German energy industry: Investments in energy transition far too low

The German utilities industry association (Bundesverband der Energie- und Wasserwirtschaft, BDEW) and management consultants EY (Ernst & Young) have presented their new »Fortschrittsmonitor Energiewende« (»Progress Monitor Energy Transition«). According to the report, private and public investments totaling an estimated € 600 billion ($ 648 billion) will be needed in the period up to 2030 to achieve the goals set by the German government for 2030 – and thus € 54 to € 57 billion annually. The largest share of these investments, €498 billion, is distributed among the expansion of power generation capacity with renewable energies (€351 billion), the expansion of transmission networks (€126 billion), the development of generation capacity for climate-neutral gases (€12 billion), and the promotion of e-mobility through the expansion of public electric charging infrastructure (€9 billion).
This spending would provide significant value creation for the manufacturers of the capital goods, for example wind turbines, solar modules or process plants for electrolysis. For Germany, BDEW and EY estimate the value creation effects triggered in this way at an average of just under € 33 billion per year.
However, the necessary progress in almost all relevant areas has so far failed to materialize, according to the report. For example, only € 14.5 billion were invested in 2021, meaning that only around a quarter of the potential value creation was realized (€ 8.6 billion).
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