German energy industry set to invest Eur320 bil for 2030 targets: BDEW

Germany's energy industry is ready to invest around Eur320 billion ($355 billion) this decade to achieve the 2030 climate targets, utility lobby BDEW said June 17.

The investment could boost German GDP by 0.6% annually and create 270,000 new jobs, but would require the right framework conditions, the BDEW said in a position paper in response to the government's coronavirus recovery program.

The 2030 target of 65% renewables in the power mix alone would require 117 GW new green capacity, more than currently projected, it said, adding that new policies like the hydrogen strategy would boost overall demand for electricity.

The BDEW is calling for a cap on the green power levy at Eur50/MWh as well as removing hurdles currently hampering German wind and solar deployment.

Chancellor Angela Merkel's coalition on June 3 announced plans for a Eur130 billion economic stimulus package to overcome the deep recession caused by the coronavirus aligned with the government's 2030 climate targets now enshrined in law.

From this package, Eur11 billion will be set aside to cap the green power levy (EEG Umlage) at Eur65/MWh for 2021 and Eur60/MWh for 2022.

Without intervention, falling wholesale power prices were set to lift the levy for 2021 above Eur80/MWh, increasing already high electricity bills.

Germany's EEG law kick-started renewables 20 years ago, with wind and solar tripling since 2010 to account for a third of German electricity. The roughly $200 billion invested in RES since 2010 are a legacy paid for by consumers through the EEG levy charge on power bills.

The government plans a reform of the EEG law and other measures to speed up expansion of on- and offshore wind as well as solar and has recently lifted its 2030 offshore wind target by 5 GW to 20 GW and plans to cancel the 52 GW ceiling that would stop support for roof-top solar.

Greener gas

The BDEW also called for increased support for new gas-fired combined heat and power (CHP) plants with approximately 17 GW new capacity required to offset the loss of nuclear and coal capacity.

Details of the CHP support are included in the coal exit draft law expected to be passed before the summer and the BDEW calling to lift the CHP target to 150 TWh/year by 2030.

Changes to the power mix also require investment into high-voltage power grid infrastructure, while the planned roll-out of EVs requires charging infrastructure and distribution grid changes further boosting investment.

Utilities currently provide three quarters of the the 27,000 public EV chargers.

The coronavirus recovery program set aside billions to boost electro-mobility aimed only at supporting sustainable investment with Eur9 billion support for green hydrogen a key driver.

German power sector emissions have fallen sharply and are currently ahead of target as coal's share shrank over recent years, while renewables rose rapidly.

However, wind expansion has come to a standstill, with the country set to shut its last reactors by 2022 amid expectations of higher electricity demand to help decarbonize the transport and heating sectors, currently lagging behind their climate targets.