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Germany, the world’s toolbox for energy efficiency

Companies should turn to the German toolbox for energy efficiency solutions

Energy efficiency is the vital but less widely recognised “twin pillar” in Germany’s energy transition plan, alongside switching to renewable energy sources. The country is committed to the ambitious target of halving energy consumption from its 2008 level by 2050.

Improving energy efficiency lowers costs and reduces carbon emissions and dependence on imported fossil fuels.

Germany has made significant progress – but remains aware that there is much more to do. In 2014, the Federal Government launched the National Action Plan on Energy Efficiency (NAPE), a comprehensive strategy to deliver on its energy consumption goals. Improvements in the building sector, establishing energy efficiency as a business model, and increasing personal responsibility were identified as three key areas.

Primary energy consumption in 2016 was 6.5 per cent lower than in 2008, according to official statistics.

Primary energy consumption in 2016 was 6.5 per cent lower than in 2008, according to official statistics. That leaves Germany needing to sharply improve energy efficiency to meet its target of a 20 per cent reduction on its 2008 consumption by 2020. But the signs this year are positive, with energy consumption dropping 5.3 per cent in the January-September period on the previous year, according to preliminary calculations by the Working Group on Energy Balances (AGEB).

Energy efficiency is big business in Germany. The country’s energy efficiency market is expected to expand at an average 9.1 per cent per year from 2016 to reach €182 billion in 2025, according to the German Environment Ministry’s GreenTech Atlas. The importance of energy efficiency has long been promoted and German industry offers some world-leading solutions in this area. In the industrial sector, thousands of small and medium-sized enterprises are developing innovative energy-efficient solutions, ranging from energy management systems for production processes to more efficient pumps, ventilators, motor and HVACR systems.

As Europe’s manufacturing powerhouse, German industry releases more than 200 TWh in waste heat every year; more than Denmark’s total annual energy consumption. It has been estimated that around 125 TWh of this could be usefully recovered creating potential annual savings of €5 billion. With generous federal incentives for heat recovery, heat-to-power, or feeding waste heat into district heat networks on offer, Germany presents huge market potential for solution providers.

With generous federal incentives for heat recovery, heat-to-power, or feeding waste heat into district heat networks on offer, Germany presents huge market potential for solution providers.

The German Energy Agency’s Renewable Energy Solutions (RES) programme promotes exports of the country’s renewable technologies, with 58 countries currently benefitting from solutions funded by the programme. A database allows for targeted searches to find German companies offering the latest energy efficiency tools.1

Within Germany’s borders, investment in energy efficiency continues apace. In July, the European Commission approved a German scheme to provide €500 million in public funding for railway companies that invest in energy-efficient technologies. The new scheme, which will run until 2022, aims to promote a shift of freight traffic from road to rail, which will reduce CO2 emissions. Specific measures include compensating companies for up to 50 per cent of the costs of acquiring modern energy-saving rolling stock.

Buildings and construction are even more crucial to Germany’s energy efficiency targets. All new buildings will be required to be essentially climate-neutral by the end of 2020 under the EU’s Energy Performance of Buildings Directive. Nearly Zero-Energy Buildings (NZEBs) require only very low amounts of energy, most of which comes from renewable sources.

The Energy Efficiency Strategy for Buildings, published by the Federal Ministry for Economic Affairs and Energy, brings together the three aspects of energy efficiency, power and heat to form a policy framework for both existing and new buildings. It promotes efficiency solutions, such as insulation of the building envelope, efficient windows, and air-tight construction, while recognising the technical and economic limits of each measure. The strategy is crucial in light of Germany’s 2050 target for the country’s entire building stock to be virtually climate-neutral.

Homes in Germany account for approximately 35 per cent of the country’s total energy consumption.

Homes in Germany account for approximately 35 per cent of the country’s total energy consumption. Most of this is used for heat and hot water, with two thirds of heating systems considered inefficient. In 2016, the government announced more than €17 billion of funding for the period up to 2020 to help households, companies and municipalities invest in energy efficiency measures. The programme covers renewables-based installations used for the heating and cooling of homes, such as solar thermal energy installations, heat pumps and biomass installations, as well as energy-efficient windows.

Peter Altmaier, Minister for Economic Affairs and Energy, has highlighted the need for a successful transition into renewable energy. Altmaier states, “every kilowatt-hour that is not consumed does not have to be generated, transported and paid for. When we convert our supply to renewable energies, the lower the required amount of energy, the quicker and cheaper we will be. We must pay special attention to the heating market, both in terms of reducing energy consumption and expanding and integrating renewable energies.”2

Many companies in Germany believe the country is an ideal location for businesses focussed on energy efficiency. Christian Büscher, Managing Director of Goldbeck International, a family-owned construction firm based in Bielefeld, North Rhine-Westphalia, says Germany is “a good place for people who are interested in investing, or starting business in modern technologies supporting sustainability. It’s not just the politics driving it, it’s also the community.”

The world must become smarter in how it uses energy if it is to meet the goals agreed under the Paris agreement on climate change. Countries that lead the way stand to reap economic, as well as environmental benefits. German expertise in this area can help the country prosper in international markets by providing a huge toolbox for foreign companies and countries in need of the smartest solutions on the market. Germany also provides a great environment for international firms to develop and produce solutions of their own.

1 The database can be found at: https://bit.ly/2PhX5Ff

2 Greetings Peter Altmaier, The Federal Minister for Economic Affairs and Energy and patron of the Energy Efficiency Award at the dena Energiewende Congress 2018 https://www.dena-kongress.de/newsroom/grusswort-peter-altmaier/

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