Power sector in 2030
Compatibility with 1.5°C pathways require rapid decarbonisation of the power sector. This could be driven by almost doubling the share of renewable energy to 88-89% by 2030, a coal phase-out by 2029 and a gas phase-out by 2036-2040.
Following the amendment of the German Renewable Energy Law in December 2020, in April 2022 Minister for Economy and Climate, Robert Habeck, presented a package of proposals that constitute a significant improvement in the renewable energy framework– with a goal of increasing the share of renewables to 80% by 2030 and close to 100% by 2035.7 The proposed target also takes into consideration the increase in electricity demand driven by electrification of other sectors. Current permitting processes need to be simplified to support implementation of renewable energy projects and achievement of the new target.
Towards a fully decarbonised power sector
1.5°C compatible scenarios indicate that emissions intensity of electricity generation should decrease by at least 67% in comparison to 2017 and the sector be fully decarbonised by 2035. However, any remaining emissions after 2030 are relatively small due to a significant decrease in emissions intensity – by at least 88%. Starting in 2030, almost all electricity could be generated from renewable sources. While their share increases only modestly in the subsequent decades, in absolute terms installed capacity doubles due to increasing electricity demand. In the early 2040s, the power sector, through the use of BECCS, starts contributing negative emissions, with grid emissions intensity reaching 0-20 gCO₂/kWh.
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27 ACEA. Fuel types of new cars: battery electric 9.1%, hybrid 19.6% and petrol 40.0% market share full-year 2021. ACEA. (2022).
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30 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available, thus we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches which developed countries will need to implement in order to counterbalance their remaining emissions and reach net zero GHG are not considered here due to data availability.
31 Benchmarks here provided are derived from the illustrative pathway CEMICS-1.5-CDR8_REMIND_1.7 (28 MtCO₂e) and the 25th percentile (47 MtCO₂e) of the analysis 1.5°C compatible pathways in this analysis, assessed by the IPCC SR1.5. See methodology section for more information.
32 Confirming previous analysis indicating that: “Germany needs to phase coal out of its electricity sector by 2030 to meet its obligations under the Paris Agreement. This is earlier than the dates discussed so far by the Coal Commission, a body established to come up with a coal exit plan by the end of 2018.”29
33 According to the Carbon Contracts for Difference, investor in low carbon technology (e.g. low carbon steel) receives subsidy that amounts to the different between the cost of producing traditional product and the low carbon alternative. This amount is reduced by what the investor would have to pay in carbon price anyway, e.g. in the framework of the EU ETS.
34 Calculations based on new data from Umweltbundesamt (UBA): www.umweltbundesamt.de/themen/klima-energie/treibhausgas-emissionen.
35 This goal reflects the 55% emissions reduction goal. The new goal for the share of renewables is not yet clear.
Germanyʼs power mix
terawatt-hour per year
- Renewables incl. biomass
- Unabated fossil
- Nuclear and/or fossil with CCS
- Negative emissions technologies via BECCS
Germanyʼs power sector emissions and carbon intensity
MtCO₂/yr
- Historical emissions
- High energy demand - Low CDR reliance
- SSP1 Low CDR reliance
- SSP1 High CDR reliance
- 100%RE
- Low energy demand
1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for Germany
Indicator | 2019 | 2030 | 2040 | 2050 | Decarbonised power sector by |
|---|---|---|---|---|---|
Carbon intensity of power gCO₂/kWh | 350 | 30 to 60 | 0 | −40 to −10 | 2035 to 2040 |
Relative to reference year in % | −93 to −83% | −100% | −112 to −104% |
Indicator | 2019 | 2030 | 2040 | 2050 | Year of phase-out |
|---|---|---|---|---|---|
Share of unabated coal Percent | 31 | 1 to 3 | 0 | 0 | 2029 |
Share of unabated gas Percent | 15 | 4 to 6 | 0 | 0 | 2036 to 2040 |
Share of renewable energy Percent | 41 | 88 to 89 | 97 | 97 to 100 | |
Share of unabated fossil fuel Percent | 47 | 7 to 9 | 0 | 0 |
Investments
Demand shifting towards the power sector
The 1.5°C compatible pathways analysed here tend to show a strong increase in power generation and installed capacities across time compared with a ccurrent policy scenario. This is because end-use sectors (such as transport, buildings or industry) are increasingly electrified under 1.5°C compatible pathways, shifting energy demand to the power sector. Globally, the “high energy demand” entails a particularly high degree of renewable energy-based electrification across the various sectors, and sees a considerable increase in renewable energy capacities over time. See the power section for capacities deployment under the various models.
Germanyʼs renewable electricity investments
Billion USD / yr
Yearly investment requirements in renewable energy
Across the set of 1.5°C pathways that we have analysed, annual investments in renewable energy excluding BECCS increase in Germany to be on the order of USD 9 to 74 billion by 2030 and USD 11 to 86 billion by 2040 depending on the scenario considered. The ‘high energy demand, low CDR reliance’ pathway shows a particularly high increase in renewable capacity investments, which could be driven by an increase of electrification of end-use sectors and modernisation of the aging electricity infrastructure. Other modelled pathways have relatively lower investments in renewables and rely to varying degrees on other technologies and measures such as energy efficiency and negative emissions technologies, of which the latter can require high up-front investments.