Germany Accelerates Commitment To Renewable Energy, Moves Closer To Carbon Neutrality

Germany plans to add 40 gigawatts of solar and wind capacity by 2025 as part of the country’s plan to have 65% of its power generation come from renewable energy by 2030.

Under Germany’s proposed renewable energy law — commonly referred to by the acronym EEG for Erneuerbare-Energien-Gesetz — 16.7 gigawatts of onshore wind will be auctioned through 2025, while solar projects will undergo 10.7 GW in auctions. Offshore wind auctions will seek 9 gigawatts.

Under an “auction,” developers of renewable energy bid the lowest price they are willing to accept to develop renewable energy projects.

The country’s aforementioned 65% target would require a total of 377 terawatt-hours of generation from renewable energy sources.

But some analysts think Germany may be unable to meet that target.

"There are clear risks that Germany will miss its 65% [renewable energy source] target in case of higher penetration of [electric vehicles], hydrogen and heat pumps boosting power demand," said S&P Global Platts Analytics' Sabrina Kernbichler.

On the other side of the energy mix, Germany seeks to reduce nuclear and coal capacity by 24 gigawatts by 2025.

According to Germany’s Federal Ministry for Economic Affairs and Energy, the percentage of renewables in electricity consumption has climbed from about 6% in 2000 to 38% in 2018.

By 2025, 40-45% of electricity consumed in Germany is expected to derive from renewables.

For example, Bosch, a German multinational engineering and technology company, has committed to increasing its dependence on solar power in order to achieve carbon neutrality.

Last month, Bosch signed three long-term deals with German utility RWE, Statkraft of Norway, and Vattenfall of Sweden under which photovoltaic electricity will power the company’s facilities in Germany.

RWE, Statkraft, and Vattenfall will each supply Bosch exclusively from newly constructed solar power plants.

“Electricity from the three suppliers’ subsidy-free photovoltaic parks will be transported through the public grid to be consumed at Bosch locations in Germany,” Bosch stated. “From 2021 onward, this will cover a total annual volume of more than 100,000 megawatt hours, equivalent to the annual electricity consumption of up to 30,000 private households or 70% of the electricity.”

Bosch has been striving to transition to cleaner energy.

In 2019, Bosch emitted about 1.94 million metric tons of carbon dioxide globally, one-third less than its emissions in 2018.

“Climate change isn’t taking a break, so neither are we. By the end of the year, we will achieve our ambitious goal of no longer leaving a carbon footprint,” said Bosch CEO Volkmar Denner. “Our efforts for the energy transition will continue after 2020. Investing in renewables is an important testament to this.”