Germany: Germany’s energy transition could cost as much as $6.3 T (€5.4 T) by 2049, raising concerns over competitiveness and affordability, according to a new study by the German Chambers of Industry and Commerce (DIHK).
The government aims for renewables to cover 80 % of electricity needs by 2030 and for the country to be climate-neutral by 2045. While wind and solar power have grown rapidly, electricity prices remain among the highest in Europe. Grid investments to integrate renewables are also set to rise sharply.
“With the current policy, the energy transition cannot succeed,” DIHK President Peter Adrian said. “It risks driving energy-intensive industries abroad while weakening Germany’s economic base.”
The study, carried out by Frontier Economics, estimated annual private investment in energy, industry, buildings and transport would need to rise to between $131 B (€113 B) and $367 B (€316 B) by 2035, compared with an average of $95 B (€82 B) in 2020–24.
Overall energy system costs between 2025 and 2049 were projected at $5.6–6.4 T (€4.8–5.5 T), including up to $2.6 T (€2.3 T) for energy imports and $1.4 T (€1.2 T) for grid expansion.
The report, released ahead of a government review of transition plans, calls for greater cost-efficiency, international coordination and stronger carbon trading. It also recommends easing regulation and extending the use of gas networks for hydrogen and low-carbon fuels.
Adopting such measures could save up to $1.06 B (€910 B) by 2050, with potential total savings exceeding $1.1 T (€1 T) if climate neutrality targets are adjusted.
Source: Reuters
