Germany will invest €17 billion ($19.4 billion) in a “broad campaign” to boost energy efficiency over the next five years, Economy Minister Sigmar Gabriel announced Thursday, with an ultimate goal of halving energy consumption by 2050.
The initiative is aimed at helping the country reach emissions reduction targets adopted both domestically and as part of the Paris Agreement, but it could prove bearish for EU carbon prices if it reduces demand for power and heating in Germany, the 28-nation bloc’s top economy and emitter.
“The cleanest and cheapest energy is that which is not consumed. We need to not only firmly anchor this principle in our energy policy, but we also need a shift in consciousness in our society,” Gabriel said, according to a release published by Germany’s Federal Ministry for Economic Affairs and Energy.
“By investing in energy efficiency technologies, we will modernise our country, strengthen innovation and the competitiveness of our economy, reduce our dependence on imported raw materials and … create sustainable jobs for our future employees.”
The plan, dubbed ‘Effizienzoffensive’, will see the €17 billion spent between 2016 and 2020 and will be comprised of four programmes to start this month or next, including:
- A competitive tender to find the most cost-effective energy saving measures;
- A pilot programme promoting smart metering;
- An initiative to improve the recovery of waste heat, and;
- An initiative to promote cross-cutting technologies, namely those that enhance the efficiency of energy output or its use.
“The goal: Lowest possible energy consumption and meet the remaining demand with renewable energy. In practical terms, to halve the energy consumption by 2050, which corresponds mathematically to the current combined energy consumption of the Benelux countries and Austria,” the ministry added.
GERMANY MAKES IT EFFICIENTLY
The campaign will consist of three core elements – promotion, advice, and information – and will be tied to a public push labelled “Germany makes it efficiently” that is aimed at helping consumers use less energy.
The ministry said a significant increase in energy efficiency is a required for the success of the country’s the energy transition, or Energiewende, adding that an expansion in renewable energy sources alone won’t be enough to hit the country’s emissions reduction targets.
Germany has pledged to slash its greenhouse gas output by 40% below 1990 levels, but has only achieved cuts of around 27% to date.
The government last year reached deals with utilities RWE, Vattenfall, and Mibrag to idle eight of their lignite power units and put them in a reserve to support baseload supply shortages, a move which is forecast to cut Germany’s greenhouse gas emissions by 11-12.5 million tonnes of CO2 by 2020.
The country has also launched supplementary measures to boost combined heat and power (CHP) sources, which it estimates will lead to reductions of a further 4 million tonnes by 2020.
Under Paris, Germany doesn’t yet have its own emissions reduction target for 2030, but the EU as a whole has pledged to cut by 40% below 1990 levels, as well as to improve energy efficiency by 27%.
Germany has also committed to cutting its GHG output by 80-95% by 2050.
By Mike Szabo – mike@carbon-pulse.com
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