Powering Progress: Transforming the energy landscape

Germany's ‘Energy Efficiency Strategy 2050’ stands as a testament to the country's commitment to a sustainable future

By Kushmita Bose

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Published: Thu 30 Nov 2023, 2:13 PM

The sustainability of an economy is significantly influenced by its effective utilisation of energy. Energy efficiency improves companies’ competitiveness, strengthens the purchasing power of consumers, reduces dependence on energy imports, and is not least the key to achieving climate targets. Germany has long been committed to transitioning towards renewable energy sources and reducing greenhouse gas emissions. The Energiewende, or energy transition, initiated in the early 2000s, set the stage for the country's commitment to phasing out nuclear power and expanding renewable energy capacities.

In the face of global climate challenges, Germany has emerged as a leader in the pursuit of sustainable energy solutions. At the forefront of its efforts is the ambitious ‘Energy Efficiency Strategy 2050’, a comprehensive plan designed to transform the country's energy landscape and reduce its environmental footprint.

The Federal Government has set an ambitious objective of making Germany the world's most energy-efficient economy. The guiding principle, termed 'efficiency first,' emphasises prioritising the reduction of energy consumption where economically viable. The remaining energy demand is intended to be primarily fulfilled through the direct utilisation of renewables. Subsequently, renewable energy should be efficiently employed in sector coupling to meet the energy needs of industry, transportation, and heating.

Investments in efficiency measures strengthen domestic value creation, secure jobs, and increase security of supply because dependence on oil and gas imports is lessened. In addition, placing a focus on energy efficiency opens up new export and growth markets for German companies producing efficiency technologies ‘made in Germany’.

Better energy efficiency also means that private consumers have more money in their household budget. By placing minimum standards on electrical appliances, for example, consumers’ energy costs are kept as low as possible – serving to protect them in the same way as energy-efficiency retrofits and consumption specifications for car manufacturers do. This means that raising energy efficiency also takes on an important social function.

Key Objectives

The Energy Efficiency Strategy 2050 outlines a series of comprehensive objectives, each playing a pivotal role in reshaping Germany's energy landscape. One of the primary goals is to achieve a significant reduction in energy consumption, aiming for a 50 per cent reduction compared to 2008 levels by the year 2050. This reduction is crucial not only for environmental reasons but also for enhancing energy security and reducing dependency on external energy sources.

Additionally, the strategy places a strong emphasis on fostering innovation and the development of cutting-edge technologies to improve energy efficiency. By investing in research and development, Germany aims to stay at the forefront of technological advancements, ensuring that its industries remain competitive while contributing to global efforts to combat climate change.

ENERGY EFFICIENCY TARGET FOR 2030

Germany has set an ambitious target of reducing greenhouse gas emissions by at least 55 per cent by 2030, compared to 1990 levels. To achieve this goal, the country is adopting a dual strategy of extensively expanding renewable energy sources and substantially decreasing overall energy consumption. This comprehensive approach is deemed essential for meeting the 2030 climate target in a cost-effective and sustainable manner. Germany has also established efficiency targets, aiming to halve its primary energy consumption by 2050 compared to 2008.

While there has been notable progress in reducing energy demand over the past decade, it is evident that Germany must accelerate its efforts significantly to meet the efficiency target within the specified timeframe. This urgency is underscored by the country's commitment to increasing the share of renewable energy in its electricity mix to 65 per cent by 2030. Achieving this ambitious target becomes particularly challenging as renewable energy is expected to cover the rising energy demands in heating, transport, and industry, replacing conventional fossil fuels.

To manage this transition effectively and minimise the need for extensive new photovoltaic and wind energy capacity, Germany must prioritise substantial reductions in energy demand across various sectors. This imperative underscores the critical importance of rapidly advancing energy-saving initiatives to align with the nation's overarching climate and renewable energy objectives.

30% LESS PRIMARY ENERGY CONSUMPTION BY 2030

Primary energy is the energy content that can be drawn from a naturally occurring energy source. In other words, it is the energy that is directly available in the source – before it is converted. These include, for example, hard coal and lignite, crude oil, natural gas, as well as solar energy, wind power, hydropower, geothermal energy, and tidal energy. Primary energy consumption thus comprises the energy content of all primary energy sources that are used in Germany. This also includes secondary energy sources such as electrical and thermal energy, fuels and coal briquettes. Primary energy consumption is calculated by adding together all energy sources procured in Germany with the balance of imported quantities, considering changes in stocks minus the stocks bunkered at sea

In line with these considerations, the Federal Government has established a national efficiency target for 2030, aiming to reduce primary energy consumption by 30 per cent compared to the levels in 2008. This will also contribute to Germany’s efforts towards meeting its national target to raise the share of renewable energy in Germany’s total gross final energy consumption to 30 per cent by 2030. At the same time, by reducing consumption by 30 per cent, Germany wants to make an appropriate contribution to meeting the efficiency targets set for the EU. These targets are laid down in the amendment to the European Energy Efficiency Directive (EED) adopted in 2018.

SECTOR-SPECIFIC APPROACHES

Recognising the diversity of energy consumption across sectors, the ‘Energy Efficiency Strategy 2050’ adopts a tailored approach to different industries.

  • Industry, commerce, trade and services account for a total of 45 per cent of German final energy consumption. Although final energy productivity has increased by more than 10 per cent since 2008, absolute energy consumption has remained constant. It is therefore crucial to intensify efforts to significantly increase energy efficiency in this sector. The Climate Action Programme 2030 is preparing the ground for this. The industrial sector, a significant contributor to energy consumption, is targeted with measures such as the promotion of energy-efficient technologies, the integration of smart manufacturing processes, and the encouragement of circular economy principles. By doing so, Germany aims to enhance its industrial efficiency while minimising environmental impact.
  • The buildings sector accounts for around 35 per cent of total final energy consumption in Germany. In total, Germans spend roughly €73 billion on heating rooms, hot water, lighting and air conditioning in residential and non-residential buildings. This means that it has a key role to play in the energy transition and in mitigating climate change. The potential for reducing energy demand and generating heating and cooling from renewables rather than fossil fuels is high. The plan includes measures to improve the energy efficiency of existing buildings and enforce stringent standards for new constructions. This approach not only reduces energy consumption but also contributes to the creation of sustainable and comfortable living and working environments.
  • There is a particularly urgent for action in the transport sector, where final energy consumption has risen by seven per cent since 2008. The main reason for this is the growth in transport services, which has cancelled out any technology-related advances in improving efficiency. Both passenger and freight transport are expected to rise in the time up to 2030. This will represent an additional challenge for reducing energy consumption. Transportation, a critical sector for reducing carbon emissions, is addressed through the promotion of electric mobility, the expansion of public transportation infrastructure, and the implementation of measures to optimise logistics and reduce fuel consumption. By electrifying transportation and promoting sustainable practices, Germany aims to significantly cut emissions in this sector.

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