Press Release, Berlin

dena Study Integrated Energy Transition: Germany needs a clear 2050 climate target

Target corridor of 80 to 95 per cent less CO2 emissions can be achieved with various scenarios / Significant increase in energy efficiency and renewable energy required / Synthetic fuels supplement electrification / Kuhlmann: “The integrated energy transition requires integrated policy concepts. There are good reasons to re-think how energy and climate protection policies are shaped.”

The Federal Government is expected to specify its climate target for the year 2050 during this legislative term. The current target corridor of 80 to 95 per cent less CO2 emissions by 2050 compared to 1990 can be achieved through a variety of approaches, such as an openness to new technologies or electrification. Depending on which end of the corridor is to be achieved, however, there are already different key decisions to be made with a view to 2030. This is the finding of dena Study Integrated Energy Transition which the Deutsche Energie-Agentur (dena) – the German Energy Agency – conducted along with scientific experts and more than 60 companies and industry associations from all sectors involved in the energy transition.

“A cross-sectoral, systemic view of possible transformation paths leads to different results than one that is sector-specific. This must be taken into account when steering the energy and climate protection policy. The dena Study Integrated Energy Transition is a good basis for this”, said Andreas Kuhlmann, dena’s Chief Executive, at the presentation of dena Study on Monday in Berlin. “Our scenarios show that not everything that seems like an obvious solution at first glance leads to the desired target when interactions with other sectors are taken into account. It also follows that it is not enough today to only discuss the 2030 climate targets. 2030 looks very different depending on the ambition level for the year 2050. And we will certainly fall short of the targets for the year 2030 if appropriate measures are not taken in this legislative term. It is urgently necessary to specify the targets for companies and to shape the political framework. The dena Study is an invitation to stakeholders in politics, society, industry and science to accelerate the necessary debate and make decisions. By tackling it together, we will be able to find workable and widely accepted solutions and make the energy transition a successful project for society as a whole.”

Mixed technology scenarios are more robust and lead to lower additional costs

Together with its study partners, dena developed four practical scenarios that achieve either the 80 or 95 per cent reduction target by 2050. Two of these are electrification scenarios where it is assumed that consumption in the building, industry and transport sectors will be largely covered by electricity, for example by using heat pumps, electricity-based production plants and electric drives to a greater extent. Two of these scenarios are mixed technology scenarios where it is assumed that a wider range of technologies and energy sources will be used, including more gaseous and liquid fuels that are synthetically produced using renewable energy sources. A reference scenario, which ambitiously pursues the current regulatory framework, reduces emissions by only 62 per cent.

The mixed technology scenarios prove to be more robust in comparison, as they are more strongly based on existing infrastructures and are more social accepted. They are more flexible and can better integrate new technological developments. On the other hand, the electrification scenarios require more space for the expansion of wind and solar power plants as well as the greater expansion of the electricity grid. Refurbishments must improve the energy-efficiency of building stock in order for heat pumps to be used more efficiently. Overall, based on the assumptions made, the 2050 transformation paths with a broad mix of technologies and energy sources are more cost-effective to the tune of up to 600 billion Euros, than those that rely more heavily on electricity-based applications.

Andreas Kuhlmann emphasised that the energy transition is less about costs than it is about investing in the future: “The energy transition and climate protection are development projects of enormous scope and complexity for the benefit of society as a whole. If we want the most economical energy transition possible that is also supported by society, we should start creating market-oriented framework conditions for a broad mix of technologies today. That is the only way to make sufficient use of the massive potential of different technologies. That is a basic requirement to achieve the targets.”

Increase the pace of energy efficiency and renewable energy sources

The following applies to every climate target scenario: An increase in energy efficiency and expansion of renewable energy are prerequisites for success. However, in both areas the current pace is not enough. With an annual economic growth of one per cent, the dena Study projects a reduction of final energy consumption of up to 64 per cent in the building sector, up to 52 per cent in transport, and up to 18 per cent in industry by 2050 compared to 2015. The significant increase in energy efficiency in industry is of particular note; however simultaneous economic growth leads to higher demand.

In the case of renewable energy sources, the dena Study indicates that the expansion of wind energy on land and photovoltaics is progressing faster than previously planned. For these two technologies alone, an additional net annual capacity of 6 to 7.6 gigawatts is required. There is a big difference between this and the legally planned expansion corridor of 5.4 gigawatts per year: 2.9 gigawatts for wind energy on land and 2.5 gigawatts for photovoltaics. It will be a challenge to find undeveloped land for the expansion of wind turbines on land. The expansion of wind energy at sea may be all the more important starting in 2030.

