The market for renewable energy in Germany is expected to grow at a CAGR of more than 3% in the forecast period . Factors such as supportive government policies and efforts to meet the rising power demand using renewable energy sources are expected to be significant contributors to the growth of the market. With the commitment of the government to obtain maximum energy from renewable and to reduce carbon emissions, the share of renewable is expected to grow significantly and are driving the renewable energy market further. On the other hand, factors like harsh climatic conditions and the use of other conventional energy are a few restraining factors for the Germany renewable energy market.
– The wind energy market is expected to have significant growth in the market during the forecast period. And is expected to play a critical role in decarbonizing the power system and improving flexibility.
– The German government according to the agreement of March 2018, as affirmed by the climate cabinet, the government is planning to speed up the growth of renewable energy, to reach a share of 65% renewable electricity by 2030.
– By 2050, solar PV, wind, and hydro, together, are estimated to produce approximately 85% of the Germany electricity generation, which in turn is expected to create an opportunity for the market to grow in the future.
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Key Market Trends
Wind Energy to Drive the Market
– In 2019, the Levelized cost of energy for offshore and onshore wind power had been estimated as USD 0.125/KWh and USD 0.062/KWh respectively.
– Intending to reach 20 GW production capacity from offshore wind farms by 2030, Germany has already attained around 7 GW of wind power capacity in 2020. Offshore wind speeds tend to be faster than on land, proving higher efficiency than onshore wind energy.
– With the installation of 136 new turbines in 2018, Germany reached a cumulative capacity of 6.4 GW from offshore wind farms alone and is expected to reach 15 GW by 2030.
– Out of the total, 225 billion kWh generated from renewable in Germany; offshore wind farms generated 19.4 billion KWh in 2019, holding a significant share of 9%. These ongoing developments and the current growth in the offshore wind energy market compared to the onshore wind energy market justifies their potential in the upcoming future.
– Government policies and targets play a crucial role in wind power development. As countries become increasingly concerned about climate change and the role of renewable energy in curtailing it, wind power, along with other renewable energy types, is expected to have more focus from the country, during the upcoming years.
Reducing Dependence on Fossil Fuel Imports to Drive the Market
– In 2019, the German government is offering a subsidy to reduce imports by acts like – The Renewable Energy Sources Act (EEG), which outlines the support to renewable electricity production, offering a feed-in tariff scheme for plants.
– Germany has few oil and gas resources to supply its energy consumption demand, and is trying to reduce its dependence upon the imports. The country is trying to transition from fossil fuels to renewable energy.
– Germany is set to disconnect the last of its nuclear reactors in 2022. The energy demand and supply gap are expected to be filled with renewable energy with a large share taken up by the wind and solar energy.
– Germany imported around 30 billion USD of crude petroleum in 2018. In 2019, more than 40% of the energy demand in the country is depended upon coal and gas. Gas is mostly imported from Norway and Russia.
– Hence, the government of Germany is utilizing acts like subsidy, innovation and laws to reduce the dependence on imports and provide energy security to the country.
Germany Renewable Energy Market Size Projected to Deliver Greater Revenues during the Forecast Period 2022-2031
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