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Germany to speed up green energy projects in ‘gigantic’ effort

Germany's Climate and Energy Minister Robert Habeck on Tuesday pledged to drastically ramp up renewable energy projects in the coming years, saying the country faced a "gigantic" task to meet climate protection goals.

Published: 11 January 2022 14:49 CET

Germany's Climate and Energy Minister Robert Habeck before Tuesday's press conference in Berlin. Photo: picture alliance/dpa | Kay Nietfeld

Germany needs to become “more efficient and faster” in the fight against climate change, Green party minister Habeck said, as he unveiled an ambitious package of measures to help make Europe’s top economy carbon neutral by 2045.

Among the most eye-catching proposals was the pledge to set aside two percent of Germany’s land surface for wind energy projects, up from around 0.5 percent currently.

Habeck – who heads a “super ministry” of energy, climate protection and the economy in the new German government – promised to cut red tape to make it easier to get wind projects approved.

He also called on citizens and regional authorities to show greater acceptance for wind turbines, after local objections often blocked such projects in the past.

“Everyone needs to cooperate,” Habeck told reporters.

As part of a “solar acceleration” plan, solar panels will be mandatory on new commercial buildings and become the norm on new-build homes, Habeck added.

Germany’s coalition government — which took over from Angela Merkel’s cabinet last month and is made up of the Social Democrats, the Greens and the pro-business FDP — aims to cut greenhouse gas emissions by 65 percent by 2030 compared with 1990 levels.

Also by 2030, the country wants to exit coal and have renewables account for 80 percent of Germany’s electricity mix.

Habeck said the country was “significantly behind” in reaching those targets and faced a “task that is huge, gigantic” to get back on track.

The share of renewable energies currently hovers at just over 40 percent in Germany, in part because the country still relies heavily on coal as a result of Merkel’s decision to phase out nuclear power by the end of 2022.

‘Creating jobs’

Following a drop in carbon dioxide emissions in 2020 when the pandemic slowed economic activity, Germany’s CO2 emissions actually jumped four percent in 2021, said Habeck, as demand rebounded and a lack of wind increased the use of fossil fuels.

Turning to other sectors, Habeck said Germany would help fund investment in hydrogen and offer financial support for industrial companies making the switch to greener production processes.

To boost the use of electric cars, Habeck said Germany would need to install 100,000 charging points annually by 2030.

Seeking to allay fears that a greener economy would upend Germany’s traditional industries, Habeck said climate protection would spur innovation “in a way we haven’t seen in this country in a long time”.

“We will renew our industries, and that means creating value and jobs.”

Habeck said he aimed for the necessary legislation for his proposals to be passed this year.

By Michelle FITZPATRICK

Member comments

Anonymous - 21 January 2022 at 11:27 CET

All this rhetoric about transforming Germany to a green economy by 2030 lacks is unrealistic. It’s going to take years to replace fossil fuel with renewable energy.

And phasing out nuclear plants without a suitable replacement? This is going to drive up already spiraling costs to heat homes and power businesses as coal becomes the primary substitute. Going forward, what’s the solution? More windmills?

Germany should take France’s lead and invest in nuclear technology to provide its energy. I believe over 70% of France’s electricity comes from nuclear plants. It’s clean, renewable and cheaper.

Become a Member to leave a comment.

Output is expected to expand 0.3 percent this year, the economy ministry said, up from a prediction of 0.2 percent in February.

The slightly rosier picture comes after improvements in key indicators — from factory output to business activity — boosted hopes a recovery may be getting under way.

The German economy shrank slightly last year, hit by soaring inflation, a manufacturing slowdown and weakness in trading partners, and has acted as a major drag on the 20-nation eurozone.

But releasing its latest projections, the economy ministry said in a statement there were growing indications of a “turning point”.

“Signs of an economic upturn have increased significantly, especially in recent weeks,” Economy Minister Robert Habeck said at a press conference.

The ministry also cut its forecast for inflation this year to 2.4 percent, from a previous prediction of 2.8 percent, and sees the figure falling below two percent next year.

“The fall in inflation will lead to consumer demand — people have more money in their wallets again, and will spend this money,” said Habeck.

“So purchasing power is increasing, real wages are rising and this will contribute to a domestic economic recovery.”

Energy prices — which surged after Russia’s 2022 invasion of Ukraine — had also fallen and supply chain woes had eased, he added.

Several months ago there had been expectations of a strong rebound in 2024, with forecasts of growth above one percent, but these were dialled back at the start of the year as the economy continued to languish.

‘Germany has fallen behind’

But improving signs have fuelled hopes the lumbering economy — while not about to break into a sprint — may at least be getting back on its feet.

On Wednesday a closely-watched survey from the Ifo institute showed business sentiment rising for a third consecutive month in April, and more strongly than expected.

A key purchasing managers’ index survey this week showed that business activity in Germany had picked up.

And last week the central bank, the Bundesbank, forecast the economy would expand slightly in the first quarter, dodging a recession, after earlier predicting a contraction.

German Economics Minister Robert Habeck

Economics Minister Robert Habeck (Greens) presents the latest economic forecasts at a press conference in Berlin on Wednesday, April 24th. Photo: picture alliance/dpa | Michael Kappeler

Despite the economy’s improving prospects, growth of 0.3 percent is still slower than other developed economies and below past rates, and officials fret it is unlikely to pick up fast in the years ahead.

Habeck has repeatedly stressed solutions are needed for deep-rooted problems facing Germany, from an ageing population to labour shortages and a transition towards greener industries that is moving too slowly.

“Germany has fallen behind other countries in terms of competitiveness,” he said. “We still have a lot to do — we have to roll up our sleeves.”

Already facing turbulence from pandemic-related supply chain woes, the German economy’s problems deepened dramatically when Russia invaded Ukraine and slashed supplies of gas, hitting the country’s crucial manufacturers hard.

While the energy shock has faded, continued weakness in trading partners such as China, widespread strikes in recent months and higher eurozone interest rates have all prolonged the pain.

The European Central Bank has signalled it could start cutting borrowing costs in June, which would boost the eurozone.

But Habeck stressed that care was still needed as, despite the expectations of imminent easing, “tight monetary policy has not yet been lifted.”

In addition, disagreements in Chancellor Olaf Scholz’s three-party ruling coalition are hindering efforts to reignite growth, critics say.

This week the pro-business FDP party, a coalition partner, faced an angry backlash from Scholz’s SPD when it presented a 12-point plan for an “economic turnaround”, including deep cuts to state benefits.

Christian Lindner, the fiscally hawkish FDP finance minister, welcomed signs of “stabilisation” in the economic forecasts but stressed that projected medium-term growth was “too low to sustainably finance our state”.

“There are no arguments for postponing the economic turnaround,” he added.