Energy transition risks creating a burden of 5.4 trillion euros for Germany
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Germany’s current energy transition strategy could cost 5.4 trillion euros by 2049, placing a significant burden on businesses and households and weakening competitiveness, the German Chamber of Commerce and Industry (DIHK) said on Wednesday, Reuters reported.
Berlin aims to meet 80 percent of its electricity needs from renewable sources by 2030, an intermediate step towards climate neutrality by 2045. But despite a strong increase in wind and photovoltaic power generation in recent years, electricity prices remain some of the highest in Europe, and forecasts show that investment in networks to cope with the increase in renewable energy production will explode in the coming years.
‘Under current policies, the energy transition cannot succeed. It risks moving energy-intensive industries abroad and weakening Germany’s economic base,’ said DIHK President Peter Adrian.
A study by Frontier Economics, commissioned by the DIHK, shows that annual private investment in energy, buildings and transport will need to increase to somewhere between 113 and 316 billion euros by 2035, from an average of 82 billion euros in the period 2020-2024.
Energy system costs between 2025 and 2049 are forecast to rise to between 4,800 and 5,500 billion euros, including 2,300 billion euros for imports and 1,200 billion euros for network costs.
Published ahead of a government review of energy demand and transition plans, the study calls for a shift towards cost-effective measures and international coordination through more carbon trading, regulatory easing and greater use of gas pipeline networks for hydrogen and decarbonised gas.
The study’s authors estimate that such measures could generate savings of €910 billion by 2050, with total savings exceeding €1 trillion if climate neutrality targets are relaxed.