Third pillar: Synthetic renewable fuels

Synthetic renewable fuels play an important role in every climate target scenario. Depending on the scenario, they cover a demand of 150 to 908 terawatt hours in 2050. In doing so, they fill the gap that cannot be met by energy efficiency or the direct use of electricity from renewable energy sources, in particular when the expected targets are not met elsewhere, such as with the expansion of wind power on land, the refurbishment of buildings, or the electrification of heavy goods traffic.

Renewable hydrogen and the energy carriers based on it, such as methane and synthetic oils, make it possible to store renewable electricity and trade it internationally. The dena Study anticipates that most of Germany’s needs will be covered by imports – from North Africa, for example, because production costs there are lower and the land potential is greater. But Germany also has potential that should be used more extensively. In order to stimulate the development of the market, Germany should develop the capacity to produce around 15 gigawatts of renewable hydrogen by 2030.

Stakeholder dialogue should clarify the foundations of supply security

A particular challenge is ensuring the security of supply in an electricity system based largely on renewable energy sources. Despite energy efficiency, the demand for electricity and the peak load will continue to increase in the climate target scenarios between now and 2050. The reasons for this include continued economic growth and increasing electrification in the consumption sectors. There is additional need for action as the nuclear phase-out and the foreseeable decline in coal power will lead to the significantly reduced availability of weather-independent power plant capacity in a few years’ time.

Various options are available to cover the guaranteed output – i.e. the capacity that must be available at all times. In the dena Study, gas-fired power plants, which increasingly use renewable fuels, cover most of the guaranteed output in every scenario, but only with relatively few operating hours. Other important factors are storage systems, demand side management, renewable energy carriers and electricity imports. Various stakeholders have differing assessments of the challenges and options. In order to quickly reach a common understanding, the dena Study recommends that the Federal Government set up its own dialogue process on the foundation of supply security in the future energy system.

As for the use of coal, the dena Study did not specify a fixed exit date in its scenarios. In the climate target scenarios, coal-fired power generation will decrease by half by 2030 and will be completely eliminated from the market by 2050 as new framework conditions will reward the elimination of CO2 emissions.

The integrated energy transition requires integrated policy concepts

The dena Study Integrated Energy Transition examines the guiding concept of the integrated energy transition. The aim is to look at the energy transition as a whole, coordinate the various technologies, infrastructures and markets from the energy, industry, building and transport sectors, and bring them together in an intelligent energy system. The dena Study has applied this cross-sectoral, systemic approach to a broad group of partners, thus setting the climate targets for the year 2050 (80 to 95 per cent CO2 reduction), but above all for the year 2030 (55 per cent CO2 reduction).

“Our common goal was to better understand the systemic connections, identify the best possible transformation paths to achieve the climate targets and provide advice and a recommended course of action”, emphasised Andreas Kuhlmann. “At the same time, we wanted to consider the market knowledge and competencies of all those who must, in the end, shape these transformation processes with their companies. We need this integrating bottom-up perspective in order to shape the integrated energy transition and to develop new, integrated policy concepts that also take international contexts into account. The system of taxes, levies and reallocation charges in the energy and climate protection sector is outdated. We need clear targets and market-oriented frameworks based on innovation, competition and entrepreneurship. That is what will allow us to achieve the best possible progress. The one and only path to achieving our targets cannot yet be foreseen. On the contrary, we need to be open to the various technological options. This requires a strong political will and mature judgment. With courage and determination we can achieve a lot.”

About dena’s pilot study

The dena Study Integrated Energy Transition is a project involving more than 60 industry partners, including energy providers, grid operators, consultancy firms and industrial companies from all sectors as well as industry associations. The study partners worked together to define three scenarios, including superordinate parameters such as population growth, interest rates, technological developments and energy prices. In addition, opportunities for development were established in the energy production and distribution sectors, as well as in buildings, industry and mobility, and interdependency was explored. Scientific experts modelled the scenarios. After an interim conclusion in October 2017, the transformation trajectories were once again discussed, revised and calculated. Detailed analyses and sensitivity analyses also answered important individual questions.

The chief scientific consultant of the dena Study was Dr. Harald Hecking (ewi Energy Research & Scenarios), supported by technical consultants Prof. Dr.-Ing. Christian Rehtanz (ef.Ruhr), Prof. Dr.-Ing. Bert Oschatz (ITG Dresden), Prof. Dr.-Ing. Andreas Holm (FIW Munich), Prof. Dr. Peter Radgen and Dr. Frank May. The dena Study was supported by an advisory board with representatives from politics, science and the community, led by Prof. Dirk Uwe Sauer, Chair of the Directorate of the project ‘ESYS Energiesysteme der Zukunft (Phase 2)’ (Energy Systems of the Future) at the Deutsche Akademie der Technikwissenschaften (National Academy of Science and Engineering), acatech.

The dena Study with dena’s conclusions and the experts’ report is available online (in German):