climate Change report  underscore that it is not a question of whether we can meet the targets – we must. We have the technical means. Of course, the initial capital expenditure will be massive and there will be other challenges, such as the state of international supply chains and the demand for qualified installers and electricians. However, the package of measures presented by the ministry will go a long way to improving the legal and regulatory framework and will provide huge impetus in the market. Germany is going to be announcing some big numbers in the budget and will be pushing very hard on this. Now is a good time for cleantech companies, especially those with new business models or innovative technical solutions, to look closely at the German market.

Why is it so important to make renewables an official matter of national security?

It is of central importance. The proposal is to define in law that the construction and operation of renewable energy plants “serves public security” and is “preeminently in the public interest.” On the surface that might sound a little dry, but in practice it would have wide ramifications for permit processes. It would give renewables priority over other protected interests, which would lead to a slew of positive decisions for project developers.

Was there anything that surprised you in the Easter Package?

Those who haven’t been following this closely might be surprised by the true scale and speed of what is set out in this package – although also in the coalition agreement. It’s hard to grasp, but the new targets for solar and wind power foresee Germany increasing annual solar installations from current levels more than three times over in just four years and the same for wind in just three years.

Everyone talks about solar panels and wind turbines, but construction and heating are an equally important part of the equation – true or false?

It’s more than true! Renewable electricity is just one part of the equation. Seventy percent of the energy used in our homes is for heating – the vast majority of which is still powered by gas and oil.

In a separate package , the government has announced amendments to the Building Energy Act that will make the efficiency standard 55 obligatory for new buildings as of next year. A heat pump offensive is going to be launched, and the hugely popular Federal Incentive Program for Energy Efficient Buildings will be augmented. There will be a new requirement for all new heating systems, as far as possible, to operate with 65 percent renewable energy as of January 1, 2024, instead of 2025 as currently planned in the coalition treaty. One change I think will prove effective is the introduction of Germany-wide municipal heat planning. Coordinating the local and efficient use of heat between multiple actors is hugely challenging for the private sector so this will go some way to helping achieve the new target of at least 50 percent climate-neutral district heating networks by 2030.