Easy Guide

Germany's Energiewende in brief

The energy transformation, or the "Energiewende", is Germany's transition to a low-carbon, nuclear-free economy. However, as the country aims to cut climate-harmful greenhouse gases to near-zero by mid-century as part of the European Union's climate neutrality drive, the project now goes well beyond expanding renewable energy while phasing out nuclear power. All economic sectors must adapt, and cooperation in Europe and globally is increasingly seen as key to success.

The Energiewende – literally, the “energy turnaround” – is Germany’s effort to reduce climate-damaging greenhouse gas emissions without relying on nuclear energy. It has enjoyed broad public backing and cross-party support, even as the coronavirus pandemic dominated public concerns.

In the landmark Paris Climate Agreement, countries around the world committed to cutting emissions to rein in climate change. The German government has been a strong voice for ambitious international action, as has the European Union.

The EU is driving the energy transition with its “Green Deal” policy programme and aims for climate neutrality by 2050. As an early starter, member state Germany’s energy transition is watched closely for valuable lessons on weaning a major economy off fossil fuels. The Energiewende, which grew from a grassroots anti-nuclear and environmental movement into a vast national project, has profound effects in society and business.

Many environmentalists cite Germany as proof that an industrialised nation can abandon fossil fuels without sacrificing growth. Critics argue the German experience confirms such transformation comes at a high cost to consumers and industry – and doesn't automatically reduce carbon emissions.

For years, the Energiewende has largely focussed on the electricity sector. Germany decided to phase out coal by 2038, but new climate targets and high CO2 prices make an earlier exit likely. Generous financial support for wind and solar power pushed renewable sources to produce more power than fossil fuels for the first time in 2020. Citizens and cooperatives still own many of these installations, but ownership is increasingly shifting to businesses, banks and utilities. Integrating this distributed, small-scale generation that depends on the weather into the power system still poses significant challenges, for example for the power grid.

At the same time, Germany is extending the scope of its energy transition, introducing emissions reduction targets for each sector with a major climate law, as well as a national CO2 price for transport and heating fuels. It aims to power industry, mobility and buildings almost entirely with renewables – a move with massive implications for its carmakers, freight industry or steel makers. Green hydrogen looks set to become the technology of choice to decarbonise sectors where emission reductions are particularly difficult, for example in heavy industry and aviation. Much must still be done to increase efficiency and reduce the energy appetite of the world’s fourth largest economy. And the financial sector is only starting to pull its full weight for a climate-friendly economy.

Despite its green ambitions, Germany struggles in key areas. Emissions from trucks and passenger cars remain stubbornly high, and renewables and grid expansion are lagging. But Germany is firmly on track to give up nuclear power by 2022. Major nuclear reactors have already been shut down without harming the security of the power supply.

This guide lays out the basics of Germany’s generational Energiewende project and links to CLEW’s in-depth reporting for those who want to find out more.

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