Germany's Plans for an Energy Efficient Future

Germany’s government realizes that for the country’s major energy transition to be successful, energy efficiency must be taken seriously.
Published: Wed 27 Mar 2013

Germany is the EU’s biggest energy consumer, with limited domestic energy supplies. For this reason, Germany has made a serious commitment to energy efficiency, making it a world leader in the adoption of energy efficiency measures. The country is currently working towards a 25-30% drop in electricity demand by 2050. In comparison, the UK is predicting a 66% increase in its own demand. This is an ambitious target for Germany as it is Europe’s manufacturing powerhouse.

The German government’s rapid phasing-out of nuclear power requires a large investment in renewables, as well as grid and storage infrastructure. In addition, this energy transition cannot be successful without also improving the country’s energy efficiency.                

Energy Efficient Buildings

The German government has realized that the most cost-effective path to energy security is energy saving. The government has put in place a clear legal framework and tight regulation at national level which requires energy efficiency upgrades to buildings. Public policies aim to refurbish all homes and all public buildings in Germany by 2030.

The upgrading of buildings will ensure a decrease in wasted energy which escapes the building structure. Inefficient equipment in buildings is also largely to blame. The government aims to double the annual rate of renovations from 1% to 2%. To encourage this growth, financing models, and low-interest loans with tax incentives or grants have been introduced to help people improve their buildings’ energy efficiency. Deutsche Bank works with the state-owned development bank KfW to help deliver low-interest energy efficiency loans to homes and businesses.

Of Germany’s 39 million homes, 75% were constructed prior to 1979-before higher energy savings standards were introduced. Thus far, 9 million of these units have been retrofitted to high energy-efficiency standards, leaving 80% of the pre-1979 buildings (20 million homes) below the legal energy standard required for existing buildings. Germany currently refurbishes around 200,000 buildings a year which is equal to around 400,000 homes. If Germany is to complete the refurbishment process by 2030, the rate must double, according to experts.

Governmental Support

Germany is leading the way in developing “green” technologies and it has the most ambitious energy-saving program in Europe.

The government also provides a great deal of information to promote behavior change towards energy efficiency by working through regional and local bodies. Through legislation and regulation, the government aims to curb demand. It has also developed enforceable standards through Energy Performance Certificates and it supports model projects across the country.

The government promotes energy-efficient construction and refurbishment programs, investments in sustainable infrastructure, and programs for energy consulting.

Energy Program

The Federal Ministry of Economics and Technology developed a program called the “E-Energy:IKT-based energy system of the future.” E-Energy develops and tests new approaches to optimizing energy supplies in six model regions through the use of modern information and communication technologies (IKT). The program aims to develop the optimization potential of the IKT so as to achieve more cost effectiveness, security of supplies, as well as climate and environmental compatibility in electricity distribution.

The research program consists of six projects-one of these is called E-DeMa. E-DeMa develops solutions to make electricity distribution smarter. In the future, the customer will be able to organize his electricity consumption on when the electricity price is cheapest, for example. In addition, the consumer should also be able to act as a provider on the energy marketplace. If, for example, he has a small decentralized cogeneration station or a fuel cell in his cellar or a photovoltaic system on his roof, he can feed excess electricity into the grid. The customer becomes a "Prosumer"- both a consumer and producer. The low supply amounts of individual households can be concentrated by the energy marketplace. The energy supply system in Germany will therefore become more flexible and local.

During the E-DeMa project, private electricity customers, within the model regions, will be connected via IKT gateways to a public electronic marketplace, as well as energy dealers, and distribution grid operators. Mülheim and Krefeld have been selected as model regions within the distribution grid area of RWE Deutschland AG. These areas are ideal model regions for E-DeMa since they offer an excellent mixture of buildings, single and multi-family houses with different social standards- a representative cross-section of the entire population structure.

In Conclusion

According to a recent analysis, Germany ranks first among all G20 countries for its energy efficiency and wider measures to fight climate change, and second for its renewable energy and feed-in tariff programs. Between 2006 and 2011, Germany created almost 500,000 new jobs in renewable energy, and nearly 900,000 jobs in retrofitting homes and public buildings such as schools. Germany has a supreme engineering and manufacturing reputation, making it an attractive production center for renewable energy technologies, while its energy saving products and systems are being exported across the EU.

As a result, green investment, new green technology development, and renewable energy exports continue to be major growth areas in Germany, Europe’s strongest economy.

Engerati Analysis

The threat of energy insecurity and high energy costs underlines the urgency of energy saving. It is widely accepted across Europe that investment in energy saving shows by far the quickest and surest return on investment.


Deutsche Bank-Energy efficiency and Germany’s energy transition

E-DeMa-E-Energy: The energy marketplace

The Guardian-Energy saving finally gets serious as alarm bells wake ministers