Sustainability is gaining ground in many spheres of Germany, providing interesting opportunities for Danish solutions. The German federal government has set ambitious targets to transform its economy into one of the most energy efficient and environmentally friendly economies, while still guaranteeing energy security. The transformation is labelled the “Energiewende” and is a high political priority in Germany. As a consequence, Germany is searching for means to reach its goals while maintaining Germany’s position as a competitive business location and maintaining affordable energy prices.
The green transition in Germany based on the Energiewende represents significant market opportunities for Danish companies with innovative technologies and energy efficient solutions. Danish companies are known for good insight and flexible solutions within German priority areas and the German market provides an excellent platform for increased Danish exports.
Energy security is of high importance in Germany and as the country is currently relying on imported energy (in 2013 Germany imported fossil fuels worth 92 billion euros) it is of high interest to reach the energy targets. Specifically, these energy targets are based on the following corner stones:
In order to reach these targets the following overall priorities and guidelines have been presented:
Below these priorities are unfolded:
Energy efficiency is gaining focus and importance in Germany. It is an important element in the energy transition, which demands a joint action plan across electricity, heating and cooling within the areas and buildings, industry and households.
Energy efficiency is viewed as the so called “second pillar” of the Energiewende next to renewable energy sources, and focuses on ways of increasing production while decreasing energy consumption as well as energy costs for households.
The investments are expected to be significant if the energy efficiency targets are to be achieved. The aim is to achieve a nearly completely climate-neutral building stock by 2050 and a roadmap for a holistic building strategy is under development to integrate electricity, heat and energy efficiency.
The industry is also going to be motivated to actively work towards reducing energy consumption through more efficient production techniques. Not least the rising electricity costs are providing leverage in this regard.
The renovation of buildings and more efficient production techniques are not the only initiatives needed for the Energiewende to succeed. In addition, an important prerequisite for Germany’s ambitious energy is the expansion of the electricity grid including Smart Grid solutions. The establishment of such a solution is estimated to be priced at around 40 billion Euros until 2020.
Currently district heating covers approximately 12% of the heat supply in Germany. District heating is particular common in agglomeration areas, such as Hamburg or Berlin. Also more district heating networks are located in the former East-German regions, but with the demographic changes in Germany it is primarily the former West-German regions that develop or expand district heating networks.
The federal government considers district heating important due to its potential to open several options to save and substitute energy and to enable a more flexible energy market. Focus areas are innovative technologies, optimal responsiveness and flexibility and increasing modernisation processes.
With a share of district heating by more than 50%, Scandinavian countries are regarded as model countries to be inspired by and learn from and this opens up for great export opportunities for Danish suppliers.
Another key area is the German wind energy market. The German wind energy industry has an annual turnover of more than EUR 9 billion and exports 2/3 of its total production. Almost 8 % of total German power production is produced by means of wind energy. According to the wind energy industry, wind energy will become the main source of power in Germany, and professionals predict that wind energy will make up 25 % of German power production by 2020.
In 2014 Germany installed windmills with a total volume of 4750 Megawatt, an all-time high for new installations. The general trend in the country is to replace old wind parks with larger and more efficient parks which gradually help increase the total volume.
The development seen in the German wind energy sector has so far mainly been dominated by a strong onshore market. However, in 2013 the German offshore market saw progress compared to earlier years. Politically, the ground for further expansion of offshore wind energy has already been prepared.
Traditionally, wind energy has been produced in the northern part of Germany, but lately more federal states in South Germany has intensified their efforts to increase the production of wind energy. This tendency is predicted to continue over the next years leaving Danish suppliers of wind solutions and technology with significant possibilities in Germany.
In addition to the energy targets Germany has proposed significant reductions on greenhouse gas emissions. These goals include a reduction in emissions by 40 % in 2020 and by 80-95% in 2050 (compared with 1990).
Current projections indicate that Germany is going to miss its 2020 goal as only a reduction of around 33-34 % is expected to be achieved on the base of the currently implemented measurements. This leaves Germany 6-7 % short, even though greenhouse gas reductions have been proven technically and economically feasible in most sectors. These potential reductions are currently being addressed in the “Aktionsprogramm Klimaschutz 2020” and presents additional opportunities for Danish export of environmentally friendly solutions across industries.
There are big opportunities for Danish companies operating within the building industry in general. The activity within the German building industry has been stable for many years, also during tough and economically challenging times.
There is a strong focus on energy efficient buildings and sustainable construction that matches the strongholds of Danish architects, construction companies, urban planners, building material and technology providers.
The construction sector is seeing solid growth rates with new construction as well as many renovation projects dominating many of the major cities in Germany. Especially the bigger cities like Berlin, Munich, and Hamburg, are expanding and the need for housing is huge. Several thousands of flats have to build within the next ten years in order to meet the demand.
On top of the market for new constructions, there is a vast market in Germany within renovation of the existing building stock. Smart solutions are required combined with energy efficiency and environmental consideration. This opens market opportunities for a number of Danish companies, products and technologies. It should, however, be noted that the market is very competitive.