13 Jan 2023, 13:37
Julian Wettengel

Consultancy says Germany must invest €900bn in 15 years for switch to renewables

Clean Energy Wire

For the comprehensive electrification of sectors like heating and road transport, Germany must massively expand renewables and update its energy infrastructure with investments of 900 billion euros over the next 15 years, said consultancy Oliver Wyman. This would significantly help the country lessen the dependence on fossil fuel imports. “More than 60 percent of Germany's primary energy demands currently comes from imports. Heat and mobility are the decisive levers for phasing out coal, oil and gas,” said the consultancy’s Jörg Stäglich. Two thirds of investment (€650bn) is needed for renewable expansion and 210 to 270 billion euros must be invested in grid infrastructure.

The price tag for Germany’s energy transition is one of the project’s most controversial aspects. Estimates on how much money the country will eventually have to invest in the shift to renewables and the good-bye to nuclear power vary wildly to this day. But the overall economic costs and benefits of the Energiewende will always remain elusive, because any assessment involves unavoidable guesses on what would happen to the world’s fourth largest economy without an energy transition. There have been several reports on the investment Germany’s economy needs to become climate neutral in recent years. Last year, an analysis by consultancy Prognos for public development bank KfW said Germany needs public investments worth 500 billion euros to become climate-neutral by 2045. However, many investment figures do not consider the benefits of climate investments, such as less expenditure on climate damages and economic growth opportunities. Consultancy McKinsey said in 2021 that Germany can achieve its 2045 climate target at net zero costs. “The savings achieved through climate action by 2045 can offset the costs of decarbonisation,” the consultancy said.

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