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Germany Doubles Pace of Energy Transition

Thanks to a change of government that reflected the country’s move towards greater climate action, Germany has doubled the pace of its energy transition. However — “Coal is pretty much dead and buried across the rest of Western Europe, but in Germany it’s still a quarter of generation. With 12% of power coming from nuclear, which is going to be totally closed down this year, even the new Green coalition government can’t end coal until 2030 and gas will persist more than a decade further than that. In 2020, the country even built a new coal plant.”

Germany’s new government has set some very ambitious targets for 2030:

“All suitable roof surfaces are to be used for solar energy.” Rooftop solar will be mandatory on new commercial buildings and near-mandatory on new residential buildings. German solar has been growing at less than the world average, but with annual deployments set to triple, the expectation is that by 2030, 50% of home heat and 80% of electricity will be green. Currently, the low feed-in tariff is a factor dragging on rooftop installation. It is hoped that the FiT will be increased to encourage greater deployment. Some carrot to go with the regulator’s stick?

With the climate, agriculture, and environment ministries all being held by the Green Party, the new government is highly likely to open up permission for agri-voltaic installations. But will they make enough land available?

The government is already making specific provision for expanding the transmission network. But perhaps the biggest issue is the ongoing entanglement with gas power. For, although coal has a deadline for decommissioning and the net zero target for 2045 implies that gas will not be part of the energy mix by then, there is a lot of discussion about Nord Stream 2.

Nord Stream 2 is strongly supported by the German manufacturing community, which sees the gas supply as strengthening its bottom line. Even with Russia’s increasingly aggressive actions towards Ukraine, Germany is not likely to cancel the pipeline. It might not have to — the US may succeed in strangling it.

My hope would be that German grit and determination will push through a rapid energy transition so that the Germans are not reliant on Russian gas and thus save a fraught relationship in Europe and the climate at the same time.

Image courtesy of Enel Green Power.

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David Waterworth is a retired teacher who divides his time between looking after his grandchildren and trying to make sure they have a planet to live on. He is long on Tesla [NASDAQ:TSLA].


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