“Ten percent is always possible” – with this appeal, Economics Minister Robert Habeck (Greens) urged Germans to save energy last spring.
Apparently this request worked. According to initial estimates, energy consumption in Germany fell by almost five percent last year, while at the same time overall economic output rose by 1.9 percent in real terms.
This step towards decoupling value creation and energy consumption can only be the first, which must be followed by others if the ambitious energy policy goals are to be achieved in Germany. The country aims to become climate neutral by 2045.
On the one hand, the national economy must switch from fossil fuels to electricity wherever feasible. On the other hand, the resulting increase in energy demand must be covered exclusively from renewable sources as far as possible. By 2030, electricity generation is to be increased to 750 terawatt hours (TWh).
This is 30 percent more than is consumed today. At least 600 TWh of electricity should come from renewable sources within eight years. After all, the nuclear power era in Germany should end very soon, the coal phase-out should succeed quickly and natural gas will then be largely dispensed with. Therefore, wind power and solar energy systems are to be expanded significantly. Regeneratively generated electricity is becoming the key element and link in the energy transition.
Same performance with less energy
So far, there has been little focus on the fact that more efficient use of energy would significantly improve the chances of achieving these ambitious climate protection goals. The less energy companies, public administration and private households need, the less energy has to be generated or imported. Technically formulated: The same machine performance, brightness, cold or heat must be achieved with less energy input.
The problem with this: The first ten percent savings may still be quite easy and the second with some effort possible. But at some point every additional percent saved becomes very expensive if there is no technological leap.
The experience of the past 50 years shows that such a decoupling of energy consumption and production is also possible over a longer period of time.
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After the oil price crises in 1973 and 1979/81, it was possible to keep energy consumption more or less constant until 1990, while total economic output rose by more than 80 percent in real terms during the same period. Previously, such an increase in energy efficiency had not been thought possible, because in the years of the economic boom from 1955 to 1970, primary energy consumption increased almost at the same pace as production.
Barely two weeks before the beginning of the Yom Kippur War, which triggered the first oil crisis in 1973, the federal government had passed an “energy program” that assumed an increase in energy consumption of 35 percent by 1980 and a further 20 percent by mid-1985 .
The government assumed that the national economy would grow in line with the trend of the past decades. In order to reduce dependence on oil imports, a rapid expansion of alternative energy sources and not least nuclear energy was sought – at that time, oil accounted for 55 percent of primary energy consumption. By 1985 reactors with an installed capacity of between 40 and 50 gigawatts (GW) were planned, which at that time corresponded to at least 35 nuclear power plants.
Admittedly, these plans never came to fruition. At their maximum production in 1989, the existing 21 nuclear power plants generated 23 GW of electricity. At that time, the last nuclear power plant in the Federal Republic went online. On the one hand, social resistance to nuclear energy as a result of the lack of a repository and the rising construction and operating costs prevented further expansion.
On the other hand, economic growth and energy consumption became decoupled in view of rising energy prices. The market mechanism worked like a textbook: In view of the increased prices, the demand for energy fell significantly. Many companies had succeeded in adapting their products, manufacturing processes and business models to the new price relations.
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In addition, the structural change from an energy-intensive industrial society to a service society contributed to declining consumption. In addition, the first regulations for the thermal insulation of buildings and energy saving came from the late 1970s.
After reunification, this decoupling process accelerated. Gross domestic product has increased by 57 percent in real terms over the past three decades, while primary energy consumption has fallen by 15 percent by 2021. Industry has succeeded in reducing energy use per euro of gross production value by an average of almost one percent per year since 1991, and in the trade, commerce and services sectors it was even two percent.
Retrospectively, therefore, confirms that a growing economy and declining energy consumption are compatible provided the market produces innovations – as illustrated by the example of lighting. First, the 100-watt light bulbs were replaced by 70-watt halogen spotlights, then by 23-watt energy-saving lamps and finally by eleven-watt LED lights, so that today the same brightness is generated with only eleven percent of the energy used.
Even if the efficiency potentials that have been realized so far have been considerable in macroeconomic terms, it is important to increase this pace in the coming decades. German industrial companies must double their energy savings if the climate protection goals are to be achieved. Estimates by the Association of the Electrical and Digital Industry show that this is possible. According to this, at least 200 TWh of energy can be saved annually in German industry with existing technologies – almost a third of the total requirement.
One way to leverage this potential is through higher energy prices, for example through rising CO2 taxes. Of course, there is a risk that energy-intensive production would migrate and damage Germany as a location without benefiting the climate.
Another way of promoting innovation processes would be more favorable depreciation rules, which often have the effect of boosting investment. “We want to create an investment premium for climate protection and digital economic goods,” the traffic light parties promised the companies in the coalition agreement.
So the intention to introduce super write-offs is there – the economy has only been waiting in vain for the implementation of this right idea.
More: Economy Minister Habeck demands European industrial electricity price