Germany Will Get 36% of Its Electricity from Renewables by 2020

Feb. 22, 2012
Growth in solar, wind energy will require large investment in power transmission infrastructure.

Expect dramatic changes in the energy market in Germany as the nation moves to shutter its nuclear plants and generate more electricity from renewables, predicts Frost & Sullivan's energy group.

Frost & Sullivan forecasts that overall electricity generation will decline from 625 terawatt hours (TWh) in 2010 to 590 TWh in 2020, due to energy efficiency measures and increased imports. But the research firm says the installed capacity will rise from 153 gigawatt (GW) to 179 GW in 2020, due mainly to the growth in wind and solar. At the end of 2011, Germany generated just over 29 GW of electricity from solar. Because of relatively low availability, Frost & Sullivan notes, these renewable energy sources will need to be supported by back-up power such as gas turbines.

"Germany is already a leading European renewables market, but it will go beyond its EU obligations with significant further investment in the next 8 years," says Frost & Sullivan energy consultant Jonathan Robinson. "However, the growth in renewables poses serious challenges and will require substantial investment in upgrading the existing power transmission infrastructure."

Robinson said Germany will need "across-the-board investment" in equipment for generation, transmission and distribution. "This creates interesting opportunities for equipment manufacturers and project developers," he adds.

Frost & Sullivan expects solar PV capacity in Germany to treble while wind will grow by an average of 2 GW per year. It predicts renewable energy will account for 36% of electricity generation by 2020.

Last May, German Chancellor Angela Merkel announced that the government would close eight nuclear plants immediately and phase out all its nuclear plants by 2022.

Along with a move to renewables, Germany is also pushing energy efficiency, with a target of reducing energy consumption by 9% by 2020, compared to the 2001-2005 period.

"Energy efficiency will be a big topic in 2012, as the EU moves towards forcing member states to take action. The voluntary approach adopted in 2007 has largely failed, with minimal energy efficiency gains in most member states. As usual in these matters, Germany is already leading the way, but it is likely that more will need to be done," adds Robinson.

From now till 2020, Frost & Sullivan points out, coal will remain the leading fuel (37% of generation) in Germany, though that will decline as a source as older power stations are decommissioned. Frost & Sullivan says there will also be an increase in gas as a fuel source. Gas is the subject of an accelerated development program which is expected to have an impact mainly after 2020.

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