A2X Consulting

Germany is the most progressive nation in Europe with respect to environmental sustainability. It has set very aggressive targets for reduction of carbon emissions. By 2020, Germany wants to reduce CO2 emissions by 40% of its 1990 level.

There are several driving forces in action which are expected to lead Germany to its CO2 targets.

Renewable Energy

Adopted in the year 2000, the Renewable Energy Sources Act called EEG is the most promising sustainability policy. Also known as feed-in tariff law, it has made Germany the global leader in solar and wind power generation. According to this law, the electric utility companies are required to buy power from renewable sources at above market rates, giving energy producers access to the grid and 15-20 year contracts. “It puts power in the hands of the people,” says Stefan Schurig, energy director for the World Future Council. Due to this law, the number of small and medium sized energy producers has grown over the years.

Germany has benefited from the EEG in several ways. In 2006, of the 230,000 renewable energy sector employments, 130,000 came directly due to EEG. The electricity generating equipment industry in Germany is expected to receive increased investments of about 20 billion euros by 2020 up from 9 billion euros in 2005. And lastly, Germany will be able to reduce its energy imports thanks to the success of EEG.

According to a study by the consulting firm Roland Berger, green technology industry will become the biggest employer in the country by 2010.

Solar industry is big in Germany. Germany received the highest cleantech investment in Europe in 2008 of $383 million. In 2008, the new PV installations in Europe were large in terms of global share – nearly 80%. Of this, Germany & Spain accounted for 84% of the installed capacity.

The share of renewable energy in the total electricity generation in Germany is 14%. The country is targeting at making energy from renewable sources to 30% by 2020.

Clean Technology Investments

The need for cost cutting is driving up cleantech investments. According to a Deutsche Bank survey, “40% of German medium sized enterprises intend to invest in 2009 in cleantech.” The Federal Ministry for the Environment states that “until 2020 there will be cleantech investments in Germany with a value of $400 billion.”

The German company Q-Cells became the world’s biggest PV cells maker in 2008.

The economic recession may affect the clean technology revolution in Germany. We will cover more of these developments as they evolve.