After 16 years of Angela Merkel, there is a new German chancellor in Berlin, but as is customary with Germany’s electoral system of proportional representation, Olaf Scholz could only be given the keys to the Chancellery after several months of coalition negotiations between the Social Democratic Party (his party), the Green Party and the Free Democratic Party (pro-business liberals).
The presence of the Greens in this “traffic light” coalition means the new government is set to bring in a raft of new green measures. Policies announced in the coalition agreement include the aim of consuming 80% renewable electricity by 2030, and for 2% of German land to be designated for onshore wind. Some 15 million fully electric cars should be on the road by 2030, while the renewable energy surcharge on household bills is set to be phased out by 2023.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
The coalition partners also agreed to a coal phase-out, “ideally” by 2030, instead of the country’s current 2038 target. Given that Germany remains Europe’s largest generator of electricity from coal, the impact of this acceleration would be profound.
Analysis from think tank Ember finds that, in the less than two years since EU countries submitted their National Energy and Climate Plans for 2030 to the Commission, planned electricity generation from coal at the end of the decade has reduced by 58%. As things stand, just three countries – Poland, the Czech Republic and Bulgaria – will be responsible for more than 95% of EU power generation from coal in 2030.
The new German government's energy plans will also have a significant impact on emissions. Total EU coal-fired power generation in 2030 would drop from 282 terawatt-hours (TWh) to 118TWh, says Ember. Assuming that coal plants emit 900g CO2/kWh, the 164TWh reduction in coal generation in 2030 represents a massive 147.6 megatonnes (Mt) of CO2 (MtCO2) saving. This is more than the Netherlands emitted in 2020 (138MtCO2).
The new German government has been celebrated in many quarters, but a study from the German Institute for Economic Research released on 3 December found that the plans remain off-track for what would be needed to limit global warming to 1.5°C by mid-century. That would require 95% renewables in the 2030 power mix, said the authors.
