Industry greatest unknown in Germany's future electricity demand – Deutsche Bank Research
Clean Energy Wire
Electricity consumption in Germany is set to increase more slowly than previously assumed in the coming five years, with uncertainty over industry as a key driver of demand, said Deutsche Bank (DB) Research in a paper.
It highlighted the energy needs of new data centres, as well as the electrification of transport, heating, and industry as key potential drivers of higher demand. “Only regarding the electrification of industrial processes are we sceptical that electricity demand will rise permanently and significantly,” said the bank.
Energy-intensive processes in the chemical sector, metal production, and building material manufacturing faced high hurdles due to costs and competition from abroad, and relevant products could be imported in future. “The companies concerned may be more inclined to shift corresponding production processes abroad over time,” Deutsche Bank said. It added that demand would depend on political framework conditions and technical progress.
Last week, a government-commissioned research report showed a “robust” growth of future electricity demand in a wide variety of scenarios. However, projections differ widely, especially for the period until 2030. While the report was seen as a well-conducted meta-study of existing scenarios, the renewables industry and environmental NGOs voiced concerns that it could slow the expansion of technologies like wind and solar.
Deutsche Bank Research stressed that the political conclusions the federal government draws from it are much more important than the report itself.
The economy ministry had labelled the report as a “reality check” for the energy transition and said it aimed to put a greater policy focus on affordability and supply security alongside decarbonisation. Minister Katherina Reiche presented ten key measures, which include plans to abolish fixed feed-in tariffs for renewables and remuneration during times of negative prices. However, she has not yet provided details on when or how this should happen. Other measures also remained vague, with more clarity expected in the coming months following further negotiations within the coalition government.
In its report, Deutsche Bank called the proposed measures “reasonable” and welcomed the strengthened focus on cost-efficiency. It added that the pace of expansion for some renewables can be “expected to decrease due to the use of more market-based instruments and a reduction in subsidies.”
