Germany has some of the most ambitious decarbonisation plans of any country in the world. While the UK, EU and US have pledged net zero greenhouse gas emissions by 2050, Germany is aiming for 2045, following a 2021 landmark court ruling that deemed earlier climate ambitions to be unconstitutional.
The next largest economy in the world with a 2045 net-zero pledge is Sweden, a country with an economy around one-eighth the size of Germany’s and one which already sources three-quarters of its electricity from nuclear and hydroelectric facilities. The challenge for Germany – which is in the process of phasing out its nuclear power stations, and continues to burn coal for more than one-quarter of its electricity – is far more profound.
New analysis of data from GlobalData, Energy Monitor’s parent company, of Europe’s power plants pipeline shows that as yet, Germany is not deploying new renewable energy capacity at the scale necessary to meet its net-zero target.
Germany’s climate plans see solar and wind driving the country’s transition to a net-zero economy, but just 2GW of new solar and wind power capacity are being built in the country, compared with more than 8GW each in Spain and the UK, which are Europe’s leaders.
The UK’s regular major auctions of offshore wind permits mean the country has maintained a steady flow of new wind construction projects. Meanwhile, Spain’s government has ensured projects reach construction stage by introducing streamlined planning rules in March 2022 to shorten permitting processes for renewables projects that have a capacity below 150MW, and a low or medium impact on the environment. Germany has been unable to keep up with the UK and Spain.
The latest findings come on top of Energy Monitor analysis from autumn 2022, which found that most renewables industries in Germany are being rolled out at just one-quarter of the rate required for the country to meet its interim target of 80% renewable electricity by 2030 (versus 47% in 2022).
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Long-standing issues regarding Germany’s renewables roll-out are well known. These include the enduring impacts of political uncertainty around national support schemes and EU targets for renewables. Germany’s federalised system also means that while the Green Party is sharing power in Berlin, some state authorities may be working to counteract its influence.
The German government is, however, working to revamp its energy laws. A new grid expansion act, which took effect on 1 January 2023, should increase the priority given to renewable energy when policy decisions are made. The government is also considering the introduction of state investment guarantees for new wind and solar projects, which could include purchase guarantees for renewable energy production.
Germany’s wind and solar construction pipeline is not the smallest in Europe. In Italy, for instance, just 0.75GW of new capacity is currently under construction, while many eastern European countries have even less on the way.
Soaring commodities prices, slowing economies and high inflation also pose problems for the renewables construction industry in Europe.
Another major hurdle is the slow and complicated permitting process new developments must pass through.
Permitting rules in many countries are complex, with exclusion zones or spatial planning constraints. Cash-strapped authorities lack resources to process applications, and procedures are slow, with multiple authorities at regional and national level causing delays. All this means projects can be indefinitely put on hold or cancelled – risk that is putting off investors.
As the below chart illustrates, there is currently more than six-times more European solar and wind capacity in permitting than under construction, according to GlobalData. On 19 December 2022, EU energy ministers formally signed off on emergency measures to accelerate permitting. In parallel, member states and MEPs are still working on a reform of the EU's 2018 renewable energy directive, which should set out a broader, longer-lasting reform of EU renewables permitting rules.