05 Mar 2024, 12:17
Jennifer Collins

Outlook for Germany's energy transition improves slightly but some indicators still off track – McKinsey

Clean Energy Wire

Germany's performance has improved slightly in consultancy McKinsey's biannual "Energy Transition Index," with targets now deemed "realistic" for eight indicators the firm uses to rate progress of the country's energy transition. That's two more than in the last report published in September 2023.  

In 2023, primary energy consumption was 9 percent lower than the previous year, pushing the indicator out of the "at risk" into the "realistic" category due to improved energy efficiency, a decline in industrial production and reduced electricity production. German household electricity prices also dipped, meaning this target was also now categorised as "realistic". The data also showed a positive trend for jobs in the renewables sector. The number of posts rose by around 50,000 to 387,700 in 2022 compared to the previous year, largely driven by a strong demand for heat pumps and solar modules. The share of renewable energy in gross electricity consumption also increased 4.5 percent to 50.6 percent in 2023 thanks to a slight increase in power generation from green energy sources. But the main driver was an overall decline in electricity consumption resulting from the energy crisis, according to McKinsey.  

Targets for five of McKinsey's indicators remain "unrealistic", including in the transport sector. CO2 emissions targets are "at risk" and remain on a "knife edge" despite falling by 73 million tons to their lowest in 70 years, said the consultancy. But the decline is likely only temporary and is mainly driven by high energy prices and an economic slump.

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