Why this is important to Wisconsin businesses: Government targets call for reducing reliance on nuclear energy while dramatically increasing the share from renewable sources.
Germany is the largest economy within the European Union, and grew for the tenth consecutive year in 2019, logging 0.6% growth to reach a GDP of €3.4 billion. However, the pandemic has also taken its toll on the German economy. At the end of July 2020, the Federal Statistical Office reported a 10.1% decline in GDP for the second quarter of 2020. In total, Germany’s economy shrank by 5.8% in the first half of 2020 in comparison to 2019. Exports, one of the main drivers of the German economy, decreased by 12.1% in the same time period in comparison to the previous year. However, due to the extensive use of short-term labor, especially during lockdown, employment was largely decoupled from this. As a result of the gradual easing of restrictions from May onward, the German economy is slowly recovering, with a special emphasis on industrial production. In view of the somewhat favorable starting position this has already created, the outlook for the remaining months of 2020 and the beginning of 2021 are more positive.
Germany has long been one of the leading nations in implementing renewable energy. As a reaction to the nuclear disaster in Fukushima in 2011, the German government made a significant change in its energy policy. This new strategy, named Energiewende (“energy turnaround”), targets abolishing nuclear energy, among other goals. Since 2011, eight nuclear power plants have been closed, while six are still running, with closing dates set between 2021 and 2022, after which the phase-out of nuclear energy will be complete.
To make up for the plants being closed, Germany is heavily investing in renewable energy. The German renewable energy sector is mainly based on wind energy, solar energy and biomass. In 2018, 34,615 German companies with 304,000 employees made up the renewable energy sector. The share of green power in electricity consumption is growing steadily, from 6% in 2000 to 46% in 2019. In 2025, the share of renewable energy is planned to be 40-45%, and by 2030 80%, according to the targets given in the German Renewable Energies Act. Within renewable sources, wind energy is the driving force, with the share of wind energy in Germany's gross electricity consumption currently standing at 18.6%. As solar energy is quite affordable because of heavy government subsidies in recent years, this segment is also growing, and has reached 1.6 million photovoltaic installations. Biomass in liquid, gaseous and solid form is used for electricity and heat generation. Currently, 23% of renewable energy electricity generation comes from biomass.
Despite Germany’s leading role in the implementation of renewable energy, further development of infrastructure is needed to meet the targets of the EEG. Especially in the field of regenerative heat technology for both private and industrial use, innovative solutions are needed, as this field has long been neglected by German companies. This raises new opportunities for Wisconsin companies active in the sector—for instance, in the supply of solutions for regenerative heat generation. However, there is also further potential in wind energy, as Germany is planning to further invest in this field. In 2019, Wisconsin companies exported wind-powered generators worth $164,560 to Germany. This leaves room for future export growth.
Germany needs the latest technology for renewable energy to achieve its climate goals. Even though the competition in this sector is strong, Wisconsin companies, with their strong background of R&D in this sector, can compete in, and supply the needed solutions to, the German market.
The latest developments in the international climate crisis have increased the urgency of investing in renewable energy. In order to reach climate targets, new solutions are needed. Wisconsin companies can support this by supplying innovative solutions to Germany. In order to get further insights into the local market and establish contacts with businesses, trade fairs like the upcoming Energy Decentral in Hannover (Feb. 9-12, 2021; check https://www.energy-decentral.com/en/ for current information), Gebäude.Energie.Technik in Freiburg (Feb. 26-28, 2021; check https://www.getec-freiburg.de/ for current information); and Wind Energy Hamburg in Hamburg (Dec. 1-4, 2020; check https://www.windenergyhamburg.com/ for current information) are good opportunities.